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Consolidated RICO Class Action Against BP|Contains a Litany of Damning Allegations

NEW ORLEANS (CN) - A newly consolidated RICO class action claims BP's "cocksure behavior," its history of safety violations, disregard for federal regulations and failure to inspect and maintain equipment all contributed to the explosion of the Deepwater Horizon. The class claims that BP conducted itself with an "underlying 'unconscious mind,'" and that its practice of putting profit before safety created the catastrophe.

The federal complaint adds that the relative newness of offshore drilling, the difficult geography of the Macondo well site, and the fact that BP was drilling at depths that exceeded its federal permit also contributed to the disaster.

The class claims the oil giant gambled with worker and environmental safety by cutting corners, misrepresenting intentions, using shoddy material and failing to run crucial safety inspections.

Ultimately, all those factors combined with the No. 1 cause of the disaster: that for BP, profit came before safety, according to the 91-page complaint.

The class claims BP was behind schedule and was spending $1 million a day to keep drilling the difficult Macondo well when the Deepwater Horizon exploded.

"Despite this history of catastrophes and close calls, BP has been chronically unable or unwilling to learn from its many mistakes or to give up its regular way of doing business," the complaint states. "The company's dismal safety record and disregard for prudent risk management are the results of a corporate safety culture that has been repeatedly called into question by government regulators."

The class action, released Monday, was consolidated under U.S. District Judge Carl J. Barbier's court as part of the oil spill multidistrict litigation. More than 300 oil spill-related lawsuits pending in Barbier's court are to be divided and consolidated into "bundles," depending on their causes of action.

On April 20, 2010, BP workers aboard the Deepwater Horizon drilling rig lost control of the subsea well they had almost completed. When highly pressurized hydrocarbons leaked into the well, the vessel's emergency equipment failed to stop the oil and gas from blowing out of the well, which led to explosions and a fire on the Deepwater Horizon, and ultimately to the sinking of the vessel. Eleven people died and gas and oil gushed into the water unchecked for 12 weeks.

"Meanwhile, BP downplayed the severity of the spill and was, contrary to their prior claims to regulators, unprepared for the massive cleanup effort required," according to the complaint.

On May 21, President Obama established the National Oil Spill Commission on the BP Horizon Oil Spill and Offshore Drilling, to examine facts and circumstances surrounding the explosion.

"A key finding of the commission was that BP repeatedly placed profits over safety, implementing procedures that greatly increased risk, primarily in order to avoid the expense of delay," according to the complaint.

According to the chairman of the investigation, "All the evidence of BP's misguided priorities and imprudent decisions regarding the Macondo well and the Deepwater Horizon described above is part of a pattern of cocksure behavior -a 'culture of complacency,'" according to the complaint.

Deepwater offshore drilling is an "immensely complex, technical process, and a relatively new one that has only developed over the last five years," the complaint states.


In emails weeks before the blowout, BP employees referred to the Macondo well as a "crazy," "nightmare" well, and indicated a sense of resignation about safety procedures, the class claims. It cites an email from BP official Brett Cocales in which he admits using less equipment than was necessary: "'who cares, it's done, end of story, will probably be fine.'"

"The risk of a blowout is one of the most dangerous but common risks in deepwater drilling," the class says.

BP had a Mineral Management Service permit to drill at 19,650 feet.

But "After the spill, a BP crewman admitted that this depth had been misrepresented to MMS, and that BP had in fact been drilling in excess of 22,000 feet, in violation of its permit," according to the complaint.

"At depths almost 3.5 miles below the sea floor, the pressures within and strengths of the various formation layers the Deepwater Horizon was drilling through varied widely and changed often, requiring constant adjustments to drilling fluid density and other factors. In some places, the subsea rock formations were so brittle that they fractured, letting gallons of expensive drilling mud escape into the cracked and porous rock around the drill," the complaint states.

"At the time of the disaster, BP was certainly aware that in addition to increasing the risk of blowouts, deep-sea drilling also increases the risk of BOP [blowout preventer] failure. BP was also aware that the industry and government had major concerns about the reliability of BOPs like the one installed on the Deepwater Horizon. A 2004 study by federal regulators ... showed that BOPs may not function in deep-water drilling environments because of the increased force needed to pinch and cut the stronger pipes used in deep-water drilling. Only three of 74 vessels studied in 2004 had BOPs strong enough to squeeze off and cut the pipe at the water pressures present at the equipment's maximum depth."

The class claims that BP used materials and specifications that its officials knew were inadequate.

In one example, concerning the number of centralizers used on the last piece of casing pipe, the complaint states that despite Halliburton's suggestion that BP use no less than 21 centralizers to ensure a secure cement job, BP officials decided to make do with six.

Centralizers ensure that the casing pipe is centered in the well bore; if the pipe is not centered, the cement placed around it may fail to create a secure seal against the highly-pressurized hydrocarbons surrounding the well.

According to BP documents, additional centralizers were available but BP didn't want to wait for them.

"In the same email that had recognized the risks of proceeding with insufficient centralizers, BP official Brett Cocales shrugged off using only six, flippantly concluding, 'who cares, it's done, end of story, will probably be fine,'" according to the complaint.

BP reportedly was paying Transocean $500,000 a day to lease the Deepwater Horizon.

BP had planned for drilling to take 51 days and to cost around $96 million.

The class claims that BP knew that Transocean, the owner of the Deepwater Horizon rig, had a horrible safety record and that the Deepwater Horizon was in need of an extensive revamp, but BP was too impatient to get going with exploration to make Transocean service its rig.

"In September 2009, a BP audit team concluded an audit of Deepwater Horizon, and found excessive overdue maintenance totaling 390 jobs and 3,545 man hours. Many were high priority. Thirty-one included findings that were related to well control system maintenance, and six related to BOP maintenance. All findings were outstanding as of December 2009," according to the complaint.

Also before the spill, the class says, "BP was on notice of significant problems related to the Deepwater Horizon's equipment and maintenance, including problems with the vessel's BOP, electronic alarm systems, ballast systems used to stabilize the vessel in the water, and other significant deficiencies that could 'lead to loss of life, serious injury or environmental damage as a result of inadequate use and/or failure of equipment.'"

The Macondo well's blowout preventer had several emergency activation methods. None was able to activate the BOP to seal the well once it started to blow because the blowout preventer, as BP knew, was not in good working order. "BP knew of these problems well before the spill, but did nothing to ensure that the BOP was in compliance with federal regulations," according to the complaint.

The enormous complaint, which includes a Steering Committee of 15 law offices and a 5-office RICO Complaint Master Working Group, is signed by plaintiff liaison counsel Stephen Herman of New Orleans and James Roy of Lafayette, La.

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