DOJ settles civil claims against BP

The US Dept. of Justice said it had reached a “global resolution of civil claims” against BP arising from the 2010 Deepwater Horizon oil spill worth $20.8 billion, the largest settlement with a single entity in the department’s history.

The settlement resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims of the five Gulf states and local governments, the DOJ said in an Oct. 5 statement.

“Building on prior actions against BP and its subsidiaries by the Department of Justice, this historic resolution is a strong and fitting response to the worst environmental disaster in American history,” said Attorney General Loretta Lynch.

On April 10, 2010, less than 50 miles off the coast of Louisiana, the Macondo well suffered a catastrophic blowout. The ensuing explosion and fire destroyed the Deepwater Horizon drilling rig, killing 11 men aboard and sending more than three million barrels of oil into the Gulf of Mexico over a period of nearly three months.

On Dec. 15, 2010, Attorney General Eric Holder announced a civil lawsuit against BP and several co-defendants, seeking to hold them accountable for the Deepwater Horizon disaster. The federal lawsuit culminated in a three-phase civil trial in which the United States proved, among other things, that the spill was caused by BP’s gross negligence.

Under the terms of a consent decree lodged in federal court in New Orleans, BP must pay the following in scheduled payments over the next 15 years:

$5.5 billion federal Clean Water Act penalty, plus interest, 80 percent of which will go to restoration efforts in the Gulf region pursuant to a Deepwater-specific statute, the RESTORE Act. This is the largest civil penalty in the history of environmental law.
$8.1 billion in natural resource damages, this includes $1 billion BP already committed to pay for early restoration, for joint use by the federal and state trustees in restoring injured resources. BP will also pay up to an additional $700 million, some of which is in the form of accrued interest, specifically to address any later-discovered natural resource conditions that were unknown at the time of the agreement and to assist in adaptive management needs.
$600 million for other claims, including claims for reimbursement of federal and state natural resource damage assessment costs and other unreimbursed federal expenses and to resolve a False Claims Act investigation due to this incident.

Additionally, BP has entered into separate agreements to pay $4.9 billion to the five Gulf states and up to a total of $1 billion to several hundred local governmental bodies to settle claims for economic damages they have suffered as a result of the spill.

Notice of both the consent decree and the draft damage assessment and restoration plan are published in the federal register. Both will be available for public comment for 60 days. The materials and instructions for commenting on the consent decree can be found at http://www.justice.gov/enrd/deepwater-horizon.