A New Orleans appeals court has ordered a district court judge to halt payments to some people claiming economic losses from the oil spill that resulted from the 2010 explosion and sinking of the Deepwater Horizon drilling platform.
The ruling is a victory for BP (BP), which contested payments to victims who did not prove evidence that their losses stemmed from the oil spill. The payments were part of a $9.2 billion settlement of claims resulting from the disaster in the Gulf of Mexico. The appeals court had ordered the district court to reconsider some of the claims last month, but BP said the court had failed to do so, Bloomberg noted.
BP alleges that the settlement administrator allowed millions of dollars in claims for “fictitious” losses. The district court approved the administrator’s granting of the disputed claims, prompting BP to appeal the decision.
The appeals court noted that its earlier opinion had been divided, possibly confusing its intent for the district court. The settlement included a formula for calculating economic losses for businesses and private property owners. The administrator had determined that claimants within a certain distance from the spill did not have to prove their losses were due directly to the spill, since their losses could be assumed as part of the accident’s regional impact.
Shares of BP sank modestly in Tuesday pre-market trading.