Tuesday, March 4, 2014

BP Challenge to settlement terms rejected by Appeals Court

The U.S. Court of Appeals for the Fifth Circuit has rejected BP's challenge in In Re Deepwater Horizon/Lake Eugenie Land & Development, et al. v, BP Exploration,No. 13-30315 ,  issued March 3, 2014 - GWC

Though a petition for en banc hearing, and cert petition to the Suprme Court are doubtless in the offing this is probably the end of the line for BP's challenge to the deal they made.  
Judge Edith Brown Clement dissents - citing Garza, and concluding that "we are left with the majority’s holding that the Claims Administrator does not need to perform the “gatekeeping function” of ensuring that claims are not paid that are not plausibly traceable to the spill. Claimants 
whose losses had absolutely nothing to do with Deepwater Horizon or BP’s conduct will recover as a result of this ruling.".
I actually thought they had a good argument - embraced by Judge Garza's dissent two months ago - that evidence of causation was needed to support the judgment.  But on reflection I  have concluded that a claim with a colorable basis was sufficient to support a judgment enforcing a class action settlement.  The reason is that this is in the end a matter of contractual interpretation - the settlement contract - and the role of the FRCP 23 court is thereby limited.  Finally there is the public policy issue: thousands of payments have been held up by the court's injunction.  Now that the panel has lifted the stay of payments by administrator Patrick Juneau, the genie will not readily go back in the bottle.
 The opinion begins below.   Times commentary HERE.  - GWC

Leslie H. Southwick, Circuit Judge 

This appeal concerns issues arising under a Settlement Agreement approved by the district court in December 2012. Relevant to us today is that the settlement provided a mechanism for presenting and processing claims for business losses caused by the April 2010 Deepwater Horizon disaster in the
Gulf of Mexico. The district court made two rulings as directed by our October 2013 remand. One concerned an accounting question, which was resolved in a sufficiently satisfactory manner as not to be appealed by any party. The other ruling was that the Settlement Agreement did not require those submitting claims for certain business losses to provide evidence of causation. BP Exploration and Production, Inc. appeals that ruling and also argues that an injunction is required to stop payments on such claims. We AFFIRM. 

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