Court Rejects BP’s Gulf Spill Settlement Appeal

February 2014, Vol. 241 No. 2

One of BP’s attempts to curb pay outs for what it says are “fictitious” and “absurd” claims related to the 2010 Deepwater Horizon oil spill has failed after an appeal was rejected by a U.S. court, according to Reuters.

BP argued the administration of a 2012 settlement was faulty because it allowed claimants without actual damages to join in. But a panel of the 5th U.S. Circuit Court of Appeals on Jan. 10 affirmed a federal judge’s approval of the multibillion dollar settlement between the oil company and businesses and individuals who lost money and property in the spill.

The court’s findings said that the company had failed to explain “how this court or the district court should identify or even discern the existence of ‘claimants that have suffered no cognizable injury.’” BP said in a written statement the following day it was assessing its legal options. “BP will continue to press its position on the proper interpretation of the settlement agreement’s provisions requiring a causal nexus between a claimant’s injury and the spill.”

BP spokesman Geoff Morrell said the company had originally projected its settlement in the case would cost $7.8 billion. As of late October it had boosted the total to $9.2 billion, and said the sum could grow “significantly higher” with billions of dollars already having been paid out to claimants, including hotel owners to oyster gatherers. Among the claims BP protested is one for $21 million from a Louisiana rice mill, located 40 miles from the coast that earned more revenue in 2010 than in any of the previous three years.

BP still faces potential fines under the Clean Water Act. It has filed numerous lawsuits to curb pay outs related to the spill after taking provisions for $42.4 billion to cover the clean-up, compensation and fines.

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