5th Circuit halts some BP oil spill payments

The appeals court rules an injunction should be filed while a district court sorts out BP’s claims

Oil company BP PLC recently raised questions concerning its payments to those affected by 2010’s Deepwater Horizon oil spill, and it seems the courts are listening. The 5th Circuit Court of Appeals ruled on Oct. 2 that a lower court judge must halt payments to some Gulf Coast businesses.

BP has regularly made payments of hundreds of millions of dollars to businesses that say they suffered damage in the wake of the oil spill in the Gulf of Mexico. The original settlement put BP on the hook for an estimated $7.8 billion in damages, which the company was expected to pay over a long period of time.

However, BP says it can no longer accurately assess the damages done because a court-appointed fund administrator improperly calculated claims. District Court Judge Carl Barbier originally declined to change calculation methods and freeze payments. However, the 5th Circuit ruled that Barbier should craft a “narrowly tailored injunction” that would temporarily halt payments while the court sorts out BP’s claims.

According to The Wall Street Journal, a BP spokesman was pleased with the ruling and hoped it would bring an end to fictitious claims. Meanwhile, lawyers for thousands in the class-action suit against BP expressed their pleasure that the ruling meant the majority of claimants would continue to see payments.

As part of the filing, BP also filed suit against the claims administrator who originally calculated the damages, lawyer Patrick Juneau. However, Barbier threw out the suit in district court, and the 5th Circuit held up his decision upon appeal.

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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