Bloomberg News

BP, Transocean Sued by Texas Over 2010 Gulf of Mexico Spill (1)

May 18, 2013

Texas sued BP Plc (BP/), Transocean Ltd. and others involved in the 2010 oil spill, calling it the “worst environmental disaster” in U.S. history and becoming the fifth Gulf of Mexico state to file claims.

The state accused the companies of violating Texas environmental laws, and is seeking damages for economic loss, including lost tax revenue, as well as for harm to natural resources. Texas asked for civil penalties for every day of oil discharge and every barrel that was dumped into the gulf.

The companies “engaged in willful and wanton misconduct,” causing the disaster, state Attorney General Greg Abbott said in a 43-page complaint filed yesterday in federal court in Beaumont. As a result of the spill, natural resources “have been injured, destroyed or lost,” according to the complaint.

In a separate proceeding, a judge in New Orleans postponed to December the trial of a former BP engineer charged in the first criminal case arising from the 2010 spill to December. It had been scheduled to start June 10.

The U.S. charged Kurt Mix, the former BP engineer, with two counts of obstruction of justice last year, alleging he deleted from his mobile phone text-message strings related to the company’s effort to estimate the size of the spill. The trial had previously been postponed from February.

Transocean, Halliburton

The Texas lawsuit names as defendants London-based BP, owner of the doomed Macondo well that blew out in the Gulf; Transocean, which owned the Deepwater Horizon drilling rig that exploded and sank; and Halliburton Co. (HAL:US), which provided cementing services for the project. Texas also sued Anadarko Petroleum Corp. (APC:US), which held a 25 percent share of the well.

Texas is the fifth state along the Gulf of Mexico to file a lawsuit over the spill against BP and the other companies. Louisiana and Alabama sued in 2010, and Mississippi and Florida filed last month.

The Texas lawsuit “preserves the state’s interest in collecting environmental resource and economic damages,” Tom Kelley, a spokesman for the attorney general, said in an e-mail. “A jury verdict or final settlement would determine the level of appropriate damages.”

The companies involved in the spill are liable for the full cost of restoring harmed natural resources, or “in the alternative,” should pay as much as $350 million in natural resources damages, as calculated under the state’s natural resources code, Texas said in the complaint.

Lost Taxes

Texas is also seeking pollution fines of as much as $25,000 a day under each of two separate state statutes, which could add as much as $4.2 million in fines. Texas presented the state’s claims for lost tax revenues to BP’s “government claims web site” last month and its claims for lost state-park revenue May 16, according to the lawyers.

Scott Dean, a BP spokesman, declined to comment on the suit. Lou Colasuonno, Transocean’s spokesman, didn’t immediately respond to phone and e-mail messages yesterday seeking comment on it.

“We continue to believe that we have substantial legal arguments and defenses against an liability in the Macondo incident and that BP’s indemnity obligation protects us,” Beverly Stafford, Halliburton’s spokeswoman, said in an e-mail. “Accordingly we will maintain our approach of taking all proper actions to protect our interests.

Settlement Terms

John Christiansen, Anadarko’s spokesman, declined yesterday to comment on the litigation. In regulatory filings this year, Anadarko stated the company’s settlement agreement with BP indemnifies it against all spill-related expenses except for potential fines under the U.S. Clean Water Act, which aren’t sought by Texas in this action.’’

The blast aboard the Deepwater Horizon drilling rig killed 11 workers and set off the largest offshore oil spill in U.S. history. The accident sparked hundreds of lawsuits against well owner BP; Vernier, Switzerland-based Transocean; and Houston-based Halliburton.

A nonjury trial on fault for the incident ended last month in federal court in New Orleans. U.S. District Judge Carl Barbier, who is overseeing the blowout litigation, has said he may not issue a judgment on fault and gross negligence before a second phase of the trial set for Sept. 16. That phase will concern the size of the spill and the efforts to contain it.

Regional Tourism

While the Texas coastline largely escaped physical oiling during the 2010 spill, regional tourism and seafood businesses were affected, which had a ripple effect on the state’s income from taxes and coastal usage fees, according to the complaint.

Tourists avoided the shore, seafood restaurants were forced to import supplies, and traditional fishing waters were closed by the threat of pollution, lawyers for the state said in the complaint. State officials claim they remain concerned about recontamination from oil and chemical dispersants that linger in the ecosystem.

‘‘The full extent of potential injuries, destruction, loss and loss of services is not yet fully known and may not be fully known for many years, because of ongoing assessment work, including monitoring and long-term study analysis,” Texas lawyers said in the filing.

“Additionally, as sunken and dispersed oil resurfaces, additional harm to marine ecosystems will occur and continue,” the lawyers said.

The sinking of the Deepwater Horizon and its aftermath also set off a criminal investigation by the U.S. Department of Justice. Mix’s prosecution was the first criminal case to arise from the 2010 spill.

Text Messages

Mix worked on BP efforts to estimate the amount of oil leaking from the Macondo well. The two counts of the indictment concern text messages between him and a contractor and another string with his supervisor.

Since his arrest in April 2012, BP and Transocean Ltd. (RIG:US) have pleaded guilty to criminal charges over the spill. In addition, two BP well-site managers were charged with involuntary manslaughter and the company’s former vice president of exploration for the Gulf of Mexico was charged with obstruction of Congress and false statements related to the size of the spill. All three have pleaded not guilty.

The delay in Mix’s trial comes after defense attorneys complained that federal prosecutors failed to turn over evidence requested that might exonerate him. Duval ordered the government at a hearing May 14 to provide the defense with additional evidence. Mix’s lawyers said they needed to postpone the trial to search through this material, according to the docket.

The U.S. didn’t oppose the postponement.

The new case is State of Texas v. BP Exploration & Production Inc., 13-cv-00315, U.S. District Court, Eastern District of Texas (Beaumont). The criminal case is U.S. v. Mix, 12-cr-00171, U.S. District Court, Eastern District of Louisiana (New Orleans).

Lawsuits overseen by Barbier are consolidated with In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • HAL
    (Halliburton Co)
    • $67.71 USD
    • 1.43
    • 2.11%
  • APC
    (Anadarko Petroleum Corp)
    • $107.33 USD
    • 1.09
    • 1.02%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus