By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans
upheld a December 24 ruling by U.S. District Judge Carl Barbier in
New Orleans, authorizing the payments on so-called business economic
loss claims. It also said an injunction preventing payments should
Monday's decision is a setback for BP's effort to limit payments
over the April 20, 2010, explosion of the Deepwater Horizon drilling
rig and rupture of BP's Macondo oil well.
The disaster killed 11 people and triggered the largest U.S.
offshore oil spill.
Barbier had ruled that BP would have to live with its earlier
interpretation of a multi-billion dollar settlement agreement over
the spill, in which certain businesses claiming losses were presumed
to have suffered harm.
BP argued that this would allow businesses to recover for fictitious
losses, but the 5th Circuit rejected its appeal.
"The settlement agreement does not require a claimant to submit
evidence that the claim arose as a result of the oil spill," Circuit
Judge Leslie Southwick wrote for the majority.
Terms of the settlement "are not as protective of BP's present
concerns as might have been achievable, but they are the protections
that were accepted by the parties and approved by the district
court," the judge added.
The 5th Circuit also said claims administrator Patrick Juneau
retained the authority to root out bogus claims, without having to
perform the "gatekeeping" function that BP sought.
Circuit Judge Edith Brown Clement dissented, saying the decision
wrongly helps claimants whose losses had "absolutely nothing to do
with Deepwater Horizon or BP's conduct."
BP spokesman Geoff Morrell said the London-based oil company
disagreed with Monday's decision, believing that the claimants were
not "proper class members" under the settlement. He said BP will
consider a further appeal.
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Steve Herman and Jim Roy, who represent the business claimants, said
in a joint statement: "Today's ruling makes clear that BP can't
rewrite the deal it agreed to."
A spokesman for Juneau did not immediately respond to a request for
BP originally projected that its settlement with businesses and
individuals harmed by the spill would cost $7.8 billion. As of
February 4, it had boosted this estimate to $9.2 billion, and said
this sum could grow "significantly higher."
As of Monday, about $3.84 billion had been paid out to 42,272
claimants, according to Juneau's website. (http://www.deepwaterhorizoneconomic
The case is In re: Deepwater Horizon, 5th U.S. Circuit Court of
Appeals, Nos. 13-30315 and 13-30329.
(Reporting by Jonathan Stempel in New
York; additional reporting by Mica Rosenberg; editing by Andre Grenon and Ken Wills and Miral Fahmy)
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