In Re: Deepwater Horizon update - June 4th Ruling

In Re: Deepwater Horizon

Liability Under Section 311 of the Clean Water act

On June 4th, the U.S. Court of Appeals for the 5th Circuit issued yet another opinion in the BP oil blowout. At issue was the decision of the district court to grant the U.S. government summary judgment in its claim for civil penalties against BP under Setion 311 of the Clean Water Act. The district court held that a discharge is the point where uncontrolled movement begins. The flowing of oil from the well through the Transocean Horizon riser was a discharge from the well.

Anadarko, a joint venture party and part owner of the well (along with MOEX Offshore 2007, LLC), brought a cross Motion for Summary Judgment asserting that the discharge was from the riser of the Transocean rig. Accordingly, no discharge occurred from a BP facility.

Recognizing the the CWA is not a "model of clarity," the unanimous court also stated that it is not overly complex. While the word "discharge" is not defined in the Act there are illustrative examples such as "spilling,leaking, pumping, pouring, emitting, emptying or dumping" all of which denote a "loss of controlled confinement." In this case, cement was deposited at the well and failed. The defendants did not contest this fact nor that oil flowed freely from the well into the navigable waters. Thus, the well is a facility from which oil was discharged within the meaning of the CWA.

The court stated that it is immaterial that the oil flowed through the riser owned by a third party from which it entered into the Gulf of Mexico. Though Anadarko and BP asserted that liability should be placed on Transocean which the court noted may have contributed to the discharge, the CWA does not allow for shifting penalites to third parties which may be at fault which may only be a mitigating factor in assessing the penalty. "[A]ny culpability on the party of Deepwater Horizon's operators does not exempt the well owners from the liability at issue here."

The unanimous panel of the Fifth Circuit thus affirmed the summary judgment in favor of the U.S. government.