Share

What Concerns BP About Gulf Oil Spill Settlement

Michael Kunzelman
Published: November 4, 2013

Getty Images

A dead crab is seen in a piece of marsh in Ocean Springs, Miss. The marsh was covered in oil after the BP oil spill of April, 2010. Photo by Mario Tama/Getty Images)

NEW ORLEANS  -- A year ago, lawyers for BP and Gulf Coast residents and businesses took turns urging a federal judge to approve their settlement for compensating victims of the company's massive 2010 oil spill.

On Monday, however, the one-time allies will be at odds when an appeals court hears objections to the multibillion-dollar deal. That's because several months after U.S. District Judge Carl Barbier approved the settlement, BP started complaining that the judge and court-appointed claims administrator were misinterpreting it. The London-based oil giant is worried it could be forced to pay billions of dollars more for bogus or inflated claims by businesses.

(MORE: Oil Spill Damaged Sea-Floor Life for Miles)

Plaintiffs' attorneys who brokered the deal want the 5th U.S. Circuit Court of Appeals to uphold the class-action settlement.

As of Friday, payments have been made to more than 38,000 people and businesses for an estimated $3.7 billion. Tens of thousands more could file claims in the coming months.

The settlement doesn't have a cap, but BP initially estimated that it would pay roughly $7.8 billion to resolve the claims. Later, as it started to challenge the business payouts, the company said it no longer could give a reliable estimate for how much the deal will cost.

The dispute centers on money for businesses, not individuals. Awards are based on a comparison of revenues and expenses before and after the spill. BP says a "policy decision" that claims administrator Patrick Juneau announced in January has allowed businesses to manipulate those figures in a way that leads to errors in calculating their actual lost profits.

Last month, a different 5th Circuit panel threw out Barbier's rulings on the dispute and ordered him to craft a "narrowly-tailored" injunction that modifies the damage calculations.

The lead plaintiffs' attorneys said the panel's decision has no effect on the separate appeal of Barbier's December 2012 approval of the settlement.

"The processing and payment of (business) claims has not in any way affected the fair, reasonable and adequate compensation paid under the Settlement Agreement's transparent and objective criteria to any Objector or any other member of the class," they wrote.

BP wants the court to adopt its interpretation of the settlement terms for businesses. If it does, the "otherwise fatal obstacles" would be eliminated and the entire settlement could be upheld, the company told the 5th Circuit.

BP is not the only one questioning Barbier's December 2012 approval of the settlement. Attorney Brent Coon, of Beaumont, Texas, argued that a rush to "close the deal" resulted in a settlement program "mired in implementation problems." He did not have a role in negotiating the settlement but filed one of several formal objections, seeking revisions to the agreement.

"Too much random guess work was needed to determine whether an individual's claim was eligible for settlement funds or not," he wrote.

Juneau's office began issuing settlement payments on July 31, 2012. As of Friday, tens of thousands of claimants have received settlement offers worth more than $4.9 billion.

BP spokesman Geoff Morrell said the 5th Circuit's ruling last month concluded that Juneau's interpretations of the settlement "do not withstand scrutiny under the law."

"If they are not corrected, the settlement class cannot be certified and the settlement should be set aside, ending what once promised to be an historic effort to benefit those who experienced losses as a result of the spill," he said in a statement.

MORE: Are Famous Landmarks Being Threatened


Featured Blogs

Invest 99L in Western Caribbean a Threat to Develop on Monday

By Dr. Jeff Masters
August 30, 2014

A tropical wave in the Western Caribbean was designated Invest 99L by the National Hurricane Center on Friday night, and is headed west-northwest at about 15 mph. Although conditions are favorable for development, 99L will likely not have enough time to develop before crossing Mexico's Yucatan Peninsula on Sunday. Conditions will be even more favorable for development on Monday when the wave will emerge in the Gulf of Mexico's Bay of Campeche.

Death Valley ‘Sliding Rocks’ Mystery Resolved

By Christopher C. Burt
August 29, 2014

An article published in the science journal PLOS ONE on August 27th by scientists from the Scripps Institution of Oceanography has finally put to rest the mystery of the ‘sliding’ rocks of Racetrack Playa in Death Valley.

Live Blog: Tracking Hurricane Arthur as it Approaches North Carolina Coast

By Shaun Tanner
July 3, 2014

This is a live blog set up to provide the latest coverage on Hurricane Arthur as it threatens the North Carolina Coast. Check back often to see what the latest is with Arthur. The most recent updates are at the top.

Tropical Terminology

By Stu Ostro
June 30, 2014

Here is some basic, fundamental terminology related to tropical cyclones. Rather than a comprehensive and/or technical glossary, this represents the essence of the meaning & importance of some key, frequently used terms.

2013-14 - An Interesting Winter From A to Z

By Tom Niziol
May 15, 2014

It was a very interesting winter across a good part of the nation from the Rockies through the Plains to the Northeast. Let's break down the most significant winter storms on a month by month basis.

What the 5th IPCC Assessment Doesn't Include

By Angela Fritz
September 27, 2013

Melting permafrost has the potential to release an additional 1.5 trillion tons of carbon into the atmosphere, and could increase our global average temperature by 1.5°F in addition to our day-to-day human emissions. However, this effect is not included in the IPCC report issued Friday morning, which means the estimates of how Earth's climate will change are likely on the conservative side.