BP Takes Spill Settlement Appeal to Full Fifth Circuit

BP Takes Spill Settlement Appeal to Full Fifth Circuit Photo: Diego M. Radzinschi/ NLJ Ted Olson of Gibson Dunn

BP PLC has petitioned the full U.S. Court of Appeals for the Fifth Circuit to review a three-judge panel’s decision to uphold the Deepwater Horizon oil spill settlement.

In a filing on Monday, BP asked the en banc court to review a lower court ruling that submitting proof of causation—in other words, that damages were caused directly by the 2010 disaster—wasn’t required under the terms of the settlement, which BP has now pegged to be worth about $9.2 billion. A divided Fifth Circuit panel of three judges upheld that order on March 3.

The panel’s decision, BP attorney Theodore Olson wrote, upholds an interpretation of the settlement that “rewrites the settlement agreement” and gives standing to businesses that “cannot establish a plausible nexus between their alleged injuries and the defendant’s conduct,” according to Monday’s petition.

The decision also conflicts with U.S. Supreme Court and Fifth Circuit precedents and “threatens to work an unprecedented expansion in the availability of class certification,” wrote Olson, a partner in the Washington office of Los Angeles-based Gibson, Dunn & Crutcher.

BP has argued that the claims administrator’s interpretations of the class settlement have led to payments to businesses that suffered no oil spill damages.

In BP’s petition, Olson argued that the three-judge panel relied on a Jan. 10 decision by a separate Fifth Circuit panel upholding class certification and approval of the settlement. BP also has filed a petition for en banc review of that decision.

“If these panels’ decisions were permitted to stand, they would work a revolution in class-action law in this Circuit, permitting the certification of classes that cannot be certified anywhere else in the country and improperly permitting hundreds of millions of dollars in windfall payments to large numbers of entities that were not harmed by the spill,” Olson wrote.

Contact Amanda Bronstad at abronstad@alm.com.

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