BP Takes Oil Spill Class Action Settlement Fight to Supreme Court

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BP PLC is continuing its fight over the $9.2 billion class action settlement stemming from the 2010 Deepwater Horizon oil spill. Less than two days after the 5th U.S. Circuit Court of Appeals refused to revisit its decision upholding the terms of the class action settlement that allow some claimants to receive payments without proof of damages from the oil spill, BP announced that it is taking the fight to the U.S. Supreme Court.

The contentious battle over the Deepwater Horizon settlement payments has been ongoing ever since the parties initially settled the massive class action lawsuit in May 2012. BP has fought over the Settlement Administrator’s method of calculating business economic loss claimants, arguing that the current interpretation of the class action settlement will allow claimants to receive payments for “fictitious” claims, and that the company will end up paying significantly more than it initially agreed to pay.

In December 2013, the 5th Circuit granted BP’s appeal to suspend further payments stemming from the Deepwater Horizon class action settlement. The appellate court ordered Judge Carl Barbier to issue an injunction allowing time for reconsideration of BP’s allegations that the settlement would have led to overpayments to thousands of Gulf Coast businesses. 

In March, a divided three-judge panel from the 5th Circuit upheld the Claims Administrator’s interpretation of the class action settlement, finding that BP had ultimately agreed to language in the agreement that authorized claimants in certain areas of the Gulf Coast to get business economic loss payments without showing that their losses stemmed from the Deepwater Horizon oil spill. The appellate court found that there is “nothing fundamentally unreasonable about what BP accepted but now wishes it had not.”

BP subsequently appealed the 5th Circuit’s decision, and requested that the full panel hear the case. According to a court filing made public on Monday, that request was denied by a vote of 8-5, leaving BP with just two options: pay the Deepwater Horizon settlement claims or appeal the case to the Supreme Court.

On Wednesday, BP asked the 5th Circuit to continue the payment freeze until after the Supreme Court has considered its challenge to the Deepwater Horizon class action settlement. “This Court should stay its mandate because there is a reasonable probability that the Supreme Court will grant certiorari and a significant possibility that it will reverse this panel’s decision, and because BP will be irreparably harmed if the mandate is not stayed,” BP wrote in its motion to the appellate court.

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Class Members are represented by Stephen J. Herman of Herman Herman & Katz LLC, James P. Roy of Domengeaux Wright Roy & Edwards LLC, Brian H. Barr of Levin Papantonio Thomas Mitchell Rafferty & Proctor PA and Robin L. Greenwald of Weitz & Luxemberg PC, among others.

The Deepwater Horizon Oil Spill MDL is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, Case No. 2:10-md-02179, in the U.S. District Court for the Eastern District of Louisiana.