California Whacks BP for $102 Million for Overcharges

SACRAMENTO (CN) — BP Energy will pay $102 million to settle a whistleblower lawsuit accusing the British oil giant of overcharging California for natural gas — the largest settlement of its kind against an oil company in state history.

The $102 million will be split between the whistleblower, the state, and counties and cities that bought the natural gas.

California Attorney General Xavier Becerra claimed BP overbilled the state as much as $300 million from 2003 to 2012 on three successive contracts.

“BP thought it could get away with providing false and misleading information in order to line its own pockets. Today, we send a clear message: cheating the people of California will cost you more than it's worth,” Becerra said in a statement.

The lawsuit was slated for jury trial this week. It began in 2012 in San Francisco County Superior Court, when former BP employee Chris Schroen accused the oil company of quoting and charging prices above a contractual cap.

The Attorney General’s Office intervened in 2015, saying BP had violated the California False Claims Act.

Schroen’s attorney Niall P. McCarthy called the settlement the largest whistleblower settlement in state history involving an oil company, and that fraud against state governments is a growing trend.

“Not only is BP paying over $100 million through this settlement, but with the conduct now stopped, taxpayers are saving millions of dollars more every year,” said, McCarthy, with Cotchett, Pitre & McCarthy.

For nearly 10 years BP was the exclusive provider of natural gas to California and its state agencies. BP negotiated its contracts with the California Department of General Services and sold the state hundreds of millions of dollars worth of natural gas. It no longer has a service contract with the Golden State.

BP did not have to admit liability under terms of the settlement.

“BP strongly believes it honestly and fairly met its obligations under its contracts with the state,” the company said in a statement.

Follow @@NickCahill_5

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit