Judge rejects BP bid to block Gulf spill payouts

BP's request to block settlement payouts associated with the 2010 Gulf of Mexico oil spill was rejected Friday by a federal judge. BP estimated a year ago that it would spend roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. 

A federal judge on Friday rejected BP's request to block what could be billions of dollars in settlement payouts to businesses that claim the company's 2010 oil spill in the Gulf of Mexico cost them money.

Before the ruling, U.S. District Judge Carl Barbier already had upheld court-appointed claims administrator Patrick Juneau's interpretation of settlement terms governing payments to businesses affected by the spill. Barbier said he saw no reason to change his March 5 ruling on the same matter and issue a preliminary injunction that would block Juneau from making payments to businesses.

Barbier also on Friday dismissed a separate lawsuit that BP filed against Juneau, who had argued he was entitled to immunity from the suit.

BP argued that Juneau made decisions in January that expose the company to fictitious losses that were never contemplated in the settlement.

"We think it rewrites the contract. We think it rewards people who have no losses," BP attorney Rick Godfrey said.

Private plaintiffs' attorneys who brokered last year's deal with BP say the London-based oil giant's allegations are baseless and self-serving. Steve Herman, one of the lead plaintiffs' attorneys on the case, said BP's request was merely a legal gambit designed to clear another path for an appeals court to review the matter.

Rick Stanley, Juneau's lawyer, said his client has a duty to follow the judge's orders and "move this (settlement) process forward."

"He did not participate in the negotiation of it. He really has no position about the wisdom of the settlement agreement or how it came to be. He just wants to do his job as claims administrator," Stanley said.

Barbier scheduled Friday's hearing before BP appealed his March 5 ruling to the 5th U.S. Circuit Court of Appeals in New Orleans earlier this week.

"Seems like this whole exercise is a belt-and-suspenders operation," Barbier said of BP's separate request for preliminary injunction.

"Not quite," Godfrey said.

"There's no subtlety here. You're trying to get this issue to the 5th Circuit," Barbier said.

BP spokesman Scott Dean said the company "will evaluate how to proceed" in light of Barbier's latest ruling "to protect our rights and prevent continued meritless awards."

"BP believes today's proceedings and the related filings were necessary steps on the way to appellate review in the 5th Circuit, which has not yet considered this issue," Dean said in a statement.

BP estimated a year ago that it would spend roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. The company now says it can't give a reliable estimate for the total value of the deal.