NEW ORLEANS -- BP asked Monday for the full 5th Circuit Court of Appeals to hear its argument that businesses seeking compensation for oil spill losses should have to prove those losses came from the effects of the spill, and not from some other factor.
The British giant made the request for an “en banc” review Monday after a smaller panel of 5th Circuit judges ruled 2-1 against BP.
The two judges in the majority on that panel, James Dennis and Leslie Southwick, said BP signed an agreement in 2012 that clearly allowed for businesses in certain locations to collect for losses without proving the spill specifically caused those losses.
But Judge Edith Clement dissented, siding with BP’s contention that paying claimants for non-spill losses should not be allowed under a class settlement. BP hopes the full 5th Circuit of 14 judges will take Clement’s view.
BP agreed in 2012 to pay businesses and other private entities for damages caused by the spill, using formulas to determine eligibility before calculating the awards. BP estimated the settlement would cost it $7.8 billion, but after paying awards through a court-appointed administrator for seven months, the British oil giant complained that the settlement had been “hijacked” and “reinterpreted” so that it paid for “fictitious losses.”
Faced with the prospect of blowing through all $42 billion it had set aside for spill recovery, cleanup and penalty costs, BP began attacking the implementation of its settlement. The appeals have slammed the brakes on settlement payments to business claimants for more than a year and already forced the district court to change the way some awards are calculated.
BP has lost two separate appeals before two separate panels and is seeking a full 5th Circuit review on both. In one, the company challenges certification of the settlement class, arguing it isn’t the settlement it agreed to in 2012. The other appeal deals with the question of proving the cause of claimants’ losses.
Clement sits on the board of an oil-industry backed think tank, but has not stepped down even though a judicial ethics panel ruled the think tank presented a conflict for judges. Clement actually raised the idea of making claimants prove the spill caused their losses without being asked to do so.
Questioned by Clement at a hearing last June, BP’s appellate attorney, Ted Olson, initially argued that BP agreed to pay some non-spill losses as a necessary part of a negotiated compromise.
But later, BP adopted Clement’s argument that such a compromise was not proper and filed that appeal in October.