Online news for Borealis - Powered by ICIS news

HSE and Industry Associations

US judge denies BP's block from $8.7bn Deepwater Horizon settlement

ICIS News : 5-Apr-13 18:23

HOUSTON (ICIS)--A US federal judge on Friday denied BP’s request to block potentially billions of dollars in business economic loss claims in the economic and property damage settlement from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

At a hearing on Friday, District Court Judge Carl Barbier upheld claims administrator Patrick Juneau’s interpretation of the settlement agreement after the UK oil giant had filed for an injunction to halt certain payments from claim payouts that have totalled over $8.7bn (€6.7bn).

BP said in Thursday’s court filing prior to the hearing that Juneau’s interpretation was resulting in the “payment of hundreds of millions of dollars – steadily mounting higher – of windfall payments that the settling parties never intended to see awarded”.

“The legal question presented in this case is critically important to BP, which faces the loss of hundreds of millions of dollars – potentially running into the billions - if the settlement program and claims administrator’s breach of the settlement agreement continues unabated,” BP said.

BP had agreed to the settlement last year, in which the company had estimated would total $7.8bn.

Last month, BP asked the court to review the Juneau’s interpretation of the settlement, particularly in the calculation of “variable profit” for business economic loss claims.

The court on 5 March affirmed Juneau’s interpretations, adding that “objective formulas, the possibility of ‘false positives’ and giving claimants flexibility to choose the most favourable time periods are all consequences BP accepted when it decided to buy peace through a global, class-wide resolution”.

On 19 March, BP filed a motion for preliminary injunction against Juneau and the settlement program, requesting a hearing scheduled for 5 April.

In response, a motion to dismiss filing on 1 April claimed that Juneau is entitled to judicial immunity from suit in his official capacity as claims administrator and that neither he nor the settlement programme has breached their responsibilities consistent to the agreement terms and provisions.

BP argued on Friday that judicial immunity does not extend to the claims administrator under any source of law and that Juneau is acting in an administrative and not a judicial capacity.

Furthermore, the company said the court’s 5 March order did not resolve the meaning of the settlement agreement, which could subject it to future requests for review. Also, the mere fact that the order exists does not mean that Juneau did not breach the settlement agreement.

BP is still in court for the federal civil trial that began in February to determine if the oil giant was “grossly negligent” in the events leading up to the explosion and oil spill.

Three of the company’s managers and a former engineer also face criminal charges.

($1 = €0.77)

Follow Tracy on Twitter

By Tracy Dang
+1 713 525 2653

Additional Information