Appeals court upholds BP’s multibillion dollar oil spill settlement agreement

BP 435x292 Appeals court upholds BP’s multibillion dollar oil spill settlement agreementBP lost another battle it waged against the giant, multi-billion dollar settlement agreement that compensates victims of its 2010 Gulf oil spill when the 5th U.S. Circuit Court of Appeals on Friday upheld federal Judge Carl Barbier’s approval of the agreement.  

BP has repeatedly taken legal action against the agreement it helped design and approve as well as Judge Barbier, who affirmed it, and Patrick Juneau, who has administrated the fund since March 2012. BP has argued that a skewed interpretation of the agreement allows fictitious and inflated claims to be paid to businesses that weren’t truly impacted by the spill. BP asked the court to suspend claim payments and require that each claimant prove its losses were directly linked to the Gulf oil spill.

“No case cited by BP or the Objectors suggests that a district court must also safeguard the interests of the defendant, which in most settlements can protect its own interests at the negotiating table,” the appellate court’s 48-page ruling stated.

Judge Barbier and lawyers representing plaintiffs with claims against BP disputed the oil corporation’s stance, saying that BP knew and acknowledged that the agreement was designed to avoid the delays that would be created by having to trace each claim back to the spill.

Supporters of the uncapped agreement say that BP began backpedaling when it became clear the company would have to spend more than the $7.8 billion it originally projected it would cost to resolve the outstanding claims. BP issued a new estimate of $9.2 billion in October and has since said it expects the final sum to be even higher.

“This ruling is a victory for the people of the Gulf Coast, who may now continue with their efforts to restore their lives and livelihoods following the 2010 BP oil spill,” said Beasley Allen lawyer Rhon Jones, who is serving on the Plaintiffs’ Steering Committee for the ongoing oil spill litigation. “The settlement agreement – which BP itself helped craft and approved – lays out transparent, objective formulas to compensate the victims of the spill. For BP to come behind it at this point, simply because it is costing them more than they expected, is unconscionable. We’re pleased the Court has upheld Judge Barbier’s decision on behalf of the Plaintiffs.”


Beasley Allen
Times Picayune
Inside Counsel