Saturday, January 10, 2015

5th Circuit denies en banc review - BP Penalties Trial Will Proceed

Saw stuck in riser pipe in BP attempt to stem spill
The Oil Pollution Act of 1990 provides for civil penalties under 33 U.S.C. § 1321(b)(7)(A).  Amending the Clean Water Act, it imposes mandatory penalties on owners of facilities "from which oil or a hazardous substance is discharged." Discharge is defined as “spilling, leaking,pumping, pouring, emitting, emptying or dumping.” 33 U.S.C. § 1321(a)(2).
District Judge Carl Barbier who manages both the private class action litigation and governmental enforcement actions held that discharge is the point where "uncontrolled movement" begins. In re Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, 844 F.Supp.2d 746, 758 (E.D.La. 2012). Applying this standard, the court concluded that oil flowing from the well through the Deepwater Horizon's riser pipe was a discharge from the well. The court then entered summary judgment on the issue of BP's and Anadarko's liability as co-owners of the well and BP appealed.

In a panel decision In re Deepwater Horizon, 753 F.3d 570 (June 4, 2014) Barbier was affirmed.  BP Exploration and co-owner Anadarko sought en banc review and asked the panel reconsider.  The well had never been successfully sealed. Since there was no "controlled confinement" there was no "discharge" within the statute's meaning and Clean Water Act penalties were not warranted.  On November 4 the panel denied the motion.

The 5th Circuit yesterday denied the motion for en banc review.  Divided 7-6, the dissenters argue that the “controlled confinement” test does not follow from
the text of the CWA".  The dissent by Judge Edith Clement denounces as "metaphysical" the panel's November 4  re-definition of loss of "controlled confinement" as the "absence of control".  That is incompatible with the CWA she says - and in a penalty statute ambiguities should be construed in favor of the defendant.

My estimate is that the BP/Anadarko argument is too clever by half. The OPA of was prompted by the Exxon Valdez spill and so discharge from a vessel or failure of a pump (e.g. a pipeline) is evoked by the statutory language.  But the OPA declares it to be national policy that there shall be no oil spills.  Any ambiguity therefore should be construed so as to effect that statute's deterrent purpose.  Yet the fact that six judges voted to reconsider will doubtless yield another petition for certification to the Supreme Court - and preserves a sharply stated issue for appeal of the ultimate penalty which will be imposed by Judge Barbier who has already found that BP engaged in "reckless or willful misconduct". - gwc

No comments:

Post a Comment