U.S. Court Rules Against BP In Gulf Spill Claims Case

BP has already paid $14 billion to clean up the 2010 Deepwater Horizon oil spill in the Gulf of Mexico and $13 billion in compensation for the disaster. Now a U.S. appeals court has ruled that it is also liable for as much as $18 billion more in fines for violating U.S. pollution laws.

On May 28, in a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans said it would not suspend BP’s liability while the company appeals an earlier ruling that exempted some businesses from having to prove direct harm from the disaster before they can collect compensation.

The oil giant has asked the U.S. Supreme Court in Washington to reverse that decision, arguing that it means “countless awards totaling potentially hundreds of millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP's conduct.”

BP says the claims administrator has already approved “$76 million to entities whose entire losses clearly had nothing to do with the spill, such as lawyers who lost their law licenses and warehouses that burned down before the spill occurred.”

It also cited an additional $546 million to individuals and businesses harmed after the spill, but not because of it.

Related Article: BP Return to Gulf of Mexico Marks U.S. Energy Sea Change

The Deepwater Horizon, an offshore oil well in the Gulf of Mexico near New Orleans, was owned by BP and Anadarko Petroleum Corp. when it exploded in April, 2010, killing 11 rig workers and spewing crude oil into the Gulf for nearly three months.

Initially, BP estimated total claims would not exceed $7.8 billion. Later, it complained that the claims administrator was adding hundreds of millions of dollars to that cost by allowing individuals and businesses to collect on what it said were false claims.

Nevertheless, BP acknowledges that many claims have been legitimate, including from businesses dependent on tourism and seafood harvesting -- industries that have been hurt by oil in the water and on local beaches.

By Andy Tully of Oilprice.com