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BP Rejected by Supreme Court on Macondo Payment Process

The U.S. Supreme Court on Monday rejected a request by BP plc to suspend payments for Macondo-related claims while the producer separately appeals the original claims settlement agreement.

The high court was asked to reverse an order issued by the U.S. Court of Appeals for the Fifth Circuit in New Orleans, which required BP to continue making claims payments while it pursued a separate request to review the claims settlement (see Daily GPIMay 29). The Fifth Circuit last month rejected by 8-5 an appeal by BP to block payments while the Supreme Court review continued (see Daily GPIMay 21May 20).

In a one-sentence order Monday, the Supreme Court said it would not put a hold on lower court rulings that required BP to begin making payments, which are part of a $9.2 billion accord reached in 2012 (BP Exploration v. Lake Eugenie Land, No. 13A1177).

The payments process now is to restart; it has been on hold since December. At issue is the landmark December 2012 agreement to pay claimants a total of $7.8 billion. Since then, the claims have escalated, raising the settlement costs to at least $9.2 billion. BP said the fund has been mishandled by the claims administrator (see Daily GPISept. 10; 2013July 16, 2013).

"BP looks forward to pursuing review by the U.S. Supreme Court of the Fifth Circuit's decisions relating to the compensation of claims with no apparent connection to the spill," a spokesman told NGI. "The company continues to believe that the lifting of the injunction suspending the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident."

Under its normal scheduling, the Supreme Court should decide later this year whether to review BP's agreement. with plaintiffs.

Co-counsel for the settlement class said Monday the decision by the high court to reject the petition "will allow businesses to continue to receive the compensation they are rightly entitled to, according to the objective, transparent formulas agreed to by BP."

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