On Wednesday a federal court ordered a lower court judge to reconsider his interpretation of a settlement with claimants who filed billions of dollars of claims against BP after the 2010 Macondo disaster.
In this partial victory for BP, the majority found that the formula assessing a potential loss needed clarification. In a dissent, the third judge argued that the company was trying to change the rules it had already agreed to.
BP has persistently complained about the claims process, saying that Patrick Juneau, the administrator of the program, was approving fabricated payments for business economic losses based on an erroneous reading of an agreement the company reached last year with victims of the incident.
Patrick Juneau, administrator of the claims program
BP has also repeatedly requested that U.S. District Court Judge Carl J. Barbier suspend payments of private claims due to misinterpretations of the agreement and additional accusations of fraud. But thus far Judge Barbier has refused, decreeing that Juneau interpreted the settlement correctly.
U.S. District Court Judge Carl J. Barbier
While upholding the lower court's dismissal of a BP lawsuit against Juneau, the U.S. Court of Appeals in New Orleans ordered Judge Barbier to grant "further consideration" to the complaints.
The court ruled that "The district court had no authority to approve the settlement of a class that included members that had not sustained losses at all, or had sustained losses unrelated to the oil spill as BP alleges." It concluded that in the event that the administrator was interpreting the settlement to include people who did not suffer damage resulting from the Macondo incident, "the settlement is unlawful."
Judge Barbier was ordered by the Appeals Court to develop a "narrowly tailored injunction" that will permit the "deliberate reconsideration of these significant issues."
BP has also claimed that private contractors employed by the claims office have been wasting money and that the office has lacked anti-fraud controls.
In a recent court filing, BP petitioned that payments be suspended until the former FBI director Louis Freeh, who was appointed by Judge Barbier to investigate wrongdoing in the claims process, aids the claims office in improving and executing anti-fraud procedures.
Juneau did not immediately issue a response to the decision, which was issued late in the day.
Geoff Morrell, a BP spokesman, said, "BP is extremely pleased with today's ruling...Today's ruling affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly nonexistent losses."