JURIST - Paper Chase: BP facing fraud lawsuits over oil spill

[JURIST] Two lawsuits have been filed against BP alleging violations of the Rackteer Influenced Corrupt Organizations (RICO) [18 USC § 1961 et seq.] statute in connection with the recent Deepwater Horizon oil spill [BBC backgrounder; JURIST news archive]. The first lawsuit, a class action filed on behalf of US residents affected by the oil spill, was filed last week and alleges [complaint, PDF] that BP engaged in a scheme to secure profits by deceiving the public. According to the complaint, BP committed a pattern of criminal acts, including bribery, mail fraud and wire fraud in order to deceive the public as to its ability to safely drill for oil and to contain oil in the event of a spill. Plaintiffs in the first suit are seeking compensatory relief, as well as injunctive relief requiring BP to comply with provisions of the Outer Continental Shelf Lands Act (OCSLA) [text, PDF]. The second suit, filed Monday, alleges [complaint, PDF] that BP has been involved in racketeering and corruption related to the BP claims payment process. According to the complaint, BP has been involved in corruption, wire fraud, mail fraud, unauthorized practice of law, violation of state insurances laws and regulations and other criminal activity in order to delay or reduce the payment of legitimate claims for damages. Plaintiffs are seeking damages and a writ of quo warranto ordering defendants to stop engaging in unauthorized practice of law and other criminal conduct.

Calls for criminal and civil actions have been mounting against BP, as evidence of the oil giant's lack of proper compliance with regulations has come out. Earlier this month, US Attorney General Eric Holder [official website] announced that the Department of Justice (DOJ) [official website] is reviewing whether any criminal or civil laws were violated [JURIST report] by BP resulting in the oil spill. Holder cited several statutes being examined by government lawyers including the Clean Water Act and the Oil Pollution Act of 1990 [materials]. The Clean Water Act includes both civil and criminal penalties, and the Oil Pollution Act can be used to hold parties liable for cleanup costs. Last month, DC-based consumer advocacy organization Food and Water Watch (FWW) [advocacy website] filed suit [JURIST report] in a US district court against the US Department of Interior (DOI) and the Minerals Management Service (MMS) [official websites] for an injunction to halt drilling at the BP Atlantis Facility [corporate website], another BP Gulf of Mexico site.