The Supreme Court won't make it tougher for defendants in class-action lawsuits to transfer cases from state courts to more business-friendly federal court.
The justices on Monday ruled 5-4 in favor of a Michigan energy company that wanted to move a class-action case from Kansas state court to federal court without showing evidence that damages in the case would exceed $5 million. That is the minimum amount required for transferring such cases.
The case involved a group of royalty owners who sued Dart Cherokee Basin Operating Co. alleging they were underpaid royalties on oil and gas wells.
A federal judge refused to transfer the case without evidence of damages. A federal appeals court declined to consider an appeal, but the Supreme Court said the law does not require such evidence.
A federal appeals court on Monday refused to reconsider its previous ruling that businesses don't have to prove they were directly harmed by BP's 2010 Gulf Of Mexico oil spill to collect settlement payments.
The decision by the 5th U.S. Circuit Court of Appeals in New Orleans could be a step toward resuming a claims process that was suspended after a district court ruling in December. However, BP spokesman Geoff Morrell said in an emailed statement Monday night that the company is considering its legal options.
BP had asked the full 5th Circuit Court of Appeals in New Orleans to rehear the case after a three-judge panel's March ruling. The court voted 8-5 against a rehearing.
The action preserves U.S. District Judge Carl Barbier's (BAHR'-bee-ay) ruling that BP had agreed in a 2012 settlement to pay claims without requiring proof that losses were directly caused by the spill resulting from the explosion of the Deepwater Horizon oil rig, which killed 11 workers.
Judge Leslie Southwick wrote in Monday's order that a 2012 policy statement, issued by the court-appointed claims administrator and developed with "input and assent from BP," spelled out the criteria for business claims.
The Supreme Court will consider the requirements for transferring class-action lawsuits from state courts to federal courts.
The justices on Monday agreed to hear an appeal from a Michigan energy company that asserts it should be allowed to move a class-action case from Kansas state court to federal court. Federal law allows such transfers in cases involving more than $5 million.
A group of royalty owners sued the Dart Cherokee Basin Operating Co. alleging they were underpaid royalties on oil and gas wells. The plaintiffs did not seek a specific damage amount, but the company claimed it would far exceed $5 million.
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A federal judge rejected the transfer request because the company did not offer any evidentiary support. The company says the law does not require detailed evidence.
Over BP's objections, a federal appeals court on Friday upheld a judge's approval of the company's multibillion-dollar settlement with lawyers for businesses and residents who claim the massive 2010 oil spill in the Gulf of Mexico cost them money.
BP has argued that U.S. District Judge Carl Barbier and court-appointed claims administrator Patrick Juneau have misinterpreted settlement terms in ways that would force the London-based oil giant to pay for billions of dollars in inflated or bogus claims by businesses.
During a hearing in November before a three-judge panel of the 5th U.S. Circuit Court of Appeals, a BP lawyer argued that Barbier's December 2012 approval of the deal shouldn't stand unless the company ultimately prevails in its ongoing dispute over business payments.
But the divided panel ruled Friday that Barbier did not err by failing to determine more than a year ago whether the class of eligible claimants included individuals who haven't actually suffered any injury related to the spill.
Affirming Barbier's initial ruling in 2012, the court said in its 48-page majority opinion that it can't agree with arguments raised by BP and others who separately objected to the settlement.
The Supreme Court won't decide the legality of an agreement between a union and a Florida casino in which the business helped the union organize in return for help with a ballot initiative on gambling.
The justices on Tuesday dismissed an appeal from UNITE HERE Local 355 without deciding whether its agreement with Hollywood Greyhound Track, Inc., also known as Mardi Gras Gaming, was valid.
The union agreed to help the company win a gambling ballot initiative, and agreed not to picket, boycott, or strike. Mardi Gras officials agreed to give the union employee addresses, access to the facility and not to ask for a secret union ballot election.
An employee, Martin Mulhall, then sued, saying that the agreement violated national labor laws, which say companies cannot give unions that want to represent employees something of value. The 11th U.S. Circuit Court of Appeals agreed, saying the company's agreement to help the union was a "thing of value" made illegal by the Labor Management Relations Act. Other federal appeals courts, however, have ruled differently.
The Supreme Court's decision not to hear the appeal leaves the 11th Circuit ruling in place.
Justice Stephen Breyer, along with Justices Sonia Sotomayor and Elena Kagan, said they disagreed with the dismissal. They say the lower court ruling should be vacated and the court should have additional briefings.
But Breyer, in his dissent, said justices found out that the union-casino contract expired before the 11th U.S. Circuit Court of Appeals made its decision, which would render the case moot. He says that the person who sued over the contract, Martin Mulhall, also may not have had to right to sue over the issue.
But "given the importance of the question presented to the collective-bargaining process, further briefing, rather than dismissal, is the better course of action," Breyer said.
The April 2010 blowout of BP's Macondo well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf. Shortly after the disaster, BP agreed to create a $20 billion compensation fund that was administered at first by the Gulf Coast Claims Facility, led by attorney Kenneth Feinberg.
BP argued that Barbier and court-appointed claims administrator Patrick Juneau misinterpreted terms of the settlement. Plaintiffs' lawyers countered that BP undervalued the settlement and underestimated how many claimants would qualify for payments.
In the panel's majority opinion, Judge Edith Brown Clement said BP has consistently argued that the settlement's complex formula for compensating businesses was intended to cover "real economic losses, not artificial losses that appear only from the timing of cash flows."
"The interests of individuals who may be reaping windfall recoveries because of an inappropriate interpretation of the Settlement Agreement and those who could never have recovered in individual suits for failure to show causation are not outweighed by the potential loss to a company and its public shareholders of hundreds of millions of dollars of unrecoverable awards," Clement wrote.
Judge Leslie Southwick wrote a concurring opinion. Judge James Dennis wrote a partial dissent, largely disagreeing with the other two.
"Because BP has not satisfied its heavy burden of showing that a change in circumstances or law warranted the modifications it sought, the district court correctly affirmed the Administrator's decision rejecting BP's argument and actions to modify the agreement," Dennis wrote.
A federal appeals court is wading into a high-stakes dispute over the terms of a multibillion-dollar settlement of claims arising from BP's massive 2010 oil spill in the Gulf of Mexico.
A three-judge panel of the 5th U.S. Circuit Court of Appeals is scheduled to hear arguments Monday by attorneys for the London-based oil giant and for Gulf Coast businesses that say the nation's worst offshore oil spill cost them money.
BP asserts that the judge who approved the deal and a court-appointed claims administrator have misinterpreted the settlement, allowing thousands of businesses to secure hundreds of millions of dollars in payments for inflated and fictitious losses.
"The result is that thousands of claimants that suffered no losses are coming forward in ever-increasing numbers, seeking and obtaining outrageous windfalls and making a mockery of what was intended to be a fair and honest court-supervised settlement process," company attorneys wrote in their brief for the hearing.