WASHINGTON Dec 16 The Obama administration has
sued BP Plc (BP.L)(BP.N) and its partners in the Macondo oil
well that spilled almost 5 million barrels of oil into the Gulf
of Mexico, creating the worst offshore oil spill in U.S.
Here are some answers to questions about what the lawsuit
means and what happens next.
Q: What does the government's lawsuit accuse the companies
A: The lawsuit accused the well owners, BP, Anadarko
Petroleum Corp (APC.N) and Mitsui & Co Ltd (8031.T) unit MOEX
as well as the well driller Transocean Ltd (RIG.N) and its
insurer QBE Underwriting, of failing to adhere to U.S.
environmental laws and safety regulations.
Specifically, the lawsuit said they failed to take the
necessary precautions to keep the well under control before it
exploded on April 20. Further, they allegedly failed to use the
best available and safest drilling technology to monitor the
well's condition or maintain continuous surveillance.
Q: Could additional companies and individuals be charged or
more charges be added to the lawsuit?
A: Yes and yes. Attorney General Eric Holder made it clear
on Wednesday that the investigation was continuing, both for
possible criminal charges and other civil charges. The lawsuit
filed only addressed violations of the Clean Water Act and the
Oil Pollution Act.
Legal experts also expect other companies like Halliburton
(HAL.N), which did the cementing for the well, or Cameron
International CAM.N, which provided the blow-out preventer,
to eventually be charged too.
Plus, they expect that prosecutors will pursue criminal
charges for violations of the environmental laws and they could
also file other charges if they find that the companies or its
employees made false statements or obstructed the
"There will be criminal charges under the Clean Water Act
for negligently discharging oil," said David Uhlmann, a
University of Michigan Law School professor who previously ran
the Justice Department's environmental crimes section.
That is what happened in the Exxon (XOM.N) Valdez tanker
spill off the Alaska coast in 1989.
"The only question is what other violations are charged,
are there false statements, was there obstruction of justice?"
he said, adding that it was an open question about whether
individuals would be charged.
Additionally, scores of animals were injured by the oil so
the Justice Department could seek charges for violations of the
Endangered Species Act and the Migratory Bird Treaty Act.
Q: What are the range of penalties that the companies could
face and would the companies settle the charges instead?
A: If found liable, BP and the other companies could face
billions of dollars in fines, potentially more than $20
billion. The Clean Water Act alone includes penalties of up to
$1,100 per barrel of oil spilled or up to $4,300 per barrel if
gross negligence or willful misconduct is found by the judge.
The harm to wildlife and animals are also subject to stiff
fines, as much as $25,000 per violation. Those penalties could
be subject to appeal if imposed by a court.
As for a possible settlement, legal experts expect most if
not all of the companies implicated in the oil spill to
negotiate a deal to settle any government charges.
Q: What happens next in the litigation?
A: The Justice Department filed its civil lawsuit in a
federal court in New Orleans which is already considering
several hundred private lawsuits involving the oil spill. The
next step is what is called discovery, to go through the
evidence that potentially could be used during the trial
against the companies.
University of Michigan Law School professor Uhlmann said
that could be an "unwieldy process" because federal prosecutors
are still reviewing possible criminal charges and some evidence
will be revealed.
(Reporting by Jeremy Pelofsky; Editing by Xavier Briand)