Gulf Oil spill

The U.S. Court of Appeals for the Fifth Circuit ruled earlier this month that British Petroleum has the right to appeal some damage claims awarded in the aftermath of the Gulf oil spill, Reuters' Jonathan Stempel reports.

The circuit court found that the settlement agreement did not resolve claims itself, but established a mechanism for the trial court to resolve claims. As a result, BP can appeal claim determinations by U.S. District Court Judge Carl Barbier.

A federal judge has ruled that BP acted with gross negligence and wilful misconduct regarding the massive oil spill in the Gulf of Mexico four years ago, the Washington Post reports. That means the energy company could face fines up to $17 billion for Clean Water Act fines.

U.S. District Judge Carl Barbier ruled that BP was 67 percent at fault for the spill, drilling rig owner and operator Transocean was 30 percent at fault and oil services giant Halliburton was 3 percent at fault.

Transocean already settled its liability for $1.4 billion. This week, Halliburton agreed to spend $1.1 billion to settle claims against it, including claims for punitive damages brought by the commercial fishing industry, the Wall Street Journal reports. While Halliburton was not found grossly negligent by the judge, the settlement ensured Halliburton avoided the risk of higher damages if it had been.

In the next two parts of the government's court case against BP, the second part will determine the size of the spill and the third part will determine the final amount of the Clean Water Act and punitive fines, the Post also reports.

The New York Times' Campbell Robertson and John Schwartz report today on why BP is now attacking a settlement process for economic-damage legal claims arising out of the Gulf oil spill. The energy firm, however, has not been able to unwind the settlement it agreed to: "While BP has won some arguments in court, its fundamental point — that the settlement has been brazenly misinterpreted to pay claims with no evidence linking them directly to the spill — was batted away in a recent decision in the United States Court of Appeals for the Fifth Circuit. 'There is nothing fundamentally unreasonable about what BP accepted,” Judge Leslie H. Southwick wrote, 'but now wishes it had not,'" The Times also reports.

The settlement allows for payouts for false positives in which businesses can show loss in income, even it was not related to the oil spill, The Times reports. Texas attorney Brent Coon told The Times BP "'underestimated how much law firms would go out and solicit clients. I cannot believe they didn’t appreciate that risk.'"

The Fifth Circuit, 2-1, rejected BP's argument that a court-appointed claims administrator has misconstrued the terms of a settlement, The Washington Post reports. BP further unsuccessfully argued that businesses claiming economic loss are receiving settlement money even when their injuries can't be traced to the Gulf oil spill, The Post further reports. The majority reasoned that BP agreed to a settlement in which plaintiffs wouldn't have to submit evidence that their claims arose as a result of the oil spill.

The Washington Post reports on "the legal gusher" facing BP in the federal courts in New Orleans.

One issue involves the April 2012 settlement over economic harm to people and businesses, and how much causation plaintiffs have to show to be entitled to be paid by the special master administering payouts from the BP fund, The Post reports. "BP alleges that many of the 256,478 claims filed--by a parade of fishermen, hotels, surf shops, law firms, nursing homes, strip clubs and others — are unjustified or even fraudulent," The Post further reports.

Another issue The Post highlights are possible conflicts of interest in which a lawyer, appointed as the appeals coordinator for disputed claims in the settlement fund, got the job because his father, a federal judge, helped arrange it with the special master overseeing the fund. The judge's sister-in-law got hired at an accounting firm advising restaurant owners and suppliers seeking money from the BP settlement. The judge's brother and nephew work at a law firm representing clients seeking money from the fund. The judge and his wife have filed a claim for payment by BP, even though the judge oversaw the trial of a BP engineer convicted of obstruction of justice.

Special master Louis Freeh found that an official involved in the administration of settled claims over the BP oil spill frequented a New Orleans bar that received $500,000 in oil-spill compensation and mishandled an email regarding the claim, the National Law Journal reports. While Freeh recommended procedural changes, BP wants witness statements and transcripts, NLJ reports. Freeh and plaintiffs lawyers oppose that request.

A federal appellate court, divided 2-1, has ordered the trial judge presiding over the settlement of Gulf of Mexico oil spill lawsuits to reconsider the formula used to calculate claimants' damages, The New York Times reports. "BP has repeatedly complained about the claims process, arguing that the program’s administrator, Patrick Juneau, was approving fabricated payments for business economic losses based on an unsound interpretation of an agreement the company reached with victims last year," The Times also reports.