Despite the company’s entreaties, the U.S. Supreme Court has decided to leave in place BP’s multibillion-dollar settlement of private claims resulting from the 2010 Deepwater Horizon oil spill disaster.
The justices did not comment Monday on their reasons for refusing to consider BP’s appeal of a lower court’s ruling that businesses do not have to prove that the April 20, 2010, oil spill caused them direct financial losses in order to collect from the 2012 settlement.
Lafayette lawyer Patrick Juneau, the court-appointed claims administrator, said in a brief statement that the high court’s ruling means “the issue of whether there is a valid and binding settlement is now settled once and for all.”
The class-action settlement was intended to avoid piecemeal litigation by resolving hundreds of thousands of claims for economic damages from one of the worst environmental disasters in U.S. history. To simplify things, the pact called for treating all claimants who lived in a certain area along the Gulf Coast similarly if they could show a loss of income after the disaster, regardless of the reason for that loss.
BP and the Plaintiffs’ Steering Committee, the group of lawyers who reached the deal, jointly heaped praise on the settlement during a fairness hearing in late 2012, urging U.S. District Judge Carl Barbier to approve it.
Since then, however, a two-year legal battle over the settlement’s terms has been playing out in federal district and appeals courts. The legal wrangling reached a height this year after the full 5th U.S. Circuit Court of Appeals refused to reconsider a three-judge appellate panel’s ruling reaffirming the pact. The panel agreed with Barbier that, even though some plaintiffs not harmed by the oil spill could receive money, BP knew as much when it agreed to the deal in order to avoid having to litigate each case individually.
Since opening in June 2012, the settlement program has processed more than 217,100 claim forms, federal court records show. As of Oct. 31, the program had issued eligibility notices affirming the validity of more than 75,300 claims, with payment offers totaling almost $5.3 billion. Almost 70,800 claims had been paid, adding up to more than $4.2 billion.
That money is in addition to $400 million that already was in the pipeline when Juneau took over from lawyer Kenneth Feinberg, whose earlier claims facility paid out $6.1 billion to more than 221,000 claimants.
Louisiana residents have accounted for 26 percent of the overall damage claims, second to Florida.
BP spokesman Geoff Morrell said Monday that the company will “continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered.”
He said BP “remains 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.”
The 5th Circuit ruling consolidated two issues: the validity of the entire settlement and whether businesses must show the spill caused their losses. BP had asked the Supreme Court to review both decisions.
Stephen Herman and James Roy, co-lead counsel for the plaintiffs, said the high court’s action marked “a huge victory for the Gulf and should finally put to rest BP’s two-year attack on its own settlement process.”
“With its order, the Supreme Court held — as had the lower courts — that BP must stand by its word and honor its contract,” they said in a statement.
Legal experts had believed that the British oil giant faced long odds in getting the Supreme Court to hear the case. The high court receives about 10,000 appeals each year and hears arguments in only about 80 cases.
After BP spent the past year arguing in court filings and ads in national newspapers that the settlement was being misinterpreted, some experts following the case noted that Monday’s ruling was a hard blow to the company’s recent legal strategy.
“They certainly spent a lot of money trying to turn public opinion in their favor and turn the legal system in their favor, and I think they failed on both of them,” said David Logan, a law professor at Roger Williams University in Rhode Island.
Eleven men died when the Deepwater Horizon drilling rig caught fire and exploded about 50 miles off the Louisiana coast in 2010. Millions of barrels of oil poured into the Gulf of Mexico, into wetlands and onto the beaches of the Gulf Coast.
Follow Richard Thompson on Twitter, @rthompsonMSY.