A federal judge on Tuesday rejected BP's argument that a multibillion-dollar settlement over the company's massive 2010 Gulf oil spill shouldn't compensate businesses if they can't directly trace their losses to the spill.
U.S. District Judge Carl Barbier said in his ruling that the settlement was designed to avoid the delays that would result from a "claim-by claim analysis" of whether each claim can be traced to the spill.
Earlier this month, a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled that Barbier erred when he initially refused to consider BP's "causation" arguments.
In response to that ruling, Barbier agreed with plaintiffs' lawyers that BP can't make these arguments because the company took a contradictory position on the same issue when it urged Barbier last year to approve the settlement.
Barbier said requiring claimants to meet BP's proposed requirements for connecting losses to the spill would bring the claims process to a "virtual standstill."
Steve Herman and Jim Roy, two of the plaintiffs' lawyers who brokered the settlement with BP, said Gulf Coast business owners should be pleased that Barbier "once again rejected BP's efforts to rewrite history and the settlement."
"The Court reaffirmed that the transparent, objective formulas spelled out in the agreement are the only way to determine a claimant's eligibility and causation," they said in a statement.
BP spokesman Geoff Morrell said the company disagrees with Barbier's decision. Morrell also said court-appointed claims administrator Patrick Juneau's interpretation of settlement terms renders the deal "unlawful."
"Awarding money to claimants with losses that were not caused by the spill is contrary to the language of the settlement and violates established principles of class action law," Morrell said in a statement. "BP intends to seek appropriate appellate remedies to correct this error."
On Dec. 5, Barbier temporarily suspended settlement payments to businesses while he reconsidered the company's causation arguments. Barbier said Juneau's office would continue accepting and processing business claims but wouldn't make final decisions or payments until the matter is resolved.
For months, BP has argued that Barbier and Juneau misinterpreted settlement terms in ways that could force the company to pay for billions of dollars in bogus or inflated claims by businesses.
In October, the same 5th Circuit panel instructed Barbier to craft a "narrowly-tailored" order that bars Juneau from paying certain claims. BP, however, argued Barbier didn't go far enough when he issued an order to comply with the 5th Circuit's directives.