BP Argues Companies Are Unfairly Cashing In On 2010 Spill BP is challenging hundreds of millions of dollars in claims that were filed after the 2010 oil spill in the Gulf of Mexico, saying some have no connection to the spill. But legal experts say the claims don't have to be spill-related and BP is relying on a friendly court to limit how much it will pay.

BP Argues Companies Are Unfairly Cashing In On 2010 Spill

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Oil giant BP is challenging hundreds of millions of dollars in claims from businesses, claims filed after the 2010 oil spill in the Gulf of Mexico. BP points out some of the claims have no connection to the Deepwater Horizon accident, but legal experts say the claims don't have to be spill related, and the BP is trying to rely on a friendly court to limit how much it will pay. NPR's Jeff Brady reports.

JEFF BRADY, BYLINE: The total price tag for BP's oil spill is huge, 42 and a half billion dollars. At issue here, is a fraction of that, but still a lot of money. BP says more than a half billion dollars has been awarded to businesses that don't deserve payment because they can't tie their losses to the oil spill. Florida attorney Kevin McLean represents one company that might fall into this category, a commercial printer near Tampa.

KEVIN MCLEAN: Did they suffer anything that I can prove was related to the spill? Absolutely not. I cannot prove that one dime of their revenue loss was related to the spill.

BRADY: Still, McLean says he filed the claim on behalf of the printer, for about $40,000. He was able to do this because of the method the claims administrator set up. Essentially, if a business in the region could show its revenue was lower after the spill, the loss was assumed to be spill related. That prompted some enterprising lawyers to run advertisements like this one in Florida.


BRADY: BP declined an interview request for this story but the company has compiled a list of claims it believes should not qualify. They include a farmer who didn't plant a crop in 2010, a lawyer who lost his license before the spill and an escort service.

Originally, BP estimated the settlement would cost $7.8 billion. But once the claims started rolling in, it was clear the figure would be higher, so BP began challenging the claims process in court. Loyola University law professor Blaine LeCesne says BP should not have been surprised by this development.

BLAINE LECESNE: They had probably the best legal representation in the world. They very easily could have excluded the kinds of business that they're now complaining about should have been excluded.

BRADY: LeCesne says in a huge settlement like this people who were not hurt are still going to be able to file claims. That's the price in return for BP getting one big settlement instead of having to litigate thousands of smaller ones. He describes the company's behavior this way.

LECESNE: Sort of like someone walking into a bar and saying, drinks for everybody on the house. And then they get the bill and say, well, I didn't really think it was going to cost me this much.

BRADY: In the months after the spill, BP clearly felt pressure to prove that it was going to do whatever it could to help the Gulf recover. Wrapping up this big settlement was a key part of that public relations campaign. But now, pressure on the company has eased some and it appears BP's strategy may be evolving. Montre Carodine is a professor at the University of Alabama Law School.

MONTE CARODINE: And now we're seeing what parties often do with this type of litigation - drag it out. That's what they're doing. That seems to be the plan, and eventually you force people who may have very legitimate claims to leave them on the table because they're tired. You wear them down. And I think that's what BP's strategy is at this point.

BRADY: BP says it's just trying to get back to the settlement the company originally agreed to. Tulane University Law School professor Ed Sherman says BP turned to the Fifth Circuit Court of Appeals to accomplish that.

ED SHERMAN: The Fifth Circuit is known to be a fairly pro-business circuit.

BRADY: And it ruled in BP's favor. Claims payments are on hold until the issue is resolved. Some have speculated this huge settlement could be in jeopardy, but Sherman is not convinced.

SHERMAN: I think there's very little likelihood that the entire settlement is going to be brought down. But BP certainly sees an opening now for reducing the amount of claims it has to pay.

BRADY: And considering how much this spill is costing BP, saving even a few percent can amount to hundreds of millions of dollars. Jeff Brady, NPR News.

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