BP's answer to US government's Macondo damages case implicates regulators

Legal scholars following the Macondo oil spill damages case against BP said Thursday that the company's most recent court filings indicate a possible new angle of defense: lax government oversight. One attorney familiar with the case noted that the assertions in the filing "seem to be conflating two theories. One is that the company was permitted and so is shielded somehow. The other element is contributory negligence. In essence that says that if the defendants are liable for fines or damages, they can seek equitable relief and share the claim for damages."

The relevant arguments -- that BP was operating with a valid permit and under government supervision, so that same government cannot recover damages; plus the suggestion that the government may have to share the blame for any violations -- were buried at the bottom of a filing BP made in federal court in New Orleans, Louisiana, late Tuesday in response to the US government's complaint against it arising out of the Macondo well blowout and oil spill last year.

Legal scholars said contributory negligence is a common defense in large damages cases, but added it typically cannot be raised against the government. When it has been tried in cases involving the Clean Water or Superfund Acts it has frequently been unsuccessful.

Other parties following the case noted that in the Racketeering Influenced and Corrupt Organizations complaint filed as part of a consolidated damages case against BP and others, the Bureau of Ocean Energy Management, Regulation and Enforcement -- formerly the Minerals Management Service -- and its employees are named as "possible wrongdoers," subject to discovery. The observers said BP may be turning that RICO allegation to its own defense in the broader case, putting at least part of the responsibility on acts or omissions by the federal agency or certain staff there.

After addressing each of the government's allegations point by point, BP's filing Tuesday offered 12 "affirmative defenses," indicating how the company would fight the case.

"No recovery may be had to the extent that actions of BP were undertaken pursuant to government mandate, direction, supervision, or with government approval," was the eighth item on that list.

Sixth on the list was an argument that said the plaintiff, the US government, "is not entitled to recover any costs or purported damages to the extent that those costs or alleged damages were incurred as a result of plaintiff's acts or omissions determined to be wrongful."

The court filing did not specify what those acts or omissions might be, or who might have committed them.

Attempts to reach BP for comment Thursday were unsuccessful, and the attorneys who prepared the document referred all inquiries to the company.

--Gregory DL Morris, newsdesk@platts.com

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