A federal judge in Louisiana has dismissed racketeering claims against BP Exploration PLC over the April 2010 blowout and oil spill in the Gulf of Mexico. In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La. 7/15/11). Plaintiffs, Gulf Coast business owners, alleged that BP defrauded government regulators, and thus violated the Racketeer Influenced and Corrupt Organizations Act (RICO) “in connection with the safety of its drilling operations, its ability to respond to any oil spill, and its response to the spill at the Macondo Well.” BP responded that plaintiffs had failed to sufficiently allege proximate causation under RICO.
Ruling for BP, the court held that plaintiffs’ alleged causal connection between BP’s alleged fraud and plaintiff’s alleged injuries was “too attenuated to state a RICO violation.” Citing Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992), the court ruled that to meet the proximate cause requirement there must be “some direct relation between the injury asserted and the injurious conduct alleged.” According to the court, the cause of plaintiffs’ harm rested as much on the inaction of the Mineral Management Service in failing to demand that BP comply with federal safety regulations, as with BP’s actions.