Ten More Cities Beat Deadline to Sue BP

HOUSTON (CN) - At least 10 Gulf Coast cities, including Houston, Galveston, South Padre Island and Sarasota, Fla., sued BP for sales taxes they lost to the giant oil spill, joining more than 2,000 plaintiffs who made the 3-year deadline for Oil Pollution Act complaints.

All 10 cities sued in federal courts. The Tampa Sports Authority also sued.

The April 20, 2010 explosion on BP's Deepwater Horizon oil rig killed 11 workers and dumped more than 200 million gallons of oil to spill into the Gulf of Mexico, Galveston says in its complaint.

Claimants can sue responsible parties for lost revenues and profits under the Oil Pollution Act of 1990. The first phase of a trial on consolidated claims concluded last week in New Orleans Federal Court. Phase one of the bench trial was meant to apportion blame among BP, Halliburton, Transocean and other companies and contractors that owned or worked on the oil well.

The 3-year deadline for Oil Pollution Act claims was Saturday. Hundreds of new claims were filed last week in federal courts across the Gulf Coast before the clock ran out.

Many were from people or businesses that do not want to participate in the settlement, do not qualify, or who presented claims to BP and were ignored or rejected.

The Oil Pollution Act requires plaintiffs to file a "presentment claim" to the liable party, giving them 90 days to settle before plaintiffs can file a lawsuit, Houston said in its complaint.

Both Galveston and Houston say BP either denied their claims or declined to pay them within 90 days of receiving them.

Houston claims it lost millions in sales tax revenue due to the spill.

"The City of Houston collects sales taxes from the many companies located within its municipal boundaries that equip, supply, manufacture, and provide support to Gulf related drilling and exploration activity," Houston said in its complaint. "The City has sustained a substantial loss in sales tax revenues in the aftermath of the spill because of the decline in exploration and drilling activity following the spill. The amount of losses sustained has been in the ten of millions of dollars and will be further refined as additional economic studies of the impact of the spill are undertaken.

"The City of Houston also is a major tourism and business center whose livelihood is an integral part of the Gulf Coast economy. The spill was a substantial contributing factor to the decline in tourist and business related activities following the spill which caused the city to suffer a loss of hotel occupancy taxes."

Galveston made a similar argument.

"The local tourism, seafood and energy industries were affected by the BP Oil Spill, resulting in a slowdown in economic activity which resulted in lower sales and property tax revenues," Galveston's lawsuit states.

Both cities seek punitive and actual damages to be determined at trial, but did not estimate dollar amounts.

Calls and emails to the cities' attorneys were not returned by press time.

Phase two of the federal trial in New Orleans, to begin in September, will seek to determine how much oil was spilled.

BP pleaded guilty to manslaughter and environmental crimes last year, and agreed to pay the Justice Department a $4 billion settlement, which is separate from the trial that just ended.

Also suing BP last week were Gulfport, Miss., the Florida cities of St. Pete Beach, Palmetto, White Springs, Treasure Island, Holmes Beach, and Manatee County.

Houston's lead attorney is Dennis Reich with Reich and Binstock; Galveston's is Jimmy Williamson with Williamson & Rusnak, also of Houston.

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