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UPDATE 3-U.S. Supreme Court rejects BP challenge to Gulf spill settlement

Mon, 08th Dec 2014 16:32

(Adds examples of businesses, paragraph 10)

By Lawrence Hurley

WASHINGTON, Dec 8 (Reuters) - The U.S. Supreme Court onMonday rejected BP's challenge to its multibillion-dollarsettlement agreement over the 2010 Gulf of Mexico oil spill,which the oil giant complained has allowed payouts to somebusinesses that are unable to trace their losses to thedisaster.

The court's decision not to hear the London-based company'sappeal is the latest setback for BP, which is trying to limitpayments over a disaster that killed 11 people and triggered thelargest U.S. offshore oil spill.

The action, disclosed in an unsigned order, means BP mustmake the payments as it continues to deal with the spill'saftermath.

BP signed a 2012 settlement agreement to compensatebusinesses claiming financial losses due to the spill. But BPhas since argued the agreement has been interpreted improperlyby Patrick Juneau, the settlement fund's court-appointedadministrator, forcing it to pay businesses that could not showdamages.

The challenge involved so-called business economic lossclaims, a key part of the settlement. BP has paid $2.3 billionin such claims out of $4.25 billion in total compensation toindividuals and businesses, according to Juneau.

BP spokesman Geoff Morrell said the company remainsconcerned that entities that suffered no injury can make claims.

"On behalf of all our stakeholders, we will thereforecontinue to advocate for the investigation of suspicious orimplausible claims and to fight fraud where it is uncovered,"Morrell added.

Two lawyers representing plaintiffs, Stephen Herman andJames Roy, said in a statement the court's action was "a hugevictory for the Gulf and should finally put to rest BP'stwo-year attack on its own settlement."

BP has estimated it will pay $9.7 billion to plaintiffsrepresented by the so-called plaintiffs' steering committee, butsays this could grow significantly.

BP has cited various claims it wanted to contest, includinga Mississippi hotel awarded more than $450,000 despite beingclosed for several months due to an unrelated fire and aLouisiana nursing home awarded $662,000 despite having closeddown before the spill.

The April 20, 2010, Deepwater Horizon drilling rig explosionand BP Macondo oil well rupture created one of the largestenvironmental disasters in U.S. history, polluting large partsof the Gulf, killing marine wildlife and harming businesses inthe region.

The settlement process is separate from other spill-relatedproceedings. BP has settled U.S. criminal charges, agreeing topay $4.5 billion in fines. BP is preparing for a January trialover whether it should pay up to $18 billion in Clean Water Actpenalties. It has put aside $43 billion to resolve all claims.

The case is BP Exploration and Production Inc v. LakeEugenie Land and Development Inc, U.S. Supreme Court, No.14-123. (Reporting by Lawrence Hurley; Editing by Will Dunham)

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