BP urges appeals judges to remove administrator who is in charge of oil spill settlement money

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NEW ORLEANS — BP was back in court Tuesday, trying to oust the man responsible for doling out billions of dollars in settlement money to businesses claiming they were hampered by the 2010 Gulf of Mexico oil spill.

It's the oil giant's latest legal effort to limit its losses from the nation's worst offshore oil spill. BP says the claims administrator, Patrick Juneau, failed to disclose that he worked on previous oil spill litigation for the state of Louisiana when he was hired to oversee settlement payouts.

Attorneys for Juneau told the 5th U.S. Circuit Court of Appeals that he hid nothing improper and his record of work for the state was public well before BP and others agreed to his hiring in 2012.

All sides hailed the settlement when it was approved in 2012. But BP later argued that Juneau was misinterpreting the settlement and paying claims to businesses that didn't deserve them.

U.S. District Judge Carl Barbier and the 5th Circuit ruled that, under the settlement BP agreed to, businesses do not have to prove they were directly harmed by the spill to collect money — only that they made less money in the three to eight months after the spill.

The U.S. Supreme Court also rejected an appeal from BP, and a settlement that BP once estimated would cost it nearly $8 billion now is expected to cost billions more.

Barbier rejected BP's arguments for removing Juneau last year, leading to Tuesday's hearing. The three-judge panel gave no indication when it would rule.

While BP has made various allegations of mismanagement and inefficiency against Juneau, the appellate hearing focused on an alleged conflict of interest.

BP attorney Theodore Olson acknowledged that Juneau had said he had been a consultant for the state attorney general after the April 2010 rig explosion at BP's Macondo well. But BP was unaware then of the extent of Juneau's role as "as a litigant, as an advocate."

In court briefs, BP argues that it only last year became aware of correspondence and state court filings Juneau had worked on in 2010 and early 2011 involving disagreements with BP and with Kenneth Feinberg, who handled the early pre-settlement claims process in the months immediately after the spill.

Samuel Issacharoff, an attorney arguing for claimants, said Juneau's work with the state had been public record and was mentioned in news articles. Juneau's attorney, Richard Stanley, said a BP attorney's notes reflect that Juneau had discussed his work as a consultant for the state dealing with Feinberg.

The hearing came a day after the end of a trial in which Justice Department attorneys argued for a Clean Water Act fine against BP at or close to a maximum $13.7 million. BP argues that its response to the spill, its cleanup work and the region's economic and environmental recovery warrant a much lower penalty.

Barbier is not expected to rule until April at the earliest.

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