BP asks Alaska lawsuit be tossed

Kathy Woods Jan. 1, 2010, 3:20pm

ANCHORAGE, Alaska (Legal Newsline)-In a hearing before Judge Peter Michalski of the state Superior Court, Jeff Feldman, attorney for BP Oil Company, urged the judge to throw out part of the state's $1 billion lawsuit for the 2006 pipeline spills in the Prudhoe Bay oil field.

Feldman claims that the state is improperly pursuing a tort claim against the company and seeking damages for those claims.

Louisiana Culter, the attorney for the state, argued that the state is seeking at least $1 billion in lost revenue to the state treasury and the Alaska Permanent Fund as a result of the 2006 spill.

The lawsuit originates from spills that were caused by the corrosion-damaged transit lines that carry sales grade oil out of the Prudhoe Bay field and feed it to the trans-Alaska oil pipeline.

The state sued BP's local operator, BP Exploration (Alaska) Inc., in March seeking compensatory and punitive damages as related to the spills.

Feldman has questioned the state's demand for punitive damages saying, "The state has never followed through on a punitive damages claim in court." He likened the situation to the state suing a store owner who pays fewer taxes as a result of his furnace failing, his pipes freezing and his business making less money.

Feldman argued that the case should be deferred to the Alaska Oil and Gas Conservation Commission. Cutler argues that the state's claims are proper and that BP is just trying to avoid a verdict by a jury.

Cutler also reminded the judge that the spills were the largest in the history of North Slope Oil production, 212,252 gallons released.

The state is seeking punitive damages for the "outrageous" or "reckless" conduct of BP by neglecting corroded pipelines in the interest of cutting costs.

More than a dozen attorneys attended the hearing in downtown Anchorage. No immediate ruling was made on the case.

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