NEW ORLEANS — BP PLC is suffering financial harm because of the way a court-appointed administrator is making payments from a settlement of claims from the 2010 oil spill in the Gulf of Mexico, an attorney for the oil giant said Monday.
Ted Olson made the arguments in a packed courtroom before a three-judge panel of the 5th U.S. Circuit Court of Appeals. A lower court already refused to block payments to businesses that claim the spill cost them money.
At stake are billions of dollars in settlement payments stemming from the blowout of BP’s Macondo well in the Gulf of Mexico.
Samuel Issacharoff, an attorney for Gulf Coast businesses and residents, argued the oil company was aware of the settlement terms and the administrator’s methods. He questioned whether the appeals court has authority to change that agreement.
But Olson, who served as solicitor general under President George W. Bush, attacked the payout process.
“Irreparable injustices are taking place and money is being dispensed to parties from whom it may not be recoverable,” he told the judges.
The panel opened Monday’s hearing by asking Olson whether the court has jurisdiction in a case involving a settlement already approved by the parties in the case and a U.S. District Court judge.
Judge James Dennis seemed skeptical at times, asking at one point, “How can we go beyond the four corners of the agreement?”
BP has asserted that the judge who approved the deal and a court-appointed claims administrator have misinterpreted the settlement, allowing thousands of businesses to secure hundreds of millions of dollars in payments for inflated and fictitious losses.
Plaintiffs’ attorneys who brokered the deal last year counter that BP undervalued the settlement and underestimated how many claimants would qualify for payments under the terms they negotiated.
BP’s appeal doesn’t apply to payouts to individuals.
The April 2010 blowout of BP’s well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf. Shortly after the disaster, BP agreed to create a $20 billion compensation fund that was administered at first by the Gulf Coast Claims Facility, led by attorney Kenneth Feinberg.