BP Moves Ahead with Medical Payments Under $9.2B Oil Spill Settlement

By Margaret Cronin Fisk and Laurel Brubaker Calkins | February 13, 2014

BP Plc. won the right to move ahead with implementing the medical-benefits portion of its $9.2 billion settlement of oil spill claims with Gulf Coast residents after an appeals court dismissed the remaining plaintiffs at their request.

Several groups of coastal residents and cleanup workers sued BP last year over claims its accord didn’t adequately compensate them for exposure to oil and chemical dispersants during the 2010 Gulf of Mexico spill.

They appealed a lower court’s approval of BP’s 2012 settlement of most private damage claims as “substantively unfair” to the estimated 200,000 victims who risk long-term health effects from chemical exposure from the spill.

The dismissal of the medical-benefit claims clears one of the last roadblocks to BP’s resolution of spill-related claims by most private parties. BP still faces claims for damages suffered by state and local governments, casinos, financial institutions and companies harmed by the Obama administration’s moratorium on deep-water drilling that followed the spill.

BP pleaded guilty in January 2013 to 11 counts of felony seaman’s manslaughter, two pollution violations and one count of lying to Congress in connection with the April 2010 Macondo well blowout and explosion that killed 11 workers and set off the worst offshore spill in U.S. history.

BP agreed to pay $4.25 billion in related criminal and civil penalties and faces as much as $17 billion in additional pending fines related to violations of the U.S. Clean Water Act.

Treated Differently

The appellants had complained that victims with the same injuries were treated differently under the accord, and that lawyers negotiating the deal traded away the interests of some victims to win greater benefits for other victims.

BP and lawyers leading the spill litigation urged the appeals court to dismiss the challenge, claiming the plaintiffs had no legal right to sue because they hadn’t filed medical- injury claims under the settlement.

When a lower-court judge agreed that the victims weren’t proper members of the settlement class, the plaintiffs voluntarily dropped their claims. The U.S. Court of Appeals in New Orleans yesterday dismissed the claims at their request.

Other Appeals

This appellate challenge to BP’s medical-benefits settlement is separate from other appeals against different aspects of BP’s overall economic-damages settlement. In one of those appeals, spill victims failed to overturn the court order approving BP’s economic-loss accord.

In other pending appeals, BP and some spill victims have challenged various settlement interpretations that the company says are inflating payments to claimants whose damages were improperly calculated or can’t be directly traced to the spill.

The appeal is In Re: Deepwater Horizon – Appeals of the Medical Benefits Class Action, 13-30221, U.S. Circuit Court of Appeals for the Fifth Circuit (New Orleans).

The underlying case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

–Editors: Mary Romano, Michael Hytha

 

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