HOUSTON – A federal judge on Monday refused to oust the claims administrator in charge of dispensing BP’s oil spill settlement money to Gulf Coast claimants, despite BP’s criticisms in recent months.
U.S. District Judge Carl Barbier in New Orleans ruled BP is wrong in its assertion that the claims administrator is bound to the same legal recusal rules as a federal judge or a special master, which don’t apply to privately negotiated settlements like BP’s multibillion-dollar 2012 pact to pay compensatory damages for the 2010 Gulf of Mexico oil spill.
BP had argued new evidence shows the claims administrator, Patrick Juneau, never disclosed a “disqualifying” conflict of interest that he had worked as a lawyer for the state of Louisiana and, in that role, had advocated policy changes that favored claimants.
But Barbier on Monday said evidence shows Juneau had in 2012 disclosed his prior work to six of BP’s attorneys or representatives before he took the job. The judge also ruled BP’s move to boot Juneau is untimely because the 5th U.S. Circuit of Appeals requires parties to file requests as soon as they learn of disqualifying facts.
“Notably, in an earlier memorandum filed in this case, BP itself pointed out why Mr. Juneau is not a special master,” Barbier wrote. “It is beyond cavil that BP had actual knowledge of Mr. Juneau’s previous consulting work.”
BP spokesman Geoff Morrell said the company strongly disagrees with Barbier’s decision and is considering appealing it.
“Simply put, it is unacceptable for the claims program to continue operating as it has been,” Morrell said. “Inefficiently, secretively, and marred by corruption, fraud, and conflicts of interest.”
BP has escalated its attacks on the claims administrator as the pace of the payouts to claimants have exceeded the company’s expectations, and as the settlement office’s costs have risen to more than $1 billion over the past two years. BP has paid more than $4 billion to oil spill claimants through the settlement.
Juneau had defended himself in court filings last month, arguing BP “fails to take into account the substantial extra costs that have been and continue to be incurred because of the inability of the parties to agree on how key provisions of the settlement agreement should be interpreted.”
On Monday, Juneau said Barbier’s ruling leaves him “focused on the job we have to do.”
“I will continue to process claims in a fair and consistent manner while following the Court’s direction,” Juneau said. “Barring any further obstacles, I will complete the job we started in June of 2012.”
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