05 August 2014 – BP has formally requested that the US Supreme Court decide on whether thousands of allegedly “fictitious” claims against the UK supermajor following the Macondo disaster should be paid out.
The company filed a petition late last week asking the high court to overturn a number of decisions in appellate courts that bind BP to the settlement to which it agreed in 2012. The petition formalises an appeal to the Supreme Court made in the wake of the Fifth Circuit Court’s denial of a request to limit BP’s compensation liability in the case.
BP wants the Supreme Court to enforce stricter requirements for claimants of a class-action lawsuit, to weed out the “vast numbers of members who have not suffered any injury caused by” the company.
BP says current interpretations of the settlement contradict US class-action law. The Supreme Court said in a recent unrelated case that class-action claimants “must actually prove – not simply plead” that they meet claim requirements, BP said.
Under the 2012 settlement, which BP helped craft, claimants have been awarded hundreds of millions of dollars in damages to “entities whose purported losses were not fairly traceable to the spill”, the petition states.
That includes $76 million “to entities whose entire losses unquestionably had nothing to do with the spill, such as lawyers who lost their law licenses and warehouses that burned down before the spill occurred”.
Payments also include the “illegitimate awards” of $546 million to “claimants that reside far from the Gulf Coast and are engaged in business activities that bear no logical connection to the spill”.
When BP signed off on the settlement it estimated costs of around $7.8 billion. The settlement included no upper limit.
BP has so far paid out close to $4 billion to around 46,000 claimants, with another 130,000 pending claims.
The case stems from the explosion that sunk the Deepwater Horizon drilling rig, killing 11 people and spilling nearly 5 million barrels of oil into the ocean, contaminating shorelines and impacting fisheries.
Lower courts have said BP agreed to the deal knowing proof of causation was not a requirement and that some fraud was a possibility.
*Luke Johnson – Upstreamonline