Judge Deals A Blow To BP’s Efforts To Dodge Deepwater Horizon Payments



CREDIT: AP Photo / Gerald Herbert

BP has sought to cut down on payments for the 2010 Deepwater Horizon disaster by asking that local businesses prove the link between their economic losses and the oil spill. A federal judge halted BP’s effort to skip payments on Tuesday, ruling that BP cannot reverse its interpretation of the settlement simply because the cost is higher than what the oil giant once estimated.

BP wanted the rules of a class action settlement to be rewritten to require “proof of causation” or to throw out the entire multi-billion dollar agreement. U.S. District Judge Carl Barbier disagreed, writing that BP’s argument is “not only clearly inconsistent with its previous position, it directly contradicts what it has told this court.” In an earlier decision, Barbier also blasted the company for “attempting to rewrite or disregard the unambiguous terms of the settlement agreement.” BP had once called the class action settlement “more than fair.” BP plans to appeal

While BP publicly touts its support for local Gulf businesses, it has deployed an army of lawyers to stall litigation over the disaster. This summer, CEO Robert Dudley explained their aggressive action by pointing a finger at people he believes suffered “no losses from the spill.” “I don’t think it’s right for America,” he said. BP even launched a hotline that pays watchdogs to report fraud.

So far, $3.81 billion has been paid out to 40,000 spill claimants. BP estimates the class action settlements will cost at least $2 billion more than what it projected. Oil industry profits typically dwarf the cost of spill fines and settlements, even of this size. BP earned back $3.7 billion in profit in just one quarter, while it spent $3.3 billion on stock buybacks that enrich the largest shareholders.