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Obama administration sues BP, other companies in gulf oil spill

The civil complaint alleges violations of federal safety and operational regulations and seeks up to $21 billon in damages.

December 16, 2010|By Richard A. Serrano and Neela Banerjee, Washington Bureau

Reporting from Washington — The Obama administration filed a civil complaint Wednesday against BP and eight other companies over the gulf oil spill this year, setting up a lengthy and complex legal battle over cleanup costs and penalties that could amount to billions of dollars.

The complaint, filed in U.S. District Court in New Orleans, alleges a series of violations of federal safety and operational regulations that resulted in the April 20 explosion and fire on the Deepwater Horizon drilling rig in the Gulf of Mexico. It charged that the companies "failed to take necessary precautions" to properly control the well and "failed to use the best available and safest drill technology" in the gulf waters.

It also accuses several companies of violations of the Clean Water Act, which could result in penalties based on the amount of oil spilled — estimated by the government to be 206 million, but disputed by BP.

"We intend to prove that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation," said U.S. Atty. Gen. Eric H. Holder Jr. "We intend to hold them fully accountable."

Lisa Jackson, administrator of the Environmental Protection Agency, said the government hopes to win up to $21 billion in damages for the oil that spewed for months into the gulf. "This is about getting a fair deal for the region that suffered enormous consequences from the disaster," she said. "And it's also about securing the future of the Gulf Coast."

The defendants include BP, the primary partner and operator of the oil well that ruptured; units of Anadarko Petroleum Corp.; MOEX; and units of Transocean Ltd. and its insurer, QBE Underwriting. Anadarko and MOEX were minority partners in the well. Transocean leased the Deepwater Horizon rig to BP.

The Department of Justice and the FBI are separately conducting a criminal investigation of the Deepwater Horizon explosion, which killed 11 workers and started the worst offshore oil spill in U.S. history. Law enforcement agents and federal prosecutors continue to comb through records and conduct interviews in the gulf region. A finding of gross negligence or willful misconduct could put some of the top executives and onsite managers of the drilling operation in jeopardy.

"It's very serious; it's ongoing," Holder said of the criminal inquiry. "We are moving as quickly as we can."

In the civil action, the government hopes to roll a significant amount of any money it recovers into a Gulf Coast restoration fund.

The lawsuit contends that all nine companies share responsibility for the spill and that together they failed to maintain surveillance on the rig and well and did not use safety measures to protect "personnel, equipment, natural resources and the environment."

David M. Uhlmann, a former head of the environmental crimes unit at the Justice Department and now director of the Environmental Law and Policy Program at the University of Michigan Law School, predicted that "this suit would probably lead to a negotiated settlement with BP and most, if not all, [of] the companies named."

The government's next step could be to subpoena key personnel on the rig who have refused to testify in other hearings. The government, he said, "made clear that there's still a lot to be learned and still a lot they don't know that they might address in this civil suit."

Responding to the lawsuit's allegations, the other companies shifted responsibility solely onto BP, the well's operator.

Officials with Anadarko said in an e-mailed statement: "We recognize that we may have obligations under federal law, and we will continue to look to the operator to pay all legitimate claims as it has committed to do. We stand by our statement of June 18, that the operator's decisions and actions on the rig likely amount to gross negligence and/or willful misconduct."

A spokesman for Transocean asserted that "no drilling contractor has ever been held liable for discharges from a well under the Oil Pollution Act of 1990. The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator."

Officials at BP declined to address the issue of sole culpability and disputed the estimated size of the spill. In a written statement Wednesday, the company said: "At this time, the unavailability of key data and information, such as the blowout preventer, capping stack and other evidence recently recovered, which are essential to determining how much oil flowed into the Gulf of Mexico from the … well, renders existing flow rate estimates highly unreliable."

The company said it has stepped up to pay for the oil cleanup and has been the only one to address the economic damage to Gulf Coast businesses and residents, setting aside $20 billion to pay all legitimate claims.

"We took these steps before any legal determination of responsibility and will continue to fulfill our commitments in the gulf as the legal process unfolds," the company said.

richard.serrano

@latimes.com

neela.banerjee

@latimes.com

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