Gulf Coast Businesses Can Celebrate This Mardi Gras

On Monday, March 3, 2014, the Fifth Circuit affirmed the lower court and concluded that the current injunction should be dissolved.  This is the same panel that remanded the case back to Judge Barbier to hold a hearing and establish a “narrowly tailored injunction”.  Recall that in October of 2013, the 5th Circuit reversed Judge Barbier’s Order denying a preliminary injunction.  Then, the Court handed down a 2-1 opinion with Judge Clement writing the opinion, Judge Southwick consented with reasons, and Judge Dennis dissenting.  From that ruling, Judge Barbier held a hearing and ruled on December 24th.  It was from that ruling that BP, once again, appealed.

Now, Southwick writes for the majority with Dennis consenting, and Clement dissenting. Essentially, BP disagreed with Barbier’s ruling that the Settlement Agreement did not require those submitting claims for certain business losses to provide evidence of causation. BP appealed that ruling and also argued that an injunction is required to stop payments on such claims.remanded the case back to Judge Barbier to hold a hearing and establish a “narrowly tailored injunction.” Recall that in October of 2013, the 5th Circuit reversed Judge Barbier’s Order denying a preliminary injunction. Then, the Court handed down a 2-1 opinion with Judge Clement writing the opinion, Judge Southwick consented with reasons, and Judge Dennis dissenting. From that ruling, Judge Barbier held a hearing and ruled on December 24th. It was from that ruling that BP, once again, appealed.

Southwick reasoned that “BP’s belated attempt to raise the issue of causation of damages under the OPA (Oil Pollution Act) clearly did not survive BP’s entering voluntarily into the settlement agreement and consent decree and failing to raise the causation issue in the initial proceedings in the district court and appeal.” Here, we finally have the Fifth Circuit recognizing that BP voluntarily entered into the Settlement Agreement that it authored.

Therefore, the Fifth Circuit affirmed Judge Barbier’s December 24, 2013 Order interpreting the Settlement Agreement. The injunction has been in place preventing payment of BEL (Business Economic Loss) claims pending the resolution of all of these issues. The Fifth Circuit stated that “between the certification panel’s decision of January 10th and ours today, all issues presented to this panel have been resolved. On the other hand, petitions for rehearing en banc of the certification panel’s decision on which we have relied have been filed. We can anticipate that our decision might not persuade all parties either. We conclude that the injunction should be dissolved, but the injunction remains in place until the mandate of the court is issued.”

If you are confused by that ruling you are probably not alone. Essentially, the Fifth Circuit said that while they conclude the injunction should be dissolved, because there is still a petition for rehearing en banc (meaning before the entire panel of Fifth Circuit judges), they will keep the injunction in place. For now, while it may appear to be a small victory it at least gives us insight as to how the Fifth Circuit views the Settlement Agreement and perhaps more importantly tells us where Southwick, who once ruled in favor of BP, stands.