Score one for the Gulf: The 5th Circuit Court of Appeals has upheld a lower court’s decision approving a multimillion dollar settlement with BP stemming from the April 2010 Deepwater Horizon oil spill.

On Jan. 10, the 5th Circuit Court of Appeals ruled (PDF) that BP’s claims that the U.S. Constitution prohibits paying a settlement to those that have not suffered an injury, or cannot prove their injuries were caused by the spill, were without merit. Instead, the appeals court said, U.S. District Judge Carl Barbier correctly found that the plaintiffs in the class action case had been damaged by the oil spill.

In a majority opinion, Judge W. Eugene Davis, who was joined by Judge James Dennis, said that the settlement agreement required those looking to be paid “meet the descriptions of one or more” of several damage categories laid out within the agreement. The judges found that the plaintiffs met those descriptions.

The 5th Circuit had previously halted some payments to the victims of the oil spill over allegations that Barbier had improperly approved rules set forth by Court Appointed Claims Administrator Patrick Juneau that had given an improper damages total. However, the 5th Circuit said that these discrepancies were not enough to overturn the agreement itself.

 “Today’s ruling is an enormous victory for the Gulf, and an important step forward in ensuring that every eligible claimant is fully compensated according to the objective, transparent formulas spelled out in the settlement agreement that BP co-authored and agreed to,” said attorneys Stephen Herman and Jim Roy, head of the committee that sued BP, in a statement to The Times-Picayune.

In his dissenting opinion, however, Judge Emilio Garza said that the majority opinion should not have ignored the Constitution’s requirement that claims be linked to causation. Garza wrote that “whether a class member was economically injured is immaterial if that loss was not caused by the oil spill” and that Administrator Juneau’s interpretation of the law eliminated “all causation requirements for a broad swath of the class.”


InsideCounsel has been on top of the ongoing BP oil spill case from the beginning. The most recent updates:

5th Circuit halts some BP oil spill payments

BP faces second leg of civil trial

Claims administrator says BP’s budget qualms an attempt to stall repayment

Texas sues BP over Gulf oil spill