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J.R. Whaley
J.R. Whaley
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BP Settlement — What SCOTUS Denial of BP’s Stay May Mean.

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BP lost its latest effort to delay making good on its much-ballyhooed “Commitment to the Gulf” earlier today.  The United States Supreme Court denied BP’s request to “stay the mandate” issuing from the United States Fifth Circuit Court of Appeals.  That “mandate” required that the Claims Administrator begin again the processing and payment of business economic loss claims. Payment of most business economic loss claims has essentially been shut down since October 2013.

What is particularly interesting about the denial of BP’s stay request is that Justice Scalia referred BP’s stay request to the entire Court which, in turn, denied the request.  So instead of just one justice deciding the stay issue (which was Justice Scalia’s right under the Supreme Court Rules), the entire Supreme Court weighed in.

Today’s decision doesn’t necessarily mean that the Supreme Court won’t eventually agree to hear the case when BP’s formal application is made.  But that seems more and more unlikely. Indeed, if the majority of the Court felt like BP’s complaints had merit, it would seem logical that it would have granted the stay request, to prevent payment of all of those “fictitious” claims that BP complains about.  In fact, that was the linchpin of BP’s request for a stay.  In the introductory paragraph of its memo, BP cried that, “Unless the mandate is recalled and stayed,countless awards totaling potentially hundreds of millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP’s conduct.”  But that argument didn’t do the trick for BP.

Another problem for BP’s cert application is that the arguments it made for a stay are essentially the same it will make when it asks the Supreme Court to review the case on the merits. To win a stay, BP had to show that 1.) there was a “reasonable probability” that the Court would grant cert; 2.) that there was a “significant possibility” that the Fifth Circuit’s decision would be reversed; and 3.) that BP would be irretrievably harmed if the stay were not granted.

Point 3 is pretty easy to understand.  Once the money is out the door, it will be hard for BP to recoup it.

So BP spent most of its efforts on points 1 and 2.  BP argued that the class action settlement (the one it crafted and sought approval for in the district court and once praised) could not “be interpreted consistent with Rule 23 and Article III to require payment to claimants who have no plausible claim that their injuries were caused by the spill.”  BP then argued that the Fifth Circuit’s decision on that point deepened a split in the circuits and contradicted United States Supreme Court jurisprudence.  Splits in the circuits and / or contradiction of SCOTUS precedent are the usual tickets for a grant of cert.  But, again, those arguments didn’t carry the day for BP in its stay request.

While denial of the stay does not automatically mean that the Supreme Court will deny the certiorari application, and there are lots of good reasons why the Supreme Court should deny BP’s cert request anyway, today’s decision does not bode well for BP’s continued efforts to crawfish from its deal.  And that’s good news for the people and businesses of the Gulf who continue to wait for BP to make good on its “Commitment.”

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  1. J.R. Whaley says:
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    Edward — I think what you are seeing is the effect of Policy 495. I believe that all claims will be analyzed to determine whether or not they have “matching” issues. If they do, those claims will be calculated under the new protocols set out in that policy. Feel free to call or e-mail to discuss this issue in more detail.

  2. edward baley says:
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    Why does a claim sit in qa status then back to claims review after6 months in?qa prior to being in claims review simce april 2013?