The attorneys of Pietragallo’s White Collar Criminal Defense practice group are experienced in all aspects of white collar criminal defense matters and investigations.
he trial regarding the April 20, 2010 blow-out of BP’s Macondo well in the Gulf of Mexico resumed today in New Orleans before U.S. District Judge Carl Barbier, sitting without a jury. The evidence in this phase of the trial will focus on the efforts of BP to plug the blown-out well, as well as the estimates of the amount of oil spilled before it was plugged. The verdict on these issues will have a significant impact on the ultimate amount that BP will pay for violations of the Clean Water Act and damage to the environment.
As reported previously in White-Collared, BP agreed in November of 2012 to plead guilty to 14 criminal charges and pay a record $4.5 billion in fines and other payments. As part of that plea, BP agreed to pay $4 billion in criminal fines and penalties including a $1.26 billion criminal fine, the largest single criminal penalty in U.S. history, $2.39 billion to the National Fish and Wildlife Foundation for clean-up initiatives and $350 million to the National Academy of Sciences.
The resumption of the trial today represents the second of three phases in a trial to determine, among other things, whether BP behaved in a “grossly negligent manner” in its operation of the Macondo well and in its efforts to plug the blow-out after it occurred. If it is found to have been grossly negligent, BP will be held liable for as much as $21 billion under the Clean Water Act.
Judge Barbier has not yet rendered a verdict on the first phase, which focused on the conduct of BP and others prior to the blow-out, and concluded on April 17, 2013. The second phase, beginning today, will include expert testimony regarding the amount of oil that was released from the well before it was finally sealed on July 15, 2010. The Justice Department’s experts estimate that 176 million gallons were spilled into the Gulf, while BP is urging the Court to use an estimate of 103 million gallons in calculating any Clean Water Act fines.
This second phase is scheduled to last 12 days, with strict time requirements for the parties to present their competing claims. The third phase, which will determine the ultimate penalty, has not yet been scheduled.
XTO Energy Inc., a Pennsylvania-based subsidiary of ExxonMobil Corp., has been charged with illegally discharging more than 50,000 gallons of toxic wastewater from a Marcellus Shale gas well site in Penn Township, Lycoming County.
Attorney General Kathleen G. Kane said evidence and testimony was presented to a statewide investigating grand jury, which recommended the criminal charges be filed. XTO owns the Marquardt well site in Penn Township, which contains two natural gas wells that produce wastewater with toxic substances — including chlorides, barium, strontium and aluminum — during natural gas extraction. XTO is charged with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act. The case will be prosecuted in Lycoming County by Chief Deputy Glenn A. Parno of the Attorney General’s Environmental Crimes Section.
XTO allegedly stored the waste in 21,000-gallon storage tanks at the Marquardt site for processing. The ExxonMobil unit hired another company to recycle the wastewater on the Marquardt site from Nov. 4, 2010, through Nov. 11, 2010, the grand jury found.
According to the Attorney General’s Office, after that one-week period, XTO directed that company to remove their processing equipment from the site. However, XTO allegedly continued to transport and store gas well wastewater at the Marquardt site despite not having the proper equipment to safely store or process the wastewater.
The illegal discharge was discovered on Nov. 16, 2010, when an inspector with the Pennsylvania Department of Environmental Protection made an unannounced visit to the Marquardt site. During the visit, a DEP inspector found that a rear discharge valve on a storage tank had been opened and a drain plug was removed, which caused the gas well wastewater to flow out of the storage tank onto the ground. There was also evidence of prior wastewater discharges from other storage tanks at the Marquardt site, according to the grand jury.
The grand jury concluded that more than 93,000 gallons of wastewater was transported to and stored at the Marquardt site between Nov. 12, 2010, and Nov. 16, 2010, of which approximately 57,000 gallons was unaccounted for following the spill. The wastewater flowed into and polluted local waters and, as a result of the spill, the DEP required more than 3,000 tons of contaminated soil to be excavated and removed from the Marquardt site. XTO allegedly failed to place a spill containment system under any of the storage tanks at the Marquardt site, failed to lock any of the storage tanks on site, and failed to utilize security measures to prevent unauthorized people from accessing the site. XTO did not have a permit to discharge wastewater at the Marquardt site and failed to report any wastewater spills to the DEP as required by law, according to the grand jury.
The attorneys of Pietragallo’s White Collar Criminal Defense practice are experienced in every aspect of a white collar criminal defense matters and investigations.
