Gulf Oil Spill Criminal and Civil Damages Could Exceed Exxon Valdez Spill
A Department of Justice criminal investigation into the BP oil spill could expose the oil giant and other companies involved to a multitude of criminal charges and civil claims -- and expose them to damages that could exceed the $1.9 billion in fines, penalties and interest Exxon paid for the 1989 Valdez oil spill.
As with Exxon after the Valdez spill, BP could face prosecution for various environmental violations. After the Valdez spill, Exxon pleaded guilty in 1991 to violating the clean Water Act, the Refuse Act and the Migratory Bird Treaty Act, and agreed to pay $100 million to settle those criminal charges. It was the largest single environmental criminal recovery ever.
But for BP and the two other companies involved, the sanctions could be worse -- or at least that's what some members of Congress are suggesting. The three companies -- BP, Halliburton and Transocean -- also could face additional criminal charges if investigators determined they either lied in the permitting process or tried to cover up the gravity of the spill. If DOJ believes the companies lied to the government, they could face felony charges for making false statements, as well as possible obstruction of justice and conspiracy charges.
Then there are the civil claims. Exxon in 1991 also agreed to settle all federal and state civil claims by paying $900 million in damages, and the company set aside another $100 million to cover any unforeseen environmental damages. A subsequent class action determined that Exxon owed $5 billion in punitive damages to people harmed by the spill. After years of litigation, the Supreme Court ultimately cut that award to $507.7 million. The company also paid an additional $470 million in interest.
A 1990 law passed in response to Valdez spill could conceivably limit some of BP's costs, since the law caps damages for lost wages and economic suffering at $75 million. But the law does not limit criminal penalties.
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