Judge Rules Against BP in Recovery of Spill Damage Overpayments

By Margaret Cronin Fisk and Laurel Brubaker Calkins | September 24, 2014

BP Plc can’t recover hundreds of millions of dollars it claims to have overpaid some victims for economic losses from the 2010 Gulf of Mexico oil spill, a U.S. judge said.

After the court revised the method for calculating such damages, BP had sought to claw back money already paid out. BP overpaid some claimants millions of dollars and wants the money back “as a matter of equity and fairness,” Geoff Morrell, a company spokesman, said in an e-mailed statement before a hearing today in New Orleans.

At the hearing, U.S. District Judge Carl Barbier rejected BP’s bid to recover the money, repeatedly quoting from language of a release people had to sign to receive payment under the settlement.

The company told claimants in the releases “if you sign this release, that’s it, it’s over for you. It doesn’t matter if the law changes or not, or if the interpretation of the settlement terms changes for better or worse,” Barbier said. “I don’t know how you get around it.”

The attempt to recover the money was “classic hair- splitting,” Barbier ruled. “The only conclusion is that this language bars BP from any attempt at restitution.”

BP said it was forced to overpay 793 claims under an earlier formula that calculated losses without requiring specific matching of revenue and expenses. BP attributed $185 million in overpayments to just 208 of these claimants, company attorney Kevin Downey told Barbier.

The earlier interpretation resulted in London-based BP paying claimants awards “well in excess of what they are entitled to under the settlement agreement — in some cases by millions of dollars — or awards that weren’t warranted at all,” Morrell said before the hearing.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

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