BP Oil Spill: Discussion of Legal Developments

Oil company BP Plc has announced on May 21 that it will ask the U.S. Supreme Court to decide whether businesses must prove that they were directly harmed by the 2010 Gulf of Mexico oil spill in order to collect payments from the 2012 settlement. The decision comes after the 5th Circuit Court of Appeals refused to reconsider its determination that businesses did not need to prove direct harm in order to collect from the settlement fund. BP will ask the 5th Circuit to continue a freeze on payments until the Supreme Court acts on the matter. See LBN’s earlier report on this case.

RIck Kuykendall

RIck Kuykendall

Attorney Rick Kuykendall explained that a number of things were pending that could complicate things. The 5th Circuit denied rehearing of motions by BP and objectors’ counsel to rehear the Rule 23 panel’s certification of the class action decision. (There is a question as to how BP, arguably the winner below, could appeal from a win). BP also lost in the 5th Circuit on its argument about business economic loss claims (BEL) decision. Kuykendall explained that the 5th Circuit affirmed the trial court’s decision that BP was estopped from raising the causation issue because they agreed to the settlement.

BP can seek certiorari to the U.S. Supreme Court within 90 days of the 5th Circuit’s mandate, but Kuykendall opines that such petitions are rarely successful. Still, the Court might be interested in looking at the case. A separate issue is the injunction that was in place in the 5th Circuit staying the payment of BEL claims; BP has asked the 5th Circuit to maintain the injunction until (1) certiorari is acted upon, or (2) until the case is finally disposed of, should certiorari be granted. Kuykendall points out that this extraordinary relief could delay BEL payments (should the Supreme Court decide to hear the case) for almost two years. Some of these payments have been pending since early 2013.

Kuykendall discusses the economic loss claims and the notion that one should not be compensated for a loss until a lawsuit has been entirely disposed of. On the other hand, he explains, this case is “fundamentally different” because the case is premised on the Oil Pollution Act of 1990 (OPA), which addressed problems with payment of claims that became apparent after the Exxon Valdez oil spill. “What Congress said in OPA is that you have to compensate people on an interim basis,” says Kuykendall. If the Supreme Court takes the case, opines Kuykendall, the congressional intent of OPA to “keep people alive” with interim payments could be denied.

Mr. Kuykendall began his law practice over twenty years ago in Birmingham, Alabama with one of the most successful union side, labor law firms in the United States -- Cooper, Mitch, Crawford and Kuykendall. After becoming the managing partner in 1983, Rick presided over the firm’s evolution into a successful and powerful plaintiff/public interest law firm with a nationwide practice. Despite the firm’s rapid growth and financial success, Rick never allowed the firm to deviate from its core mission of helping those who needed it the most, despite the odds. The, provides online, on-demand, legal video content, provided by attorneys, law professors and others from around the world.  The Legal Broadcast Network is a featured network of Sequence Media Group.