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Archive for Thursday, December 16, 2010

Feds sue BP, other companies for Gulf oil spill damages

December 16, 2010

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— The Justice Department sued BP and several other companies involved in the Gulf oil spill Wednesday, an opening salvo in the government’s effort to get billions of dollars for untold economic and environmental damage.

The government accuses the companies of disregarding federal safety regulations in drilling the well that blew out April 20 and triggered a deadly explosion on the Deepwater Horizon rig. The lawsuit is separate from a Justice Department criminal probe that has not resulted in any charges.

“The department’s focus on investigating this disaster and preventing future (spills) is not over,” Attorney General Eric Holder said during a news conference in Washington. “Both our civil and criminal investigations are ongoing.”

The federal lawsuit filed in New Orleans names BP, rig owner Transocean and some other companies involved in the ill-fated drilling project, but not Halliburton — the project’s cement contractor — or the maker of a key cutoff valve that failed. Both could be added later.

BP said it would respond to the claims at a later date but noted that it stands “alone among the parties” in having already stepped up to pay for the cleanup. It said in a statement that it will continue to fulfill its commitments to the Gulf and to cooperate with ongoing investigations.

“The filing is solely a statement of the government’s allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit,” BP said.

The lawsuit makes it possible for the federal government to seek billions of dollars in penalties for polluting the Gulf of Mexico, beaches and wetlands, and reimbursement for its cleanup costs. More than 300 lawsuits filed previously by individuals and businesses, and now consolidated in the New Orleans federal court, include claims for financial losses and compensation for the families of 11 workers killed in the blast.

The judge overseeing those lawsuits had set Wednesday as the deadline to file certain types of complaints, though it was unclear whether the government was bound by that time frame.

“The Justice Department has left its options open to argue that there was gross negligence and therefore should be higher penalties,” said David Uhlmann, a law professor at the University of Michigan who headed up the Justice Department’s environmental crimes section for seven years. “The government has not limited itself in any way with the filing of its civil lawsuit.”

The suit asks that the companies be held liable without limitation under the Oil Pollution Act for all removal costs and damages caused by the spill, including damages to natural resources. The lawsuit also seeks civil penalties under the Clean Water Act.

The government did not set a dollar figure in the lawsuit, saying the amount of damages and the extent of injuries sustained by the United States are not yet fully known.

Under the Clean Water Act alone, BP faces fines of up to $1,100 for each barrel of oil spilled. If BP were found to have committed gross negligence or willful misconduct, the fine could be up to $4,300 per barrel.

That means that based on the government’s estimate of 206 million gallons released by the well, BP could face civil fines of between $5.4 billion and $21.1 billion. BP disputes the government’s spill estimate.

The government did not specify in its lawsuit whether it believes there was gross negligence, but it left open the possibility for such a finding later.

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