NEW ORLEANS (AP) — Over BP’s objections, a federal
appeals court on Friday upheld a judge’s approval of the company’s
multibillion-dollar settlement with lawyers for businesses and residents
who claim the massive 2010 oil spill in the Gulf of Mexico cost them
money.
BP has argued that U.S. District Judge Carl Barbier and
court-appointed claims administrator Patrick Juneau have misinterpreted
settlement terms in ways that would force the London-based oil giant to
pay for billions of dollars in inflated or bogus claims by businesses.
During
a hearing in November before a three-judge panel of the 5th U.S.
Circuit Court of Appeals, a BP lawyer argued that Barbier’s December
2012 approval of the deal shouldn’t stand unless the company ultimately
prevails in its ongoing dispute over business payments.
But the
divided panel ruled Friday that Barbier did not err by failing to
determine more than a year ago whether the class of eligible claimants
included individuals who haven’t actually suffered any injury related to
the spill.
Affirming Barbier’s initial ruling in 2012, the court
said in its 48-page majority opinion that it can’t agree with arguments
raised by BP and others who separately objected to the settlement.
"No
case cited by BP or the Objectors suggests that a district court must
also safeguard the interests of the defendant, which in most settlements
can protect its own interests at the negotiating table," the ruling
says.
The majority rejected BP’s request for the panel to "find an
intraclass conflict of interest because the claimants allegedly include
persons and entities that have suffered no injury."
"In support
of this allegation, BP presents us with a series of economists’
declarations that had not been provided to the district court when the
class was certified," the ruling says.
One of the three appellate
judges, Emilio M. Garza, disagreed with the majority in a 14-page
dissent. Garza said the "attempted global settlement fails in a narrow,
but significant, regard" and should be vacated so it can be fixed.
Plaintiffs’
lawyers have argued that BP simply undervalued the settlement and
underestimated how many claimants would be eligible for payments.
"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
plaintiffs’ attorneys Steve Herman and Jim Roy, who negotiated the
settlement and urged the 5th Circuit to uphold it.
BP spokesman
Geoff Morrell said the company "is assessing its legal options and the
further implications of the Fifth Circuit’s decision."
"BP will
continue to press its position on the proper interpretation of the
settlement agreement’s provisions requiring a causal nexus between a
claimant’s injury and the spill."
In October, a different 5th
Circuit panel threw out Barbier’s rulings on the dispute over business
payments and ordered him to change the calculation of some damages. Last
month, Barbier rejected BP’s argument that the settlement shouldn’t
compensate businesses if they can’t directly trace their losses to the
spill. BP has asked the other panel to overturn that ruling.
The
settlement doesn’t have a cap, but BP initially estimated that it would
pay roughly $7.8 billion to resolve the claims. Later, as it started to
challenge the business payouts, the company said it no longer could give
a reliable estimate for how much the deal will cost.
Copyright 2014 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.