NEW ORLEANS – BP Exploration & Production Inc. has lost its appeal against Murphy Oil USA to recover $58.4 million in an award settlement as part of the Deepwater Horizon Oil Spill lawsuit.
The appeal, which was heard in the U.S. Court of Appeals for the Fifth Circuit, challenged the award settlement given to Murphy Oil through a discretionary review and reinstatement by a claims administrator. The appeal came from the U.S. District Court for the Eastern District of Louisiana and examined Murphy Oil’s relation as an independent business entity.
Murphy Oil filed 127 claims under the Deepwater Horizon Economic and Property Damage Settlement Agreement. BP argued that Murphy Oil was excluded from any settlement award as its parent company Murphy Oil Corporation was a “cradle to grave” oil company that engages in everything from oil exploration and extraction to sales, according to the court opinion.
While the claims administrator who doled out the award settlement found that Murphy Oil was not excluded from receiving monetary payment under the settlement agreement, an appeal panel found that the company was essentially operating as the refining and marketing arm of its parent company, according to the court opinion. After examination, the appeals panel deemed Murphy Oil an integrated oil and gas company that was not eligible for a settlement under the agreement.
Murphy Oil appealed the decision and the district court reviewed the motion, finding that the North American Industry Classification System (NAICS) code named Murphy Oil's primary business as gasoline sales. This allowed the court to identify Murphy Oil as a separate arm of its parent company and reinstate the $58.4 million settlement award to the company made by the claims administrator.
BP appealed the judgment to the appeals court, which after reviewing the record and all arguments found that the district court didn’t rule in error. It affirmed the decision of the court, and provided that Murphy Oil wasn’t an excluded entity under the settlement agreement and was indeed entitled to the settlement award.