BP Plc, Transocean Ltd. and Anadarko Petroleum Corp. should be found liable before trial for violations of federal pollution laws stemming from the April 2010 Gulf of Mexico oil spill, lawyers for the U.S. argued today at a hearing in federal court in New Orleans.
The Justice Department is asking U.S. District Judge Carl Barbier to find the companies violated the Clean Water Act on the basis of so-called strict liability because they were operators of the doomed project. Barbier, who’s overseeing much of the spill litigation, has scheduled a nonjury trial for Feb. 27 to determine liability and apportion fault for the disaster.
A ruling by Barbier against the companies would mean they couldn’t fight allegations of Clean Water Act violations at the trial and would allow the U.S. to seek fines of as much as $1,100 from each company per barrel of oil spilled. The government has also asked Barbier to find Anadarko and Transocean liable under the Oil Pollution Act, a separate environmental law, for cleanup costs and damages. BP (BP/) already accepted responsibility for those costs.
“Each of the defendants is liable because it is an owner and/or operator of an offshore facility or vessel,” the U.S. said in a Dec. 8 court filing. “Given the strict liability scheme” of both federal pollution laws, “there is no need for a trial as to the liability of the defendants,” the government said.
Even if Barbier does rule for the U.S. on its bid for a pretrial decision, the question of gross negligence, which will determine whether the companies are subject to enhanced fines under the Clean Water Act, will be considered at trial.
If Barbier denies the U.S. motion, he’ll determine at trial which companies can be held liable and thus subject to fines.
The April 2010 Macondo well blowout and explosion killed 11 workers and caused the worst offshore oil spill in U.S. history. The accident spurred hundreds of lawsuits against BP and its partners, including Transocean Ltd. (RIG), the Switzerland-based owner and operator of the Deepwater Horizon drilling rig that exploded, and Anadarko, which owned 25 percent of the well.
The U.S. sued BP, Transocean and Anadarko in December 2010, alleging violations of federal pollution laws. The Clean Water Act allows the government to seek per-barrel spilled fines of as much as $1,100 on a finding of strict liability to $4,300 for gross negligence. The Oil Pollution Act holds responsible parties liable for damages, cleanup and restoration costs.
Strict liability is a legal term for automatic responsibility.
The government estimates that 4.1 million barrels were spilled before the well was capped. BP set aside $3.5 billion for Clean Water Act fines, assuming $1,100 a barrel and its own estimate of 3.2 million barrels, according to an annual report extract posted on the company website.
BP, Anadarko and Transocean argued in court filing that they should be able to defend themselves at trial against the federal claims.
The U.S. motion “goes too far, too fast in seeking various legal rulings,” BP said in a Jan. 9 filing. BP has also acknowledged it’s a responsible party under the Oil Pollution Act.
“Whether BP was an operator of the Macondo well for purposes of the Clean Water Act presents an issue of fact upon which the government bears the burden of proof,” the company said Jan. 9. “BP delegated operational responsibilities to Transocean,” the company said in a separate filing yesterday.
Anadarko said it can’t be held responsible for Clean Water Act violations, calling itself in court papers a non-operating party under the contract with BP.
‘No Operational Control’
“Anadarko had no operational control over operations aboard the Deepwater Horizon,” the company said.
Transocean also denied it was a responsible party under the Oil Pollution Act or liable for penalties under the Clean Water Act.
An owner or operator of a mobile offshore drilling unit can only be a responsible party under Oil Pollution Act if the discharge is on or above the water’s surface, Transocean said in a Jan. 9 filing.
“The undisputed facts submitted by the United States do not establish any above-surface discharge,” the company said.
Transocean said it isn’t responsible under CWA either because the oil was discharged underwater from the well and not the rig.
“As a matter of law, Transocean is not the operator of the Macondo well from which the oil was discharged,” the company said.
The U.S. said in court papers that oil came from the Deepwater Horizon in addition to the well, making the company liable for violations of federal pollution laws.
Transocean is liable by law under OPA because it was an owner and operator of the Deepwater Horizon rig, the government said. The Deepwater Horizon was a vessel for the purposes of OPA and a responsible party under that law means anyone owning, operating or chartering a vessel, the U.S. said in a Dec. 8 filing.
The companies “are liable as a matter of law, because there is no genuine dispute as to the material facts on which their liability rests,” government lawyers said.