Panel Rules BP Spill Claims Don’t Require Direct Harm

A federal appeals panel ruled Monday that businesses don’t have to prove that they were directly harmed by BP’s 2010 Gulf Of Mexico oil spill to collect settlement payments.

The ruling could clear the way for payments to resume from a settlement administrator after they were frozen.

By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans upheld a Dec. 24 ruling by U.S. District Judge Carl Barbier in New Orleans. Barbier ruled that BP had agreed to pay claims without requiring strict proof that losses were directly caused by the oil spill, and that the company’s arguments didn’t allow it to get out of the settlement it agreed to.

“We conclude the settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill,” Appeals Court Judge Leslie Southwick wrote.

Judge James Dennis affirmed the ruling separately.

It’s the latest decision in a legal back-and-forth over who BP owes money to following the nation’s largest oil spill. The same panel ruled in December that Barbier had to consider BP’s arguments. But Barbier ruled against the company.

Judge Edith Brown Clement dissented, writing that whatever BP agreed to in its settlement, courts should still make sure that only people with injuries got paid. She wrote that swearing that damage was caused by BP is not enough, and that lawyers have urged “uninjured plaintiffs” to file claims.

“The subsequent implementation has expanded those who can recover even to those who cannot trace their injuries to BP’s conduct,” she wrote.

The 2012 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. So far, the company has paid $3.84 billion, of which about $2.1 billion has gone to the businesses covered by Monday’s ruling.

Plaintiff’s lawyers Steve Herman and Jim Roy said BP can’t go back on the settlement.

“Today’s ruling makes clear that BP can’t rewrite the deal it agreed to,” they said in a statement.

For months, BP has argued that Barbier and settlement administrator Patrick Juneau misinterpreted settlement terms in ways that could force the company to pay for billions of dollars in bogus or inflated claims by businesses. The company indicated Monday it may appeal to the full 5th Circuit Court of Appeals.

“BP had asked the court to prevent payments to business economic loss (BEL) claimants whose alleged injuries are not traceable to the Deepwater Horizon accident and oil spill,” spokesman Geoff Morrell said in a statement.

On Dec. 5, Barbier temporarily suspended settlement payments to businesses while he reconsidered the company’s arguments. Barbier said Juneau’s office would continue accepting and processing business claims but wouldn’t make final decisions or payments until the matter was resolved. Juneau didn’t immediately respond to requests for comment Monday.