BP Denies Oil Spill Claims by Alabama Cities, Mexico States

BP Plc (BP) denies it should compensate a group of Alabama cities and Mexican states that sued over lost tax revenue and natural resources damages stemming from the 2010 oil spill, saying they’re too far from where oil washed ashore.

BP was sued last year by four Alabama municipalities that claim local businesses lost income when tourists stopped traveling through the state to reach Gulf of Mexico resorts during the worst offshore oil spill in U.S. history. A subsea well owned by BP blew out off Louisiana in April, polluting hundreds of miles of seashore and closing much of the central and eastern Gulf to commercial fishing.

BP was also sued last year by three coastal states in Mexico, which claimed their fishermen suffered during the Gulf fishery closures and tourism slumped because of fears ocean currents would wash oil onto Mexican beaches. The Mexican governments also sought funding for scientific studies to monitor environmental damage from the spill.

“Given that no oil came anywhere near Mexico, the Deepwater Horizon oil spill could not have injured or destroyed property or a natural resource upon which the Mexican states rely for revenue,” Don Haycraft, London-based BP’s lead trial lawyer, said today in a filing in federal court in New Orleans.

“The Alabama cities are located more than 100 miles from the Alabama coast -- and their alleged damages are likewise geographically too remote to establish proximate cause,” Haycraft said.

‘Entirely Derivative’

BP claims the Alabama cities’ losses are “indirect and entirely derivative” of losses their businesses suffered from declining road traffic that could’ve been caused by “a myriad of possible alternative causes,” including higher fuel prices, the economic recession or the oil spill, Haycraft said.

BP also denied liability for wildlife restoration claims brought by eight Louisiana parishes suing under state laws that forbid harassment of native animals. The company said those claims should be brought by state wildlife officials, not local governments.

BP faces more than 350 lawsuits from businesses and individuals seeking damages for economic and physical injuries related to the spill. The lawsuits are consolidated before U.S. District Judge Carl Barbier in New Orleans.

BP today asked Barbier to dismiss the lawsuits by the local governments in Alabama, Louisiana and Mexico because the entities haven’t yet formally presented their claims to the Gulf Coast Claims Facility, which is processing all oil-spill damage claims for BP. The company said the Oil Pollution Act requires that all claims follow this path before going to court.

The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans)

To contact the reporters on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com; Allen Johnson Jr. in New Orleans at allenmct@gmail.com

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net

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