On Monday, a Federal Appeals Court ruled that BP must adhere to its Settlement agreement and pay business economic claimants for damage without their having to prove it was caused by the spill. By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans upheld a December 24 ruling by U.S. District Judge Carl Barbier in New Orleans, authorizing the payments on business economic loss claims. It also said an injunction preventing payments should be lifted.
BP argued that the Settlement was allowing businesses to recover for losses unrelated to the Spill, but the 5th Circuit rejected its appeal.
“The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill,” Circuit Judge Leslie Southwick wrote for the majority. Terms of the settlement “are not as protective of BP’s present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court,” the judge added.
According to the NY Times, the judge explained that people and businesses making claims would still have to attest that their financial losses had been caused by the spill, but an objective formula was a rational compromise in a case with large numbers of claimants and the problem of precisely accounting for the natural ups and downs of business.
Circuit Judge Edith Brown Clement dissented, saying that “causation was a critical part of the Settlement Agreement,” but that “the interpretation and implementation of the agreement eliminated this requirement” and that the decision wrongly helps claimants whose losses had “absolutely nothing to do with Deepwater Horizon or BP’s conduct.”
BP originally estimated that its settlement with businesses and individuals harmed by the spill would cost $7.8 billion. As of February 4, its projection rose to $9.2 billion.
As of Monday, approximately $3.84 billion had been paid out to 42,272 claimants, according to the Claims Administrator’s website.
The Louisiana BP business claims attorneys at Lambert Zainey assist local business owners who were affected by the 2010 oil spill.