A year after agreeing to a multi-billion dollar settlement with victims of the 2010 Gulf oil spill, BP is aggressively challenging terms of the deal in a legal strategy that could backfire with the judge who will rule on the company's potentially hefty federal fines.
The British oil giant has pushed for multiple reviews by the 5th Circuit Court of Appeals, complaining the claims system approved by the U.S. District Judge Carl Barbier is overpaying for damages from the country's worst offshore disaster.
BP's challenges directly question decisions by Barbier, who presided over the settlement and then himself approved claim terms. Barbier is also handling a separate government case against BP and has wide latitude to assess fines for violations of the Clean Water Act.
BP expects the settlement with Gulf residents to cost about $9.6 billion, well above the $7.8 billion it initially estimated.
Altogether the oil producer has provisioned some $42 billion to pay for cleanup and other costs since the explosion of the Deepwater Horizon rig, which killed 11 workers in 2010 and spewed millions of barrels of oil into the Gulf of Mexico.
Federal penalties could add to that bill. Maximum fines might top $17 billion, while BP has only set aside about $3.5 billion for them.
"They are alienating in a very profound way the very judge that is going to determine their liability," said Blaine LeCesne, a law professor at Loyola University in New Orleans. "I'm not sure that's a wise decision."
Barbier has called BP's efforts to try and contradict many of his rulings with appeals to the 5th Circuit "deeply disappointing" and has said BP is trying to "rewrite or disregard the unambiguous terms of the Settlement Agreement."
While the company has won some important victories at the appeals court, a ruling on Friday upheld the foundation of the settlement deal.
