BP settles whistle-blower lawsuit for $102 million

January 11, 2018
San Francisco Chronicle

BP will shell out $102 million to the state of California more than five years after an employee blew the whistle on the company’s alleged scheme to overcharge the Golden State for natural gas.

On Thursday, law firm Cotchett, Pitre & McCarthy announced the agreement, calling it the largest whistle-blower settlement in California history involving an oil company.

BP was accused of overcharging local jurisdictions, public agencies and universities for natural gas over the course of a decade through “exotic financial derivative products,” according to the law firm, which partnered with the state attorney general’s office to reach the deal. The reported overcharges were brought to light by former BP employee Chris Schroen, who filed a lawsuit under the protection of the California False Claims Act, which allows private citizens to file suit to expose nonpublic fraud against the government.

“Fraud against the government is a growth industry,” said Niall McCarthy, the lead attorney in the case. “Whistle-blowers like Chris Schroen are vital to protecting taxpayers. Not only is BP paying over $100 million through this settlement, but with the conduct now stopped, taxpayers are saving millions of dollars more every year. While Trump is allowing oil companies to drill off the California coast, this oil company was stopped from drilling California’s pocketbook.”

Brett Clanton, a spokesman for BP, disputed the law firm’s characterization of the settlement in a written statement.

“As BP has stated consistently, the state’s allegations were entirely without merit,” Clanton said. “BP strongly believes it honestly and fairly met its obligations under its contracts with the state. The state’s Department of General Services confirmed its agreement to the terms of each transaction, and the state never attempted to exercise its right to seek price quotes from alternative suppliers as a result of any price provided by BP.

“But given the cost of protracted litigation and the unpredictability of outcomes at trial, BP has agreed to this compromise settlement for an amount well below what the state demanded in its complaint. We believe resolving this dispute in this manner is in the best interest of BP and its shareholders.” ... (To view the entire article, please click HERE)