BP to ask Supreme Court to hear claims issue
By KEVIN McGILL | The Associated Press May 21, 2014 2:22PM
Updated: May 21, 2014 2:22PM
NEW ORLEANS — BP PLC said Wednesday it will ask the U.S. Supreme Court to decide whether businesses must prove they were directly harmed by the 2010 Gulf Of Mexico oil spill to collect payments from a 2012 settlement.
The announcement came two days after judges of the 5th U.S. Circuit Court of Appeals voted 8-5 against reconsidering the issue. A three-judge panel of the circuit court in March had upheld a district court ruling that businesses did not need to prove direct harm.
BP initially estimated it would pay roughly $7.8 billion to resolve spill claims. The company later said the claims administrator was misinterpreting the settlement in ways that could add billions of dollars worth of bogus or inflated claims and it could no longer estimate the deal’s ultimate cost.
“No company would agree to pay for losses that it did not cause, and BP certainly did not when it entered into this settlement,” the company said in a news release.
BP also said it will ask the 5th Circuit to keep the current freeze on claims payments in place until the Supreme Court considers the issue.
Writing for the majority of the 5th Circuit Monday, Judge Leslie Southwick wrote that court exhibits include a 2012 policy statement, issued by the court-appointed claims administrator and developed with “input and assent from BP” that spelled out the criteria for business claims including geographic zones, types of businesses involved, formulas used to present the case for economic loss and “various presumptions regarding causation that apply to specific combinations of those criteria.”
There has been no dispute that some Gulf Coast businesses, including those that were tourism-based and fisheries-related interests, lost money because of oil on beaches or the closure of fishing waters after the spill. However, BP argues that the claims administrator’s interpretation of the 2012 settlement, using pre- and post-spill revenue and expenses, has led to unwarranted claims from businesses with losses that cannot be linked to the spill. Examples cited by the oil giant — and in a strongly worded 5th Circuit dissent by Judge Edith Brown Clement — include a wireless telephone company that burned to the ground and an RV park that closed before the spill.
Clement, in her dissent Monday, said the majority ruling upholding such claims made the court “party to this fraud.”
BP cited that dissent in its news release announcing plans to seek Supreme Court review.
“The dissenting opinions emphasize that the issues raised by BP ‘present questions of exceptional importance,’ reflect a deep divide in approaches among the federal appellate courts, and merit Supreme Court review.
The oil spill resulted from the April 20, 2010, explosion of BP’s Deepwater Horizon rig off the coast of Louisiana. The explosion killed 11 workers and resulted in the worst offshore spill in U.S. history.
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.