A New Orleans appellate court Monday night rejected BP’s effort to block payments to businesses whose damage claims could not be traced to the Gulf of Mexico oil spill that followed the 2010 explosion of the Horizon Deepwater platform.
The U.S. Court of Appeals for the 5th Circuit rejected BP’s argument that a court-appointed claims administrator had wrongly interpreted and applied the terms of a settlement, resulting in payments to businesses that weren’t harmed by the spill.
In a 2 to 1 ruling, the court found that the claims administrator had followed procedures BP had agreed to in a settlement it reached with plaintiffs in 2012.
“The Settlement Agreement contained many compromises. One of them was to provide in only a limited way for connecting the claim to the cause,” the court said. “The claims administrator, parties, and district court can resolve real examples of implausible claims as they resolve other questions that arise in the handling of specific claims.”
Two leading lawyers on the plaintiffs’ steering committee, Steve Herman and Jim Roy, told the Washington Post, “Today’s ruling makes clear that BP can’t rewrite the deal it agreed to.”
Geoff Morrell, a BP spokesperson, said the company “disagrees” with the decision and “is considering its appellate options.”
BP estimated that the 2012 settlement it had agreed to would cost $7.8 billion in payouts. But the new price tag could be $9.2 billion.
BP has sold $38 billion in assets since the Deepwater Horizon disaster in the Gulf of Mexico,including $22 billion in 2013.
The disaster killed 11 men and caused the biggest oil spill in U.S. history.
The company said the provision to cover the spill’s clean-up, fines, compensation and legal costs had now risen to $42.7 billion from $42.5 billion last year.
BP pleaded guilty in 2012 and paid $5.26 billion to resolve criminal and civil charges brought by the federal government.
It still faces potential fines under the Clean Water Act of $18 billion or more if the government proves gross negligence led to the spill of 4.2 million barrels of crude.
BP is arguing for fines of about $2.7 billion.