United States v. B.P. Exploration & Production, Inc.
753 F.3d 570 (2014)
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Rule of Law:
Under the Clean Water Act, a "discharge" of oil occurs at the point where controlled confinement is lost. The owner of the facility where this initial loss of confinement occurs is strictly liable for civil penalties, regardless of the path the oil subsequently traverses or the fault of third parties.
Facts:
- BP Exploration & Production, Inc. ('BP') and Anadarko Petroleum Corporation ('Anadarko') were co-owners of the Macondo Well, an exploratory oil well in the Gulf of Mexico.
- The well was being drilled by the Deepwater Horizon, a mobile offshore drilling vessel owned and operated by Transocean entities.
- The vessel was connected to the well by a riser and a blowout preventer, both of which were owned by Transocean.
- On April 20, 2010, a cement seal inside the well failed, causing a high-pressure, uncontrolled release of oil and gas from the well.
- The blowout preventer, which was designed to stop such a release, also failed to function.
- The uncontrolled oil and gas mixture flowed up from the well, through the riser, and onto the deck of the Deepwater Horizon, where it ignited.
- The resulting explosion and fire caused the vessel to capsize and sink, which severed the riser.
- For nearly three months, oil flowed continuously from the well, through the broken riser, and into the Gulf of Mexico.
Procedural Posture:
- The federal government filed a civil enforcement action in the U.S. District Court for the Eastern District of Louisiana against BP and Anadarko, among others, for Clean Water Act violations.
- The government moved for partial summary judgment on the issue of the well owners' liability for civil penalties for the subsurface discharge of oil.
- Anadarko filed a cross-motion for summary judgment, arguing the discharge was from Transocean's riser, not from a facility it owned.
- The district court granted the government's motion, concluding the oil was discharged from the well and finding BP and Anadarko liable as owners.
- BP and Anadarko (appellants) appealed the district court's summary judgment order to the U.S. Court of Appeals for the Fifth Circuit, with the U.S. government as the appellee.
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Issue:
Does the release of oil from an undersea well, which then travels through a third-party-owned riser before entering the ocean, constitute a 'discharge' from the well for which the well's owners are liable for civil penalties under the Clean Water Act?
Opinions:
Majority - Fortunato P. Benavides
Yes, the release constitutes a discharge from the well for which the owners are liable. The court reasoned that a 'discharge' under the Clean Water Act occurs at the point where controlled confinement of the oil is lost. In this case, confinement was lost when the cement seal inside the well failed, allowing oil to escape uncontrollably. The fact that the oil then traveled through Transocean's riser before entering the Gulf of Mexico is irrelevant, as liability attaches at the source of the initial release, not where the pollutant ultimately enters navigable waters. Furthermore, the court held that civil penalty liability under this section of the Act is strict, meaning any fault on the part of Transocean in failing to prevent the blowout does not absolve the well owners of their own liability for the discharge from their facility.
Analysis:
This decision solidifies a broad interpretation of 'discharge' and reinforces the strict liability nature of civil penalties under the Clean Water Act. By defining discharge as the initial loss of controlled confinement, the court prevents facility owners from evading liability by pointing to the intervening property or negligence of a third party. This precedent makes it clear that liability attaches at the source of the problem, streamlining the government's ability to hold polluters accountable. The ruling discourages defendants from attempting to shift blame for civil penalties, emphasizing that third-party fault may be considered in determining the penalty amount but not in establishing initial liability.
