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On Monday, the U.S. Supreme Court refused BP PLC’s request to block payments to businesses from a class action settlement stemming from the devastating 2010 Deepwater Horizon oil spill in the Gulf of Mexico. The oil giant had asked the high court to freeze the payments until it had a chance to review the terms of the class action settlement that allow some business economic loss claimants to submit claims without proving direct harm from the oil spill. BP argues that under the current interpretation of the class action settlement terms, it will be forced to pay some claims to businesses that did not suffer actual harm from the Deepwater Horizon oil spill.
In a one-sentence order, the Supreme Court indicated it would not interfere with lower court rulings that require BP to begin making the payments under the terms of the $9.2 billion class action settlement. Although BP agreed to settle the BP Deepwater Horizon lawsuits in 2012, the oil giant has raised concern that the claims administrator’s interpretation of the class action settlement leaves the company on the hook for paying millions of dollars’ worth of “fictitious claims.” Last month, BP asked the Supreme Court to hear their case.
The business economic loss payments from the BP class action settlement have been on hold since October when the company successfully won a freeze on the business economic loss payments until the claims approval process was clarified. The lower court and the 5th Circuit both upheld the terms of the class action settlement after finding BP had agreed to offer payments to business claimants who lived in certain regions of the Gulf Coast without proof that their losses stemmed from the oil spill. A 2-1 majority of the 5th Circuit found that there was “nothing fundamentally unreasonable about what BP accepted and now wishes it had not.” The 5th Circuit has refused to rehear the case.
Patrick Juneau, the claims administrator for the Deepwater Horizon oil spill settlement, began processing the business economic loss claims earlier this month.
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Class Members are represented by Stephen J. Herman of Herman Herman & Katz LLC, James Parkerson Roy of Domengeaux Wright Roy & Edwards LLC, and Samuel Issacharoff of New York University School of Law.
The BP Deepwater Horizon Oil Spill Class Action Lawsuit is BP Exploration & Production Inc., et al. v. Lake Eugene Land & Development Inc., et al., Case No. A-13A1177, in the Supreme Court of the United States.
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