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Second Federal Appeals Court Affirms BP Settlement Program, Said Injunction on Payments Should Be Lifted

Orlando, FL – (March 3, 2014) — The Fifth Circuit U.S. Court of Appeals in Louisiana today ruled against BP in its bid to try and stop or severely change the terms of the Deepwater Horizon Court-supervised Settlement Program.  The Appeals panel agreed by a 2-1 vote in support of presiding Federal Court Judge Carl Barbier, who ruled on December 24th of last year that BP should not be allowed to change the terms of the deal it made.

By its ruling, the 5th Circuit has now formally rejected BP’s arguments and requests for new and additional proof requirements beyond the satisfaction of the economic formulas that establish when valid claims for business economic losses relating to the oil spill should properly be paid.  The 5th Circuit also ruled that the injunctive stay that has been in place pending its ruling can now be lifted so that payments to businesses may continue.  Businesses can now reasonably expect the processing of claims by the Settlement Program to resume in due course, as the Program under the watchful eye of the Federal District Court resumes its normal claims processing function and implements the Court’s other prior mandates to ensure claims processing fairness and uniformity.

The Court’s ruling of today is yet another affirmation that the Settlement Agreement entered into by BP is legally binding and enforceable, and that the Settlement Program it created is fair and appropriate in how it operates and functions.  While BP has argued that the Program is paying claims that should not be paid, the fact remains that the Program is merely implementing the terms of the Agreement that BP itself helped write and advocate for before the District Court in 2012, which the 5th Circuit has now blessed.

The Deepwater Horizon Court-supervised Settlement Program was initiated on June 4, 2012 to compensate individuals and businesses affected directly and indirectly as a result of the 2010 BP oil spill.  BP and the Plaintiffs’ Steering Committee entered into the Economic and Property Damage Class Action Settlement Agreement on April 18, 2012. On December 21, 2012, the United States District Court for the Eastern District of Louisiana approved this Settlement Agreement.  The Agreement was negotiated by BP as a way to satisfy the immense legal action BP was facing within years rather than decades, as evidenced by other similar occurrences in the past.

“Terms of the settlement “are not as protective of BP’s present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court,” Circuit Judge Leslie Southwick wrote for the majority.  “There is nothing fundamentally unreasonable about what BP accepted but now wishes it had not.”

“The Court has held BP to its word for the good of the thousands of businesses and individuals harmed by BP’s negligence,” said ERG Law Firm founding partner, Henry “Hank” Didier.  “The Settlement’s objective, transparent formulas can now work to recompense the true victims of the 2010 oil disaster.  I applaud the Courts for not allowing BP to succeed in its efforts to derail a good program.”

Steve Herman and Jim Roy, attorneys for spill victims on the Plaintiffs’ Steering Committee, said in an e-mailed statement that the “ruling makes clear that BP can’t rewrite the deal it agreed to.”

Prior to negotiating and agreeing to this Settlement Program, BP handled approximately 950,000 claims directly through its own Gulf Coast Claims Facility (GCCF), an exercise which offered significant experience in how claim damages were calculated.  BPs objections came only after it realized the scope of those it hurt, and after the deadline passed for claimants to opt-out. Therefore, the Settlement Program is now claimants’ only recourse for recovering funds lost as a direct or indirect result of the 2010 oil spill.

The 2010 BP oil spill was the worst environmental disaster in our country’s history. 11 rig workers lost their lives in the tragic explosion.  The National Oceanic and Atmospheric Association has linked lung disease and deaths among the Gulf’s dolphin population to the spill.  The Wildlife Federation reported that 1,100 miles of shoreline and coastal wetlands were oiled, and habitats for many animals such as sea turtles and brown pelicans were contaminated, among other damage.  And, Florida missed out on billions of dollars as tourism halted for the second half of 2010, and businesses experienced indirect or trickle-down economic losses.

Now, with the current deadline to file claims only weeks away for affected business owners to seek compensation to recoup some of their lost revenues, BP still continues its multi-million dollar PR and advertising campaign designed with the apparent intent to deter potential claimants from being evaluated.  Only businesses that exercise their rights and get evaluated for a potential claim will be compensated.

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