By JEF FEELEY and LAUREL BRUBAKER CALKINS
BP lost a bid to require businesses to provide proof their
economic losses were caused by the 2010 Gulf of Mexico oil
spill under a $9.2 billion settlement over the disaster.
US District Judge Carl Barbier in New Orleans, overseeing the
settlement of lawsuits spawned by the blowout of BPs
Macondo well, found the London-based oil company would have
to live with its agreement to pay billions of dollars in
business losses tied to the disaster. An appeals court
ordered Barbier in October to reexamine
accords terms to ensure claimants werent
receiving improper payouts.
In the settlement, BP agreed businesses in certain
geographical regions were presumed to have been harmed by the
oil spill if their losses followed a specific pattern,
Barbier concluded in Tuesday's ruling. As part of the accord,
BP agreed these claimants wouldnt have to prove a link
to the spill to recover, the judge said.
The company now contends claimants can only recover if they
have damages directly linked to the spill.
BPs current position is not only clearly
inconsistent with its previous position, it directly
contradicts what it has told this court regarding
causation of damages, Barbier said in his ruling.
BP officials said they plan to appeal Barbiers ruling
that claimants dont have to show their damages were
directly tied to the spill.
Awarding money to claimants with losses that were not
caused by the spill is contrary to the language of the
settlement and violates established legal principles,
Geoff Morrell, a BP spokesman, said in an e-mailed statement.
Business owners across the Gulf should be pleased that
Judge Barbier once again rejected BPs efforts to
rewrite history and the settlement, Steve Herman and
Jim Roy, leaders of a group of plaintiffs lawyers
overseeing the BP settlement, said in an e-mailed statement.
They said Barbier found the accords objective
formulas were the proper way to determine whether a
Barbier said because he had accepted BPs previous
position on the damages issue, he barred the company
from making future arguments that losses must be linked to
the spill to qualify for compensation.
BP this month won an appeals-court order stopping some
payments under the settlement until Barbier could sort out
which claims should be paid. The company has complained that
its spill payments were being wrongly inflated by hundreds of
millions of dollars in fictitious claims and
improperly calculated spill-related losses.
In two separate appeals before the US Court of Appeals in New
Orleans, BP argued that its settlement will be legally
unsupportable unless the companys interpretation
Imposing additional causation requirements as BP suggests
frustrates the parties attempt to reach a
final resolution of thousands of spill claims, Barbier
concluded. The delays that would result from having to
engage in a claim-by-claim analysis of whether damages
were directly caused by the spill would be unduly burdensome,
In another part of the decision, Barbier sided with BPs
arguments that spill-related business losses should be
calculated with properly matched revenue and expenses. He
reversed his previous ruling which supported an
interpretation by Claims Administrator Patrick Juneau that
some expenses and revenue need not be matched.
Juneau is responsible for overseeing settlement payments.
Barbier instructed Juneau to adopt and implement an
appropriate protocol or policy
for handling business
economic- loss claims in which the claimants financial
records do not match revenue with corresponding variable
The blowout of BPs deep-water Macondo well off the
Louisiana coast in April 2010 killed 11 people and sent
millions of barrels of oil spewing into the Gulf of Mexico.
The accident sparked thousands of lawsuits against BP, as
well as Transocean, owner of the Deepwater Horizon drilling
rig that burned and sank, and Halliburton, which provided
cement services for the well.
BP reached a settlement with most private plaintiffs in March
2012, just before a trial on liability for the incident was
to begin. BP initially valued the economic-loss settlement at
$7.8 billion. It put the cost at $9.2 billion in an Oct. 29
BPs settlement doesnt cover claims by financial
services institutions, casinos, businesses in certain parts
of Texas and Florida or companies claiming losses from the
deep-water drilling moratorium imposed by the Obama
administration following the spill.
The 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).