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December 03, 2015
Testimony by David Sunding Contributes to Significant Win for Anadarko in Deepwater Horizon Penalty Phase

David Sunding, a principal of The Brattle Group and professor at the University of California, Berkeley, provided expert testimony on behalf of Anadarko Petroleum Corporation in the recently concluded penalty phase stemming from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

U.S. District Court Judge Carl Barbier in New Orleans ordered Dr. Sunding’s client to pay $159.5 million for Clean Water Act violations, a significant victory for Anadarko given that the U.S. government sought a penalty of more than $1 billion and the maximum civil penalty would have been about $3.5 billion.

The court had previously held that as a non-operating investor Anadarko was not culpable for the blowout, although it was still subject to civil penalties because it was a part owner of the Macondo Well. Notwithstanding the seriousness of the violation, Dr. Sunding showed that penalizing a non-operator like Anadarko would not effectively deter future violations.

Dr. Sunding also testified that the government's attempt to impose CWA penalties on a non-operating party would reduce investment in oil and gas exploration nationwide and raise the cost of capital to operators in the industry.

The judge took various factors into consideration when determining the penalty, and ultimately determined that the low penalty amount “strikes the appropriate balance between Anadarko’s lack of culpability and the extreme seriousness of this spill.”

Recent news coverage on the decision can be found on Bloomberg and Law360. The court's opinion can be downloaded using the link below.