A Louisiana federal judge ordered Anadarko Petroleum Corp. to pay $159.5 million for Clean Water Act (CWA) violations stemming from the massive 2010 Deepwater Horizon oil spill, saying the penalty was relatively small because the company was a minority owner of the well and didn’t cause the spill. U.S. District Judge Carl Barbier said in his order that the award was an attempt to balance Anadarko’s lack of culpability with the seriousness of the historic spill in the Gulf of Mexico in which 11 workers were killed and oil leaked for months. The maximum civil penalty would have been about $3.5 billion. Judge Barbier said in the order:
Although this amount [$159.5 million] is high when viewed out of context, it is only 4.5% of the maximum penalty, and therefore on the low end of the spectrum. The court finds that this amount strikes the appropriate balance between Anadarko’s lack of culpability and the extreme seriousness of this spill, considering the purposes of the CWA and § 1321(b)(7)’s civil penalty.
Anadarko owned a 25 percent interest in the Macondo Well, while BP Exploration & Production Inc. owned a 65 percent interest and operated it. Judge Barbier said the relatively low penalty also reflects the fact that Anadarko has paid $4 billion to settle compensatory claims stemming from the spill. He said the $159.5 million penalty is roughly in line with fellow non-operating well minority owner MOEX USA Corp.’s agreement to pay $90 million as part of a June 2012 consent decree. MOEX owned a 10 percent interest in the well. In addition, the judge said, Anadarko should be able to survive the penalty. The order comes after a penalty phase trial in January and February, followed by post-trial briefing. The government had urged the court to award more than $1 billion in penalties, while Anadarko argued that it should face “no more than a nominal penalty.”
Anadarko was found to be liable for civil penalties under the CWA in February 2012 because it was an owner of the well. That finding was upheld on appeal. Judge Barbier said he settled on the penalty after considering the seriousness of the violation, the economic benefit of the violator resulting from the violations, culpability, other penalties from the same incident, prior violations, attempts to minimize the effects of the discharge, the economic impact of the penalty of the violator, and other matters “as justice may require.” He noted that the spill was the largest in U.S. history and said that “the seriousness of this violation cannot be overstated.” But Anadarko received only a minor economic benefit from the violations, which has been eclipsed by costs it has since incurred. Anadarko was not culpable for the spill, the court found. He said the responsible parties were Anadarko’s co-owner, BPXP, and two of BPXP’s contractors.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.