Federal judge dismisses BP oil spill fraud lawsuit

[JURIST] A judge for the US District Court for the Eastern District of Louisiana on Friday dismissed [order, PDF] consolidated racketeering claims against British Petroleum (BP) [corporate website] in connection with the Deepwater Horizon oil spill [BBC backgrounder; JURIST news archive]. Gulf residents and businesses filed lawsuits in June 2010 [JURIST report] alleging violations of the Racketeer Influenced Corrupt Organizations (RICO) [18 USC § 1961 et seq.] statute, claiming that BP purposefully defrauded the American public in order to increase company profits. The first lawsuit, a class action filed on behalf of US residents affected by the oil spill, contends that BP engaged in a scheme to secure profits by deceiving the public. The second suit alleges 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. The court granted BP's motion to dismiss the RICO claims on the grounds that the causal connection between BP's alleged fraud and the plaintiffs' injuries was too attenuated to constitute a RICO violation. The same court on Friday also granted [order, PDF] BP's motion to stay a claim filed by Andarko, a BP partner, because its contract with BP required arbitration for such legal disputes rather than litigation.

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. In February, Mississippi Attorney General Jim Hood [official website] asked the district court to order the Gulf Coast Claims Facility (GCCF) [official website] to fulfill its legal obligations to aid victims of the spill and to remedy inadequate claims mechanisms [JURIST report]. The GCCF began processing claims in August following the completion of negotiations [JURIST reports] between BP and the US Department of Justice [official website]. Former Alabama Attorney General Troy King filed a lawsuit [JURIST report] in August against BP for damages to the state's coast and economy, claiming that the oil giant has failed in its efforts to accept responsibility for the oil spill. In July, a class action lawsuit [JURIST report] was filed against the company in a Louisiana state court alleging that its negligent actions led to the spill and that BP was further negligent in its oversight of the cleanup effort, resulting in volunteers falling ill due to inadequate protective equipment. In June 2010, 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]. In May 2010, 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.

 

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