BP asks Supreme Court to stay latest ruling in settlement dispute

[JURIST] BP [corporate website] asked [text, PDF] the US Supreme Court [official website] on Wednesday to stay a March ruling requiring the company to make massive settlement payments as a result of the 2010 Deepwater Horizon oil spill. BP contends [press release] that the US Court of Appeals for the Fifth Circuit [official website] decision [JURIST report] to deny an injunction of the settlement agreement allows many business economic loss (BEL) claimants to collect payments that are not traceable to the damage caused by the Deepwater Horizon accident and oil spill. BP believes that such BEL claimants are not proper class members under the terms of the settlement. In Wednesday's application BP argued the consequences of a removal of the injunction would result in "irreparable injury" to the company and "countless awards potentially totaling millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP's conduct." The original $7.8 billion settlement agreement was approved [JURIST report] by a federal judge in Louisiana in December 2012, and BP has paid [text, PDF] more than $3.9 billion to over 47,000 unique claimants as of May 29, 2014, with more than half of the aggregate claim payments made to BEL claimants. BP initially estimated the costs of the settlement to run to $7.8 billion, but the company increased [Bloomberg report] the figure to $9.2 billion in a regulatory filing in 2013. Additionally, BP argued the criteria for a recall and stay of the Fifth Circuit's mandate are satisfied in this case and the Supreme Court is likely to grant certiorari to resolve a split among the federal circuit courts regarding the certification of a class of claimants under Rule 23 of the Federal Rules of Civil Procedure governing class actions and Article III of the US Constitution related to limits on federal court power [LII backgrounders]. The application was directed [Reuters report] individually to Justice Anton Scalia, in his capacity as circuit justice for the Fifth Circuit, and there is no time limit for Scalia to act on the matter. Alternatively, he may refer the matter to the nine justices as a whole and unless the justices act, the injunction will be lifted and settlement payments will resume.

Wednesday's application is the most recent development in the ongoing legal dispute [JURIST news archive] arising from the Deepwater Horizon [JURIST backgrounder] oil explosion and spill in April 2010, which killed 11 people and released millions of barrels of oil into the Gulf of Mexico. JURIST Guest Columnist Brent Coon argued [JURIST op-ed] the litigation surrounding the BP oil spill economic class settlement is truly unique in American jurisprudence. Last week BP announced it would appeal [JURIST report] the Fifth Circuit's ruling to the US Supreme Court, after the Fifth Circuit voted eight-five not allow BP to appeal its case to the Fifth Circuit en banc. On Wednesday the Fifth Circuit Court of Appeals issued a mandate [ERG law report] to the district court to lift the injunction in accordance with its December 2013 decision [JURIST report], which held BP could not require businesses to prove their economic losses were directly caused by the Deepwater Horizon spill under the terms of the settlement agreement.

 

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