Supreme Court Denies BP's Bid to Undo Settlement

A decision by the United States Supreme Court saw through all the BP smoke and mirrors, denying the oil company’s petition for review, and leaving intact a landmark settlement for the people and businesses of the Gulf Coast, arising out of the disastrous 2010 spill.

If anyone had any doubt about what BP intended, you only need to look at one exchange between attorney Mike Juneau, on behalf of the Claims Administrator, and BP:

On September 25, 2012, Juneau wrote to the parties to clarify the Causation requirements:“As to [Business Economic Loss] claims, once a claimant’s financial records satisfy the causation standards does the Settlement Agreement mandate and/or allow the Claims Administrator to separate out losses attributable to the oil spill vs. those that are not?”

Then Mr. Juneau made it clearer:“Stated another way, once a claimant passes the causation threshold, is the claimant entitled to recovery of all losses as per the formula set out in Exhibit 4C, or is some consideration to be given so as to exclude those losses clearly unrelated to the spill?

To make absolutely sure, Juneau posed a hypothetical situation:“A small accounting corporation / firm is located in Zone B. They meet the ‘V-shaped curve’ causation test. The explanation for the drop in revenue is that one of the three partners went out on medical leave right around the time of the spill. Their work output, and corresponding income, thus went down by about a third. The income went back up 6 months later when the missing partner returned from medical leave.  Applying the compensation formula under Exhibit 4C of the Settlement Agreement, the accounting firm can calculate a fairly substantial loss. Is that full loss recoverable?”

What did BP say?Yes. “If the accurate financial data establish that the claimant satisfies the BEL causation requirement, than all losses calculated in accord with Exhibit 4C are presumed to be attributable to the Oil Spill. Nothing in the Causation Framework or Compensation Framework provides for an offset where the claimant firm’s revenue decline (and recovery, if applicable) satisfies the causation test but the extraneous non-financial data indicate that the decline was attributable to a factor wholly unrelated to the Oil Spill. Such ‘false positives’ are an inevitable concomitant of an objective quantitative, data-based test.” [Letter from BP Counsel Mark Holstein to Juneau, Sept. 25, 2012]

The Supreme Court basically told BP: Enough is Enough. It’s time to live up to the promise you made to the businesses and families of the Gulf: Make It Right.

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