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Richard Sarver, Craig Isenberg, Andrea Price, Seth Thorp and Kevin Powell

A federal court for the first time ever calculated a civil penalty under the Oil Pollution Act (OPA) amendments to the Clean Water Act, crafting a penalty that amounted to three percent of what the federal government sought at trial. In rejecting the government’s $247 million penalty calculation, the U.S. District Court for the Western District of Louisiana adopted arguments and evidence submitted by the defendant—a major oil company, which admitted fault for a 2006 oil spill from its land-based refinery to the Calcasieu River in southwest Louisiana—during a two-week bench trial held last March. DRI members Richard Sarver and Craig Isenberg of Barrasso Usdin Kupperman Freeman & Sarver LLC in New Orleans led the trial team, joined by Andrea Price and Seth Thorp (also from New Orleans) and Kevin Powell from the firm's Lake Charles, Louisiana, office. 

Of the many issues that drove the outcome of the case, two were particularly important and divisive: (1) determining the amount of oil released for OPA’s per-barrel penalty calculation; and (2) determining whether the defendant’s conduct was grossly negligent or intentional, a finding that could supersize OPA’s per-barrel penalty. On both fronts, the court adopted the defense’s evidence and arguments, which included expert testimony in the areas of industrial hygiene, economics, toxicology, chemical fate and transport, oil spill response, environmental impact analysis, and plant design, and—contrary to DOJ’s contention that enhanced penalties were appropriate because the defendant’s conduct supposedly garnered enormous financial benefits—found enhanced penalties were unwarranted.  

After making its findings, the court ordered a civil penalty of $110/bbl of oil released, together with injunctive relief aimed at enhancing refinery operations. To read the decision, click here.

An article in the next issue of DRI’s In-House Defense Quarterly comes from two members of the defense trial team, plus Adam Swensek of the firm’s New Orleans office. In “Staring Down the Barrel: Calculating Economic Benefit Under the Oil Pollution Act Amendments to the Clean Water Act,” Mr. Isenberg and Ms. Price provide their insight into the economic-benefit factor—one of many complex issues the defense must confront when litigating civil-penalty claims under OPA.

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