U.S. District Judge Carl Barbier in New Orleans, overseeing the settlement of lawsuits stemming from the 2010 Deepwater Horizon spill, said the oil giant initially agreed many businesses and other claimants living close to coastal areas directly hit by the spill would be assumed to be damaged by it.
Barbier said BP's current demand that all business claimants prove "causation" before being paid was an improper reversal of the company's original agreement.
"BP's current position is not only clearly inconsistent with its previous position, it directly contradicts what it has told this court regarding causation," Barbier said in his ruling.
But Barbier also said his ruling might be overturned since a three-judge panel of the 5th U.S. Circuit Court of Appeals did not yet rule on an appeal BP is part of that challenges Barbier's approval of the entire settlement, the Times-Picayune of New Orleans said.
BP officials said they would appeal Barbier's ruling to the same appeals court, arguing all businesses must prove their claimed losses resulted from the spill.
"Awarding money to claimants with losses that were not caused by the spill is contrary to the language of the settlement and violates established principles of class-action law," BP Senior Vice President Geoff Morrell said in a statement.
Plaintiff Steering Committee attorneys, representing the thousands of private petitioners seeking settlements, applauded Barbier's decision.
"Business owners across the Gulf should be pleased that Judge Barbier once again rejected BP's efforts to rewrite history and the settlement," the attorneys said in a statement.
"The court reaffirmed that the transparent, objective formulas spelled out in the agreement are the only way to determine a claimant's eligibility and causation," the statement said.
The April 20, 2010, explosion and sinking of the Deepwater Horizon oil rig killed 11 workers. A sea-floor oil gusher that followed the explosion spewed an estimated 4.9 million barrels of crude oil into the Gulf until the well was capped July 15.