The U.S. Supreme Court has been asked by BP plc to review a mandate that would require the producer to continue paying Macondo-related oil spill settlement claims regardless of whether the original agreement is determined to be fair.
The claims payments to individuals and businesses that claimed to be impacted by the Gulf Coast oil spill in 2010 have been on hold since December after a federal district court issued an injunction (see Daily GPI, Dec. 3, 2013; Oct. 4, 2013). The U.S. Court of Appeals for the Fifth Circuit in New Orleans rejected by 8-5 an appeal by BP to halt claims payments while the terms of of the original claims settlement were reviewed; BP then appealed that decision to the Supreme Court (see Daily GPI, May 21; May 20).
After BP lost its appeal, U.S. District Judge Carl Barbier, who is overseeing the multidistrict litigation, on Wednesday ordered claims administrator Patrick Juneau to resume the claims payouts. The Fifth Circuit agreed and mandated that the payment process continue.
BP now is appealing that decision separately to the Supreme Court. The second case is to be heard by Justice Antonin Scalia alone, who handles emergency orders regarding the Fifth Circuit. Unless the claims payments are blocked, “countless awards totaling potentially hundreds of millions of dollars will be irreparably scattered to claimants that suffered no injury traceable to BP’s conduct,” said BP’s new court filing.
“BP has applied to the U.S. Supreme Court for an order recalling and staying the Fifth Circuit’s mandate that…resulted in the lifting of the injunction suspending the payment of business economic loss claims,” said spokesman Geoff Morrell. “As noted in BP’s filing, unless the mandate is recalled and stayed, hundreds of millions of dollars could be irretrievably scattered to claimants that suffered no injury traceable to the spill.
“Separately, BP has announced that it will seek Supreme Court review of the underlying Fifth Circuit decisions concerning the settlement’s causal-nexus requirement and class certification.”
A BP spokeswoman told NGI on Thursday that there is no time limit for Scalia, who may act on BP’s request or refer the matter to the nine justices as a whole. Unless Scalia or the justices as a whole act to recall the circuit court’s mandate or issue a temporary stay, the injunction would be lifted and the payments process would restart.
The original claims settlement agreement reached in 2012 by BP and the claims committee was $7.8 billion. To date, BP has paid $3.88 billion in settlement claims to more than 44,200 claimants, according to Juneau’s office.
BP had set aside a total of $42.7 billion for the oil spill costs, including cleanup efforts. The oil major doesn’t have an estimate on how much more it might be liable for regarding all of the oil spill claims, the spokeswoman said. “As to how much in claims we’ve paid to date, it’s more than $12 billion in claims to individuals, government entities and businesses…”
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