BP Settlement Claims

Gulf Coast Disaster News

BP Wins Expedited Appeal of Bid to Stop Spill Payments

January 3, 2014, 1:03 pm

BP Plc (BP/)’s bid to block economic-loss payments tied to the 2010 Gulf of Mexico oil spill unless the claims can be directly linked to the disaster won fast-track consideration by an appeals court.

The London-based company said last week that U.S. District Judge Carl Barbier in New Orleans has ignored the appellate court’s earlier decision requiring him to review causation in determining which claims should be paid. The company asked an appeals panel for immediate review while lawyers for spill victims sought a delay.

BP’s request for expedited consideration was granted in an order issued yesterday by U.S. Circuit Judge Edith Brown Clement in New Orleans. She directed spill victims to respond to BP’s motion by Jan. 8 and both sides to file letters that day on the causation issue.

The blowout of BP’s deep-water Macondo well off the Louisiana coast in April 2010 killed 11 people and sent millions of barrels of oil spewing into the Gulf of Mexico. The accident sparked thousands of lawsuits against BP, as well as Transocean Ltd. (RIG), owner of the rig that burned and sank, and Halliburton Co. (HAL), which provided cement services for the well.

BP reached a settlement with most private plaintiffs in March 2012, just before a trial on liability for the incident was to begin. BP initially valued the economic-loss settlement at $7.8 billion. It put the cost at $9.2 billion in an Oct. 29 regulatory filing.

Spill Victims

Geoff Morrell, BP spokesman, declined to comment on Clement’s order. David Falkenstein, a spokesman for lawyers leading the spill litigation, didn’t immediately respond to a request for comment.

BP has been battling since the beginning of last year with Barbier, lawyers for spill victims and the administrator of the settlement, Patrick Juneau, over an interpretation of the agreement that the company says improperly allows payments to claimants who can’t link losses to the spill.

The company claims Juneau has approved millions of dollars in payments to businesses for “fictitious” economic losses that weren’t related to the worst offshore spill in U.S. history. It appealed Barbier’s decision upholding Juneau’s interpretation and won review by the New Orleans-based appeals court in a divided opinion in October.

Barbier, in a Dec. 24 order, said BP couldn’t tie payments to direct causation under the settlement agreement. BP brought the matter back to the appeals court Dec. 30.

“The district court has definitively refused to enforce the settlement’s causal-nexus requirement and has made clear that it will adhere to its erroneous position on causation unless this court directly tells it otherwise,” the company said in the Dec. 30 filing.

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