BP Hammers Judge Over Claim Payments in Deepwater Spill

, The Litigation Daily


Gibson, Dunn & Crutcher's Theodore Olson and his client BP are continuing to attack U.S. District Judge Carl Barbier in New Orleans, who is overseeing the $9.6 billion settlement claims process for victims of the Deepwater Horizon oil spill. On Thursday, Olson filed an emergency motion with the U.S. Court of Appeals for the Fifth Circuit on behalf of BP Exploration and Production Inc., asserting that Barbier has failed to halt the payment of claims that weren't caused by the 2010 oil spill. Olson argues that an emergency injunction is needed to prevent the release of hundreds of millions of dollars in undeserved windfall payments.

The plaintiffs lawyers, in a filing Friday, counter that BP is trying to alter the terms of the settlement that the parties signed last year. Under that settlement, they state, the causation requirement is presumed to be met for claimants who qualify under a mathematical formula that looks at their revenue before and after the spill and other factors. Now, the plaintiffs maintain the company is trying to repudiate that position by requiring a more subjective individual test of causation.

BP's emergency motion follows an Oct. 2 ruling by the Fifth Circuit in which it ordered Barbier to issue a preliminary injunction to stop payment on certain claims. The ruling by a divided panel reversed two earlier orders by Barbier upholding the claims process and refusing BP an injunction. The court told Barbier to craft an injunction that barred claims that weren't supported by a certain accounting method.The court also questioned whether the mathematical model in the settlement can be used as a substitute for proof of actual causation.

On Oct. 18 Barbier issued an order stopping the payment of certain claims. But in its filing Thursday, BP argued that Barbier didn't go far enough. It maintained that the judge still has improperly refused to require claimants to show that their claims were caused by the oil spill.

While Kirkland & Ellis negotiated the settlement for BP and is listed as co-counsel on Thursday's filing, Gibson, Dunn has been brought in to handle appellate issues. The company also recently added Williams & Connolly to its Deepwater Horizon legal team.

The plaintiffs team is lead by Stephen Herman of New Orleans' Herman, Herman & Katz and James Parkerson Roy of Domengeaux, Wright, Roy, & Edwards in Lafayette, La. A representative for the plaintiffs lawyers declined to comment.

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