BP Atlantis $256 Billion Whistle-Blower Case Dismissed

BP Plc (BP/) won’t face a $256 billion lawsuit brought by a whistle-blower who claimed the company’s Atlantis oil production platform in the Gulf of Mexico was unsafe.

Kenneth Abbott, a former BP contractor, and Food & Water Watch Inc., an environmental group, sued in 2009 to shut down BP’s second-largest gulf platform. They said engineering drawings for the system’s subsea components lacked required safety approvals.

They also sought to force BP to pay triple damages on the full $88.8 billion estimated value of the Atlantis field, saying the company obtained those offshore leases by lying to regulators in claiming the platform met safety requirements.

“BP never misrepresented -- much less knowingly distorted what it was doing,” U.S. District Judge Lynn N. Hughes in Houston said today in a 10-page summary ruling, finding that the case was ultimately about “paperwork wrinkles” instead of engineering shortcuts.

Abbott and the environmentalists “have not blown a whistle,” he said. “They have blown their own horn.”

David Perry, Abbott’s lead lawyer, didn’t immediately respond to phone and e-mail requests for comment on the decision.

“We are pleased that the court understood that plaintiff’s claims have no merit,” Brett Clanton, a spokesman for London-based BP, said in an e-mail after the ruling.

Deepwater Horizon

The Atlantis whistle-blower case attracted enormous public attention following the 2010 explosion of the Deepwater Horizon off the Louisiana coast, which killed 11 workers and spawned the worst offshore oil spill in U.S. history.

Abbott pressed congressmen, federal regulators and the court to close down Atlantis, capable of producing 200,000 barrels of oil daily. He initially brought his case under the federal False Claims Act, which allows people to sue on behalf of the U.S. government and receive a portion of any award.

Regulators, who refused to join Abbott’s suit on behalf of the U.S., gave Atlantis two clean inspection reports during the course of the litigation. BP voluntarily took the platform out of service briefly in 2012 to retrofit and repair some components, leading Hughes to comment that the whistle-blowers had accomplished their stated safety goal.

Subsea Components

“If BP is improving the safety of the subsea components, that is what they asked that it be compelled to do,” Hughes said at the time.

The judge said today that Abbott wasn’t eligible to sue because he lacked firsthand knowledge that hundreds of Atlantis engineering drawings were missing approval stamps by certified engineers.

After internal e-mails and working documents raised his suspicions, Abbott obtained papers giving details of the alleged lapses through Freedom of Information Act requests. Hughes said that wasn’t enough to overcome legal barriers to whistle-blower lawsuits.

“Precise and verifiable facts make you an original source, not unfounded suspicions,” Hughes said. “Abbott has only seen working papers that BP created to help it track the paperwork errors that it needed to fix.”

Hughes said Abbott’s “unprincipled” case was “abetted by ideologues.” He said the purported whistle-blower hadn’t visited the gulf personally since 2010, “when he was there to be photographed for ‘60 Minutes.’” Hughes also rejected Abbott’s claim that the U.S. was damaged by BP, which has paid more than $600 million in federal royalties, bonuses and rental fees on the Atlantis offshore leases.

The case is U.S. ex. rel. Abbott v. BP Exploration & Production Inc., 09-cv-01193, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.