Ohio Sues BP Over Funding to Clean Up Tank Leaks BP

Ohio Sues BP Over Funding to Clean Up Tank Leaks

The state of Ohio is seeking more than $33 million from BP Products North America, claiming the company double-dipped to pay for cleanup of storage tank leaks.

The Ohio Attorney General’s office, on behalf of the Ohio Petroleum Underground Storage Tank Release Compensation Board, has filed a lawsuit against BP Products North America in the Franklin County Court of Common Pleas, claiming the company didn’t deserve the more than $33 million it collected from 2,651 claims it submitted to the state to clean up storage tank leaks.

The Petroleum Underground Storage Tank Release Compensation Board administers the Ohio Petroleum Underground Storage Tank Financial Assurance Fund. The board and the fund were established to ensure that there were financial resources available to cover the cost of corrective action for accidental releases of petroleum from underground storage tanks (UST). The fund reimburses owners or operators of UST for the costs associated with corrective actions. Owners or operators of USTs – as “responsible persons” – are required to participate in the fund and may apply for reimbursement of corrective action costs.

According to the lawsuit, BP “made materially false and misleading statements to the board” and concealed material information that was required to be disclosed by those participating in the fund concerning its ownership of insurance, insurance claims filed for environmental contamination (including those resulting from the operation of UST), insurance claim reimbursement and insurance settlements.

Not true, says BP. ““BP acted at all times in good faith and believes its dealings with the Ohio state underground storage tank fund have been proper,” said company spokesman Jason Ryan. “BP plans to defend itself against the allegations in the complaint.” 

The lawsuit claims “BP did not fully disclose its complex insurance program, which included hundreds of insurance policies through commercial, mutual and captive insurers, to the Board in its applications for eligibility or in many of its claims applications for reimbursement.”

The board also claims BP also did not advise it about coverage-in-place agreements, insurance reimbursements, insurance coverage settlement agreements and monies received from commercial, mutual and captive insurers, “despite the board’s right of subrogation and entitlement to indemnification.”

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

The state accuses BP of numerous violations of Ohio law. Specific counts include subrogation, indemnification, breach of contract, unjust enrichment, negligent misrepresentation and conversion.

According to the Ohio Attorney General's Office, an additional 905 claims – with a value of nearly $22.3 million – are pending review with the state.

The lawsuit seeks reimbursement of the $33 million already paid to BP, as well as unspecified damages.

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