BP Spill Compensation Revisited

Judge suspends payments to consider criteria for tracing claims directly to disaster


NEW ORLEANS -- A federal judge has temporarily suspended BP oil spill settlement payments to businesses while he reconsiders the company's arguments against compensating those that cannot trace losses directly to the nation's worst offshore oil spill, reported the Associated Press.

U.S. District Judge Carl Barbier issued an order Thursday noting the claims office will continue taking and processing business claims, but won't make final decisions or payments until the matter is settled.

BP is trying to block what could be hundreds of millions of dollars in payments to Gulf Coast businesses

A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled Monday that Barbier must reconsider BP PLC's arguments.

BP last month asked for an injunction halting payments to claimants whose injuries weren't traceable to the spill, contending the New Orleans federal judge overseeing the case ignored the appellate court's Oct. 2 mandate to review claims, said a Bloomberg report. The settlement agreement provided a formula for calculating payments to businesses without requiring proof that losses were caused by the spill.

"The district court erred by not considering the arguments on causation," the appellate panel said yesterday in a two-to-one decision, agreeing to the halt. "The issue of causation is again remanded for expeditious consideration."

BP is challenging Barbier's decision upholding the interpretation of the agreement by the settlement's claims administrator. BP claimed the administrator, Patrick Juneau, approved millions of dollars in payments to businesses for "fictitious" economic losses that weren't related to the spill.

The appeals court in New Orleans in October sent the dispute back to Barbier to review his interpretation of some of the accord's terms. The panel also ordered Barbier to stop some payments under the settlement until he can sort out who has legitimate claims.

The appeals panel repeated those orders, acknowledging that it may have confused matters by issuing a divided opinion in October.

"This court's expressing its views through two different opinions may have created interpretive difficulties on the remand," the court said.