Court won’t reopen settled BP oil spill case (UPDATED)
on Dec 8, 2014 at 10:01 am
UPDATED 1:35 p.m. The following post has been updated and expanded.
Without comment and with no Justice noting a dissent, the Supreme Court today turned aside a plea by the oil-drilling affiliate of BP to reopen a 2012 deal aimed at settling hundreds of millions in claims over the April 2010 oil spill in the Gulf of Mexico. The Court issued a brief order denying review of BP Exploration & Production, Inc., v. Lake Eugene Land & Development, Inc.
Issuing further orders from its private Conference last Friday, the Court did not grant any new cases today and did not send any new cases to the Justice Department for reaction. The Court granted review in three cases Friday.
The denial of BP Exploration’s petition marked the second setback for the company in the Supreme Court this year. Last June, the Court without explanation rejected a plea to delay a series of lower court actions that — the company said — would require it to pay out more than $600 million for economic damages to claimants that could not trace any injury directly to the massive oil spill.
The spill, the largest in U.S. history, spread some 200 million gallons of oil across the Gulf and its shores throughout the eighty-seven days before a fractured exploratory well could be capped. The damage to the well was one of the results of an explosion and fire aboard BP’s Deepwater Horizon platform located off the Louisiana coast. The incident killed eleven people and injured seventeen others.
In the aftermath of the incident, BP put up $20 billion in a fund to cover the losses and restore damaged properties and affected coastal areas. Over a period of sixteen months, more than one million claims were paid, totaling about $6.2 billion. After a series of class-action lawsuits were filed against BP, those were assembled before a federal trial court.
The case that reached the Supreme Court was basically a protest by BP’s drilling affiliate that this settlement had resulted, and would continue to result, in payments to businesses or individual claimants who could not prove that any injuries they were claiming could be blamed on BP or the oil spill. This was related to the “causation” question. While BP argued in its appeal that, unless each claim was backed up by proof that the spill was to blame, it would violate the Constitution’s Article III or a federal law governing class-action lawsuits — Rule 23.
The companies on the other side of the dispute answered BP’s appeal with the argument that BP had agreed to the settlement deal before it was finalized and approved in the trial court in December 2012, and that the company was not trying to get out from under a deal it had joined in working out.
Because the Supreme Court, as is its custom, did not explain why it turned down BP’s appeal, it is not clear why the oil giant’s plea for review was rebuffed. This did not bring to a complete end the continuing legal process of paying claims made in response to the oil spill.
BP responded to the Court’s denial Monday by saying that it would continue to press for official investigations of “suspicious or implausible claims” as the spill’s aftermath continues to unfold. Lawyers for companies and professional individuals claiming harms from the spill said that the Court’s action would free the claims manager to continue to go forward making specific payments under the terms of the settlement package.
There is a six-month deadline for filing further claims with the claims manager, and there will be continuing legal proceedings over claims made under the federal Oil Pollution Act and to determine what happens to those who had opted out of the 2012 settlement or were not included in the designated class.
BP also faces potential penalties for alleged violations of the federal Clean Water Act.