Ohio goes to court to recover wrongful reimbursements to BP

Petroleum giant sought money from UST storage fund for leaks covered by insurance

The Ohio Petroleum Underground Storage Tank Release Compensation Board recently announced a lawsuit against BP Inc. to recover $33 million in wrongful compensation the petroleum company sought to pay for clean up of leaks from underground tanks the company owned in Ohio.

Bailey & Glasser attorney Michael L. Murphy — a member of the management committee for a consortium of law firms that directly represents a number of states, state officials and underground storage tank funds — is assisting with the lawsuit. Murphy works from Bailey & Glasser’s Washington, D.C., office.

According to the suit, BP knowingly “double-dipped,” requesting reimbursement to clean up leaks, claiming it had no insurance when it was actually well covered and accepted insurance money to pay for cleaning up those same leaks.

The Petroleum Financial Assurance Fund is designed as a financial resource of last resort. Underground tank owners can only accept money from the fund if they do not have coverage or accept money from any other source, such as insurance companies.

BP submitted 2,651 claim applications for reimbursement from the fund for specific releases at Ohio sites, and received more than $33 million in reimbursement for cleanup costs. Nearly a thousand more claims worth $22 million are also under review.

The suit alleges a number of violations of state law, including subrogation, indemnification, breach of contract, unjust enrichment and negligent misrepresentation.

“Our lawsuit alleges that BP knowingly and intentionally took more than $33 million that it was not eligible to accept,” said Ohio Attorney General Mike DeWine. “BP has to follow the same rules as other businesses, and can’t engage in misconduct without consequence.”

According to the suit, BP made materially false and misleading statements to the Petroleum Board when it submitted these applications, and concealed information it was required to disclose. BP did not fully disclose its complex insurance program, which included hundreds of insurance policies.

The fund, established in 1981, has paid out more than $221 million. Including companies it later acquired, BP is the largest recipient of those funds.

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