BP Rejects Liability Under Two Federal Laws

NEW ORLEANS (CN) - BP filed an answer in Federal Court on Monday in response to the federal government's lawsuit seeking damages for the Deepwater Horizon oil spill, under the Clean Water and Oil Pollution Acts. BP wrote in response that the government's "request for a declaratory judgment regarding alleged damages under OPA constitutes improper claim splitting."

BP admits the explosion of the Deepwater Horizon caused the oil spill in the Gulf of Mexico, but says the amount of oil spilled from its Macondo well is still unknown.

According to the government's December complaint, BP and other oil spill defendants will be subject fines of $1,100 to $4,300 per barrel of oil spilled.

In its answer, BP denies that the fines necessarily apply on a per-barrel-spilled basis. It says the fines could be assessed at a per-day-spilled rate.

BP says the United States cannot charge a maximum penalty of $4,300 per barrel because another, lower estimate of the maximum penalty already has been stated by a federal agency.

BP admits that the Deepwater Horizon rig is still sitting on the floor of the Gulf of Mexico, and that the Macondo well was an offshore facility within the meaning of the Clean Water Act - but it denies it was an offshore facility within the meaning of the Oil Pollution Act.

The government's December lawsuit was the first suit brought by the United States after the April 20, 2010 explosion of the Deepwater Horizon drilling rig killed 11 workers and unleashed millions of barrels of oil into the Gulf of Mexico.

The Justice Department's investigation of the oil spill is continuing; still unknown is whether criminal charges may be filed against BP and the other oil spill defendants.

BP has asked federal permission to resume drilling in the Gulf of Mexico in July.

As the catastrophic oil spill began, BP said that 5,000 barrels of oil were flowing a day from its broken Macondo well.

Later estimates by scientists independent of BP placed the flow rate more likely between 30,000 and 60,000 barrels a day.

The federal government estimates that more than 200 million gallons of oil (4.9 million barrels) spewed into the Gulf over a period of 87 days.

The government's original complaint said that millions of gallons of oil had been discharged into the Gulf of Mexico and adjoining shoreline.

In answer, BP Exploration and Production (BPXP) "admits that a still undetermined amount of oil was discharged into and upon waters of the Gulf of Mexico," but said the specific amount remains unknown.

"BPXP admits that plaintiff refers to the Clean Water Act, the full text of which speaks for itself, and that plaintiff seeks Clean Water Act penalties for each barrel of oil that the defendants discharged into the Gulf of Mexico. BPXP denies that penalties must always be based in part on the number of barrels of oil discharged, as the Clean Water Act also contemplates courts assessing penalties based on the number of days of the discharge," BP wrote in its 36-page Answer.

BP says that even if the government were to prove gross negligence or willful misconduct at trial, the maximum penalty for which BP can be held liable is $4,000 per barrel, not $4,300, as the U.S. complaint states.

BP says the Coast Guard's and EPA's inflation adjustments under Clean Water Act disagree with one another, and "pursuant to due process fair notice principals, only the lesser inflation-adjusted penalty number could ever be applied."

As for the U.S. action having been brought under the Declaratory Judgment Act, the Clean Water Act, and the Oil Pollution Act of 1990, BP "denies the plaintiff has stated a valid claim or in entitled to any relief" under those acts.

BP denies that it failed "to use the best available and safest drilling technology to monitor and evaluate the Macondo well."

BP denies that it failed to "fulfill its respective responsibilities to maintain well control of the Macondo well."

BP denies that it failed to "maintain continuous surveillance on the rig floor."

BP denies that it contributed to the spill through "corporate practices of disregarding federal regulations, as evidenced by various safety and other audits of Deepwater Horizon, reflecting the known failure, prior to the Deepwater Horizon spill, to properly design, install, maintain, repair, and operate equipment intended to prevent personal injury, loss of life, harm to the environment, and disasters like the Deepwater Horizon spill."

In response to the assertion in the original complaint that BP and the responsible parties are liable for civil penalty under the Clean Water Act, under OPA, and liable for all removal costs and damages resulting from the Deepwater Horizon spill, BP "denies that the United States is entitled to the relief it seeks with respect to" BP.

BP says the "plaintiff's request for a declaratory judgment regarding alleged damages under OPA constitutes improper claim splitting" and that BP "reserves the right to object to any attempt to amend or supplement the complaint to add any such claims for damages, other than in accordance with a schedule to be agreed upon by the parties that ensures that all claims of the plaintiff are asserted in a timely and appropriate manner."

BP claims "there are superseding causes of the relevant discharges of oil beyond any events proximately caused by BPXP, including but not limited to, defective design and/ or manufacture of the [blowout preventer] and/or negligent operation of the [blowout preventer]."

A federal investigation of the failure of the blowout preventer showed that a bent pipe prevented the device from sealing off the broken well.

The blowout preventer was made by Cameron International.

Transocean, as owner of the Deepwater Horizon rig, was responsible for maintaining the blowout preventer.

BP's answer is signed by Don Haycraft with Liskow & Lewis of New Orleans.

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