Liskow Lawyer Jonathan Hunter on Team Securing Dismissal of False Claims Act Suit Alleging Violation of Offshore Regulations
In Abbott v. BP, the plaintiffs alleged that BP had falsely certified to compliance with regulatory requirements pertaining to the engineering of the Atlantis Platform, a semi-submersible floating production facility capable of producing more than 100,000 barrels/day. Based on these allegations, Plaintiff Kenneth Abbott filed a qui tam suit under the False Claims Act (FCA), asserting that BP had obtained approval to produce oil from the Department of the Interior by falsely certifying to compliance with regulatory engineering standards. Abbott’s FCA damages claim exceeded $70 billion (reduced from an original claim of $266 billion). In the same lawsuit and based on the same allegations of regulatory noncompliance, Abbott and plaintiff Food & Water Watch, Inc. filed a citizen suit under the Outer Continental Shelf Lands Act (OCSLA), seeking an injunction of production from the Atlantis platform. In 2014, the district court granted summary judgment in favor of BP on all claims, finding no material fact in dispute about BP’s regulatory compliance. On March 14, 2017, the Fifth Circuit affirmed the district court’s ruling.
The Fifth Circuit upheld summary judgment in favor of BP under the FCA based on the “demanding” “materiality” standard articulated by the United States Supreme Court last year in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016). The record in Abbott included a 2011 report by the Department of the Interior which concluded, following a Congressionally-mandated investigation, that “Mr. Abbott’s allegations about false submissions by BP to [DOI] are unfounded.” Applying Escobar, the Fifth Circuit held that the Department of the Interior’s decision to allow Atlantis to continue production precluded Abbott from satisfying the “materiality” element mandated by the FCA. The Court also dismissed, for lack of standing, the OCSLA-based citizen suit action to enjoin production.