A federal appeals court’s decision not to reconsider its previous decisions in appeals involving the Deepwater Horizon oil spill settlement means that BP PLC must pin its hopes on the U.S. Supreme Court.
An en banc panel of the U.S. Court of Appeals for the Fifth Circuit on Monday refused to rehear a pair of appeals involving administration of the agreement, which BP now pegs at $9.2 billion. BP alleges that claims administrator Patrick Juneau has misinterpreted the settlement’s terms so that businesses with no economic damages tied to the 2010 spill are collecting billions of dollars.
But the Fifth Circuit, ruling on both appeals, concluded that both sides had agreed upon specific criteria in the settlement’s terms—such as claimants’ proximity to the spill and certain mathematical formulas—to determine who gets paid. Juneau’s policies, the panel found, are in line with those terms.
Those criteria, Circuit Judge Leslie Southwick wrote, were “the compromise reached by the parties on how an extremely difficult part of the claims process was to be handled.” Juneau’s policies interpreting those terms clarified “that the compromise still controls even when its accuracy as a substitute for direct evidence of causation as to a particular claim is questionable.”
BP spokesman Geoff Morrell said in a written statement: “BP is disappointed that the full Fifth Circuit will not be considering the divided panel decisions relating to the compensation of claims for losses that have no apparent connection to the spill. The company is considering its legal options.”
BP, which has three months to petition the U.S. Supreme Court, found some support in dissents written by Justice Edith Brown Clement in both appeals. Of the 13 judges on the en banc court, she and four others voted to rehear both appeals.
“While our en banc court had the opportunity to address and clarify this issue for our circuit, confused as it was by two separate panel opinions on one essential, constitutional issue, it has declined to do so,” she wrote. “Admittedly, even this articulation would not have been enough for our sister circuits considering the deep split on this issue. Another court surely must resolve this.”
Although the U.S. Supreme Court has been inclined to review cases dealing with class certification, a potential petition by BP would be a long shot, said David Logan, dean of Roger Williams University School of Law in Bristol, R.I., who specializes in torts.
“It would be an unusual case to end up before the U.S. Supreme Court, even though clearly there’s a robust group of judges on the Fifth Circuit who think the case was decided incorrectly,” he said. “In the end, the chances are BP is going to swallow hard and recognize the contract they entered into was a bad one and they have to live with it.”
If the Supreme Court doesn’t take the case, the claims process moves forward. In a written statement, plaintiffs lawyers Stephen Herman of Herman Herman & Katz in New Orleans and James Roy of Domengeaux Wright Roy & Edwards of Lafayette, La., co-lead counsel for the class members in the settlement, said: “We are pleased that the court of appeals agreed that BP must honor its contract.”
Contact Amanda Bronstad at firstname.lastname@example.org.