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BP rejected by Supreme Court on Gulf payments reprieve

by | Aug 2, 2014 | Class Action Lawsuits

BP must pay potentially hundreds of millions of dollars in claims after the U.S. Supreme Court refused to halt disputed payments stemming from the 2010 Gulf of Mexico oil spill.

In a one-sentence order issued today, the justices said they wouldn’t put a hold on lower court rulings that require the oil company to begin making the payments, part of a $9.2 billion accord.

BP says some of the money would go to businesses whose losses were unrelated to the spill, including lawyers who lost their licenses and warehouses that burned down before the incident. The company says the process violates the Constitution and the federal rules that govern class action litigation.

BP believes that failure to suspend “the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident,” Geoff Morrell, a company spokesman, said in an e-mail today.

BP’s American depositary receipts fell immediately after the court issued its order before recovering. They rose 3 cents to $50.84 at 4:15 p.m. in New York.

Under its normal scheduling practices, the high court will decide late this year whether to take up BP’s appeal.

2012 Settlement

BP settled with most private-party plaintiffs in 2012, initially estimating the cost of the agreement at $7.8 billion. The company contends that a flawed interpretation by the claims administrator helped raise the price to $9.2 billion or more.

Lawyers for spill victims say BP is trying to renege on a settlement that is proving more costly than anticipated.

“We’re pleased that this denial of BP’s request for a stay will allow businesses to continue to receive the compensation they’re rightly entitled to according to the objective, transparent formulas agreed to by BP,” Steve Herman and Jim Roy, lead lawyers for spill victims, said in an e-mailed statement.

The case is BP Exploration v. Lake Eugenie Land, 13A1177.