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BP settlement revisited: BP recycles arguments, calling BP claims”absurd”

BP claims filed by businesses in Deepwater Horizon oil spill settlement are again in dispute as BP seeks court order requiring BP settlement administrator to stop paying certain claims

According to a Bloomberg report and several other news outlets, BP has filed new papers seeking to avoid paying many BP claims. The papers were filed on March 15, 2013, in New Orleans federal cort against Deepwater Horizon settlement administrator Patrick Juneau. BP is asking the court to stop  Juneau from paying BP claims based upon Juneau’s interpretation of the Deepwater Horizon settlement agreement and the use of a revenue formula to determine the validity and amount of BP claims.

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If BP’s request is unsuccessful, it alternatively will ask the BP settlement judge to ban BP claims payments to businesses in industries in which BP asserts that most of the fraudulent BP claims have been filed. That includes businesses in agriculture, construction, professional services, real estate, manufacturing and retail.

BP claims process leads to “false positives” and “absurd results,” says BP.

BP argues that the BP settlement administrator’s revenue formula for paying BP claims is requiring the global oil giant to pay billions more than it expected when it settled the Deepwater Horizon class action lawsuit. Juneau’s formula, BP says, leads to “false positives” with “absurd results.”

BP said that the settlement administrator made decisions in January that expose it to BP claims that were not contemplated when the BP settlement was agreed upon. BP is asking the court to order the settlement administrator to stop BP claims payments to any businesses whose claims are part of the administrator’s January decisions.

BP is also asking the court to block BP claims payments to businesses in certain industries, including agriculture, construction, professional services, real estate, manufacturing and retail.

$9.7 million BP claim was approved for a highway, street and bridge construction company in northern Alabama.

After the BP settlement was approved in December, 2012, attorneys throughout the Southeast have begun filing BP claims on behalf of all types of businesses, including some which are located hundreds of miles from the Gulf Coast. One example cited by BP in its Friday court filings was a $9.7 million BP claim that was approved for a highway, street and bridge construction company in northern Alabama, over 200 miles from the Gulf Coast.

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BP claims are exceeding BP’s previous estimates.

BP estimated a year ago that businesses would file BP claims totaling  approximately $7.8 billion. BP increased its estimate of BP claims earlier this year to $8.5 billion, but now says it can’t estimate what the total amount of BP claims will be. “Although the ultimate exposure is at this time inestimable, it grows daily and could cost BP billions,” said lawyers representing BP.

Attorneys who negotiated the BP Deepwater Horizon settlement say that BP is merely trying to avoid paying BP claims that it agreed to pay when it signed the BP settlement agreement. Steve Herman and Jim Roy, two of the many attorneys who represented the plaintiffs in the BP Deepwater Horizon oil spill class action, issued a statement, saying:

“Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas that BP agreed to.”

BP’s arguments against paying BP claims based on objective formulas have already been rejected by the BP settlement judge.

BP has been making the same arguments for approximately two months. It’s first motion seeking to block payment of claims was denied weeks ago. BP then filed a motion asking the court to reconsider its ruling. That motion was denied last week by Judge Carl Barbier, who said that the settlement anticipated that “such results would sometimes occur.” His order denying BP’s motion also stated, in part:

“Objective formulas, the possibility of ‘false positives,’ and giving claimants flexibility to choose the most favorable time periods are all consequences BP accepted when it decided to buy peace through a global, class-wide resolution.”

BP claims can’t be handled fairly without using a formula, says attorney for Alabama businesses filing BP claims.

Michael J. Evans, a Birmingham, Alabama attorney who represents businesses filing BP claims (full disclosure: Evans is publisher of the blog) said that the claims administrator’s interpretation of the settlement agreement is reasonable.

The Deepwater Horizon Settlement Administrator, Patrick Juneau is merely doing his job and implementing the settlement in a way that compensates all businesses hurt by the oil spill, even if they aren’t located right on the Gulf Coast.

How can BP argue that it’s “absurd” to pay a North Alabama contractor millions of dollars? BP signed a settlement agreement in which it agreed to pay businesses located anywhere in the entire state of Alabama. But now BP acts surprised when North Alabama businesses file claims.

There is nothing “absurd” about paying an oil spill settlement claim to a North Alabama business which lost revenue in 2010. BP made these same basic arguments to Judge Barbier, in January and February, and Judge Barbier rejected BP’s arguments both times.

The BP oil spill devastated the businesses on the Gulf Coast, but the damage didn’t stop just a few miles from the coast.There were suppliers of Gulf Coast businesses who suffered economic loss. Businesses which provided goods and services to the suppliers were also harmed by the oil spill. The settlement administrator and the court have both recognized that it is fair to pay businesses based solely upon a formula comparing gross revenues during the time of the Deepwater Horizon oil spill (May-December 2010) with gross revenues earned in other years.

Although BP says that the settlement administrator’s use of a revenue formula  leads to “false positives” and “absurd results, the use of a revenue formula is the only way to make sure every business harmed by BP’s negligently caused oil spill is fully compensated.


BP claims are being filed by all types of businesses all over Alabama. If your business revenues decreased during at least 3 months from May to December, 2010, you may be entitled to a substantial BP claims payment.

Our experienced attorneys are handling BP claims for businesses throughout Alabama and the West Coast of Florida, all the way south to Key West. Attorney Michael J. Evans has joined with the law firms of Yearout & Traylor, P.C. and Gathings Law to represent businesses with BP claims. Use our Free BP Claims Evaluation Form to get a free review of your BP claim. Or call Gusty Yearout at 800-226-6116 or Lloyd or Honora Gathings at (877) 803-3006. 

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. The hiring of a law firm is a serious decision that should not be based on advertising alone. Please write the firm for more information.

Click here to see BP claim forms online.

References: Bloomberg, Reuters, and Fox News.

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