The U.S. 5th Circuit Court voted 8-5 to not hear two BP appeals that were previously denied in March. This decision could start up the oil spill claim payment process again, a process that has been stalled for almost eight months.
In March of this year, the 5th Circuit Court of Appeals, in a 2-1 vote, authorized payments on business economic loss claims and lifted an injunction preventing these payments. BP’s goal is to stop payments to businesses attempting to recover money over the 2010 Gulf of Mexico oil spill. BP has argued that the Settlement has been misinterpreted allowing hundreds of businesses to be paid for losses unrelated to the oil spill that devastated the Gulf Coast in April 2010. In another appeal, BP argued that court-appointed claims administrator Patrick Juneau had improperly expanded the class of claimants covered by the settlement.
After the three-panel decision in March, BP requested that the entire 5th Circuit rehear the case. The 5th Circuit has voted 8-5 to let the March ruling stand, according to a court filing made public yesterday.
Maritime attorneys note that BP has been trying to wriggle out of its Settlement since last summer and was successful in staying the claims payments last fall. As mentioned above, BP lost before the Fifth Circuit panel in March, but claims have not been paid for months.
On Monday, the appeals court held that BP agreed to terms that clearly set up a formula to establish whether a business claimant suffered from the oil spill, and this formula avoids having to check if each individual business’ losses were really due to the spill or not. The majority ruled that the formula “was the compromise reached by the parties on how an extremely difficult part of the claims process was to be handled” and Juneau’s interpretation “simply states that the compromise still controls even when its accuracy as a substitute for direct evidence of causation as to a particular claim is questionable.”
BP was originally accepting of the “false positives” saying that they were “inevitable,” however, it changed its position later on, arguing that claimants should have to prove that the Spill, and not something else, caused their losses.
Judge Edith Clement dissented stating, “today the court approves a class action settlement agreement that permits payment for economic losses without regard to whether such losses resulted or may have resulted from a cause other than the Deepwater Horizon oil spill. Left intact, our holdings funnel BP’s cash into the pockets of undeserving non-victims. These are certainly absurd results. And despite our colleagues’ continued efforts to shift the blame for these absurdities to BP’s lawyers, it remains the fact that we are party to this fraud….”
BP’s Vice President expressed the company’s disappointment in the decision stating that it plans to further explore its legal options. Based on previous statements made by BP’s Appellate lawyer, BP will likely take the case to the U.S. Supreme Court.
According to an Eyewitness News Report, the District Court’s injunction could be lifted in seven days, when something called the “mandate” related to the denial of rehearing is issued. But BP could also keep the stay in place by going to the Supreme Court and preventing the mandate from being issued.