BP asks U.S. Supreme Court to hear its oil spill settlement case

BP 435x292 BP asks U.S. Supreme Court to hear its oil spill settlement caseAs if causing the worst environmental disaster in the nation’s history weren’t enough of a blow to the U.S., BP appears determined to waste millions of taxpayer dollars by fighting every court decision until it gets the outcome it demands.

On Friday, BP filed a petition to the U.S. Supreme Court, claiming the New Orleans federal court and the U.S. Fifth Circuit Court of Appeals wrongly approved the multi-billion dollar settlement that the oil giant itself helped draft and then approved in March 2012. BP has been trying to suspend payments on claims to businesses harmed by the 2010 Deepwater Horizon oil spill and overturn its agreement ever since last summer, when it became clear that the actual cost of settling thousands of outstanding claims far exceeded BP’s estimations.

Given the sheer number of claims and the complexity of the litigation, BP and plaintiffs’ lawyers created and approved an uncapped agreement with a formula that would allow claims to be settled as quickly and efficiently as possible. At the time, BP conceded that streamlining the claims process could result in some “false positives” or what it later called “fictitious claims.”

Seeking judicial approval of the settlement, Richard Godfrey, BP’s lead attorney, said in 2012:

“Like any settlement, the settlement that has been reached to resolve this litigation is a compromise, a yielding of the highest hopes in exchange for certainty and resolution. The settlement stands alone, however, in its substantive generosity to the class members and in its procedural fairness.”

However, “BP has changed directions on its argument in the last year,” according to WWL-TV New Orleans. “BP lawyer Ted Olson, a former U.S. Solicitor General, initially argued in the 5th Circuit that BP agreed to pay businesses whose losses were not from the spill as part of a compromise, then later claimed that it should not have to pay anyone whose losses were from anything other than the spill.”

In March, the appellate court struck down BP’s latest attempt to undo the settlement, prompting it to urge the U.S. Supreme Court to hear its case. The Supreme Court already rejected a petition BP submitted in June to keep all payments on claims it is challenging frozen pending.

BP alleges that Patrick Juneau, the court-appointed oil spill claims administrator, has “hijacked’ the claims process. The oil giant accuses Mr. Juneau of honoring about $622 million in claims it says are false or inflated.

WWL-TV New Orleans
Bloomberg BusinessWeek