Judge Tosses BP Fuel Dealers’ Brand Name Claims

By MICHAEL KUNZELMAN | October 4, 2012

A federal judge on Tuesday dismissed claims by BP fuel stations and convenience stores that the 2010 oil spill in the Gulf of Mexico diminished the value of the oil giant’s brand and cost them business.

photo: BP p.l.c

U.S. District Judge Carl Barbier’s ruling says the dealers’ claims against BP PLC aren’t viable under the Oil Pollution Act of 1990, general maritime law or state law.

Thomas Bleau, a lawyer for BP dealers Tobatex Inc. and M.R.M. Energy Inc., argued during a hearing last month that consumer animosity and bungling by BP corporate executives after the nation’s worst offshore spill severely damaged the company’s brand name. Switching brands wasn’t an option for the dealers because many are locked into long-term contracts, he told Barbier.

The judge’s ruling, however, says the BP dealers’ allegations “do not state a claim for which relief may be granted.” He didn’t pass judgment on whether BP dealers have viable claims for economic losses based on a decline in tourism after the spill.

“It doesn’t completely close the door on BP dealer claims,” said Bleau, who added that he may appeal Barbier’s ruling.

All claims by the roughly 13,000 BP fuel stations in the U.S. are excluded from the company’s proposed settlement of billions of dollars of claims by other businesses and individuals who blame the spill for economic damages.

Also on Tuesday, Barbier tossed out claims against BP by Gulf Coast homeowners who say the spill hurt their property values even though no oil physically touched their property and they haven’t sold their homes. A provision of the Oil Pollution Act only allows recovery for “loss of profits” or “impairment of earning capacity,” the judge noted.

“Such claims concern neither a `loss of profits’ nor ‘impairment of earning capacity.’ Before real property is sold, there can be no `profits’ to be lost,” Barbier wrote. “Furthermore, until property is sold and a loss realized, damages are speculative – it is possible that the value of real property eventually may meet or exceed its pre-spill amount.”

A BP spokeswoman declined to comment on the judge’s rulings.

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