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BP says rejection of private oil spill claims appeal could scuttle whole settlement
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BP says rejection of private oil spill claims appeal could scuttle whole settlement

A BP attorney on Friday warned the U.S. 5th Circuit Court of Appeals that a failure to throw out a lower court ruling upholding rules the company claims allows businesses to be overpaid potentially billions of dollars for Deepwater Horizon oil spill economic settlement claims could result in the invalidation of the entire private claims settlement.

Theodore Olson, an attorney representing BP in its 5th Circuit challenge of the business claims rules, issued his warning in a motion filed Friday requesting an end to delays in a separate appeal before the 5th Circuit that challenges the entire settlement that BP entered into in 2012.

The appeal of the overall settlement was filed in 2012 by a variety of organizations that said their clients either were not included or received too little in the private settlement of economic and medical claims agreed to by BP and attorneys representing more than 100,000 claimants. The settlement was approved by U.S. District Judge Carl Barbier in November 2012.

But BP has been at odds with Barbier over the way Claims Administrator Patrick Juneau has been interpreting part of the agreement the company says could result in billions of dollars in "business economic-loss payments" to firms that did not experience losses directly attributable to the Deepwater Horizon accident and ensuing oil spill.

Included in what BP says are improper payments are those that have been or would be made to several law firms, including some that are representing other claims clients.

Barbier denied BP's appeal of the business class rules, as well as the company's attempt to delay the business class payments while it appealed the rules to the 5th Circuit. 

Olson's motion requested that the settlement appeal be expedited by the 5th Circuit, since it already has expedited its hearing of the business claims rules appeals. Olson argued that if the 5th Circuit upholds Barbier, leaving the objectionable rules in place, the appeals court would then throw out the entire agreement, apparently on grounds that it no longer followed earlier court rulings governing class action lawsuits requiring that individual be treated equally.

"As BP has argued, if the district court's decision in the (business claims) appeal were to be affirmed, the class certification and class settlement at issue in this case would be rendered invalid, which is one of the reasons why reversal is required in that appeal," said the motion authored by Olson, who was U.S. solicitor general under President George W. Bush.

If the business claims rules are upheld, and a delay ensues before the appeals court throws out the entire settlement, Olson argued, "BP would have paid out hundreds of millions, and possibly billions of dollars in disputed awards under an improper agreement that should never have taken effect."

One provision of the settlement prohibits the repayment of money given to claimants, once the payments are approved and issued. 

As of July 28, the court-supervised settlement program had offered awards of $4.2 billion, including an average $119.1 million a week in the previous three weeks, according to a statement filed with the BP motion.

Attorneys for the Plaintiff Steering Committee, which represents the claimants in the settlement, filed their own motion in the settlement appeal on Monday, rejecting BP's arguments in favor of speeding up that case.

That motion charges that BP's request comes after the company filed no objection to the settlement with the lower court, did not participate in the appeal, and didn't even file any paperwork supporting the parties who did appeal the settlement.

It points out that under the terms of the settlement, BP is contractually bound to support it and to "defend it against objections, appeal or collateral attack."

In addition, it said, BP already has benefited from the settlement, because more than 40,000 claimants who have already been paid during the past 14 months signed releases prohibiting them from bringing further legal proceedings against the company.

It also points out that in BP's appeal of the business claims rules, the 5th Circuit already denied a BP emergency motion for an injunction halting the claims payments pending the business class appeal.

By Mark Schleifstein, | The Times-Picayune 
on August 05, 2013 at 4:11 PM, updated August 05, 2013 at 8:09 PM

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