06-11-14 Ruling... SCOTUS: BP must pay claims during appeal
NEW ORLEANS (AP) — The U.S. Supreme Court says BP must continue paying claims from a fund established after the 2010 Gulf of Mexico oil spill while the company appeals terms of its settlement with some businesses.
The justices on Monday let stand without comment lower court refusals to halt payments while BP PLC appeals lower court rulings that businesses don't have to prove they were directly harmed by the spill to collect money.
The 5th Circuit and a district court have ruled that BP must stand by its agreement to pay such business claims without requiring strict proof that the spill caused losses.
The order indicates that the high court is unlikely to hear BP's appeal, said Loyola University law professor Blaine LeCesne, who is not involved in the case. BP contends that that the claims administrator is misinterpreting its agreement with many businesses.
"It's obviously a major victory for the plaintiffs, who can now proceed with processing these business economic loss claims," he said. "Given the several months interim before the Supreme Court rules on the appeal, likely many of these claims will have been processed and paid."
Steve Herman and Jim Roy, lead attorneys for businesses and individuals who have filed claims against BP, said in a one-sentence statement that the order "will allow businesses to continue to receive the compensation they're rightly entitled to according to the objective, transparent formulas agreed to by BP."
BP will ask the high court to review whether it must pay claims without any apparent connection to the spill, company spokesman Geoff Morrell said in an emailed statement.
"The company continues to believe that the lifting of the injunction suspending the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident," he wrote.
At question are terms of BP's settlement with businesses that do not have any connection to fisheries — one of eight groups of individuals and businesses set out in a complex March 2012 agreement to settle claims of losses from its 2010 spill.
The 5th U.S. Circuit Court of Appeals ruled 2-1 in March and 8-5 in May that the settlement's terms were clear. District Judge Carl Barbier had made the same finding in December.
Judge Edith Brown Clement, the dissenter in March, wrote that whatever BP agreed to in its settlement, courts should make sure that payments go only to people who can prove the spill caused their losses.
When the company went to the 5th Circuit, LeCesne said, its arguments were based entirely on accounting principles. "It was only when Judge Clement threw out the question 'What about causation?' that the light went on in BP's head — 'She's giving us another argument,'" LeCesne said.
The claims fund was set up after BP's Macondo well off the Louisiana coast blew out in April 2010 and spewed oil into the Gulf for nearly three months.
BP estimated at first that claims would total about $7.8 billion. It later said the administrator was misinterpreting the settlement in ways that could add billions of dollars in bogus or inflated claims.
There has been no dispute that some Gulf Coast businesses, including tourism and fisheries interests, lost money because of oil on beaches or the closure of fishing waters after the spill.
However, BP argues the claims administrator wrongly interpreted the settlement to mean that businesses without any connection to fisheries must only show losses during and after the spill without proving a direct link. Examples cited by BP and Clement include a wireless telephone company that burned to the ground and an RV park that closed before the spill.
BP says it has paid out more than $12 billion in claims to individuals, businesses and government entities. A trial scheduled for January 2015 in New Orleans is part of the litigation that will determine how much the oil giant owes in federal Clean Water Act penalties.
05-19-14 Ruling... Appeals court won't rehear BP settlement issue
A federal appeals court on Monday refused to reconsider its previous ruling that businesses don't have to prove they were directly harmed by BP's 2010 Gulf Of Mexico oil spill to collect settlement payments.
The decision by the 5th U.S. Circuit Court of Appeals in New Orleans could be a step toward resuming a claims process that was suspended after a district court ruling in December. However, BP spokesman Geoff Morrell said in an emailed statement Monday night that the company is considering its legal options.
BP had asked the full 5th Circuit Court of Appeals in New Orleans to rehear the case after a three-judge panel's March ruling. The court voted 8-5 against a rehearing.
The action preserves U.S. District Judge Carl Barbier's (BAHR'-bee-ay) ruling that BP had agreed in a 2012 settlement to pay claims without requiring proof that losses were directly caused by the spill resulting from the explosion of the Deepwater Horizon oil rig, which killed 11 workers.
Judge Leslie Southwick wrote in Monday's order that a 2012 policy statement, issued by the court-appointed claims administrator and developed with "input and assent from BP," spelled out the criteria for business claims.
"Instead of direct evidence of a causal connection between the Deepwater Horizon disaster and the claimant's business losses, the Exhibit described four geographic zones, several types of businesses, formulae for presenting economic losses, and various presumptions regarding causation that apply to specific combinations of those criteria."
Southwick said all parties agreed to the criteria prior to final court approval of the 2012 settlement.
Judge Edith Brown Clement dissented. "Our courts' decisions would allow payments to 'victims' such as a wireless phone company store that burned down and a RV park owner that was foreclosed on before the spill," she wrote. "Left intact, our holdings funnel BP's cash into the pockets of undeserving non-victims." She said the ruling made the court "party to this fraud" and said judges in the majority were trying to "shift the blame for these absurdities to BP's lawyers."
Monday's ruling consolidated multiple appeals in the case and appears to settle what BP said were conflicts between two earlier panel decisions related to the settlement. It is the latest development in a complicated legal back-and-forth over to whom BP owes money following the nation's largest oil spill. A three-judge panel ruled in December that Barbier had to consider BP's arguments. But Barbier ruled against the company.
"BP is disappointed that the full Fifth Circuit will not be considering the divided panel decisions relating to the compensation of claims for losses that have no apparent connection to the spill," Morrell's statement said.
Attorneys Steve Herman and Jim Roy, lead lawyers for the steering committee of plaintiffs in the case, applauded the court's decision. "We are pleased that the Court of Appeals agreed that BP must honor its contract," they said in an email.
The 2012 settlement doesn't have a cap, but BP initially estimated that it would pay roughly $7.8 billion to resolve the claims. Later, as it started to challenge the business payouts, the company said it no longer could give a reliable estimate for how much the deal will cost.
BP says it has paid out more than $12 billion in claims to people, businesses and government entities. A trial scheduled for January in New Orleans is part of the litigation that will determine how much the oil giant owes in federal Clean Water Act penalties.
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