Judge Carl Barbier has dismissed claims by BP fuel stations and convenience stores that the 2010 oil spill diminished the value of BP’s brand and cost them business. Judge Barbier’s ruling says the dealers’ claims against BP PLC aren’t viable under the Oil Pollution Act of 1990, general maritime law or state law. BP dealers Tobatex Inc. and M.R.M. Energy Inc. had contended that consumer animosity and bungling by BP corporate executives after the nation’s worst offshore spill severely damaged the company’s brand name. It was contended that switching brands wasn’t an option for the dealers because many are locked into long-term contracts.
The judge’s ruling, however, says the BP dealers’ allegations “do not state a claim for which relief may be granted.” Importantly, the judge didn’t pass judgment on whether BP dealers may have viable claims for economic losses based on a decline in tourism after the spill. Therefore, the ruling doesn’t completely close the door on BP dealer claims.
Judge Barbier has also dismissed claims against BP by Gulf Coast homeowners who say the spill hurt their property values even though no oil physically touched their property and they haven’t sold their homes. A provision of the Oil Pollution Act only allows recovery for “loss of profits” or “impairment of earning capacity,” the judge noted. In his order, Judge Barbier wrote:
“Such claims concern neither a `loss of profits’ nor ‘impairment of earning capacity.’ Before real property is sold, there can be no `profits’ to be lost. Furthermore, until property is sold and a loss realized, damages are speculative – it is possible that the value of real property eventually may meet or exceed its pre-spill amount.”
This ruling as it affects the BP dealers and Gulf property owners could be appealed, but at this juncture, I don’t believe that will happen. If they are appealed, claimants will face many very difficult legal hurdles to overturn the judge’s rulings. Judge Barbier has made good decisions based upon applicable law and we have confidence in his rulings.
Source: Claims Journal
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