BP wants Supreme Court to toss part of oil spill settlement plan
Published: August 4,2014
NEW ORLEANS — BP PLC has asked the U.S. Supreme Court to throw out part of its settlement of claims for damage from its enormous oil spill in 2010 — a section saying businesses don’t have to prove that the spill directly harmed them to be eligible for payment, only that they lost money afterward and recovered in 2011.
Claims administrator Patrick Juneau has awarded hundreds of millions of dollars to businesses whose losses “were not fairly traceable to the spill” in the Gulf of Mexico, including $76 million to businesses whose entire losses had absolutely nothing to do with it, the company’s lawyers wrote in a request filed late Friday.
Those included $3.5 million to an Alabama excavation company that had sold nearly all of its assets in 2009 and $172,000 to a lawyer whose license was revoked in 2009, they wrote.
The high court hears arguments in 75 to 80 of the 10,000 appeals it gets each year.
BP argued in its formal request for a hearing that it should be one of those few heard by the nation’s highest court because the settlement goes against rulings in other federal districts and by the Supreme Court itself.
When it canceled a class action suit against retail giant Wal-Mart Stores Inc. in 2011, the Supreme Court ruled that members of a class had to have suffered the same injury, they wrote. “Claimants whose purported injuries did not result from the spill cannot have suffered the ‘same injury’ as those who actually did suffer spill-related loss,” the appeal said.
Lead class attorneys Steve Herman and Jim Roy said, “BP co-wrote and agreed to every word in the Settlement Agreement,” including Juneau’s policy. “It is not surprising that the Courts have all told BP to honor its word,” they said in an emailed statement.
The 5th U.S. Circuit Court of Appeals has upheld the settlement in deeply split rulings with votes of 2-1 and 8-5.
BP’s attorneys said one federal appeals court has, like the 5th Circuit, ruled that groups bringing a class-action suit may include members who have not been injured by the defendant, but four have rejected such classes.
“The issues raised here are important to all companies, which depend on a fair and consistent application of the law when they choose to do business in the United States,” company spokesman Geoff Morrell said in an emailed statement. Upholding terms of the settlement reached in 2012 could lead companies to go to court rather than settle claims, “resulting in years of court proceedings and delayed justice for real victims,” he said.
Millions of gallons of oil gushed from BP’s Macondo well in the months after it blew wild on April 20, 2010, killing 11 men. The well was capped in July of that year.
BP says it has spent about $27 billion on response, cleanup, early restoration and claims payments, about $14 billion on response and cleanup and the rest in claims and other payments such as money to test seafood and grants for tourism campaigns in Gulf Coast states.
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