BP Exploration & Production Inc., et al. v. Gina McCarthy, EPA Administrator

Case Updates

BP entered into an agreement with the EPA that resolves all matters related to the suspension, debarment and statutory disqualification of BP following the Deepwater Horizon accident and oil spill. Under the agreement, BP is once again eligible to enter into new contracts with the U.S. government.

The U.S. Chamber and a broad coalition filed an amicus brief urging the U.S. District Court for the Southern District of Texas to declare unlawful the EPA’s unprecedented disqualification of an oil exploration and production company's headquarters facility, as well as the suspension over its affiliates, from receiving any new government contracts (including drilling leases) based on a Clean Water Act violation at a single company facility. The EPA’s remarkable statutory overreach in this instance, if permitted to stand, will inject tremendous uncertainty in government contracting, to the detriment of the public and the contracting community alike.

In performing their work, contractors must comply with a wide variety of federal standards. When, despite those standards, accidents happen, an agency can take action to protect against mistakes that may harm the public interest. An agency cannot, however, adopt sweeping punishments based on mere affiliation – as the EPA did here. Far from protecting the public interest, excluding a company’s affiliates from all federal programs punishes entities that share no blame.

In this case, the EPA declared that it has authority to declare that a Clean Water Act violation occurring at a single company facility results in the mandatory disqualification of the corporate headquarters from involvement in any federal program. And according to EPA, the discretionary suspension of a company based on the improper conduct of its employees automatically results in the indefinite suspension of multiple worldwide affiliates of that company, no matter their connection to or involvement in the improper conduct. The suspension also is not restricted to a single agency or a single industry; the affiliates are barred from entering into a contract with any government agency or working with any company involved in a federal program, even in an entirely unrelated industry.

These expansive assertions of authority, and EPA’s actions pursuant to that authority, pose a grave threat to federal contractors and private industries with business touching on federal programs or federal lands. The Chamber's co-amici include the American Petroleum Institute, the National Association of Manufacturers, the National Ocean Industries Association, the Organization for International Investment, and TechAmerica. The Chamber, along with the other amici, represent the interests of companies that develop, produce, manufacture, and supply the nation’s energy resources, communication infrastructure, consumer and commercial goods, business services, and other resources. And amici’s members contract with numerous federal and state agencies to perform this vital work, operating numerous facilities engaged in work covering all aspects of business and industry, including the oil, natural gas, and renewable energy industries, and millions of employees work at these facilities on behalf of their employers. Each of these industries and services could be adversely affected if the EPA and other agencies engage in similar overreach in other instances.

Bruce D. Oakley, Catherine E. Stetson, Thomas L. McGovern III, Jonathan D. Shaub, and Katherine L. Morga of Hogan Lovells LLP represented the U.S. Chamber as co-counsel to the National Chamber Litigation Center.