November 10, 2014 / 10:09 PM / 3 years ago

U.S. judge rejects BP bid to oust Gulf spill claims chief

(Reuters) - BP Plc has failed to persuade a federal judge to oust the administrator overseeing payouts to businesses and individuals claiming damages arising from the 2010 Gulf of Mexico oil spill.

A British Petroleum (BP) logo is seen at a petrol station in south London April 27, 2010. REUTERS/Toby Melville

U.S. District Judge Carl Barbier in New Orleans on Monday rejected several arguments by the London-based oil company to remove the claims administrator, Patrick Juneau.

BP claimed that Juneau had a conflict of interest because he previously advised Louisiana over claims, made misleading statements about that work, and improperly sped up claims of people represented by the Plaintiffs’ Steering Committee.

In a four-page order, Barbier said it was “beyond cavil” that BP knew of Juneau’s prior consulting work for Louisiana. The judge also said BP’s arguments were “mostly a regurgitation of old issues or complaints.”

As to the only “new” issue, processing claims by PSC clients, Barbier said Juneau had discretion to review claims out of order, and there was no evidence he acted improperly.

BP spokesman Geoff Morrell in a statement said the company “strongly disagrees” with Barbier’s decision and may appeal.

“Simply put, it is unacceptable for the claims program to continue operating as it has been - inefficiently, secretively, and marred by corruption, fraud, and conflicts of interest,” he said.

The decision is a fresh setback to BP’s effort to curb costs from the April 20, 2010 explosion of the Deepwater Horizon rig, which led to 11 deaths and the largest U.S. offshore oil spill.

BP has accused Juneau of awarding excessive payouts, including to claimants who were not harmed by the spill. It has asked the U.S. Supreme Court to review his methods.

Last month, BP estimated that its settlement with the PSC would cost $9.7 billion, but that this sum would likely go “significantly higher.”

It also faces a January trial over whether it should pay a potential $18 billion in fines for violating the U.S. Clean Water Act.

Through Monday, Juneau has paid out $4.24 billion to 52,577 economic and property damages claimants.

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown

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