BP Settlement Challenged

The U.S. Circuit Court of Appeals for the Fifth Circuit ruled this week that a trial judge must reconsider BP's arguments for injunctive relief that 2012 settlement proceeds only compensate businesses whose economic losses are directly traced to the 2010 Gulf of Mexico oil spill, holding that the lower court erred last month in refusing to consider causation arguments in interpreting the consent decree. BP attacked its multibillion-dollar settlement and has previously received favorable rulings on appeal regarding disputes over payouts to businesses. BP argued court settlement administrators wrongly considered bogus or inflated claims by businesses. Plaintiffs' lawyers countered that BP undervalued claims and underestimated the number of claimants qualifying for payments. BP and the plaintiffs' lawyers had agreed on objective and specific methods of proving that losses were caused by the spill such that losses for businesses located in certain areas from Louisiana to Florida were presumed to be caused by the spill under the settlement's terms. The U.S. District judge presiding over the case felt it unreasonable to expect claimants to prove losses were directly traced to the spill, and that doing so would defeat the purpose of a class settlement. Citing lack of some colorable claims, the appellate court directed the trial judge to craft an order allowing businesses who can trace their losses to the spill to continue receiving payments, but ensuring those who cannot trace their losses to the spill don't receive compensation. BP attorneys complained dozens of claimants whose losses were caused by something other than the spill have received millions. The trial judge already expressed disappointment that BP accused the claims administrator of disregarding the settlement terms and felt that BP was attempting to rewrite unambiguous terms of the Settlement Agreement. However, the appeals court stated that by allowing recovery from the settlement fund by those who have no case and cannot state a claim, the court acts "ultra vires." Meanwhile, LawFinance Group, a provider of capital for litigation, announced the availability of the $50 million in funding due to financing demand that allows smaller plaintiffs’ firms to stay afloat while they litigate with BP over disputed claims. See stories here-- http://abcn.ws/18BY60h and http://buswk.co/1bfEs8J and opinion here-- http://www.ca5.uscourts.gov/opinions/pub/13/13-30315-CV0.pdf