BP seeks return of millions in oil spill damage payments

HOUSTON – BP asked a federal judge on Friday to recall millions of dollars in “erroneous” payments to Gulf Coast businesses under its multibillion-dollar oil spill settlement, plus interest and attorney fees.

The London oil company said “a vast number of claimants” were paid before the court wrote a new policy in May that reversed accounting rules on how certain cash-based businesses are compensated for losses related to the 2010 Gulf of Mexico oil spill.

“They were unjustly enriched,” BP said in court documents filed in New Orleans in the massive  civil case over the Gulf of Mexico spill. The company said it was entitled to restitution under rules created by the Supreme Court nearly a century ago.

BP’s request follows months of court battles over the settlement it reached in 2012 with lawyers for Gulf Coast residents claiming economic damages from the spill. BP is waiting to see if the Supreme Court will take up a separate dispute over oil spill claims BP alleges were fabricated. An eight-month order blocking spill payments to businesses was lifted last month.

Steve Herman and Jim Roy, lead attorneys for thousands of spill claimants, said the settlement agreement BP signed states that future legal proceedings that alter terms won’t affect claimants.

“This is just another attempt by BP to back out of the commitment it made to the Gulf,” the Louisiana lawyers said in a written statement. “BP itself has already told the Supreme Court that it ‘will have no practical way of recovering’ the money it paid. Every claim that was paid was done so according to an independent trust agreement that BP co-authored and agreed to.”

In the court documents, BP said a seller of animal skins was overpaid by $14 million and a construction company hundreds of miles away from the Gulf received $8.4 million, examples of payments the company says “bear no relationship” to economic reality.

The company also asked U.S. District Judge Carl Barbier to order certain claimants not to spend damage awards until they are recalculated under the new rules.

BP spokesman Geoff Morrell said the company had tried to avoid legal action over the payments by asking federal judges to stop the flow of “inflated and fictitious awards” pending the courts’ decision on the dispute over the interpretation of the settlement.

“Unfortunately, however, claimants’ lawyers vigorously opposed BP’s efforts, thereby exposing claimants to the risk that some or all of the money they received would have to be paid back after BP’s interpretation prevailed in the courts,” Morrell said.