The Supreme Court Refuses To Let BP Pay Less For Its Oil Spill

CREDIT: AP/Dave Martin

Stan Wright stands atop a pile of oysters in Bayou La Batre, Alabama in 2011.

On Monday, the Supreme Court rejected BP’s attempt at appealing its own settlement with businesses and individuals that lost money due to the massive 2010 Gulf of Mexico oil spill. The court’s refusal to hear the appeal means BP will have to make payments to those that it argues cannot tie their losses to the explosion of the Deepwater Horizon platform and drilling rig, which killed 11 people and spilled an estimated 4.9 million barrels of oil into the Gulf. The Supreme Court justices did not comment on the case in their refusal to hear it.

According to Tom Young, a Florida attorney who filed an amicus brief with the Supreme Court opposing BP’s appeal, business owners and individuals that experienced a loss of profit or earnings tied to the incident now have six months to file for compensation.

“One would be hard pressed to identify too many Gulf area businesses that did not endure some loss, small or large, that related in some way to the disaster,” writes Young. “A loss is a loss and BP has agreed to compensate all those so affected. With today’s decision, the Supreme Court has confirmed this arrangement.”

BP has been pursuing a number of different routes to avoid paying fines and compensations related to the disaster. In November, BP asked a federal judge to cap the amount of spill-related fines at $12.3 billion — almost a third less than the amount U.S. prosecutors are seeking.

Under the Clean Water Act, a finding of “gross negligence” — a term meaning an extreme lapse in attention — triggers the maximum permitted fine. In September, U.S. District Judge Carl Barbier found that the series of mistakes surrounding the spill did in fact amount to gross negligence. Barbier reinforced his findings when he rejected BP’s request for a new trial. The gross negligence ruling opens BP up to the maximum $18 billion in fines, which could be imposed if the judge finds that the disaster spilled more than four million gallons into the Gulf.

BP signed the settlement agreement in 2012, but has since made the claim that its interpretation is causing the company to pay compensation to those that cannot prove damages. This settlement is separate from the environmental and criminal penalties relating to the spill, which are undergoing their own court proceedings. BP has estimated that it will pay at least $9.7 billion to plaintiffs, about $2.3 billion of which has already been paid.

In the appeal, BP claimed that it had made more than $600 million in illegitimate payments to claimants not actually harmed by the spill. A federal district court in New Orleans and the 5th U.S. Court of Appeals upheld the settlement earlier this year before the Supreme Court refused to hear it.

The oil giant has also been making a public relations push to try and minimize the impacts of the spill and while lionizing their cleanup efforts. In October, a senior vice president for communications at BP penned a Politico article stating that BP has consistently done the right thing for the last four years and that the company “should not be accountable for damages caused by the acts of others, or those conjured up by opportunistic advocacy groups.”

In response to the Supreme Court’s decision, BP spokesman Geoff Morrell said the company will “continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered.”

While the lasting impacts of the oil spill on the Gulf and coastal communities is still being determined, the outlook is not good. In October, a study documented a 1,235-square-mile “bathtub ring” of oil on the ocean floor where 10 million gallons of oil settled and coagulated after the spill.