WASHINGTON -- The U.S. Supreme Court has rejected BP's challenge to its multibillion-dollar settlement agreement over the April 20, 2010, Deepwater Horizon drilling rig explosion and BP Macondo oil well rupture and spill in the Gulf of Mexico, which the oil company complained has allowed payouts to some businesses that are unable to trace their losses to the disaster, reported Reuters.
The court's decision not to hear the London-based company's appeal is the latest setback for BP, which is trying to limit payments over a disaster that killed 11 people and triggered the largest U.S. offshore oil spill.
The action, disclosed in an unsigned order, means BP must make the payments as it continues to deal with the spill's aftermath. The court's decision makes the economic and property damage settlement final, starting a six-month deadline for filing claims, plaintiffs' attorney Joe Rice told the Associated Press.
BP signed a settlement agreement in 2012 to compensate businesses claiming financial losses due to the spill. But BP has since argued the agreement has been interpreted improperly by Patrick Juneau, the settlement fund's court-appointed administrator, forcing it to pay businesses that could not show damages.
The challenge involved business economic loss claims, a key part of the settlement. BP has paid $2.3 billion in such claims out of $4.25 billion in total compensation to individuals and businesses, according to Juneau.
Geoff Morrell, BP America's senior vice president of U.S. communications and external affairs, issued the following statement on December 8 in response to the Supreme Court's denial of BP's request to review the Fifth Circuit decisions relating to the compensation of claims for losses with no apparent connection to the Deepwater Horizon spill:
When it became apparent that the settlement agreement was being misinterpreted, we sought a remedy in the courts. We were successful before the Fifth Circuit in correcting the "matching" accounting rules fashioned in error by the claims program, and we are hopeful that the new policies will improve the program's compliance with the terms of the settlement agreement. Unfortunately, however, the Supreme Court has declined to review the lower court decisions relating to causation.
We nevertheless remain concerned that the program has made awards to claimants that suffered no injury from the spill--and that the lawyers for these claimants have unjustly profited as a result. On behalf of all our stakeholders, we will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered. In doing so, we hope to prevent further exploitation of our commitment to compensating all those legitimately harmed by the spill.
Two lawyers representing plaintiffs, Stephen Herman and James Roy, said in a statement cited by Reuters that the court's action was "a huge victory for the Gulf and should finally put to rest BP's two-year attack on its own settlement."
BP has estimated it will pay $9.7 billion to plaintiffs represented by the plaintiffs' steering committee, but says this could grow significantly.
BP has cited various claims it wanted to contest, including a Mississippi hotel awarded more than $450,000 despite being closed for several months due to an unrelated fire and a Louisiana nursing home awarded $662,000 despite having closed down before the spill, said the report.
The settlement process is separate from other spill-related proceedings. BP has settled U.S. criminal charges, agreeing to pay $4.5 billion in fines. BP is preparing for a January trial over whether it should pay up to $18 billion in Clean Water Act penalties. It has put aside $43 billion to resolve all claims.
The case is BP Exploration and Production Inc. v. Lake Eugenie Land and Development Inc., U.S. Supreme Court, No. 14-123.
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