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Reply to BP's request to stop claims payments

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Posted: Jun 2, 2014 6:53 PM

Updated: Jun 2, 2014 6:53 PM

NEW ORLEANS (AP) BP PLC's request to halt payments under a Gulf of Mexico oil spill settlement made two years ago does not raise any question requiring the U.S. Supreme Court to review the company's settlement, lawyers for businesses and people hurt by the spill say.

The company wants payments halted while it appeals rulings about what businesses must prove to be eligible for the payments.

The company may regret signing the agreement, but that "advanced case of buyer's remorse" isn't enough to release it, the attorneys said in a 46-page response to BP's request.

BP agreed in March 2012 to pay business claims without requiring strict proof that the 2010 spill caused losses, and that agreement stands, a federal district judge and the 5th U.S. Circuit Court of Appeals have ruled.

The appeals court refused 2-1 last week to stop payments while the Supreme Court considers whether to hear BP's appeal.

BP says it has paid out more than $12 billion in claims to people, businesses and government entities. A trial scheduled for January in New Orleans is part of the litigation that will determine how much the oil giant owes in federal Clean Water Act penalties.

In its motion last week, BP argued that without the stay it is asking for, "countless awards totaling potentially hundreds of millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP's conduct."

The company said the halt to payments is reasonable because the 5th Circuit's ruling intensified a split among appeals courts and because the high court is likely to take its side. The split is about whether courts can approve a group of people who say it was wronged by the same action, which is called a class, "even when it includes vast numbers of members who were not injured by the defendant's conduct," BP's attorneys wrote last week.

BP said the claims administrator has approved "$76 million to entities whose entire losses clearly had nothing to do with the spill, such as lawyers who lost their law licenses and warehouses that burned down before the spill occurred." He has approved another $546 million to people and companies far from the coast whose businesses have no logical connection to the spill, according to the appeal.

The plaintiffs' lawyers countered, "No court of appeal has decreed that settlement class boundaries must be drawn to include only those to whom a settlement payment will ultimately be made."

They said anyone submitting a business claim must be able to prove that revenues fell after the spill and recovered in 2011.

Before the settlement was approved, the attorneys wrote, several of BP's economic experts testified that such a framework was "consistent with economic reality." And, they said, when the claims administrator stated that such losses would be used to decide causation whether or not a claim might have been caused by something other than the spill, BP's attorneys formally agreed with that policy.

"BP's repeatedly voiced claim that uninjured parties are being compensated is without any factual support in the record. No court has ever made a factual finding that any claim without a traceable injury was deemed eligible for payment," they wrote.

Topics: Gulf Oil Spill-Settlement

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