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BP Faces Lawsuit to Recover Billions in Damages From Gulf Spill

December 15, 2010 at 4:39 PM EDT
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The Justice Department filed a major lawsuit against BP and eight other companies involved in the Gulf oil spill disaster. Ray Suarez has more.

JIM LEHRER: The Justice Department began legal action today against BP and other companies involved in the Gulf oil spill. Nine companies were named in a civil lawsuit aimed at recovering billions of dollars in the largest offshore oil spill in U.S. history.

In Washington, Attorney General Eric Holder said the companies failed to live up to safety standards.

U.S. ATTORNEY GENERAL ERIC HOLDER: We intend to prove that these violations caused or contributed to the massive oil spill and that the defendants are therefore responsible under the Oil Pollution Act for government removal costs, economic losses, as well as environmental damages.

We are also seeking civil penalties under the Clean Water Act, which prohibits the unauthorized discharge of oil into the nation’s waters.

JIM LEHRER: The oil rig explosion killed 11 people last April. An estimated five million barrels of oil spilled into the Gulf. It’s been called the worst offshore oil disaster in the nation’s history.

Ray Suarez takes our coverage from there.

RAY SUAREZ: The administration’s lawsuit is seeking an unspecified amount of damages from the companies. But, so far, the government has not yet decided whether to pursue criminal charges, nor has it sued Halliburton, which did the cement work at the Macondo well.

John Schwartz is covering this for The New York Times, and he joins me now.

John, what were some of the companies named in the suit and the specific laws under which they’re being sued?

JOHN SCHWARTZ, The New York Times: Well, the partners in ownership in the well, Anadarko Petroleum, MOEX, are in the suit, as well as Transocean, the owner of the Deepwater Horizon rig. And the laws that are being cited here are numerous. You have got the Clean Water Act. You have got the Oil Pollution Act.

And there are natural resources laws being discussed as well. So, it’s a big suit.

RAY SUAREZ: One company designed the rig. One company built it. One serviced it. One extracted the oil. Is it hard in a case like this to figure out who’s responsible for what?

JOHN SCHWARTZ: Well, that’s what the investigators have been doing both in the government and outside the government over the last several months, trying to figure out exactly what happened on the well in the days before the blowout.

And if it was easy, you would settle it and everybody would go home. That’s what the finder of fact is for. That’s why we have juries and judges.

RAY SUAREZ: Well, the government has said it seeks liability without limitation. What does that mean?

JOHN SCHWARTZ: Well, there’s been a lot of discussion under the Oil Pollution Act of a $75 million cap on liability. Now, BP has said from the start that they’re going to waive that protection. And, in fact, if the government can prove certain things, like gross negligence, the cap goes away anyway.

And so the $75 million cap has been much discussed. I think the government felt they needed to put a flag down on this and say we’re not going to be limited by that. But that cap was gone anyway.

RAY SUAREZ: But once you’re seeking liability without limitation, does that mean if new underwater pools of oil are found, if you’re already in the civil proceedings and new damage is found, can the price tag continue rising even while the matter is still under litigation, or after?

JOHN SCHWARTZ: It — if new damage is found, I believe you could go back with — with new filings. But, in fact, what this is about now is a starting document. Eric Holder said today that this could be amended over the course of the — of the procedure. And they didn’t even cite what the damages are today. It could be in the billions of dollars. But this is just a starting play.

RAY SUAREZ: During the months of the spill, Halliburton was mentioned prominently as one of the companies involved in the Macondo well. Did the attorney general discuss why they weren’t named in today’s suits?

JOHN SCHWARTZ: He didn’t want to talk about it, but he did say that it’s an open document and other people could be named later.

RAY SUAREZ: Are the federal agencies that are pursuing this going to be using the findings from the recent presidential commission and its report, or, once something like this commences, is the Justice Department, is the EPA going to be doing its own investigation?

JOHN SCHWARTZ: Well, the Justice Department and EPA have been investigating all along. But, once things go to trial, every possible piece of evidence goes into the hopper.

RAY SUAREZ: Meaning that there may still be facts in evidence…

JOHN SCHWARTZ: Well, other investigations, other reports that — everything — everything goes in. Everything gets before the judge in order to help figure out just what happened here.

RAY SUAREZ: Did Holder mention — did the attorney general mention that criminal charges may still be in the offing or discuss what has to happen in order for that to move forward?

JOHN SCHWARTZ: Well, that’s the big shoe that’s left to drop. The attorney general did say that there’s no criminal indictment at this time. He said that that’s — that that investigation is ongoing. And he said they’re making progress. He didn’t say whether it would happen or not.

RAY SUAREZ: John, can we talk a little bit about the mechanics? There are already thousands of lawsuits against BP and some of the associated companies involved in the well.

When the attorney general of the United States announces a suit, what happens? Do they jump to the head of the line? Do they become just another co-applicant, along with these other people who’ve already filed? How does that work?

JOHN SCHWARTZ: Well, first of all, the federal cases were consolidated over the summer in a single courtroom in New Orleans under Judge Carl Barbier.

And that process, which happened in Boise, Idaho, is called multidistrict litigation. And the MDL is now consolidated in New Orleans. The United States joins it, largely for purposes of discovery. That is, the fact-finding that has to go forward among the various plaintiffs gets all put into one pool. And the United States is going to have a prominent role there.

But, in fact, the facts that have to be discovered for the various lawsuits should all be done together, because that saves — it’s all about efficiency. Then there’s an option later to separate out the suits and send each of the plaintiffs their separate way to other courtrooms or to continue from there, especially if things are moving toward a global settlement.

RAY SUAREZ: Well, you mentioned this specific judge and New Orleans. Can we assume that the federal government — that that’s where the federal government’s case will be heard, or is it where BP is headquartered? Is it in Washington, D.C.? And will it be heard by a judge, or will a jury be impaneled?

JOHN SCHWARTZ: Well, all those are questions to be worked out later.

But, you know, from the start, BP, Halliburton, and the other companies have said they’d love to have their trial in Houston, where their headquarters are, where their American headquarters are, and a place that would be more convenient for them.

The United States government might prefer New Orleans, because that’s the — that’s where a lot of the other cases are being tried. But it could go anywhere.

RAY SUAREZ: John Schwartz of The New York Times, thanks for joining us.

JOHN SCHWARTZ: Happy to be here.