BP 2014 Annual Report Download - page 238

approximately $35 billion. BP will defend vigorously against these claims
if adjudicated at trial. Certain of these states (including the states of
Alabama, Florida, Texas and Mississippi, as described below) and local
government entities have filed civil lawsuits that pertain to claims
asserted by them under their earlier OPA 90 submissions to BP.
In April 2013, the states of Alabama, Florida and Mississippi each filed
actions against BP related to the Incident, which have been consolidated
with MDL 2179. On 19 April 2013, the State of Alabama filed an action
against BP alleging general maritime law claims of negligence, gross
negligence, and wilful misconduct; claims under OPA 90 seeking
damages for removal costs, natural resource damages, property damage,
lost tax and other revenue and damages for providing increased public
services during or after removal activities; and various state law claims.
The State of Alabama’s complaint also seeks punitive damages.
On 20 April 2013, the State of Florida filed suit against BP and Halliburton
in federal court in Florida, and its case has also been transferred to MDL
2179. Florida’s complaint alleges general maritime law claims for
negligence and gross negligence; OPA 90 claims for alleged lost tax
revenue, other economic damages and natural resource damages; and
various state law claims. Florida also seeks punitive damages.
The State of Mississippi filed both federal court and state court
complaints in Mississippi against BP in April 2013. Mississippi’s federal
court complaint alleges OPA 90 claims against BP, Transocean and
Anadarko for natural resource damages, property damage, lost tax
revenue and damages for providing increased public services during or
after removal activities. It asserts general maritime law claims for
negligence and gross negligence against Halliburton only. Mississippi’s
state court complaint alleges various state law claims, including
negligence, gross negligence and willful misconduct. Both Mississippi
complaints seek punitive damages. The State of Mississippi’s federal
court action and state court action have both been consolidated with
MDL 2179.
On 17 May 2013, the State of Texas filed suit against BP and others in
federal court in Texas. Its complaint asserts claims under OPA 90 for
natural resource damages, lost sales tax and state park revenue; claims
for natural resource damages under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA); and claims for
natural resource damages, cost recovery, civil penalties and economic
damages under state environmental statutes. The State of Texas’s action
has been consolidated with MDL 2179.
On 14 February 2014, BP moved to strike the State of Alabama’s jury trial
demand as to its claim for compensatory damages under OPA 90. BP’s
motion remains pending.
On 5 March 2014, the State of Florida filed a lawsuit (which has since
been consolidated with MDL 2179) to declare various BP entities (and
other entities) liable for removal costs and natural resource damages.
OPA Test Case Proceedings
Seven OPA test cases will address certain OPA 90 liability questions
focusing on, among other issues, whether plaintiffs’ alleged losses tied
to the 2010 federal government moratoria on deepwater drilling and
federal permit delays are compensable. On 3 June 2014 the district court
entered an Agreed Upon Scheduling Order for these test cases. That
scheduling order has now been suspended indefinitely with no new
deadlines being established.
State of Alabama Damages Case Proceedings
On 16 July 2014 the district court issued a scheduling order for the State
of Alabama’s economic damages claims against BP and other parties and
a request by the district court for the parties to set aside the month of
November 2015 for a trial. That scheduling order has now been
suspended indefinitely with no new deadlines being established.
Agreement for early natural resource restoration
On 21 April 2011, BP announced an agreement with natural resource
trustees for the US and five Gulf Coast states, providing for up to
$1 billion to be spent on early restoration projects to address natural
resource injuries resulting from the Incident. Funding for these projects
will come from the $20-billion Trust fund. BP and the trustees have
reached agreement on a total of 54 early restoration projects that are
expected to cost approximately $698 million. These include 10 projects
that are already in place or underway, and 44 projects that were filed with
the court on 2 October 2014, following a regulatory review and public
comment process. As part of the project agreements, BP will receive
Natural Resource Damages (NRD) restoration credits that can be used to
offset related NRD restoration obligations, either in whole or in part.
Other civil complaints
On 26 August 2011, the district court in MDL 2179 granted in part BP’s
motion to dismiss a master complaint raising claims for economic loss by
private plaintiffs, dismissing the plaintiffs’ state law claims and limiting
the types of maritime law claims the plaintiffs may pursue, but also held
that certain classes of claimants may seek punitive damages under
general maritime law. The court did not, however, lift an earlier stay on
the underlying individual complaints raising those claims or otherwise
apply its dismissal of the master complaint to those individual complaints.
On 30 September 2011, the court granted in part BP’s motion to dismiss
a master complaint asserting personal injury claims on behalf of persons
exposed to crude oil or chemical dispersants, dismissing the plaintiffs’
state law claims, claims by seamen for punitive damages, claims for
medical monitoring damages by asymptomatic plaintiffs, claims for
battery and nuisance under maritime law, and claims alleging negligence
per se. As with its other rulings on motions to dismiss master
complaints, the court did not lift an earlier stay on the underlying
individual complaints raising those claims or otherwise apply its dismissal
of the master complaint to those individual complaints.
Citizens groups have also filed either lawsuits or notices of intent to file
lawsuits seeking civil penalties and injunctive relief under the Clean
Water Act and other environmental statutes. On 16 June 2011, the
district court in MDL 2179 granted BP’s motion to dismiss a master
complaint raising claims for injunctive relief under various federal
environmental statutes brought by various citizens groups and others.
The court did not, however, lift an earlier stay on the underlying individual
complaints raising those claims for injunctive relief or otherwise apply its
dismissal of the master complaint to those individual complaints. In
addition, a different set of environmental groups filed a motion to
reconsider dismissal of their Endangered Species Act claims on 14 July
2011. That motion remains pending.
On 31 January 2012, the district court in MDL 2179, on motion by the
Center for Biological Diversity, entered final judgment on the basis of the
16 June 2011 order with respect to two actions brought against BP by
that plaintiff. On 2 February 2012, the Center for Biological Diversity filed
a notice of appeal of both actions to the Fifth Circuit. Following oral
argument, the Fifth Circuit ruled in BP’s favour on 9 January 2013 in
virtually all respects, though it remanded the Center for Biological
Diversity’s claim under the Emergency Planning and Community Right to
Know Act (EPCRA) to the district court. On 22 January 2013, the Center
for Biological Diversity filed a Petition for Panel Rehearing in the Fifth
Circuit, which was denied on 4 February 2013. In January 2014, the
district court in MDL 2179 set a schedule for proceedings on remand of
the EPCRA claim under which limited discovery has taken place, and the
parties filed cross-motions for summary judgment that were fully briefed
by 19 May 2014. The district court has not acted and the cross motions
remain to be decided.
Halliburton lawsuits
On 19 April 2011, Halliburton filed a lawsuit in Texas state court seeking
indemnification from BPXP for certain tort and pollution-related liabilities
resulting from the Incident. On 3 May 2011, BPXP removed Halliburton’s
case to federal court, and on 9 August 2011, the action was transferred
to MDL 2179.
On 1 September 2011, Halliburton filed an additional lawsuit against BP
in Texas state court alleging that BP did not identify the existence of a
purported hydrocarbon zone at the Macondo well to Halliburton in
connection with Halliburton’s cement work performed before the
Incident and that BP has concealed the existence of this purported
hydrocarbon zone following the Incident. Halliburton claims that the
alleged failure to identify this information has harmed its business
ventures and reputation and resulted in lost profits and other damages.
On 7 February 2012, the lawsuit was transferred to MDL 2179.
Non-US government lawsuits
On 15 September 2010, three Mexican states bordering the Gulf of
Mexico (Veracruz, Quintana Roo and Tamaulipas) filed lawsuits in federal
court in Texas against several BP entities. These lawsuits were
234 BP Annual Report and Form 20-F 2014