DOJ Files Suit on Deepwater Horizon Spill

| Wed Dec. 15, 2010 4:13 PM EST

The Department of Justice announced Wednesday that it is filing suit against BP and eight other companies for the Deepwater Horizon oil spill. The DOJ is seeking civil penalties under the Clean Water Act—which could add up to as much as $21 billion—and wants to declare eight of those companies "liable without limitation" for the costs of clean up and damage caused by the disaster.

The DOJ filed suit in the US District Court in New Orleans, arguing that all of the listed companies in some way "caused or contributed" to the oil spill. It lists BP, along with several companies under the parent corporations Anadarko and Transocean, along with MOEX Offshore 2007 LLC, Triton Asset Leasing GMBH, and QBE Underwriting Ltd./Lloyd’s Syndicate 1036 (BP’s insurer).

Here's the statement from Attorney General Holder:

"We intend to prove that these defendants are responsible for government removal costs, economic losses, and environmental damages without limitation," said Attorney General Holder. "Even though the spill has been contained, the Department’s focus on investigating this disaster and preventing future devastation has not wavered. Both our civil and criminal investigations continue, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the gulf area and its economy is moving forward."

The DOJ also lists the alleged oversights:

  • Failing to take necessary precautions to keep the Macondo Well under control in the period leading up to the April 20th explosion;

  • Failing to use the best available and safest drilling technology to monitor the well's conditions;

  • Failing to maintain continuous surveillance; and

  • Failing to use and maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources, and the environment.

I broke down the role of a number of the companies in this post a few months ago. Worth pointing out that several of the companies on that list—cement provider Halliburton and blowout preventer manufacturer Cameron—aren't listed on this complaint. That's not to say that they couldn't be listed in future complaints, of course, but this does give a sense of where the DOJ is assigning blame right now. Holder noted in his remarks today that both the civil and criminal investigation into the spill are ongoing.

It's also worth noting that BP has indicated it intends to challenge the federal government's estimate of spill size. BP argues that the total estimate from the federal government, 4.9 million barrels of oil spilled in the nearly-three-month ordeal, is much too high.

How much oil spilled and whether the companies were guilty of negligence is crucial. The companies face a fine of at least $1,100 a barrel, but the figure could be as high as $4,300 if the court determines that the companies were negligent.