U.S. Supreme Court Rules Against BP In Claims Case

BP’s lawyers say the U.S. Supreme Court ruling that the oil company continue making compensation payments related to the 2010 Gulf of Mexico oil spill means many claimants not harmed by the disaster will be paid money they don’t deserve.

“The company continues to believe that the lifting of the injunction suspending the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident,” BP spokesman Geoff Morrell said in a statement shortly after the June 9 ruling.

Morrell said the company will ask the Supreme Court to review whether BP must pay some claims that appear to have no connection to the explosion of the Deepwater Horizon oil rig off the Louisiana coast. BP argues that the claims administrator has been misinterpreting its agreement with many businesses that claim damage from the accident but were not affected.

Blaine LeCesne, a law professor at Loyola University in New Orleans, said the Supreme Court decision means that the same panel probably won’t hear BP’s appeal. “It's obviously a major victory for the plaintiffs, who can now proceed with processing these business economic loss claims," he said.

Related Article: Exxon, BP Defy White House; Extend Partnership with Russia

That means that BP is running out of options for avoiding such payments.

The Deepwater Horizon, owned by BP and Anadarko Petroleum Corp., exploded in April 2010, killing 11 rig workers and spewing crude oil into the Gulf for nearly three months. BP at first estimated total claims would not exceed $7.8 billion. Later, it complained that the claims administrator was allowing individuals and businesses to collect on what it said were false claims.

Nevertheless, BP acknowledges that many claims have been legitimate, including from businesses dependent on tourism and seafood harvesting -- industries that have been hurt by oil in the water and on local beaches.

By Andy Tully of Oilprice.com