Spill Victims Claim BP Wants Settlement Approval Reversed

Victims appealing BP Plc’s $9.6 billion settlement of most economic-damage claims from the 2010 Gulf of Mexico spill said the company also wants approval of the agreement reversed.

The victims’ lawyers said in a filing in the U.S. Court of Appeals in New Orleans that BP agreed with them that the accord didn’t meet the legal requirements for class action, or group, settlements. BP contends that the initial approval by a lower court has been “undermined” by the claims administrator’s interpretation of the settlement, the victims said.

“It was reversible error for the district court to approve a settlement that was susceptible to an interpretation that undermines commonality and typicality, and permits the payment of settlement benefits to persons clearly outside of the class definition of intended beneficiaries,” John Pentz, a lawyer for a group of spill victims appealing the settlement as unfair, said in today’s filing.

BP reached the agreement last year with most private-party plaintiffs. London-based BP has been fighting what it contends is a “misinterpretation” of deal terms by Patrick Juneau, its court-supervised claims administrator, that has swollen the estimated cost of the accord by almost $2 billion in the past year.

Scott Dean, BP’s spokesman, didn’t immediately respond to phone and e-mail requests for comment on today’s filing.

BP told the appeals court last month that the settlement can’t be approved if the dispute over claim payments isn’t resolved in the company’s favor. BP said it will be forced to pay billions of dollars in compensation to businesses that suffered no losses as a result of the worst offshore spill in U.S. history.

Lawyers leading litigation over spill damages have said BP has “buyer’s remorse” and shouldn’t be allowed to renegotiate a deal that’s proving more costly than expected.

The case is In Re Deepwater Horizon, 13-30095, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The lower-court case is In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

(Editors: Fred Strasser, Michael Hytha)