NEW ORLEANS - The U.S. Supreme Court has declined to review the multi-billion dollar Deepwater Horizon settlement agreement meant to compensate victims of the 2010 Gulf of Mexico oil spill.
The court’s refusal to review the case leaves in place a lower court’s ruling that claimants do not have to prove they were damaged by the oil spill to receive a settlement. BP and others have argued this ruling runs counter to existing case law.
As is its custom, the Supreme Court provided no reason for passing on the case. A spokesman for BP said the oil giant will continue to agitate for fairness in the settlement.
"We nevertheless remain concerned that the program has made awards to claimants that suffered no injury from the spill – and that the lawyers for these claimants have unjustly profited as a result,’’ Geoff Morrell said. “On behalf of all our stakeholders, we will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered."
BP says it has identified hundreds of millions of dollars in payments that should never have been paid to claimants. It accuses court-appointed settlement administrator Patrick Juneau of turning a blind eye to fraud in the settlement program. An independent auditor recently noted that nearly 20 percent of certain claims were paid even though required documentation for those losses was absent.
Critics have long maintained that Juneau has allowed a culture of corruption to persist through lax internal policies. At least five senior level executives in Juneau’s operation have been fired or resigned after being accused of engaging in questionable ethical behavior.
John Baker Jr., LSU professor emeritus of law and current visiting professor of law at Georgetown University, said the Supreme Court may have judged BP's petition settled business when it declined to hear the case.
“The contorted nature of the litigation, a result of BP appealing a class action settlement to which it had agreed, may have been a factor cutting against review,’’ Baker said.
Now that BP's appeal has been exhausted the clock will start ticking on a six-month deadline for claimants to submit all claims.