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December 15, 2010 6:56 PM

Justice Department Sues BP, Eight Other Defendants Over Deepwater Horizon Disaster

Posted by Brian Baxter

The Justice Department has sued BP and eight other defendants in U.S. district court in New Orleans over the three-month oil spill in the Gulf of Mexico, U.S. attorney general Eric Holder, Jr., announced on Wednesday.

The explosion on April 20 that eventually sank the Deepwater Horizon offshore drilling rig turned into the largest oil spill in U.S. history. BP, which leased the Deepwater Horizon for work on an undersea well, subsequently established a $20 billion compensation fund for victims of the spill.

The London-based company now has to deal with a 27-page complaint filed under the Oil Pollution Act and Clean Water Act that will only add to its potential liabilities.

"We intend to prove that these defendants are responsible for government removal costs, economic losses, and environmental damages without limitation," Holder said in a press conference in Washington, D.C. Holder was flanked by EPA administrator Lisa Jackson, assistant attorney general for the Justice Department's civil division Tony West, and Ignacia Moreno, head of the environment and natural resources division.

Seven of the nine defendants are units or subsidiaries of BP, oil exploration firm Anadarko Petroleum, and offshore drilling contractor Transocean. Another defendant, MOEX Offshore, is a minority owner of BP's Macondo well that was permanently sealed in September. The last defendant, QBE Underwriting/Lloyd's Syndicate 1036, is an insurer for Transocean, according to The New York Times. (The Wall Street Journal estimates fines ranging from $4.5 billion to $21 billion against the defendants, who refuted the charges in statements to the New Orleans Times-Picayune.)

As we have previously noted, Transocean has turned to Skadden, Arps, Slate, Meagher & Flom and Sutherland Asbill & Brennan for outside legal counsel related to the massive oil spill. BP's lead outside lawyer on oil spill litigation has been Wilmer Cutler Pickering Hale and Dorr public policy and strategy chair Jamie Gorelick. Kirkland & Ellis, Arnold & Porter, and Cozen O'Connor are also handling oil spill litigation for the British energy giant, according to our previous reports.

Corporate Counsel, a sibling publication, has profiled the top in-house lawyers at each of the companies involved in the spill. BP's general counsel is Rupert Bondy and the company's lead in-house lawyer for its U.S. unit is John Lynch, according to Corporate Counsel, while Transocean's top in-house lawyer is Eric Brown. (Anadarko's general counsel is Robert Reeves.)

The defendants will be up against the full force of the federal government--the names of 21 lawyers from the Justice Department appear at the end of the civil complaint, which does not preclude criminal charges from also being filed, prosecutors said on Wednesday.

 

* RELATED ARTICLE FROM THE AM LAW LITIGATION DAILY

DOJ Files Civil Suit Against BP and Other Oil Spill Defendants; Plaintiffs Lawyers Welcome Feds to New Orleans MDL

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