BP wins appeal to limit Gulf spill payouts

The oil company will no longer have to compensate businesses that can't prove they were directly impacted

Published December 3, 2013 2:17PM (EST)

A big appeals court victory for BP will put a halt to some of the payouts it's required to make for the Gulf oil spill.

The oil company will still have to compensate victims of the 2010 spill, which killed 11 people and dumped millions of gallons of oil into the Gulf of Mexico -- but only those who can prove they were directly affected. The original, $9.2 billion settlement, made last year, required BP to pay claimants whose losses weren't traceable to the spill, a payout formula that the company argued was too generous. In Monday's 2-1 decision, a 5th U.S. Circuit Court of Appeals in New Orleans agreed to the halt, overturning U.S. District Judge Carl Barbier’s original decision.

BP, which as of Monday has paid out about $3.78 billion in settlements, is celebrating the victory. From Bloomberg News:

The appeals court’s order yesterday “again underscores that the implementation” of the settlement “has veered off course,” Geoff Morrell, BP’s spokesman, said in an e-mail. “If properly implemented by the district court, the Fifth Circuit’s order will help return the settlement to its original, intended and lawful function –- the compensation of claimants who sustained actual losses that are traceable to the Deepwater Horizon accident.”

Morrell said the appellate order further supports BP’s contention that “continued violation of the settlement agreement’s clear terms” creates legal problems that “threaten to invalidate the entire settlement unless corrected.”

Lawyers for spill victims have claimed in court filings that BP is trying to renegotiate a deal that is proving more costly than it intended. They contend BP is suffering from “buyer’s remorse.”

By Lindsay Abrams

MORE FROM Lindsay Abrams

Related Topics ------------------------------------------

Bp Gulf Oil Spill Lawsuit Oil Companies