On Friday, Jan. 10, a panel of the 5th U.S. Circuit Court of Appeals affirmed federal Judge Carl Barbier’s ruling approving the multi-billion dollar settlement agreement between BP Plc and businesses and individuals financially harmed by the 2010 oil spill in the Gulf of Mexico.
“This ruling is a victory for the people of the Gulf Coast, who may now continue with their efforts to restore their lives and livelihoods following the 2010 BP oil spill,” said Beasley Allen lawyer Rhon Jones, who is serving on the Plaintiffs’ Steering Committee for the ongoing oil spill litigation. “The settlement agreement – which BP itself helped craft and approved – lays out transparent, objective formulas to compensate the victims of the spill. For BP to come behind it at this point, simply because it is costing them more than they expected, is unconscionable. We’re pleased the Court has upheld Judge Barbier’s decision on behalf of the Plaintiffs.”
For the past several months, BP’s lawyers have been attempting to void the agreement, saying its terms had been “misinterpreted,” forcing them to pay “bogus” or inflated claims by businesses. BP has been trying to undo the uncapped settlement agreement since it became apparent that the cost of resolving outstanding claims would exceed its original estimation of $7.8 billion. By October, BP’s estimate for anticipated payments under the uncapped settlement had grown to $9.2 billion, and the company expected the total to go even higher.
BP took the issue to the U.S. 5th District Court of Appeals in November, after Judge Barbier denied the company’s attempts to block payments. In December, two of the judges on the three-judge panel intervened, ordering Judge Barbier to block any and all claims payments to businesses whose “injuries are not traceable to the spill.” The order brought claims payments to a screeching stop.
However, Judge Barbier, who is overseeing oil-spill litigation in New Orleans, rejected BP’s protests that damage claims should not be paid to businesses that can’t prove their losses were directly caused by the 2010 disaster. He said that BP cannot assume a new position on the causation of damages and reverse a settlement agreement that it once deemed “more than fair,” even if abiding by it led to payouts significantly higher than the company’s original projections.