Monday, December 8, 2014, the day after the day of infamy (plus 73 years), the Supreme Court decided to leave in place BP’s multi-billion-dollar settlement for Business Economic Losses resulting from the 2010 oil spill in the Gulf of Mexico. The court declined BP’s invitation to review the lower-court ruling rejecting the London-based oil giant’s assertions that it was being forced to compensate businesses for economic losses unrelated to the disaster.
We Knew That
We have always claimed that under the 2012 settlement BP agreed to, businesses do not have to prove they were directly harmed by the spill to collect compensation. Economic damages were a domino effect. Direct damages to the fishery, boating, restaurant and tourist industries fanned out to affect other businesses. The settlement only required that businesses or individuals made less money in the three to eight months after the spill than in a comparable pre-spill period.
Justices Remained Quiet
The Justices did not even bother to comment on the lower court’s misinterpreted settlement terms while making the economic and property damage settlement final. There was a change in the way profits and losses were determined. But this was a minor snag in an otherwise good settlement for the Gulf region.
Lower Court Speaks Out
As Circuit Judge Leslie Southwick wrote when a panel of the U.S. Court of Appeals for the 5th Circuit ruled 2-to-1 against BP, the terms of the settlement were “…accepted by the parties and approved by the district court…” There is a common tenant in the legal system – the court’s will not modify a contract that all parties had previously agreed too.
In ruling against BP a lower court said, “There is nothing fundamentally unreasonable about what BP accepted but now wishes it had not.”
Lead Attorneys Speak Out
Lead attorneys for the class of affected businesses said in a statement following Monday’s decision: “With the high court’s rejection of BP’s attempts to rewrite history, Mr. Juneau can get on with the business of processing and paying eligible claims” and said the court’s action was “a huge victory for the Gulf, and should finally put to rest BP’s two-year attack on its own settlement,”
In a legal brief filed on behalf of the claims administrator, Patrick Juneau said “In the light of these facts, there is no room for an argument that the parties to the settlement agreement did not know or understand that causation would be judged for each and every claim – but only by those objective standards set forth plainly in the settlement agreement”.
BP Will Fight Back
BP has said that it will advocate for continued investigation of claims it thinks are “suspicious or implausible”. An approach that may yet slow the processing of claims. This despite the fact that a third-party audit of the settlement program, made public in November, found that it “correctly” processed more than 99.5 percent of the business economic loss claims.
BP has been waging a public relations battle in the electronic media, has placed full page ads in the Washington Post and the New York Times, and hired an all-star battalion of lobbyists and lawyers to make the argument that it was being forced to make payments resulting from bogus filings approved by claims administrator Patrick Juneau. These allegedly fraudulent claims have enriched unaffected businesses and aggressive lawyers. But lawyers for the class of claimants covered by the agreement said BP simply had “buyer’s remorse” and noted that even before signing the Settlement Agreement, BP’s own lawyers had explicitly agreed to hypothetical cases almost identical to the ones it now complains about.
Claims Processing
There are approximately 107,000 business economical claims waiting for resolution. Currently, an average of 28 of these claims is processed each business day. A little math shows the claims will all be paid in about seven years. To all those that have placed a claim under the Deepwater Horizon Economic & Property Damages Settlement, please be patient.