The U.S. Supreme Court has refused to hear BP’s appeal of the settlement agreement forcing the company to pay billions of dollars to businesses deemed hurt in the Deepwater Horizon oil spill.
Monday’s decision means the British oil giant must continue to make the payments under the agreement it signed after the 2010 spill in the Gulf of Mexico.
BP argued that the claims administrator and the judge overseeing the settlement were misinterpreting the terms of the deal and that the process was riddled with fraud. BP said it was being forced to pay businesses that couldn’t prove their losses were a result of the massive oil spill.
BP took out ads in national newspapers blasting the payouts as unfair and launched a legal fight through the appeals court system. The Supreme Court, in an unsigned order without explanation, declined Monday to review lower court rulings that went against BP.
Most recently, a three-judge panel of the 5th U.S. Circuit Court of Appeals had denied BP’s claim two-to-one in March. Federal Judge Leslie Southwick wrote at the time that BP needs to live with the settlement it signed, adding that “there is nothing fundamentally unreasonable about what BP accepted but now wished it had not.”
Attorney Joe Rice, a lead negotiator for the plaintiffs against BP, said Monday that BP’s “cruel antics” in the courts had muddied the process of getting payments out.
“BP has over and over again painted itself the victim, when in fact it harmed thousands of Americans in the largest oil spill this country has seen,” Rice said.
BP spokesman Geoff Morrell said Monday that the company remained “concerned that the program has made awards to claimants that suffered no injury from the spill – and that the lawyers for these claimants have unjustly profited as a result.”
“On behalf of all our stakeholders, we will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered,” Morrell said in a statement.
The settlement is turning out to be more costly than the company had expected. BP initially set aside $7.8 billion for the payouts, but it now expects they might go “significantly higher” than $9.2 billion.
The Deepwater Horizon oil rig explosion killed 11 workers, led to the biggest offshore oil disaster in U.S. history, and did major economic damage to Gulf Coast businesses. But BP argued that some businesses that received payouts as a result of the settlement agreement – among them an adult escort service and a global nuclear consultant – never proved the spill had cost them revenue and shouldn’t have received the money.
Lawyers for the plaintiffs said BP had “buyer’s remorse” and that the settlement didn’t require proof from businesses that the spill directly caused them losses.
The settlement, they said, is based on a formula that takes into account how far the business was from the site of the spill and compares revenue for certain months before and after the accident. Under the formula, if a business met the criteria its loss was presumed to be spill-related.
Plaintiffs attorneys Stephen Herman and James Roy said in a statement Monday that “today’s ruling is a huge victory for the Gulf, and should finally put to rest BP’s two-year attack on its own settlement.”