Oil Spill

BP oil-spill settlement is upheld by 5th Circuit


A federal appeals court has upheld the settlement in the 2010 Gulf oil spill over BP’s objections that a claims administrator’s interpretation of the deal was resulting in payments to businesses that suffered no injuries.

The New Orleans-based 5th U.S. Circuit Court of Appeals ruled on Friday, report the Wall Street Journal (sub. req.), the New Orleans Times-Picayune and the Associated Press. How Appealing links to the decision (PDF).

BP had argued that Article III’s case-or-controversy requirement bars certification of a settlement class that includes members who suffered no injury. But the name plaintiffs had alleged injury in fact, the appeals court said, and the class definition requires injury, even in the economic damage category. Allegations that the claims administrator was applying the wrong evidentiary standard is not a matter of Article III standing, the court concluded.

A BP spokesperson said the company will continue to contest the claims administrator’s interpretation of the settlement in a separate case, and the decision does not foreclose its arguments.

Lawyers for oil-spill plaintiffs seeking damages, Steve Herman and Jim Roy, praised the ruling in a statement issued to the publications. “Today’s ruling is an enormous victory for the Gulf, and an important step forward in ensuring that every eligible claimant is fully compensated according to the objective, transparent formulas spelled out in the settlement agreement that BP co-authored and agreed to,” they said.

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