BP Can’t Hold Spill Payments Until Supreme Court Hears Settlement Appeal

By Margaret Cronin Fisk and Laurel Brubaker Calkins | May 27, 2014

BP Plc can’t delay writing checks for hundreds of millions of dollars in damage claims while it asks the U.S. Supreme Court to review disputed payments in its $9.2 billion accord over the 2010 Gulf of Mexico oil spill.

The U.S. Court of Appeals in New Orleans Tuesday rejected BP’s request to extend a halt on payments to businesses that can’t directly prove they were damaged by the spill while the company seeks review by the Supreme Court.

A trial judge in December suspended payments to all businesses harmed by the spill, even those with losses unquestionably linked to the disaster, while the appeals court weighed BP’s concerns. On May 19, the entire New Orleans appellate court refused to reconsider its earlier rejection of BP’s complaint that its claims administrator was misinterpreting the accord and approving hundreds of millions of dollars in “fictitious” claims.

BP settled with most private-party plaintiffs in 2012, initially estimating the cost of the agreement at $7.8 billion. The company contends a flawed interpretation by the claims administrator has raised the price to $9.2 billion or more.

Geoff Morrell, a spokesman for the London-based company, didn’t immediately respond to telephone or e-mail requests for comment on the decision.

‘Buyer’s Remorse’

Lawyers for spill victims have accused BP of “buyer’s remorse” and trying to renege on a settlement that is proving more costly than anticipated.

“We are pleased that the court has refused BP’s latest request to further delay claims payments,” Steve Herman and Jim Roy, lead attorneys for the spill victims, said in an e-mailed message today.

The appeal is In Re Deepwater Horizon, 13-30095, 13-30315, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The lower-court case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

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Latest Comments

  • May 29, 2014 at 1:45 pm
    shirley says:
    if the judge has made his ruling then why bp not been given a time limit as to when payments need to be made..all the waiting is putting more and more stress on people waiting... read more
  • May 28, 2014 at 4:07 pm
    Sherman Barnes says:
    The ruling may not make much difference. My company filed 12/05/12 and was not even put under review till 6/13. They can stall the process by slowing down the reviews, because... read more
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