BP, Anadarko ask appeals court to reconsider Clean Water Act liability issues

BP 435x292 BP, Anadarko ask appeals court to reconsider Clean Water Act liability issuesBP and its Deepwater Horizon partner Anadarko Petroleum Corp. asked the U.S. Fifth Circuit Court of Appeals last week for another chance to demonstrate they should not be penalized for Clean Water Act violations as a result of the 2010 Gulf oil spill.

According to Law360, the oil companies filed separate petitions for another hearing, claiming as they did the first time the issue was argued in court that the blowout preventer controlled by Transocean should have stopped the oil from escaping, as it was designed to do.

However, last month the Fifth Court upheld a lower court ruling rejecting that argument. In that ruling, U.S. District Judge Carl Barbier, who is overseeing the oil spill litigation in New Orleans, said that BP and Anadarko are liable for Clean Water Act violations because the Macondo well was the relevant source of the oil — not the blowout preventer and the rig it was connected to.

In its petition, BP says “Not one drop of oil entered the Gulf directly from the Macondo well.”

As Law 360 reports, “There can be no (Clean Water Act) violation until oil escapes confinement, and it was Transocean’s blowout preventer that allowed the uncontrolled movement of oil, the petition contends.”

Anadarko relies on the same skewed reasoning in its own petition to the 5th Circuit, adding that the appellate court resolved factual considerations that a jury should have decided, Law 360 reports, such as the cement seal that Halliburton created to BP’s specifications. The 5th Circuit panel found the well had been sealed by Halliburton, but the integrity of that seal is disputed by Anadarko, which contends that the cement seal never hardened, so the well wasn’t actually sealed.

Should the court agree with Anadarko’s arguments about the seal, blame for the disaster could be diffused among the liable parties, meaning each would likely pay less in Clean Water Act fines.

Judge Barbier had ruled that the Macondo well, not the equipment attached to it, was the single point of discharge for the oil, which placed all Clean Water Act violations on BP and Anadarko. When the oil giants appealed, a three-judge panel at the U.S. 5th Circuit “said the language of the (Clean Water Act) and the facts of the case clearly made BP and Anadarko liable,” Law360 reported.

BP faces paying as much as $18 billion in Clean Water Act penalties for spilling 4.2 million barrels of oil if it is found “grossly negligent” for its role in the Deepwater Horizon oil spill. Under the Act, fines of $1,100 to $4,300 per barrel of oil spilled are levied, depending on whether the courts decide that negligence was a factor.