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BP Taking Macondo Payout Decision to Supreme Court

BP plc will ask the U.S. Supreme Court to review a ruling that would force the company to pay economic damages to businesses that haven't proved the Macondo well blowout directly caused their losses.

The London-based oil major, whose largest operations are in the United States, said Wednesday it would appeal the 8-5 ruling issued on Monday by the U.S. Court of Appeals for the Fifth Circuit in New Orleans (see Daily GPIMay 20).

The dissenting opinions by the circuit court “emphasize that the issues raised by BP ‘present questions of exceptional importance,’ reflect a deep divide in approaches among the federal appellate courts, and merit Supreme Court review,” a spokesman told NGI. “The Constitution and established class action law preclude certification of a class that includes substantial numbers of claimants who were not harmed by the spill and thus lack standing to bring suit.

“If the Fifth Circuit’s erroneous ruling were allowed to stand, it would fundamentally redefine the prerequisites for class membership. That, in turn, will surely alter the calculus for companies in determining whether to enter into class action settlements or engage in protracted litigation that would delay compensation for true victims.

“No company would agree to pay for losses that it did not cause, and BP certainly did not when it entered into this settlement. BP will continue to fight to return the settlement to its original, explicit, and lawful purpose -- the compensation of claimants who suffered actual losses due to the spill.”

BP also is asking the Fifth Circuit not to require that it make business economic loss payments during the appeals process. Suspension of the mandate would keep the stay of business economic loss payments in place during that time, the spokesman said.

BP negotiated a broad settlement agreement that some court decisions have argued requires businesses to be compensated for any losses associated with the massive spill, which shut down a portion of the Gulf Coast for four months. Citing BP's settlement with the Macondo plaintiffs steering committee, the majority circuit court rejected a request to prevent some compensation payments unless the businesses submitting claims could prove they were harmed directly by the oil spill.

The decision was handled by 13 circuit court judges en banc, with five voting for a rehearing. A 14th judge had indicated he would have joined the dissent. Another judge did not participate.

Because the circuit court rejected BP's appeal, it had only two choices, one being to appeal to the Supreme Court. The other would have required BP to continue paying for many of the claims determined to be legitimate by claims administrator Patrick Juneau. BP's lawyers long have argued that Juneau and his staff have misinterpreted the criteria in the claims settlement.

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