BP today reached an historic $20.8 billion settlement with the government and five Gulf states to resolve civil claims arising from the 2010 Macondo well blowout and the massive oil spill that followed in the Gulf of Mexico. It is the largest settlement with a single entity in the Department’s history.
The settlement, which still must be approved by the court, is the result of a civil lawsuit the Justice Department filed against BP and several co-defendants in December 2010, seeking to hold them accountable for the Deepwater Horizon disaster. “The federal lawsuit culminated in a three-phase civil trial in which the United States proved, among other things, that the spill was caused by BP’s gross negligence,” according to the Justice Department.
Each of the Gulf States—Alabama, Florida, Louisiana, Mississippi and Texas—also filed civil claims against BP relating to the spill, including claims for economic losses and natural resource damages.
The settlement includes civil claims under the Clean Water Act, for which BP has agreed to pay a $5.5 billion penalty—the largest civil penalty in the history of environmental law. It includes natural resources damages claims under the Oil Pollution Act, for which BP has agreed to pay $7.1 billion, in addition to the $1 billion it previously committed to pay for early restoration work.
BP also will pay $600 million for other claims, including claims for reimbursement of federal and state natural resource damage assessment costs and other unreimbursed federal expenses and to resolve a False Claims Act investigation due to this incident.
Additionally, BP has entered into separate agreements to pay $4.9 billion to the five Gulf states and up to a total of $1 billion to several hundred local governmental bodies to settle claims for economic damages they have suffered as a result of the spill.
The latest settlement is in addition to several earlier criminal and civil settlements of federal government claims concerning the Deepwater Horizon disaster. In 2012, MOEX Offshore, which had a 10 percent stake in the well, reached a $90 million settlement with the United States.
In 2013, BP Exploration and Production pleaded guilty to illegal conduct leading to and after the 2010 Deepwater Horizon disaster and was ordered to pay $4 billion in criminal fines, penalties and restitution, including $2.4 billion for natural resource restoration.
Also in 2013, Transocean Deepwater, the Deepwater Horizon’s owner and operator, pleaded guilty to violating the Clean Water Act and was ordered to pay $400 million in criminal fines and penalties for its conduct in relation to the disaster. A separate civil settlement imposed a record $1 billion Clean Water Act penalty on Transocean and required the company to take significant measures to improve its performance and prevent recurrence of this conduct.
Notice of both the consent decree and the draft damage assessment and restoration plan are published in the Federal Register. Both will be available for public comment for 60 days. The materials and instructions for commenting on the consent decree can be found here.