Judge Orders Suspension of Some BP Gulf Oil Spill Settlement Payments

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Louisiana Federal Judge Carl Barbier has ordered the Claims Administrator of BP PLC’s $7.8 billion oil spill class action settlement to suspend some payments after the U.S. Court of Appeals in New Orleans overturned the administrator’s interpretation of the deal.

BP earlier asked the appeals court to order a re-examination of the key terms of the class action settlement as they argued that Claims Administrator Patrick Juneau was approving payments based on what BP referred to as flawed interpretation of the agreement.

“In view of the ruling rendered by the Fifth Circuit panel on October 2, 2013 in case number 13-30315 consolidated with 13-30329, the Claims Administrator is ordered to immediately suspend the issuance of any final determination notices or any payments with respect to those BEL claims in which the Claims Administrator determines that the matching of revenues and expenses is an issue,” the order penned by the judge overseeing the Deepwater Horizon oil spill multidistrict litigation said.

Judge Barbier previously refused BP’s request to stop class action settlement payments, saying that Juneau was interpreting the terms of the settlement properly. He dismissed BP’s request to stop certain payments while the company is appealing his ruling. The appeals court, however, upheld the judge’s dismissal of BP’s suit against Juneau but sent back his other rulings.

The appeals court said that Juneau’s interpretation could be rewarding fictitious claims and asked the judge to issue an appropriate “narrowly tailored” preliminary injunction order that would allow time for reconsideration of BP’s allegations that Juneau was approving millions of dollars in “fictitious” payments to thousands of businesses based on flawed interpretation of the agreement between BP and victim’s lawyers in 2012.

In light of this court of appeals ruling, Judge Barbier was asked to reevaluate complex accounting issues underlying some settlement claims and to halt some payments until that review is completed.

The judge clarified that other settlement payments should move forward as scheduled.

“Staying the processing or payment of all [business economic loss] claims would be overly broad and unnecessary as applied to those claims for which matching of revenues and expenses is not an issue,” the order stated.

Judge Barbier asked lawyers to meet with him behind closed doors on October 11, 2013, to discuss the case.

The plaintiffs’ steering committee includes Brian H. Barr of Levin Papantonio Thomas Mitchell Rafferty & Proctor PA, Matthew E. Lundy of Lundy Lundy Soileau & South LLP and Robin L. Greenwald of Weitz & Luxenberg PC, as well as attorneys from Herman Herman & Katz LLC and Domengeaux Wright Roy & Edwards LLC, among others.

The BP 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.

Further details on how to file a claim for the BP Oil Spill Class Action Lawsuit Settlement can be found here in our Open Lawsuit Settlements section. You can also learn more by visiting www.DeepwaterHorizonSettlements.com.

UPDATE 1: Payments from the Deepwater Horizon Oil Spill Class Action Settlement have been further suspended as of Dec. 2, 2013.

UPDATE 2: On Jan. 10, 2014, the U.S. Appeals Court upheld approval of the Deepwater Horizon class action settlement, rejecting BP’s and objector’s arguments that the deal is unfair or that claims are being improperly paid.