US Supreme Court Throws Out Lawsuit Against Shell

WASHINGTON -

The Supreme Court Wednesday said a centuries-old statute making international law enforceable in U.S. federal court can't be applied to actions that take place overseas, blunting a tool human-rights groups had used against torturers and other abusers for violations in their home countries.

In an opinion by Chief Justice John Roberts, the court held that the Alien Tort Claims Act, adopted in 1789 shortly after Congress met for the first time, applies only to actions that take place in the U.S. While all justices voted to dismiss the suit against Royal Dutch Shell PLC, Justice Stephen Breyer, joined by three other liberals, disputed the bright line majority conservatives drew.

Justice Breyer wrote that some lawsuits based on overseas acts should be permitted, if the defendant is an American national or the challenged conduct allegedly harms American interests.

In past decades, victims of former officials of foreign governments have won judgments in federal courts against their abusers. Those rarely have been paid, however, and more recently human-rights advocates have pursued defendants with deeper pockets, such as corporations doing business in countries with questionable regimes, under a theory that they are complicit in the misconduct.

The Supreme Court's ruling Wednesday will close off many such suits.

Still, the majority opinion left open at least the theoretical possibility that some acts abroad could so significantly "touch and concern the territory of the United States" to "displace the presumption" against the statute's use. In a concurring opinion, Justice Anthony Kennedy emphasized that future cases could provide "further elaboration and explanation" of that exception.

The alien tort law remained dormant for most of its history until human-rights advocates rediscovered it in the 1970s and began applying it to violations of modern international law.

In 1980, the U.S. Court of Appeals for the Second Circuit, in New York, ruled that a Paraguayan immigrant could invoke the law against a former Paraguayan police official for the torture and killing of her brother in Paraguay.

Wednesday's ruling involved a case brought by Nigerian refugees against Royal Dutch Shell. The plaintiffs alleged that the Anglo-Dutch oil giant aided and abetted the Nigerian government in a repressive campaign in the country's Ogoni region. Shell denies the allegations.

Initially, the Supreme Court agreed to consider whether the alien-tort law applied to corporations as well as individuals, but after a first round of arguments in February 2012, the justices ordered additional arguments over the far-broader question of whether the law applies at all to events overseas.

At arguments last October, several justices voiced concern that affirming such liability would make American courts a magnet for aggrieved foreign plaintiffs bringing claims for acts completely unrelated to the U.S.--and could invite foreign courts to encourage judging U.S. corporations for actions outside their own borders.

The case is Kiobel v. Royal Dutch Petroleum Co.

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US Court Rules Against BP on Oil Spill Settlement Payments Dispute

A federal judge denied BP PLC's plea to halt payments from a settlement fund set up to reimburse businesses and individuals for losses from the 2010 Deepwater Horizon accident.

During a hearing in New Orleans Friday morning, U.S. District Judge Carl Barbier rejected BP's arguments that the fund administrator, Patrick Juneau, was misinterpreting how claims should be assessed and payments calculated, according to lawyers who attended the hearing. BP claims the fund has made millions of dollars in payments for "fictitious" claims.

Lawyers representing the claimants argued the claims formulas were approved by BP. "The court's ruling speaks for itself," said Steve Herman, one of the lead lawyers representing thousands of businesses and individuals.

BP said in a statement that it has already appealed an earlier decision on the fund's payments to the U.S. Court of Appeals for the Fifth Circuit.

BP said it still believes that Mr. Juneau's interpretation of payment formulas is wrong, resulting in "unjustified windfall payments to numerous business claimants for non-existent, artificially calculated losses."

The ruling wasn't a surprise given Judge Barbier's previous rejection of BP's arguments, said Tom Claps, an analyst and legal expert with Susquehanna Capital, who has closely followed the case. It will be very difficult for the oil giant to score a victory at the appeals court because the settlement was "extensively negotiated, drafted and approved by BP and its legal team," Mr. Claps said.

The hearing took place during a break in the ongoing civil trial aimed at determining the degree of culpability that BP and other companies have for the accident. Judge Barbier has heard six weeks of testimony from employees of BP, drilling rig owner Transocean Ltd., cement contractor Halliburton Co. and expert witnesses.

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Brazil's Supreme Court Suspends New Oil-Royalties Regime

RIO DE JANEIRO - Brazil's Supreme Court late Monday suspended the redistribution of oil royalties that would cost three states billions of dollars in lost revenue.

Supreme Court Justice Carmen Lucia granted the injunction after Rio de Janeiro, Espirito Santo and Sao Paulo states filed lawsuits last week to block implementation of the new royalties regime. The states claim the new scheme is unconstitutional because it would break existing contracts, while also causing budget shortfalls that would severely crimp public services.

The ruling on the injunction will be reviewed by the full court at a later date, according to a court official.

In her decision, Ms. Lucia said that the case required urgent judicial attention from the court because royalties are paid on a monthly basis. The changes represented "unequaled risks" to the financial health of the states and cities involved, "impelling me to immediately grant the requested injunction," Ms. Lucia said.

The lawsuits are the latest step in a long-running political battle that pits Brazil's three major oil-producing states of Rio de Janeiro, Espirito Santo and Sao Paulo against the country's remaining 24 states, which have little oil production and stand to benefit financially from the new distribution scheme. The legal wrangling, however, isn't expected to delay an important auction of new oil and natural gas exploration concessions set for May.

The new law equally distributes royalties from existing and future oil production between the country's 27 states.

The states requested an injunction to block implementation of the new royalties regime, in addition to a ruling on the constitutionality of the new law. The law, however, is effectively suspended until the Supreme Court makes a definitive ruling on the lawsuits, a court official said last week.

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Brazil's Supreme Court Suspends New Oil-Royalties Regime

RIO DE JANEIRO - Brazil's Supreme Court late Monday suspended the redistribution of oil royalties that would cost three states billions of dollars in lost revenue.

Supreme Court Justice Carmen Lucia granted the injunction after Rio de Janeiro, Espirito Santo and Sao Paulo states filed lawsuits last week to block implementation of the new royalties regime. The states claim the new scheme is unconstitutional because it would break existing contracts, while also causing budget shortfalls that would severely crimp public services.

The ruling on the injunction will be reviewed by the full court at a later date, according to a court official.

In her decision, Ms. Lucia said that the case required urgent judicial attention from the court because royalties are paid on a monthly basis. The changes represented "unequaled risks" to the financial health of the states and cities involved, "impelling me to immediately grant the requested injunction," Ms. Lucia said.

The lawsuits are the latest step in a long-running political battle that pits Brazil's three major oil-producing states of Rio de Janeiro, Espirito Santo and Sao Paulo against the country's remaining 24 states, which have little oil production and stand to benefit financially from the new distribution scheme. The legal wrangling, however, isn't expected to delay an important auction of new oil and natural gas exploration concessions set for May.

The new law equally distributes royalties from existing and future oil production between the country's 27 states.

The states requested an injunction to block implementation of the new royalties regime, in addition to a ruling on the constitutionality of the new law. The law, however, is effectively suspended until the Supreme Court makes a definitive ruling on the lawsuits, a court official said last week.

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Federal Court Upholds Greenpeace Injunction for Shell Operations

The U.S. Court of Appeals has upheld a lower court ruling that environmental group Greenpeace must stay away from Shell's offshore Alaska drilling operations.

The court upheld the ruling by the U.S. District Court for Alaska, concluding that Shell had shown "a likelihood of success on the merits of its claim that Greenpeace USA would commit tortuous or illegal acts against Shell's Arctic drilling operations in the absence of an injunction" and that the resulting harm would be irreparable.

Prior to the start of its Arctic Alaska drilling campaign, Shell initially filed in U.S. District Court in Alaska for a temporary restraining order, and then a preliminary injunction, to prevent Greenpeace USA from coming within a specified distance of vessels involved in Shell's Arctic Outer Continental Shelf (OCS) exploration and from committing various "unlawful and tortious acts" against those vessels.

Shell argued that Greenpeace activists used illegal direct action to interfere with legal oil drilling activities on a number of occasions, according to the court filing. These acts include boarding vessels to try and halt drilling activities. In May 2010, Greenpeace USA activists boarded the Harvey Explorer, a vessel Shell had contracted to use for Arctic OCS operations. The vessel was in the Gulf of Mexico at the time when activists boarded the vessel, painting slogans and unfurling banners.

The injunction expired Oct. 31, 2012, the last day of the 2012 Arctic Ocean open water season.

Greenpeace USA, which has undertaken a public campaign to halt Shell's Arctic drilling plans, challenged the injunction, arguing that the dispute did not present a justiciable case or controversy, that the district court lacked subject matter jurisdiction to issue its order, that Shell had sued the wrong Greenpeace entity, and that the court erred in its application of Winter v. Natural Resources Defense Council.

Greenpeace USA and the websites of virtually all Greenpeace organizations have featured a campaign to stop Shell, according to the court filing.

Shell also presented evidence to the lower court of Greenpeace activists illegally boarding and holding protests on Shell-operated vessels. In February 2012, activists boarded the Noble Discoverer (mid-water drillship), which had stopped offshore New Zealand on its way to the Arctic. The Noble Discoverer is one of two rigs that Shell has used for drilling offshore Alaska.

In March of that year, Greenpeace activists also boarded Shell's Nordica and Fennica ice break support vessels, which were in port in Finland at the time. Greenpeace members in May 2012 twice boarded and occupied the Nordica as it moved through Swedish and Danish waters. Activists chained themselves to the vessel, dropped weights and other objects in the water to block the vessel, and created a human blockade using divers.
Greenpeace activists have also sought to halt Arctic drilling operations in Greenland. In 2010 and 2011, activists boarded an oil rig offshore Greenland, trying to stop Cairn Energy from conducting OCS oil and gas exploration activities.

The court noted that Greenpeace USA does not dispute evidence that its own activists carried out the attack on Shell's Harvey Explorer.

"And, although the record does not make clear which Greenpeace entity was directly responsible for multiple attacks on Cairn Energy vessels in the Arctic Ocean."

The court noted that Greenpeace USA's executive director essentially took credit for the Cairn attacks, describing the perpetrators as "our activists" and boasting that Cairn didn't find oil in 2010 as a direct result of Greenpeace's direct action.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Federal Court Upholds Greenpeace Injunction for Shell Operations

The U.S. Court of Appeals has upheld a lower court ruling that environmental group Greenpeace must stay away from Shell's offshore Alaska drilling operations.

The court upheld the ruling by the U.S. District Court for Alaska, concluding that Shell had shown "a likelihood of success on the merits of its claim that Greenpeace USA would commit tortuous or illegal acts against Shell's Arctic drilling operations in the absence of an injunction" and that the resulting harm would be irreparable.

Prior to the start of its Arctic Alaska drilling campaign, Shell initially filed in U.S. District Court in Alaska for a temporary restraining order, and then a preliminary injunction, to prevent Greenpeace USA from coming within a specified distance of vessels involved in Shell's Arctic Outer Continental Shelf (OCS) exploration and from committing various "unlawful and tortious acts" against those vessels.

Shell argued that Greenpeace activists used illegal direct action to interfere with legal oil drilling activities on a number of occasions, according to the court filing. These acts include boarding vessels to try and halt drilling activities. In May 2010, Greenpeace USA activists boarded the Harvey Explorer, a vessel Shell had contracted to use for Arctic OCS operations. The vessel was in the Gulf of Mexico at the time when activists boarded the vessel, painting slogans and unfurling banners.

The injunction expired Oct. 31, 2012, the last day of the 2012 Arctic Ocean open water season.

Greenpeace USA, which has undertaken a public campaign to halt Shell's Arctic drilling plans, challenged the injunction, arguing that the dispute did not present a justiciable case or controversy, that the district court lacked subject matter jurisdiction to issue its order, that Shell had sued the wrong Greenpeace entity, and that the court erred in its application of Winter v. Natural Resources Defense Council.

Greenpeace USA and the websites of virtually all Greenpeace organizations have featured a campaign to stop Shell, according to the court filing.

Shell also presented evidence to the lower court of Greenpeace activists illegally boarding and holding protests on Shell-operated vessels. In February 2012, activists boarded the Noble Discoverer (mid-water drillship), which had stopped offshore New Zealand on its way to the Arctic. The Noble Discoverer is one of two rigs that Shell has used for drilling offshore Alaska.

In March of that year, Greenpeace activists also boarded Shell's Nordica and Fennica ice break support vessels, which were in port in Finland at the time. Greenpeace members in May 2012 twice boarded and occupied the Nordica as it moved through Swedish and Danish waters. Activists chained themselves to the vessel, dropped weights and other objects in the water to block the vessel, and created a human blockade using divers.
Greenpeace activists have also sought to halt Arctic drilling operations in Greenland. In 2010 and 2011, activists boarded an oil rig offshore Greenland, trying to stop Cairn Energy from conducting OCS oil and gas exploration activities.

The court noted that Greenpeace USA does not dispute evidence that its own activists carried out the attack on Shell's Harvey Explorer.

"And, although the record does not make clear which Greenpeace entity was directly responsible for multiple attacks on Cairn Energy vessels in the Arctic Ocean."

The court noted that Greenpeace USA's executive director essentially took credit for the Cairn attacks, describing the perpetrators as "our activists" and boasting that Cairn didn't find oil in 2010 as a direct result of Greenpeace's direct action.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Court Reverses More Than $1 Billion In Damages Against Exxon Mobil

WASHINGTON - Exxon Mobil Corp. has won a legal victory in its effort to fight damages of about $1.5 billion stemming from a 2006 gasoline spill in Maryland.

In a decision released Tuesday, the Maryland Court of Appeals reversed more than $1 billion in punitive damages, awarded by a jury in 2011, and said residents and business who accused the energy giant of fraud hadn't sufficiently proven their case.

The court also reversed a large number of compensatory damages, which originally totaled about $500 million.

The case stems back to February 2006 when 26,000 gallons of gasoline leaked from underground storage tanks owned by Exxon Mobil at a fueling station in Jacksonville, Md. The gasoline moved into a water aquifer that supplied drinking water to many residents.

Dozens of residents and business owners filed suit and accused Exxon Mobil of fraud. They also said they suffered because of concerns over contracting cancer and losing value on their properties.

In 2011, a jury at the Circuit Court for Baltimore County awarded the residents and business owners about $500 million in compensatory damages and $1 billion in punitive damages.

Exxon said the company is reviewing the court's decision.

"The evidence showed that we acted appropriately after the accident and the court has agreed," the company said, adding that it has apologized to the Jacksonville community and remains "ready to compensate those who were truly damaged by this unfortunate incident."

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Court Testimony: BP Managers Under Cost-Cutting Pressure before Spill

NEW ORLEANS - BP PLC's managers were under pressure to cut costs significantly in the years leading up to the Deepwater Horizon accident, according to testimony at the federal trial here over liability for the 2010 explosion and oil spill.

Kevin Lacy, BP's former head of drilling in the Gulf of Mexico, said in a videotaped deposition that he was told to cut hundreds of millions of dollars in costs in 2008 and 2009.

"I was never given a directive to cut corners or deliver something unsafe," Mr. Lacy said. "But there was tremendous pressure on costs."

The testimony came on the third day of the civil trial that will determine the degree of culpability that BP and other companies have for the accident, which killed 11 workers. They are being sued by the federal government, state, and local businesses that say they were hurt financially by the oil spill, which lasted for three months.

Mr. Lacy's testimony was preceded by excerpts from interviews lawyers for plaintiffs suing BP did with its former chief executive, Tony Hayward, who was asked repeatedly about speeches he had given on cost-cutting at the company. In many cases Mr. Hayward tried to point out a broader context for the statements and speeches.

On Monday, lawyers for the parties traded barbs over who was to blame for the explosion that unleashed the worst offshore oil spill in U.S. history. Tuesday was dominated by testimony from Robert Bea, a University of California Berkeley engineering professor who called the accident "a classic failure of management and leadership in BP" that came after many warnings to the company.

Lamar McKay, the head of BP's exploration and production business, repeatedly rebuffed attempts by a lawyer for the plaintiffs to place the entire blame for the accident on BP. Mr. McKay stressed that decision making and safety were shared responsibilities among all the companies working on the doomed rig.

The trial is scheduled to take up to three months, but could be cut short or temporarily stopped if the parties reach a settlement.

A second trial, scheduled for the fall, will determine how much oil leaked into the Gulf of Mexico.

Together, they will determine the size of fines firms face under the Clean Water Act, which could total as much as $17.6 billion.

BP, which hired Transocean Ltd. and Halliburton Co. to work on drilling its well, has said the fines would likely be under $5 billion.

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Court Testimony: BP Managers Under Cost-Cutting Pressure before Spill

NEW ORLEANS - BP PLC's managers were under pressure to cut costs significantly in the years leading up to the Deepwater Horizon accident, according to testimony at the federal trial here over liability for the 2010 explosion and oil spill.

Kevin Lacy, BP's former head of drilling in the Gulf of Mexico, said in a videotaped deposition that he was told to cut hundreds of millions of dollars in costs in 2008 and 2009.

"I was never given a directive to cut corners or deliver something unsafe," Mr. Lacy said. "But there was tremendous pressure on costs."

The testimony came on the third day of the civil trial that will determine the degree of culpability that BP and other companies have for the accident, which killed 11 workers. They are being sued by the federal government, state, and local businesses that say they were hurt financially by the oil spill, which lasted for three months.

Mr. Lacy's testimony was preceded by excerpts from interviews lawyers for plaintiffs suing BP did with its former chief executive, Tony Hayward, who was asked repeatedly about speeches he had given on cost-cutting at the company. In many cases Mr. Hayward tried to point out a broader context for the statements and speeches.

On Monday, lawyers for the parties traded barbs over who was to blame for the explosion that unleashed the worst offshore oil spill in U.S. history. Tuesday was dominated by testimony from Robert Bea, a University of California Berkeley engineering professor who called the accident "a classic failure of management and leadership in BP" that came after many warnings to the company.

Lamar McKay, the head of BP's exploration and production business, repeatedly rebuffed attempts by a lawyer for the plaintiffs to place the entire blame for the accident on BP. Mr. McKay stressed that decision making and safety were shared responsibilities among all the companies working on the doomed rig.

The trial is scheduled to take up to three months, but could be cut short or temporarily stopped if the parties reach a settlement.

A second trial, scheduled for the fall, will determine how much oil leaked into the Gulf of Mexico.

Together, they will determine the size of fines firms face under the Clean Water Act, which could total as much as $17.6 billion.

BP, which hired Transocean Ltd. and Halliburton Co. to work on drilling its well, has said the fines would likely be under $5 billion.

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Court Reverses More Than $1 Billion In Damages Against Exxon Mobil

WASHINGTON - Exxon Mobil Corp. has won a legal victory in its effort to fight damages of about $1.5 billion stemming from a 2006 gasoline spill in Maryland.

In a decision released Tuesday, the Maryland Court of Appeals reversed more than $1 billion in punitive damages, awarded by a jury in 2011, and said residents and business who accused the energy giant of fraud hadn't sufficiently proven their case.

The court also reversed a large number of compensatory damages, which originally totaled about $500 million.

The case stems back to February 2006 when 26,000 gallons of gasoline leaked from underground storage tanks owned by Exxon Mobil at a fueling station in Jacksonville, Md. The gasoline moved into a water aquifer that supplied drinking water to many residents.

Dozens of residents and business owners filed suit and accused Exxon Mobil of fraud. They also said they suffered because of concerns over contracting cancer and losing value on their properties.

In 2011, a jury at the Circuit Court for Baltimore County awarded the residents and business owners about $500 million in compensatory damages and $1 billion in punitive damages.

Exxon said the company is reviewing the court's decision.

"The evidence showed that we acted appropriately after the accident and the court has agreed," the company said, adding that it has apologized to the Jacksonville community and remains "ready to compensate those who were truly damaged by this unfortunate incident."

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Argentina Appeals Court Upholds Embargo on Chevron Assets

BUENOS AIRES - An Argentine appeals court has upheld an embargo on the assets of Chevron Corp.'s local subsidiary, a legal setback for the company, which had said the embargo compromised its operations in the country.

A lower court judge issued the embargo last year as part of a decades-old legal dispute involving claims that Chevron is responsible for environmental contamination in Ecuador.

"We are very pleased with the resolution of the Court of Appeals, which is well founded," said Enrique Bruchou, lead attorney for the plaintiffs in Argentina.

An Ecuadorian court had previously awarded $19 billion to indigenous people who said they had been harmed by pollution. Chevron has denied the allegations and said the ruling is based on fraudulent evidence, which the plaintiffs deny.

"Chevron respectfully disagrees with the court's decision," the company said Wednesday in a statement from California. "Chevron Argentina intends to pursue all available legal remedies to reverse the interim measure."

The Argentine embargo applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries and 40% of the money Chevron has or may eventually have in Argentine banks.

The court order says the embargo will remain in place until Chevron has paid off the Ecuador award in full.

Last year, Mr. Bruchou estimated that Chevron's assets in Argentina amounted to about $2 billion.

The proceeds from Chevron Argentina's oil production, valued at $600 million in 2010, are also subject to the embargo until the legal claim is settled, Mr. Bruchou said at the time.

Chevron doesn't have significant assets in Ecuador, so the plaintiffs have been trying to seize the company's assets in other countries to enforce settlement on the judgment.

The Argentine court's embargo ruling cited a treaty between Argentina and Ecuador that allows judges in one country to enforce court orders from the other.

In a full-page ad placed in Argentina's leading newspapers last November, Chevron Argentina said the claims against it have no legal foundation and that the embargo has broader consequences for the entire country.

"The judicial embargo compromises Chevron's capacity to operate and reinvest given that the order affects more than 90% of its income through crude sales," the company said.

The lawsuit in Argentina is the latest development in an almost 20-year legal dispute over claims that Texaco Inc., which Chevron bought in 2001, contaminated parts of Ecuador's Amazon region when it was operating in the country.

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Court Accepts BP Plea Resolving All Macondo Criminal Claims

The U.S. District Court for the Eastern District of Louisiana has accepted BP's plea resolving all federal criminal charges against the company stemming from the Deepwater Horizon accident, oil spill and response.

Under the plea agreement that BP reached with the U.S. Department of Justice (DOJ) last November, BP will pay $4 billion over a five-year period and will serve five years' probation. The court also ordered certain equitable relief, including additional actions related to BP's risk management processes as well as several initiatives with academia and regulators to develop new technologies related to deepwater drilling safety.

Additionally, the company will appoint a process safety monitor and an ethics monitor, both with a term of four years, and an independent auditor will report annually on BP's compliance with the remedial terms of probation.

"Our guilty plea makes clear, BP understands and acknowledges it role in that tragedy, and we apologize – BP apologizes – to all those injured and especially to the families of the lost loved ones," said Luke Keller, vice president of BP America, during the court hearing Tuesday in New Orleans.

BP faced charges that included 11 felony counts of manslaughter for each of the workers killed in the incident, one misdemeanor count of violating the Clean Water Act (CWA), one misdemeanor count of violating the Migratory Bird Treaty Act and one felony count of obstruction of a congressional investigation. If BP had rejected the agreement, the court would have had to allow the company to withdraw its agreement to plead guilty.

Since the Deepwater Horizon incident in April 2010, BP has made significant changes to enhance safety throughout its global operations, the company said in a statement. These changes include launching an internal investigation immediately after the accident and implementing the investigation's 26 recommendations.

"The company also made key leadership changes, reorganized its upstream business, created a centralized Safety and Operational Risk organization, and adopted voluntary deepwater drilling standards in the Gulf that exceed current regulatory requirements," BP said in a statement.

The misdemeanor count under the CWA triggered a mandatory debarment following the sentencing. Mandatory debarment prevents a company from entering into new contracts or new leases with the U.S. government that would be performed at the facility where the Clean Water Act violation occurred. Existing contracts between BP and the government would not be impacted.

In November 2012, the U.S. Environmental Protection Agency (EPA) announced a temporary suspension of numerous BP entities after BP entered into a plea agreement with DOJ, which prevents BP from entering into new government contracts, grants or other transactions.

Following the court's acceptance of the plea, the suspension may be maintained or converted into a proposed discretionary debarment of these entities. In additional to mandatory debarment of the violating facility itself, that continues the ineligibility of those entities while negotiations with the EPA continue. The process for resolving both mandatory and discretionary debarments is essentially the same as for resolving the temporary suspension.

"While BP's discussions with the EPA have been taking place in parallel to the court proceedings on the criminal plea, the company's work toward reaching an administrative agreement with the EPA is a separate process, and it may take some time to resolve issues relating to such an agreement," BP said in a statement.

BP reported it is the largest investor and deepwater leaseholder in the Gulf of Mexico, with more than 700 gross blocks and seven rigs currently operating in the region. The U.S. government has awarded BP more than 50 federal leases since the Deepwater Horizon incident and since the government moratorium that followed Deepwater Horizon was lifted.

The Deepwater Horizon semisubmersible had been drilling BP's Macondo well. On the evening of April 20, 2010, control of the well was lost. The natural gas that blew with oil and mud from the well at tremendous pressure ignited on board the rig, killing the 11 workers -- all subcontractors assisting in the drilling for BP.

Earlier this month, drilling contractor Transocean and DOJ settled outstanding civil and potential criminal claims related to the April 2010 Deepwater Horizon incident. That settlement concluded DOJ's criminal investigation of Transocean's role in the largest offshore oil spill in U.S. history.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Court Accepts BP Plea Resolving All Macondo Criminal Claims

The U.S. District Court for the Eastern District of Louisiana has accepted BP's plea resolving all federal criminal charges against the company stemming from the Deepwater Horizon accident, oil spill and response.

Under the plea agreement that BP reached with the U.S. Department of Justice (DOJ) last November, BP will pay $4 billion over a five-year period and will serve five years' probation. The court also ordered certain equitable relief, including additional actions related to BP's risk management processes as well as several initiatives with academia and regulators to develop new technologies related to deepwater drilling safety.

Additionally, the company will appoint a process safety monitor and an ethics monitor, both with a term of four years, and an independent auditor will report annually on BP's compliance with the remedial terms of probation.

"Our guilty plea makes clear, BP understands and acknowledges it role in that tragedy, and we apologize – BP apologizes – to all those injured and especially to the families of the lost loved ones," said Luke Keller, vice president of BP America, during the court hearing Tuesday in New Orleans.

BP faced charges that included 11 felony counts of manslaughter for each of the workers killed in the incident, one misdemeanor count of violating the Clean Water Act (CWA), one misdemeanor count of violating the Migratory Bird Treaty Act and one felony count of obstruction of a congressional investigation. If BP had rejected the agreement, the court would have had to allow the company to withdraw its agreement to plead guilty.

Since the Deepwater Horizon incident in April 2010, BP has made significant changes to enhance safety throughout its global operations, the company said in a statement. These changes include launching an internal investigation immediately after the accident and implementing the investigation's 26 recommendations.

"The company also made key leadership changes, reorganized its upstream business, created a centralized Safety and Operational Risk organization, and adopted voluntary deepwater drilling standards in the Gulf that exceed current regulatory requirements," BP said in a statement.

The misdemeanor count under the CWA triggered a mandatory debarment following the sentencing. Mandatory debarment prevents a company from entering into new contracts or new leases with the U.S. government that would be performed at the facility where the Clean Water Act violation occurred. Existing contracts between BP and the government would not be impacted.

In November 2012, the U.S. Environmental Protection Agency (EPA) announced a temporary suspension of numerous BP entities after BP entered into a plea agreement with DOJ, which prevents BP from entering into new government contracts, grants or other transactions.

Following the court's acceptance of the plea, the suspension may be maintained or converted into a proposed discretionary debarment of these entities. In additional to mandatory debarment of the violating facility itself, that continues the ineligibility of those entities while negotiations with the EPA continue. The process for resolving both mandatory and discretionary debarments is essentially the same as for resolving the temporary suspension.

"While BP's discussions with the EPA have been taking place in parallel to the court proceedings on the criminal plea, the company's work toward reaching an administrative agreement with the EPA is a separate process, and it may take some time to resolve issues relating to such an agreement," BP said in a statement.

BP reported it is the largest investor and deepwater leaseholder in the Gulf of Mexico, with more than 700 gross blocks and seven rigs currently operating in the region. The U.S. government has awarded BP more than 50 federal leases since the Deepwater Horizon incident and since the government moratorium that followed Deepwater Horizon was lifted.

The Deepwater Horizon semisubmersible had been drilling BP's Macondo well. On the evening of April 20, 2010, control of the well was lost. The natural gas that blew with oil and mud from the well at tremendous pressure ignited on board the rig, killing the 11 workers -- all subcontractors assisting in the drilling for BP.

Earlier this month, drilling contractor Transocean and DOJ settled outstanding civil and potential criminal claims related to the April 2010 Deepwater Horizon incident. That settlement concluded DOJ's criminal investigation of Transocean's role in the largest offshore oil spill in U.S. history.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Russian Court Dismisses $3B Case Against BP

MOSCOW – A Russian court Thursday dismissed a $3 billion damages ruling against BP PLC and closed the case, a court official said, ending months of legal strife for the U.K. company as it finalizes a deal to sell out of its joint venture in the country and take a stake in oil giant OAO Rosneft.

An arbitration court in the Siberian town of Omsk dismissed another court's ruling from last year ordering BP to pay just over 100 billion Russian rubles ($3.1 billion) in damages to its Russian joint venture TNK-BP. That court had ruled in July that BP caused damage to TNK-BP and the interests of its minority shareholders when it sought an alliance last year with Rosneft in the Arctic exploration deal without involving TNK-BP.

The Omsk court, which was hearing BP's appeal, dismissed the case Thursday after the minority investors filed to withdraw the suit.

BP and its partners are selling TNK-BP to Rosneft in deals worth $55 billion after years of disagreements. BP will hold a 19.8% stake in Rosneft as part of its move to sell out of TNK-BP. The deals are expected to close in the first half of 2013.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Medical marijuana dispensaries ask court to keep them in business

Font ResizeCops and CourtsLongmont Times-Calldenverpost.comPosted: 12/15/2012 02:52:18 PM MSTDecember 15, 2012 10:10 PM GMTUpdated: 12/15/2012 03:10:58 PM MST

Dacono's three medical marijuana dispensaries are suing to stay open.

On Friday, a lawyer for Dacono Meds, MaryJane's Medicinal and Green Medicals (formerly The Green Door) asked the Weld County District Court to block the city's ban of marijuana-related businesses. Without legal protection, all three will have to leave town after Dec. 31.

The Dacono City Council passed the ban in June by a 4-2 vote, but a petition drive by the dispensaries put the ban on the ballot. That means Dacono residents will vote in 2013 on whether the ban lives or dies. But the petition couldn't change the dispensaries' deadline, and an attempt to extend the drop-dead date until after the special election failed on a 4-3 City Council vote.

http://www.timescall.com/news/longmont-local-news/ci_22196455/dacono-dispensaries-ask-court-block-medical-marijuana-ban

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Tweet Posted on Dec 10, 2012 Screenshot

Justice Antonin Scalia.

All eyes will be on the Supreme Court in June when the justices are expected to decide the legality of the Defense of Marriage Act and California’s Proposition 8, two landmark cases that will have widespread implications on the hot-button issue of same-sex marriage in this country. Although it’s the first time same-sex marriage has made its way to the high court, we can glean information about how the justices will possibly vote based on other cases involving gay rights.

Take, for instance, this little nugget conservative Justice Anton Scalia left us in Lawrence v. Texas, the blockbuster 2003 decision that ruled states cannot criminalize sexual acts between two consenting adults of the same gender. In the minority dissent, Scalia wrote that the court’s reasoning behind striking down the sodomy laws in Texas “leaves on pretty shaky grounds state laws limiting marriage to opposite-sex couples.”

His dissent also said, “Today’s opinion dismantles the structure of constitutional law that has permitted a distinction to be made between heterosexual and homosexual unions, insofar as formal recognition in marriage is concerned.”

More from Talking Points Memo:

The Reagan-appointed justice accused the majority on the Court of having “taken sides in the culture war” and having signed on to the “homosexual agenda.”

“The people may feel that their disapprobation of homosexual conduct is strong enough to disallow homosexual marriage, but not strong enough to criminalize private homosexual acts — and may legislate accordingly,” Scalia wrote. “The Court today pretends that it possesses a similar freedom of action, so that that we need not fear judicial imposition of homosexual marriage.”

Ten years later, public opinion has shifted dramatically in support of marriage equality. And next spring the Supreme Court will consider whether or not the Defense of Marriage Act — the 1996 law that prohibits federal recognition of same sex marriage — also violates the Constitution’s guarantee of equal protection. Two federal appeals courts have ruled that it does.

Read more

—Posted by Tracy Bloom.

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