BP plc on Monday lost an attempt to remove the court-appointed administrator who has overseen the claims settlement fund for the Macondo well blowout for two years.
Patrick Juneau was appointed in 2012 to run the settlement claims stemming from the 2010 Gulf of Mexico disaster. However, BP in September asked that Juneau be removed, citing a "disqualifying conflict of interest" that he had failed to disclose at the time he was appointed (see Daily GPI, Sept. 4). Juneau briefly had been an advocate for Louisiana claimants as a lawyer.
U.S. District Judge Carl Barbier, who is overseeing the multi-district litigation in New Orleans, rejected BP's request. BP should have filed its concerns about Juneau and any bias issues sooner, said the judge.
"It is beyond cavil that BP had actual knowledge of Mr. Juneau's previous consulting work" for Louisiana and had discussed the claims administration job with him when vetting him for the position, Barbier said.
Barbier already has ruled in favor of Juneau's decision to pay millions in claims to businesses that weren't required to prove their losses were tied directly to the Macondo well blowout. The U.S. Court of Appeals for the Fifth Circuit in New Orleans issued split decisions regarding Barbier's ruling. BP has stated that it never intended to pay claims to businesses without proof. Terms of the original agreement required compensation for all businesses that met certain mathematical loss formulas, according to Barbier's ruling.
BP has appealed to the U.S. Supreme Court to sort out the claims process (see Daily GPI, Aug. 4). It has asked for a review of Juneau's interpretations and other court decisions that BP lawyers said render the original claims settlement invalid.
A trial in Barbier's court is set to begin in January to determine how much BP should pay in penalties for violations under the Clean Water Act. In a worst-case scenario, fines could exceed $18 billion. In its 3Q2014 earnings report, the company said the most recent estimate for the cost of the claims is $9.7 billion. However, claims are "likely to be significantly higher," according to CEO Bob Dudley.
BP said it is considering an appeal of Barbier's latest ruling.