US court rejects BP appeal over Gulf oil spill losses

New York: A divided US appeals court on Monday rejected BP's bid to block businesses from recovering money over the 2010 Gulf of Mexico oil spill, even if they could not trace their economic losses to the disaster.

 US court rejects BP appeal over Gulf oil spill losses

Reuters

By a 2-1 vote, the 5th US Circuit Court of Appeals in New Orleans upheld a December 24 ruling by US District Judge Carl Barbier in New Orleans, authorizing the payments on so-called business economic loss claims. It also said an injunction preventing payments should be lifted.

Monday's decision is a setback for BP's effort to limit payments over the 20 April, 2010, explosion of the Deepwater Horizon drilling rig and rupture of BP's Macondo oil well.

The disaster killed 11 people and triggered the largest US offshore oil spill.

Barbier had ruled that BP would have to live with its earlier interpretation of a multi-billion dollar settlement agreement over the spill, in which certain businesses claiming losses were presumed to have suffered harm.

BP argued that this would allow businesses to recover for fictitious losses, but the 5th Circuit rejected its appeal.

"The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill," Circuit Judge Leslie Southwick wrote for the majority.

Terms of the settlement "are not as protective of BP's present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court," the judge added.

The 5th Circuit also said claims administrator Patrick Juneau retained the authority to root out bogus claims, without having to perform the "gatekeeping" function that BP sought.

BP spokesman Geoff Morrell said the London-based oil company disagreed with Monday's decision, believing that the claimants were not "proper class members" under the settlement. He said BP will consider a further appeal.

Lawyers for the claimants were not immediately available for comment. A spokesman for Juneau did not immediately respond to a request for comment.

Circuit Judge Edith Brown Clement dissented, saying the decision wrongly helps claimants whose losses had "absolutely nothing to do with Deepwater Horizon or BP's conduct."

BP originally projected that its settlement with businesses and individuals harmed by the spill would cost $7.8 billion. As of 4 February, it had boosted this estimate to $9.2 billion, and said this sum could grow "significantly higher."

As of Monday, about $3.84 billion had been paid out to 42,272 claimants, according to Juneau's website.

Reuters

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Updated Date: Mar 04, 2014 07:56:28 IST