Judge approves BP class action settlement

In a big win for British oil giant BP in its effort to resolve liability from the 2010 Gulf of Mexico oil spill, a federal judge has given final approval to a multibillion dollar class action settlement between the company and individuals and businesses affected by the spill.

U.S. District Judge Carl Barbier of New Orleans said in his ruling late Friday that the settlement for economic and property damages is fair.

A footnote in a flurry of documents filed in conjunction with the ruling said Barbier would rule separately on a medical benefits settlement that BP reached with plaintiffs.

BP has estimated that it will pay out $7.8 billion in the two settlements to thousands of claimants for economic, property and health claims — although the agreement BP reached with lawyers for plaintiffs earlier this year does not have a cap on damages.

BP welcomed the news.

“We believe the settlement, which avoids years of lengthy litigation, is good for the people, businesses and communities of the Gulf and is in the best interests of BP’s stakeholders,” the company said in a statement Friday evening.

“Today’s decision by the court is another important step forward for BP in meeting its commitment to economic and environmental restoration efforts in the Gulf and in eliminating legal risk facing the company.”

A committee of plaintiffs’ lawyers that negotiated the deal also praised the decision.

“This settlement has — and will continue to —  bring the people and businesses of the Gulf the relief they deserve,” the attorneys  said in a statement.

Barbier said claimants who decided to opt out of the settlement will not benefit from it. The judge also ruled that economic plaintiffs joining the settlement reserve their right to assert certain claims against rig owner Transocean and cement contractor Halliburton. Under the settlement, BP transferred some claims against those companies to the plaintiffs.

Hundreds of plaintiffs objected to the settlement and thousands opted out. Barbier noted the controversy in his ruling, but said the arguments against approval were not persuasive.

“While these filings suggest that certain parties view the evidence differently from how BP does, none suggests that the settlement— which is designed to resolve such disagreements — is anything but fair, reasonable, and adequate,” the judge said in his 125-page order.

“All objections to the settlement are hereby overruled,” he added.

Eleven workers were killed when an undersea well owned by BP blew out on April 20, 2010, and caused an explosion on the Deepwater Horizon drilling rig off Louisiana. The resulting oil spill was the worst offshore spill in U.S. history.

BP has already spent or committed tens of billions of dollars on cleanup costs and compensating victims. It is set to plead guilty next month to criminal charges, including manslaughter and obstruction of Congress. BP has agreed to pay a $4 billion criminal penalty. Victims’ kin have opposed the pact. If a judge rejects it, BP can withdraw its plea and go to trial.

Still unresolved are expected civil fines and penalties from the federal government, which could add billions more to BP’s tab.