Supreme Court denies BP on spill payment freeze

HOUSTON – The Supreme Court on Monday rejected BP’s emergency petition to halt oil spill payments while it considers whether  to take up a broader dispute over allegedly fabricated economic-loss claims.

The London-based oil company had asked Supreme Court Justice Antonin Scalia, who has jurisdiction over certain petitions coming from the 5th U.S. Circuit Appeals Court in New Orleans, to reverse the lower court’s order that had lifted an injunction last month on payments to thousands of Gulf Coast businesses who say they sustained financial damage in the wake of the 2010 Gulf of Mexico oil spill.

BP is still pursuing the high court’s review of the appeals court’s recent decision not to reconsider BP’s fight over how settlement payments are made to businesses, specifically “compensation of claims with no apparent connection to the spill,”  said BP spokesman Geoff Morrell in an emailed statement.

“The company continues to believe that the lifting of the injunction suspending the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident,” Morrell said.

BP has argued for months that it has likely paid hundreds of millions in fictitious claims from its estimated $9.2 billion settlement with Gulf Coast residents, which was struck in 2012. Lawyers for Gulf residents had made their case as well, asking Scalia to reject the call to reinstate the freeze on payments because of BP’s “buyer’s remorse.”

On Monday, Louisiana attorneys Steve Herman and Jim Roy, who represent Gulf residents and claimants in the settlement, said the Supreme Court’s decision “will allow businesses to continue to receive the compensation they’re rightly entitled to according to the objective, transparent formulas agreed to by BP.”

Legal experts had said if Scalia granted the stay on oil spill payments, it could have bought BP another six months to avoid shelling out spill payments to the biggest group of claimants, those who claim business economic losses as a result of the spill. Those payments had been on hold since December when the original injunction was put in place.

The Supreme Court was BP’s last judicial recourse to get a stay on business economic claims, said Blaine LeCesne, a law professor at Loyola University who has followed the case.

“The Supreme Court’s refusal to grant a stay is a strong signal that BP is not likely to prevail on the merits of its appeal and that the Court will probably not even hear it,” LeCesne said. “This ruling is likely the penultimate ending of BP’s ill-fated quest to throw out the settlement. It’s all but over.”

Even if the court ruled in BP’s favor, it would be very difficult to track down the actual oil spill payments the company claims were unrelated to the spill, said Carl Tobias, a law professor at the University of Richmond who studies federal courts and has followed the legal fallout from the 2010 disaster.

“In many instances, the money would already have been spent, especially when you’re talking about individuals and even small entities,” Tobias said.

It’s still possible the Supreme Court will hear BP out, but it’s more likely to happen after a federal judge has rendered his judgement in the case, “rather than in piecemeal appeals,” Tobias said.