Potential Breach of Contract Against Feds re: Lifting BP's $75 MM Liability Cap

[wordpix]

http://lawprofessors.typepad.com/business_law/2010/06/bp-may-be-innocent-until-proven-grossly-negligent.html

BP May Be Innocent Until Proven Grossly Negligent
June 9, 2010 by Josh Fershee

Law.com reports that some energy experts are warning about possible breach of contract claims against the federal government if Congress were to remove the $75 million liability limit "for an offshore facility except a deepwater port" provided in the Oil Pollution Act of 1990, 33 U.S.C. § 2704. The claim is that the oil and gas companies purchased leases from the federal government, and those leases are contracts that were signed with certain liability expectations.

The Oil Pollution Act of 1990 carries an exception to the $75 million limit. Specifically, the liability limit

does not apply if the incident was proximately caused by--

(A) gross negligence or willful misconduct of, or

(B) the violation of an applicable Federal safety, construction, or operating regulation by, the responsible party, an agent or employee of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party (except where the sole contractual arrangement arises in connection with carriage by a common carrier by rail).

Thus, if BP were found to be grossly negligent or if the incident were caused by a violation of an applicable Federal regulation, the cap doesn't apply to BP, anyway.

:puke: Here it comes---litigation lasting through the next century

[Catherina]

1. Bring it on n/t

[BadgerKid]

2. Seems like part (a) should be a slam dunk.

Don't eff it up, Feds.

[dipsydoodle]

3. litigation lasting .............

Not that long but years anyway.

They have ignored the cap issue anyway by having spent over US$900 million to date. The total figure most frequently mention is c. US$20billion Some comedian here has already said multiply that by 10. If that were true they'd bail out now.