U.S. V. BP Exploration & Production, Inc. (D. La.)

Rig In Flames

EES | Cases by Practice Area

Oil EverywhereIn what continues to be one of the largest civil enforcement efforts ever undertaken by the Department, the Environment Division - in cooperation with Civil Division - continues pressing to hold accountable all those responsible for the April 2010, multi-billion-barrel oil spill in the Gulf of Mexico. This disaster stems from the blowout of the Macondo Well and the loss of the drilling vessel Deepwater Horizon.  Those events - already judged by a federal district court to be the result of gross negligence and willful misconduct by one party and negligence by another - caused environmental, economic, and social upsets that continue to this day. Some of the parties accountable under federal law for this disaster have resolved with the United States key portions of that responsibility – at least under the Clean Water Act:

  • MOEX, a minority owner of Macondo Well, settled its civil penalty exposure under the Clean Water Act by agreeing to pay $70 million in civil penalty and by acquiring and preserving environmentally sensitive lands in several Gulf States. That work, which cost some $20 million, should preserve and protect in perpetuity habitat and resources important to water quality;
  • The Transocean companies, which owned and operated the Deepwater Horizon, have paid a civil penalty of $1 billion to resolve their civil liability under the Clean Water Act and also agreed to implement comprehensive changes in operation of their drilling vessels working in the Gulf of Mexico.  At the same time, Transocean resolved its criminal liability for the spill through a $400 million plea agreement with DOJ’s criminal Task Force;  that agreement included a criminal fine and remedial payments that should further both Gulf restoration and research on measures to make drilling safer both in the Gulf and around the world; and
  • BPXP, while continuing to contest the full measure of its civil-side responsibility for this disaster, did plead guilty under the Clean Water Act and felony manslaughter charges. It resolved those violations of criminal law through a $4 billion plea agreement comprised of a criminal fine and remedial payments that should further both Gulf restoration and research on measures to make drilling safer both in the Gulf and around the world.

BPXP (the majority owner of and an operator of the Macondo Well) and Anadarko (which owned a significant share of the Well), continue to dispute their liability for the spill under the Clean Water Act and the extent of any civil penalty each should pay.  As part of the multi-district litigation through which one district court is hearing many lawsuits arising from this spill, the U.S. has completed all three phases of trial necessary to the Court’s assessing a civil penalty against each of those defendants.  That work involved hundreds of depositions, production of hundreds of millions of pages of documents, a substantial and robust motions practice, and many weeks of trial.

The district court already has ruled on the issues tried in the first two phases of trial.  Upon the district court’s ruling on issues addressed in the third (a/k/a “penalty”) phase, the court will have decided all issues necessary to assessing civil penalties, one against BPXP and a separate one against Anadarko.  These multi-billion dollar companies each face maximum penalty exposures that reach into the billions of dollars.

Just as it guided the use the civil penalties already paid by the Transocean defendants, the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act) will direct about eighty percent of any other civil penalties ultimately recovered here to environmental and economic projects that will benefit Gulf States region.

The other major civil claim of the U.S. is for various damages related to the spill, in particular damages to natural resources.  The U.S. already has secured a declaratory judgment for such damages against defendants Anadarko and BPXP.  The federal and state agencies that are trustees for those resources are presently working to identify both the extent of injury to those resources and the work that would be appropriate to mitigate those injuries and restore those resources.  The immense size of the spill and the complex ecosystem effected (significant portions of the Gulf of Mexico region) make massive the work the trustees must perform in assessing both injury and the projects appropriate for mitigating or restoring those injured resources.

     

    Updated May 14, 2015