BP’s Appeal of Deepwater Horizon Class Action Settlement Is Denied

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According to a court filing made public on Monday, the 5th U.S. Circuit Court of Appeals has declined to revisit BP PLC’s bid to bar claimants from receiving payment from the estimated $9.2 billion Deepwater Horizon class action settlement without submitting evidence that their damages were directly caused by the 2010 oil spill.

In March, the appellate court voted 2-1 to authorize payments for the business economic loss claims that stemmed from the oil spill and ruled that an injunction barring payments should be lifted. BP subsequently asked the entire 5th Circuit to revisit the case and reconsider whether the Claims Administrator’s interpretation of the class action settlement terms expanded the number of eligible Class Members beyond the certified definition. According to court documents made public Monday, the appellate court voted 8-5 to let the March ruling stand.

“In settling this lawsuit, the parties agreed on a substitute for direct proof of causation by a preponderance of the evidence,” the panel wrote. Because BP already agreed to the terms of the class action settlement, including the issue of causation, the panel refused to reconsider its March decision to end the payment freeze.

BP hoped to limit payments stemming from economic damages related to the 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 people and triggered a massive oil spill in the Gulf Coast. BP argued that the class action settlement would allow business to recover damages for losses that could not be traced to the oil spill, but the appeals court ruled that the terms of the Deepwater Horizon settlement would stand.

The decision is a major setback for BP’s attempt to limit payments stemming from the 2010 explosion of the Deepwater Horizon drilling rig. Now that the 5th Circuit has refused to rehear the case, the company will either have to pay billions of dollars owed under the terms of the class action settlement or appeal the case to the U.S. Supreme Court.

The Deepwater Horizon class action settlement was initially reached in March 2012. Under the terms of the oil spill settlement, BP agreed to compensate those who suffered economic or property damage or had medical bills associated with the Deepwater Horizon oil spill. Subsequently, the 5th Circuit granted BP’s emergency motion seeking an injunction to stop further payments under the class action settlement over concerns that the settlement funds would be distributed to claimants who could not trace their injuries to the oil spill.

In January 2014, the appellate court upheld the approval of the Deepwater Horizon class action settlement, rejecting BP’s arguments that the deal was unfair or that the claims would be improperly paid. In February, the appellate court dismissed the remaining appeals of BP’s $130 medical benefits settlement, clearing the way for payments to be distributed to a class of workers involved with cleanup of the Deepwater Horizon oil spill.

For more information about the Deepwater Horizon oil spill class action settlement, click here or visit www.DeepwaterHorizonEconomicSettlement.com. For more information about the Deepwater Horizon medical settlement, visit www.DeepwaterHorizonMedicalSettlement.com.

The class is represented by Stephen J. Herman of Herman Herman & Katz LLC and James P. Roy of Domengeaux Wright Roy & Edwards LLC.

The BP Oil Spill Class Action Lawsuit is In re: Deepwater Horizon, Case Nos. 13-30315, 13-30329 and 13-3122-, in the U.S. Court of Appeals for the Fifth Circuit.

UPDATE 5/23/14: BP has indicated it will ask the U.S. Supreme Court to review the Deepwater Horizon oil spill settlement and has asked the 5th Circuit to continue the payment freeze until the case is resolved.