Supreme Court says BP must pay spill claims during appeal

The U.S. Supreme Court said Monday that BP must continue paying claims from a fund established after the 2010 Gulf of Mexico oil spill while the company appeals terms of its settlement with some businesses.

The justices let lower court refusals to halt payments stand while BP challenges a ruling that businesses don't have to prove they were directly harmed by the spill to collect money.

Monday's decision was another setback for BP's contention that the claims administrator is misinterpreting its agreement with many businesses. The 5th Circuit and a district court previously ruled that BP agreed in March 2012 to pay such claims without requiring strict proof that the 2010 spill caused losses.

The claims fund was set up after a BP well off the Louisiana coast blew out in April 2010 and spewed oil into the Gulf for nearly three months. The initial blast killed 11 people, while the ecological fallout from the spill was described as one of the worst environmental disasters that the U.S. has faced.

BP initially estimated that about $7.8 billion would cover all claims. It later said the administrator was misinterpreting the settlement in ways that could add billions of dollars in bogus or inflated claims.

There has been no dispute that some Gulf Coast businesses, including tourism and fisheries-related interests, lost money because of oil on beaches or the closure of fishing waters after the spill.

However, BP argues that the claims administrator wrongly interpreted the settlement to mean that businesses must only show losses during and after the spill without proving a direct link. 

BP says it has paid out more than $12 billion in claims to people, businesses and government entities. A trial scheduled for January 2015 in New Orleans is part of the litigation that will determine how much the oil giant owes in federal Clean Water Act penalties.

BP spokesman Geoff Morrell said the company still plans to seek Supreme Court review of the appeals court ruling on the overall case. 

“The company continues to believe that the lifting of the injunction suspending the payment of business economic loss claims will allow hundreds of millions of dollars to be irretrievably scattered to claimants whose losses were not plausibly caused by the Deepwater Horizon accident,” he added. 

Lawyers representing the plaintiffs said in a statement that the court action on Monday “will allow businesses to continue to receive the compensation they're rightly entitled to according to the objective, transparent formulas agreed to by BP.”

Wire services