On Friday, U.S. District Judge Carl Barbier rejected BP’s request to temporarily stop all settlement payments, the Associated Press reports. BP lost its newest bid to halt payouts to Gulf Coast residents and businesses affected by the Deepwater Horizon oil spill.
BP filed for an emergency preliminary injunction earlier in the week that would have allowed them to temporarily suspend payments. In their motion, BP alleged that two lawyers working at the Claims Facility appeared to be receiving “kickbacks” from a law firm filing claims, and asked the court for an injunction in order to avoid “potentially wrongful expenditures.”
Last month, claims administrator Patrick Juneau announced that he was conducting an internal investigation based on rumors that Claims Facility staff attorney Lionel Sutton was receiving money from settlement payments to clients that he referred to the Claims Facility before becoming a member of the staff there.
However, Sutton was in private practice prior to becoming a staff member of the BP Claims Facility, and referring out claims is a common and acceptable practice among attorneys. Sutton could have received referral fees as a result. He and his wife are no longer employed with the Claims Facility.
During the hearing, Judge Barbier pressed BP attorney Jeff Clark as to whether the company has evidence that either of the attorney staff members in question, Sutton and his wife, “had any influence over the calculation and computation of claims,” The Times-Picayune reports.
Clark replied that BP has “not alleged that there is specific evidence” that either Sutton or his wife “influenced the calculation of claims,” but stated that BP “didn’t sign up for a deal in which this ‘kind of corruption’ entered the [claims] program.”
Judge Barbier called BP’s filing a preliminary injunction an “extraordinary remedy” that was “uncalled for.”
“The problem I have here, is you all have made a lot of accusations, put out a lot of innuendo, and I want to know what evidence there is to support this,” Barbier said.
Juneau’s attorneys also argued that BP’s motion to suspend payments was “partially based on premature speculation” and was “completely overbroad in its scope.”
According to Wesley Bowden, an attorney with the Levin, Papantonio law firm, “This is just another attempt by BP to derail the Settlement Agreement that they co-authored. Vague accusations like this should cause everyone to question whether BP is truly committed to the Gulf Coast and the thousands of businesses, fishermen, and individuals their negligence and subsequent disaster affected.”
Earlier this month, chairman and president of BP America, John Minge, wrote an opinion letter regarding another preliminary injunction the company filed recently, claiming that the company is being forced to overpay and pay fraudulent claims. In the motion, the company argued that the Settlement Agreement, which they co-authored and agreed to in 2011, was forcing them to pay “fictitious and inflated claims.”
Judge Barbier denied BP’s request for an injunction the first time as well; however, BP challenged his decision in the 5th U.S. Circuit Court of Appeals, where a verdict has not yet been reached.
Alisha is a writer and researcher for Ring of Fire.
