Appeals court upholds claimant's $2 million award from BP

By Kyla Asbury | Apr 8, 2019

NEW ORLEANS — The United States Court of Appeals for the Fifth Circuit ruled that an award of $2 million by BP to a claimant involving Deepwater Horizon litigation was proper.

The panel, which included Judges Patrick E. Higginbotham, Stuart Kyle Duncan and Jennifer Walker Elrod, ruled that the district court did not err by declining to grant discretionary review in the case, according to the March 28 opinion. Elrod authored the opinion.

Elrod wrote that the district court properly denied discretionary review and the appeals court affirmed that decision. 

The claimant, an Alabama company, manufactures commercial signs and submitted a claim in November 2013, which was rejected twice by the claims administrator. A third review determined the claimant was entitled to $2 million under the Economic and Property Damages Settlement.

BP then appealed the award, citing that the damages alleged from the oil spill were implausible, that the claims administrator improperly characterized a research-and-development expense and that the claims administrator "erroneously omitted its adjustments that 'matched' the (research and development) costs to the months in which they were incurred," the opinion states.

After the appeals panel denied the appeal, BP sought discretionary review from the district court, which was denied in June 2018. BP then appealed to the appeals court.

"BP does not identify any other possible causes of Claimant’s loss, nor does it rely on any evidence or authority to demonstrate that Claimant’s losses could not have been caused at least in part by the Deepwater Horizon disaster," the opinion states. "Accordingly, BP has not established that Claimant’s causation attestation is implausible. The district court therefore properly denied discretionary review."

BP argued that regardless of the analyses undertaken by the claims administrator and the appeals panel, the research-and-development expense was inaccurate. The appeals court found that the district court did not abuse its discretion on this point in denying review.

Pertaining to the third argument, the court found that the district court did not err in declining to grant discretionary review. The court found that BP did not demonstrate the need for discretionary review and the appeals court affirmed the decision made by the district court.  

United State Court of Appeals for the Fifth Circuit Case number: 18-30844

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