Pursuant to an August 10, 2010 Order by the Multidistrict Litigation Panel, hundreds of individual and class action oil spill claims for the Deepwater Horizon blowout were transferred last fall to the Eastern District of Louisiana for consolidation in the multi-district litigation proceeding, 2:10-md-02719-CJB-SS (“MDL 2179”). Among the cases that were transferred for consolidation are causes of action asserted under the Racketeer Influenced and Corrupt Organizations Act (“RICO Act”), 18 U.S.C. §§ 1961–1968.
On January 24, 2011, the Plaintiffs’ liaison counsel filed a 91-page master complaint in MDL 2179, consolidating all of the RICO claims into one class action (the “RICO Complaint”) asserted against BP Exploration & Production, Inc., BP America Production Company, and BP p.l.c. (collectively, “BP”), for damages arising from the Deepwater Horizon accident on April 20, 2010 and the resulting oil spill in the Gulf of Mexico. The RICO Complaint focuses principally on the federal RICO Act, but it also alleges a claim under Florida’s state law equivalent.
In simple terms, the federal RICO Act creates a civil cause of action for damages that arise from a pattern of racketeering involving illegal acts that are committed (or attempted) on behalf of an enterprise. See 18 U.S.C. §§ 1962 & 1964. More particularly, the RICO Plaintiffs in MDL 2179 would need to show as part of their prima facie case that BP is a RICO “person” (within the meaning of 18 U.S.C. §§ 1961(3) & 1962(c)) that conducted, or participated in the conduct, management, or operation of an enterprise, through a pattern of racketeering activity. The RICO plaintiffs also would need to establish, among other things, that BP conducted or participated in at least two predicate acts to commit one or more of the criminal offenses enumerated in 18 U.S.C. § 1961(1).
In the consolidated RICO Complaint, the RICO Plaintiffs seek recovery only from BP, but they are required to establish the existence of a separate RICO “enterprise” (within the meaning of 18 U.S.C. § 1961(4)). In the consolidated RICO Complaint, the Plaintiffs define the enterprise as an “association in fact” between BP and the owner of the Deepwater Horizon drilling rig, Transocean, Ltd.
The RICO Plaintiffs’ primary argument is that BP tried to save costs by concealing from government regulators the alleged inadequacy of BP’s safety plan to prevent or remedy offshore blowouts and oil spills in the Gulf of Mexico. To show predicate criminal offenses that would trigger RICO liability, the RICO Plaintiffs allege that BP committed acts of wire fraud and mail fraud by transmitting false or misleading reports and information to the Minerals Management Service (“MMS”), the U.S. Interior Department agency responsible for offshore drilling operations that is now called the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”).
Unlike some of the causes of action that were transferred to MDL 2179, the RICO Plaintiffs must satisfy multiple layers of statutory requirements and predicate elements to establish civil liability for a RICO violation. On the other hand, as a unique feature of the RICO Act, an award of damages would automatically be trebled under 18 U.S.C. § 1964(c) if the RICO Plaintiffs are successful in establishing liability.
Practice Areas: Complex Business Litigation and Arbitration