A US judge tonight rejected BP's argument that a multibillion-dollar settlement over the company's massive 2010 Gulf oil spill should not compensate businesses if they cannot directly trace their losses to the spill.
District Judge Carl Barbier said in his ruling the settlement was designed to avoid the delays that would result from a "claim-by claim analysis" of whether each claim can be traced to the spill.
Earlier this month, a three-judge panel of the 5th US Circuit Court of Appeals ruled that Judge Barbier erred when he initially refused to consider BP's "causation" arguments.
In response to that ruling, he agreed with plaintiffs' lawyers that BP cannot make these arguments because the company took a contradictory position on the same issue when it urged him last year to approve the settlement.
Judge Barbier said requiring claimants to meet BP's proposed requirements for connecting losses to the spill would bring the claims process to a "virtual standstill".
Steve Herman and Jim Roy, two of the plaintiffs' lawyers who brokered the settlement with BP, said Gulf Coast business owners should be pleased that Judge Barbier "once again rejected BP's efforts to rewrite history and the settlement".
They said: "The court reaffirmed that the transparent, objective formulas spelled out in the agreement are the only way to determine a claimant's eligibility and causation."
BP spokesman Geoff Morrell said the company disagrees with Judge Barbier's decision. He also said court-appointed claims administrator Patrick Juneau's interpretation of settlement terms renders the deal "unlawful".
Mr Morrell said: "Awarding money to claimants with losses that were not caused by the spill is contrary to the language of the settlement and violates established principles of class action law.
"BP intends to seek appropriate appellate remedies to correct this error."
On December 5, Judge Barbier temporarily suspended settlement payments to businesses while he reconsidered the company's causation arguments.
He said Mr Juneau's office would continue accepting and processing business claims but would not make final decisions or payments until the matter is resolved.
For months, BP has argued that the judge and Mr Juneau misinterpreted settlement terms in ways that could force the company to pay for billions of dollars in bogus or inflated claims by businesses.
In October, the same 5th Circuit panel instructed Judge Barbier to craft a "narrowly-tailored" order that bars Mr Juneau from paying certain claims.
BP, however, argued Judge Barbier did not go far enough when he issued an order to comply with the 5th Circuit's directives.