Environmental Law

Oil Spill $75M Damages Cap Wouldn’t Apply Under New Bill or Criminal Prosecution

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A federal law caps liability at $75 million for the indirect costs of an oil cleanup, but the limit could fall by the wayside if criminal charges are filed in the Gulf oil spill—or if legislation is approved to change the limit.

There has been no confirmation of a criminal probe, but legal experts told McClatchy Newspapers that criminal charges are likely. Prosecutors in such cases often seek penalties amounting to twice the cost of the environmental and economic damages caused by an oil spill.

Meanwhile, Bloomberg, Reuters and the Associated Press report there is a move in Congress to raise the economic damages liability cap to $10 billion. The Oil Pollution Act of 1990 caps liability at $75 million for costs not directly connected to the cleanup of oil spills, such as lost wages and tourism, according to AP.

William Carter, the former chief of the environmental crimes section for the Los Angeles U.S. attorney’s office, is among the experts predicting a prosecution. “I would be shocked if there were no criminal charges filed in this case,” he told McClatchy. “There are so many things that went wrong out there.”

Negligence would be enough to support a misdemeanor criminal charge, the experts said. They cite a 1999 opinion by the San Francisco-based 9th U.S. Circuit Court of Appeals that upheld a misdemeanor conviction for a supervisor whose rock quarry project accidentally ruptured an oil pipeline. A felony charge would require proof of a knowing violation of the regulations.

Hat tip to Twitter Breaking News.

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