Ala. gov says AG King's lawsuit may delay BP payment

By Jessica M. Karmasek | Aug 18, 2010


BIRMINGHAM, Ala. (Legal Newsline) - Alabama Gov. Bob Riley says he fears oil giant BP won't pay the state's first oil spill claim of $148 million because of a lawsuit filed last week by the state's attorney general.

The state filed the multimillion-dollar claim for lost revenue with the company last week.

"They would have sent us a check this week for $148 million, and now since we're in court, we very well could not get it for years," Riley told the Montgomery Advertiser earlier this week.

Last week, Attorney General Troy King sued BP and its partner companies, accusing them of negligence and reckless behavior in the Gulf of Mexico oil spill. The suits seek economic and punitive damages. No specific amount was listed.

King announced last month he was preparing a lawsuit to make up for lost tax revenue. The attorney general described the spill as "the largest legal disaster ever encountered," and said the state would be working for years to rebuild its economy.

An explosion and fire occurred on Transocean's drilling rig Deepwater Horizon, licensed to BP, on April 20, killing 11 workers and resulting in the largest offshore spill in U.S. history.

Chris Bence, chief of staff for King, told the Advertiser filing the lawsuit should have the opposite effect.

"(King) has said repeatedly, if British Petroleum will keep their word, which to date they have not, and they make the state and its people whole, the lawsuit can be dropped," he said.

Bence told the newspaper important issues need to be known about any compensation or agreement, such as whether it absolves the company from blame, fault or liability.

"This amount could truly turn out to be chump change thrown at the people of Alabama by BP, and this office will not agree to it or sign off on it and will not consider changing its course of legal protection for the people of Alabama until the governor's office has convinced us beyond a reasonable doubt that the settlement is what they claim it to be," he said.

Jeff Emerson, communications director for the governor, said an official with BP called to inform them that discussions were on hold due to the lawsuit.

Emerson told the Advertiser $148 million is the estimated loss in state revenue in the region affected by the spill from May through September and is not the final amount.

"We're going to expand our analysis to include areas and other parts of the economy," he said.

Bence noted King's office is the state's legal office and told the newspaper it would be wise for the governor's office to inform them of those talks.

The governor and attorney general continue to clash over the lawsuit. Riley is already seeking to limit King's negotiating power in the state's landmark case.

Late last week, Riley issued an executive order that restricts King's authority to hire private lawyers to help represent the state.

Riley's order stipulates that any legal contract that exceeds $195 an hour or that contains a contingency fee agreement must be approved by his office.

King has suggested Riley does not grasp the stakes in the multimillion-dollar case.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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