Court opens door to BP settlement appeals

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A federal appeals court has opened the door for BP to appeal some claims related to a settlement reached after the 2010 Gulf of Mexico oil spill.

The 5th U.S. Circuit Court of Appeals in New Orleans ordered a lower court judge to change a procedure that effectively blocked appeals. And the appeals court told the judge to reconsider a rule barring BP from appeals regarding the calculation of a business’ losses.

However, the court upheld the lower court’s ruling that barred appeals dealing with payments to nonprofit groups. And, it said the court could continue to prevent appeals arising from BP’s contention that something other than the oil spill caused some businesses’ losses — an issue the oil giant has fought unsuccessfully for years.

The opinion released late Friday is the latest dealing with a 2012 settlement of oil spill economic loss litigation. The settlement agreement was hailed by all involved when it was signed but soon became the subject of contention over the way it was interpreted by the district court in New Orleans and the court-appointed claims administrator.

BP eventually won a change in the way losses are calculated after arguing that administrator Patrick Juneau wasn’t correctly matching businesses’ revenue and expenses. The appeals court, noting that the methodology has changed and has been the subject of numerous developments that “muddy the waters,” told the district court, where U.S. District Judge Carl Barbier, is overseeing spill cases, to take another look at the issue, and to provide reasons if the bar is continued.

In 2012, BP estimated it would pay about $7.8 billion to resolve claims under the settlement. A fourth-quarter earnings statement put the estimate at closer to $10 billion, while noting that there were various factors that could change that number.

BP and lawyers pursuing claims both found something to like in Friday’s ruling.

“We are pleased that the 5th Circuit upheld our right to appeal individual claims determinations,” company spokesman Geoff Morrell said in an emailed statement. The company did not estimate how the decision might affect the cost of claims.

“With regard to ‘alternative causation,’ we’re pleased the 5th Circuit saw through BP’s latest attempt to re-fight an issue that it has lost on every level,” plaintiffs’ attorneys Steve Herman and Jim Roy said in an email. “We’re further pleased the court shut the door on BP’s effort to deny the claims of nonprofit organizations.”

Republished with permission of The Associated Press.

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