NEW ORLEANS -- Businesses with Oil Spill claims won a major ruling Monday night when the U.S. 5th Circuit Court of Appeals refused to re-hear BP’s appeals about how claims are paid under a multi-billion-dollar settlement agreement.
After an eight-month stop on business claims payments, the long-awaited decision brought hope to those who had been in a holding pattern.
“This is a major step,” said the court-appointed claims administrator, Patrick Juneau. “Till we got this ruling, everything was on hold. So at least the ball is definitely moving forward now.”
But there are still some procedural hurdles, such as a seven-day waiting period before the appellate court’s ruling is officially issued through something called a “mandate.” And BP could continue to hold up business claims payments by appealing to the U.S. Supreme Court and asking to suspend the mandate until the High Court hears its case.
So, forgive Nat Krasnoff if he isn’t celebrating just yet. His company, Harahan-based Digital Designers, got the go-ahead for payment from BP 10 months ago – after winning a drawn-out appeal by BP on its specific claim. But the security camera and low-voltage communications company still hasn’t been paid.
“It’s going to start the ball rolling again, but it’s in the hands of the courts, it’s in the hands of BP,” Krasnoff said. “Are they going to go to the Supreme Court? During the seven-day waiting period right now, is something going to surface? Yeah, it’s a step in the right direction. We’re not counting our chickens.”
BP hasn’t decided how to proceed with appeals just yet. It could ask the 5th Circuit to keep the stay in place while seeking an appeal at the U.S. Supreme Court. If they don’t get a positive ruling from the appeals court, they could go straight to the Fifth Circuit’s representative on the High Court, Justice Antonin Scalia.
Scalia agreed to something similar in 2010 for tobacco companies appealing a $270 million settlement with the state of Louisiana. Scalia’s son Eugene is law partners with BP’s appellate lawyer, Ted Olson. And Scalia is considered closely aligned with the 5th Circuit judge who championed BP’s argument in this case, Edith Clement.
Clement wrote a scathing dissent Monday against the 8-5 decision to not hear BP’s case as a full court. She complained that the other appellate judges were trying to “shift the blame to BP’s lawyers” for agreeing to Juneau’s interpretation that some claimants unhurt by the spill would qualify for payment.
Ironically, it was Clement who directly blamed BP’s lawyers for the exact same thing at a hearing last July.
“It's totally unrelated to the oil spill, but yet BP's lawyers, two of them in fact, said that would be recoverable, that would be presumed. How can that logically be correct?” Clement asked BP’s Olson in oral arguments presented July 8, 2013.
At the time, Olson explained it was “part of a compromise,” as any settlement is. That backed up testimony from a BP expert and a letter from BP’s lead settlement attorney that said such “false positives” should be paid. But after Clement pushed the issue of “causation” – calling on the district court to consider some other way to establish whether each claimant’s losses had really come from the spill – BP changed course and filed an appeal on those very grounds.
In another interesting aspect of Clement’s dissent Monday, she argued that the settlement was paying “absurdities” and cited two examples from a “60 Minutes” TV report two weeks ago, rather than referring to examples BP had detailed in the court record.
The two claims Clement referenced were an RV park that went into foreclosure before the oil spill and a wireless store that had burned down. Because Clement doesn’t give specific examples from the court record, it was hard to tell exactly which claims she was referring to.
But lead plaintiffs’ lawyer Steve Herman said he looked through BP’s complaints in the court record and found one about a foreclosed RV park. He said that claim was approved for payment because it was for a whole chain of RV parks, only one of which had gone into foreclosure.
“BP kind of takes it out of context and talks about one RV park instead of the business as a whole and BP expressly allowed you to file for your business as a whole,” Herman said.
He said that’s typical of how BP “cherry picks” aspects of claims to attack the settlement in court and in the media. Another example BP used in the “60 Minutes” interview was, in fact, in the court record. BP notes that it was a car dealer that sold Pontiacs until the brand was discontinued before the spill. What BP doesn’t say, Herman said, is that the auto dealer in question also sold Buick and GMC vehicles and suffered its post-spill losses on sales of those makes, not because it had to stop selling the Pontiacs.
BP said Tuesday it is still considering its appeal options. Meanwhile, Herman asked claimants like Krasnoff to remain patient.
“We know it’s frustrating; we appreciate your patience,” Herman said. “Sometimes it’s more important to get things right than to get things fast. It’s probably going to take more time. I assume BP is going to keep challenging. But this is very good news. It’s a very positive step in the process.”