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BP in court to argue oil spill damages calculation

A three-judge panel of the US Court of Appeals for the Fifth Circuit [official website] heard oral arguments [audio recordings] Monday by BP [corporate website] alleging that the claims administrator was awarding damages to plaintiffs based on biased revenue data. US District Judge Carl Barbier approved a settlement [JURIST report] last year that allows plaintiffs to claim damages to their business by comparing income [Times-Picayune report] and revenue before and after the spill. The calculations used to determine such data sets are not expressly determined in the ruling. BP claims that many plaintiffs are receiving awards based solely on their best-performing periods, instead of a comprehensive evaluation of their business value for a set period of time. Plaintiffs' attorneys counterclaimed that BP merely underestimated the price of the settlement agreed to, and is now concerned that it will be forced to pay much more than it originally calculated. There is no cap on the amount of damages that can be awarded to this class of commercial plaintiffs. This proceeding does not affect the trust fund for those whose homes or residential property were damaged by the spill.

The BP appeal comes as the court prepares to resume the non-jury trial to determine liability [JURIST report] for the April 2010 rupture of the Macondo well and explosion of the Deepwater Horizon [JURIST news archive] drilling rig. In January a judge for the US District Court for the Eastern District of Louisiana accepted a plea agreement [JURIST report] between BP and the US Department of Justice (DOJ) [official website] for the company's criminal liability in the spill. Earlier in January Transocean Ltd. [corporate website] pleaded guilty [JURIST report] to "negligently discharging oil into the Gulf of Mexico," in violation of the Clean Water Act (CWA) [EPA summary] and will pay $1 billion in civil penalties and $400 million in criminal penalties for its role in the Deepwater Horizon spill. A federal judge ordered [JURIST report] BP to share partial liability with Transocean in oil spill claims in January 2012. In November of last year BP executives pleaded not guilty [JURIST report] to criminal charges stemming from the oil spill. Earlier that month BP agreed to pay [JURIST report] $4.5 billion in penalties for felony misconduct for its role in the spill.

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