Court Denies BP’s Big Oozy Claim Appeal

At least for now, BP's claim crusade is stalled in federal court. The U.S. Fifth Circuit Court of Appeals decided Monday not to rehear the British oil giant's imploring about the process by which Gulf Coast businesses can receive money from the Deepwater Horizon oil disaster settlement reached in 2012.


The Court voted 8-5 to deny BP's two appeals, which argued that settlement money is going to people who didn't suffer any losses as a result of the Big Oozy.


BP officials initially expected the settlement to cost $7.8 billion, but later went on the offensive after officials said they could not estimate the cost in the face of rising payouts.


In court, media and elsewhere, BP has mounted a blitz arguing that the settlement's claims process is tainted by fraud. The process is designed to provide payouts to individuals and businesses who suffered losses as a result of the 2010 oil disaster. BP argues that many plaintiffs who received money were not actually harmed by the Big Oozy.


A U.S. District Court judge halted the claim payouts in December, freezing all payments to people harmed by the disaster. Three-judge panels from the U.S. 5th Circuit Court of Appeals denied to take the case further in 2-1 rulings. BP then asked the full 5th Circuit to take the case. Monday's ruling turned back that request, and opens up the possibility that the claims process will restart.


In the court's majority opinion, Judge Leslie Southwick wrote that proof of direct losses was not part of the criteria for the claims process. She added that BP and the other companies agreed to those criteria before the settlement was approved.


Judge Edith Brown Clement wrote a fiery dissent, arguing that the ruling makes the court a "party to this fraud" that would "funnel BP’s cash into the pockets of undeserving non-victims."


“Our courts’ decisions would allow payments to ‘victims’ such as a wireless phone company store that burned down and a RV park owner that was foreclosed on before the spill," she wrote.


In a statement issued Monday night, BP spokesman Geoff Morrell didn't tip his hand about the company's next legal move.


"BP is disappointed that the full Fifth Circuit will not be considering the divided panel decisions relating to the compensation of claims for losses that have no apparent connection to the spill," he said. "The company is considering its legal options."


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