By Jess Bravin
WASHINGTON--The Supreme Court on Monday rejected BP PLC's
challenge to a 2012 class-action settlement of claims from the
Deepwater Horizon rig explosion, declining to review whether
millions of dollars in payouts improperly went to businesses that
didn't suffer damage from the Gulf of Mexico oil spill.
The company contended a 2012 settlement it accepted has been
administered too loosely, allowing some businesses to recover even
if they can't prove economic damage due to the spill.
"Those awards include $76 million to entities whose entire
losses unquestionably had nothing to do with the spill, such as
lawyers who lost their law licenses and warehouses that burned down
before the spill occurred," BP said in the appeal.
In March, the Fifth U.S. Circuit Court of Appeals in New Orleans
rejected BP's arguments, finding in a 2-1 ruling the company had
agreed to the settlement's terms in exchange for avoiding trial and
resolving claims more efficiently. Businesses located in some areas
affected by the spill must show revenue fell following the 2010
accident and recovered in 2011. While claims forms require
businesses to assert losses resulted from the spill, they are not
required to prove that fact.
"There is nothing fundamentally unreasonable about what BP
accepted but now wishes it had not," Judge Leslie Southwick wrote
for the majority. "Why businesses fail or, why one year is less or
more profitable than another," can be difficult questions to sort
out, so substituting "proof of loss" for "proof of causation," was
justifiable, given the scale of the accident and the vast number of
potential claims.
BP said federal class-action rules and the Constitution preclude
the payment of claims to entities that didn't suffer from the oil
spill. A variety of outside parties filed briefs siding with BP,
including disaster liability expert Kenneth Feinberg, who
administered a different Deepwater Horizon claims program.
BP spokesman Geoff Morrell in a written statement said the
company remains concerned the program has paid out claims unrelated
to spill damages. "We will therefore continue to advocate for the
investigation of suspicious or implausible claims and to fight
fraud where it is uncovered," Mr. Morrell said.
Businesses that made successful claims under the fund's
standards opposed BP's challenge, arguing the company accepted the
terms of the settlement and didn't fall victim to a flaw in the
application class-action law.
Stephen Herman, a lawyer for regional businesses in the case, in
a written statement said the court's denial of the case "should
finally put to rest BP's two-year attack on its own
settlement."
Write to Jess Bravin at jess.bravin@wsj.com
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