Quietly, a Criminal Probe of the Gulf Spill

File photo, cleanup operations continue for the BP
Deepwater Horizon platform disaster off the coast
of Louisiana. (photo: Getty Images)

By Margaret Cronin Fisk, Laurel Brubaker Calkins, Bloomberg News

08 July 12

he U.S. government asked a federal judge to reject Transocean Ltd.'s bid to use a 159-year-old law to cap its liability at $27 million for environmental claims tied to the Deepwater Horizon oil spill.

The filing came the same day the Justice Department announced an investigation of whether any criminal or civil laws were violated in the BP Plc oil disaster in the Gulf of Mexico, the biggest U.S. spill on record. The government is reviewing whether there were violations of the Clean Water Act and the Oil Pollution Act of 1990.

The U.S. filed the motion yesterday in Houston federal court to "make clear" it's entitled to pursue claims "for pollution response costs, environmental damages and other injuries stemming from the oil spill," Assistant U.S. Attorney General Tony West wrote.

"It is simply unconscionable, in the circumstances of this case, that Transocean is attempting to use this" law to avoid paying states or the U.S. for damages caused by the rig explosion, West said in a May 24 letter to Transocean's lawyers.

The spill began after an April 20 fire aboard the Deepwater Horizon rig, which London-based BP leased from Switzerland-based Transocean to drill its Macondo well in the Gulf.

1851 Law

The law cited by Transocean, the Limitation of Liability Act of 1851, is pre-empted by the Oil Pollution Act of 1990, the U.S. said. The claims of state governments are also "not subject to the limitation act," West wrote.  READ MORE