Appeals court won't stop BP oil spill claims payments

The 5th U.S. Circuit Court of Appeals will not put a stop to payments while BP appeals the court’s earlier ruling that businesses, under the settlement, don’t have to prove they were directly harmed by the spill to collect money.
By JANET McCONNAUGHEY, Associated Press Published: May 28, 2014

— BP PLC must resume paying claims while it asks the U.S. Supreme Court to review its settlement with businesses over the 2010 Gulf of Mexico oil spill, a federal appeals court panel said Wednesday.

The 2-1 judgment said the 5th U.S. Circuit Court of Appeals will not put a stop to payments while BP appeals the court’s earlier ruling that businesses, under the settlement, don’t have to prove they were directly harmed by the spill to collect money.

BP asked the Supreme Court to review Wednesday’s ruling, saying that otherwise “countless awards totaling potentially hundreds of millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP’s conduct.”

Federal appeals courts divided

The high court is likely to hear the case because it deepens a split among federal appeals courts about whether courts can approve of a group of people who say it was wronged by the same action, which is called a class, “even when it includes vast numbers of members who were not injured by the defendant’s conduct.” Six appellate courts have said no; the 5th Circuit is one of two that have upheld certification of such classes, the attorneys wrote.

It said the claims administrator has approved “$76 million to entities whose entire losses clearly had nothing to do with the spill, such as lawyers who lost their law licenses and warehouses that burned down before the spill occurred.” He has approved another $546 million to people and companies far from the coast whose businesses have no logical connection to the spill, according to the appeal.

The 5th Circuit’s four-sentence judgment does not include detailed reasons for an order handed down a day earlier or for the dissent by Judge Edith Brown Clement, who also disagreed in the court’s March 3 ruling. In March, she wrote that whatever BP agreed to in its settlement, courts should make sure that payments go only to people who can prove the spill caused their losses.

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