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US Supreme Court Rejects BP Request for Review of Gulf of Mexico Spill Settlement

The oil major agreed to an estimated $8 billion settlement in 2012 but has since said companies with no apparent connection to the spill were being awarded payments.

by Matt Smith
Dec 8 2014, 6:55pm

Image via AP/Charlie Riedel

The US Supreme Court rejected on Monday BP's challenge to its own multibillion-dollar Deepwater Horizon settlement, turning aside the company's complaint that it was paying claims to businesses that never lost a dime in the oil spill.

BP agreed to the settlement in 2012 but soon began to argue that businesses with no apparent connection to the spill — some of them far from the Gulf Coast — were getting payments from the settlement, initially estimated at nearly $8 billion. The company began to fight back against the deal in federal courts and in the court of public opinion, launching an aggressive public relations campaign highlighting what it called fraudulent claims.

A federal appeals court in New Orleans upheld the settlement in March, noting: "There is nothing fundamentally unreasonable about what BP accepted but now wishes it had not."

The Supreme Court refused to review that decision Monday, issuing a brief order without comment.

Primary Sources: How BP lobbied the EPA to let it continue being a business partner of the government. Read more here.

In a statement on Monday's decision, BP said its challenge had succeeded in fixing some problems with the settlement process and that it was committed to compensating anyone "legitimately harmed" by the 2010 blowout off the coast of Louisiana.

"We nevertheless remain 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," the company said. "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."

But lawyers for the plaintiffs in the case, Stephen Herman and James Roy, hailed Monday's decision.

"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," Herman and Roy told VICE News. "With its order, the Supreme Court held — as had the lower courts — that BP must stand by its word and honor its contract."

BP says it has paid out $32 billion for cleanup, damages, fines, and other costs from the undersea blowout that erupted in April 2010. The explosion killed 11 workers aboard the drill rig Deepwater Horizon and set loose a gusher from beneath the ocean floor that spewed crude into the Gulf of Mexico for three months.

Scientists say an area the size of Rhode Island is coated with oil from the BP well explosion. Read more here.

In 2012, BP pleaded guilty to manslaughter, violations of the Clean Water Act, and obstructing Congressional inquiry into the spill.

Scientists are still trying to discover what the long term environmental impact of the accident will be. In November, researchers described how an area of the sea floor the size of Rhode Island remained coated with a giant "bathtub ring" of oily residue. BP has disputed the results of the study, saying the researchers failed to undertake a chemical analysis that proved the oil found in the sediment came from its well.

In September, a federal judge concluded BP bore most of the responsibility for the disaster — a finding of "gross negligence" that could bring billions more in penalties under the Clean Water Act, even as BP workers reportedly face layoffs due to falling crude prices.

The company, which reported $3 billion in quarterly profits in October, is appealing the decision.

Follow Matt Smith on Twitter: @mattsmithatl