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Sunday, May 19, 2024 | Back issues
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New Class Action as U.S. House Considers|Future for Gulf of Mexico Oil Spill Fines

NEW ORLEANS (CN) - A class action filed on the eve of a U.S. House vote on how to use Clean Water Act fines from the Deepwater Horizon oil spill claims that the 5 million barrels of oil dumped into the Gulf of Mexico by BP and Transocean will continue to hurt the region.

The House Transportation and Infrastructure Committee today (Wednesday) will hold a hearing on two bills, together known as the Restore Act, that propose dedicating 80 percent of the Clean Water Act fines recovered from the oil spill to rebuilding wetlands and repairing oyster and coral reefs, and other long-term restoration projects. A similar bill is being reviewed in Senate committees.

Federal Clean Water Act fines range between $1,100 and $4,300 per barrel of oil spilled. In this case that's somewhere between $5.5 and $21 billion.

The Restore Act bill scheduled for a vote today proposes distributing the Clean Water Act fines as follows: 35 percent to be divided equally among the five Gulf states (Florida, Alabama, Mississippi, Louisiana and Texas); 30 percent for comprehensive restoration plans for Gulf states, and 30 percent for impact-driven projects for states with the most damage. The rest would fund long-term studies of the Gulf.

If the Restore Act fails, the money recovered will go into the federal Oil Spill Liability Trust Fund. While that money will stem from damages to the Gulf of Mexico, the federal government will not be obligated to spend any of it to restore the Gulf Coast.

In November, U.S. District Judge Carl Barbier, who is overseeing the consolidated oil spill litigation, ruled that states cannot collect damages from oil spill defendants separate from Clean Water Act fines. The states will have to rely upon the federal government for restoration money.

In the new class action, Cecil Lapeyrouse and 122 others say their livelihoods depend on the health of the Gulf of Mexico. "Much of the oil that was released from the well now rests on the seafloor and remains extremely hazardous and/or toxic, posing a constant and significant risk to marine life in and around the Gulf of Mexico," according to the complaint.

Lapeyrouse says he has owned and operated a general store in Chauvin, La. for more than 25 years, selling fuel, bait, and groceries to the public and to commercial and recreational fishermen.

The April 20, 2010 explosion of the Deepwater Horizon killed 11 people and unleashed the worst oil spill in U.S. history. The oil slick covered a surface area larger than South Carolina.

(A growing number of people along the Gulf Coast believe the Macondo formation continues to leak oil from the seafloor. In August, U.S. District Magistrate Judge Sally Shushan issued an orderwaiving the "security zone" around the Macondo well, imposed by another judge after the well was capped in 2010. In November, BP confirmed to Courthouse News that it has several vessels in the vicinity of the well, researching oil seeps.)

The new class action states: "Much of the oil that was released from the well now rests on the seafloor and remains extremely hazardous and/or toxic, posing a constant and significant risk to marine life in and around the Gulf of Mexico; marine life crucial to the vast and complex food chain of the Gulf of Mexico from Lake Charles, Louisiana to Key West, Florida. The oil is particularly toxic to juvenile and other slow-moving marine life at the bottom of the aquatic food chain such as plankton, shrimp, crabs, fish, and other species. For months after the well was capped, slow-moving marine species could not escape the continuous walls of oil suspended in the Gulf's water column. Scientists fear that, in the coming years, the walls of oil will have created massive generational gaps in numerous aquatic species, further damaging the Gulf Coast's fragile fishing industry.

"Plaintiffs derive their income either directly or indirectly from or on the coastal waters of Louisiana and the Gulf of Mexico which will be dramatically affected for years to come. The oil spill has created a negative perception as to the quality and safety of the Louisiana seafood brand. Commercial fishermen have experienced reduced catches and plummeting market prices. Bait shops and marinas have witnessed their profits dwindle in the wake of numerous fishery closures along the Gulf coast. The ecological calamity has become the worst oil spill in the history of the United States, wreaking billions of dollars of damages to plaintiffs and others similarly situated."

The complaint adds: "BP and Transocean knew that their actions and omissions created unsafe and hazardous conditions. BP and Transocean did nothing to remedy the unsafe conditions even though they had knowledge of them prior to the incident. BP and Transocean's acts and omissions in this regard, when viewed objectively from the standpoint of BP and Transocean, involved an extreme degree of risk, considering the probability and magnitude of potential harm to others. BP and Transocean had actual, subjective awareness of the risk involved, but nevertheless proceeded with conscious indifference to the rights, safety, or welfare of others, including plaintiffs. ...

"Prior to the incident described above, the Gulf of Mexico was one of the most prolific recreational and food source grounds for plaintiffs and was the natural source of most of the seafood supplied to the Gulf region. As a result of the above described incidents, the fisheries and other natural resources in the Gulf of Mexico have been harmed to the extent that plaintiffs' business ties to the fishing and recreational industries have been significantly damaged and will continue to be damaged for many years to come."

Named as defendants are BP, Transocean, and Cameron International Corp., the manufacturer of the faulty blowout preventer.

The plaintiffs' lead counsel is Byron Hutchinson, with Klitsas & Vercher in Houston.

Business Week on Tuesday speculated that the Justice Department and BP will likely strike a deal on CWA fines.

According to Business Week: "Noah Hall, an environmental-law professor at Wayne State University in Detroit, said the BP penalty probably will be lower than the maximum allowed and large enough for President Barack Obama to claim the company has been punished enough. ...

"'This is more of a political decision than a legal decision,' Hall said. 'This will probably end in a settlement with a figure that will allow President Obama to say he hit BP with the largest civil environmental fine in U.S. history, while also assuring BP investors.'"

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