Alabama attorney general blasts BP for challenging Gulf oil spill claims

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Alabama Attorney General Luther Strange is blasting British oil giant BP for challenging certain claims that could cost the company billions of dollars as part of a class-action settlement the company agreed to last year with victims of the 2010 Gulf of Mexico oil spill.

“At the same time BP lauds its efforts for restoring the Gulf in the media, it blames others in court for its own mistakes to avoid responsibility for its own conduct,” Strange said in  statement Thursday.

Strange said that if BP underestimated how much it would owe under the terms of its agreement, that is BP’s problem, not the citizens’.

“BP cannot undo a settlement it wrote and signed, just to avoid its consequences. The courts should not allow it,” he said.

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U.S. District Judge Carl Barbier in New Orleans has scheduled an April 5 hearing on BP’s request to prevent payments of what the oil company calls fictitious or inflated claims that are being made as part of the settlement.

In an emergency filing last week, BP said it will suffer irreparable harm if the judge doesn’t grant the injunction relating to  business economic loss claims.

“While the ultimate amount at stake is at present inestimable, awards for fictitious losses already are hundreds of millions of dollars and could reach billions,” BP lawyers said in the filing.

Separately, BP filed a complaint against the settlement program and its administrator, Patrick Juneau, alleging breach of contract. The complaint doesn’t seek monetary damages, but it does ask that Juneau be ordered to change how he  interprets the agreement so that he complies with what BP believes the agreement says.

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The Plaintiffs Steering Committee, the lead attorneys for the thousands of individuals and business affected by the spill that reached the settlement with BP, has defended the claims administrator’s interpretation of the agreement, noting that the court has  affirmed his interpretation.

And Strange said in his statement that “a legion of BP attorneys wrote and negotiated the terms” of the agreement.

“But now, BP is objecting to the terms of the agreement it signed.  This challenge is not surprising; it is consistent with BP’s past behavior,” he said.

Because of a January decision by the claims administrator about how to handle the disputed business economic loss claims, BP has stopped estimating the total amount under last year’s landmark settlement that it expects to pay out.

Initially, BP had estimated it would pay out $7.8 billion under the uncapped settlement for economic and health damages arising from the disaster off Louisiana. Later, it raised that estimate to $8.5 billion. But in a recent regulatory filing, the company said it would only now project the amount it can reliably estimate, which is $7.7 billion. That figure excludes  disputed claims that are the subject of BP’s filings.

Harry Weber

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