No proof of causation needed for Oil Spill claimants, Barbier rules

NEW ORLEANS – Claimants do not need to show a direct link between the 2010 Deepwater Horizon Oil Spill and loss of income to be eligible for a business economic loss claim, a federal judge has ruled, after months of contention between BP and the plaintiffs’ steering committee.

Although most business economic loss claims have been delayed in recent weeks, Judge Carl Barbier, who is overseeing the case in the U.S. District Court for the Eastern District of Louisiana, has decided to keep intact part of the settlement process that BP argues has allowed businesses to receive inflated claims or claims for losses that are unrelated to the oil spill.

BP has maintained that allowing companies who cannot show a direct causal relationship between a decline in their profits when the oil spill was ongoing and the effects of the oil spill itself has driven up the costs of the settlement they reached with the plaintiffs' steering committee.

Currently, BP has paid out $9.2 billion to settlement claimants while they only initially estimated to spend $7.8 billion on all settlement claims.

The court was ordered to revisit the settlement process after the U.S. Fifth Circuit Court of Appeals ruled in BP’s favor in early October.

In a Dec. 24 ruling, Barbier found the settlement did not require claimants to track the exact reason behind a decrease in a business’s income during and after the oil spill because the settlement BP agreed to did not require that information.

“[T]he loss may be due to some cause other than the oil spill, or it may be caused in part by the oil spill and in part by something else, or it may in fact be entirely caused by the oil spill. But to ascertain the truth of the matter would require some counter evidence beyond what the claimant was required to submit under the Settlement,” the ruling said.

However, Barbier did order Claims Administrator Patrick Juneau to develop a policy for handling business economic loss claims in which a claimants financial records that do not match revenue to corresponding variable expenses.

BP spokesman Geoff Morell said the company’s essential argument remains unchanged.

“Awarding money to claimants with losses that were not caused by the spill is contrary to the language of the settlement and violates established principles of class action law. BP intends to seek appropriate appellate remedies to correct this error,” Morell said.