California Attorney General Sues BP and ARCO over Gas Stations

February 5, 2013

California Attorney General Kamala D. Harris has filed a civil lawsuit against BP West Coast Products, BP Products North America Inc. and Atlantic Richfield Company for allegedly violating state laws governing hazardous materials and hazardous waste by failing to properly inspect and maintain underground tanks used to store gasoline for retail sale at more than 780 gas stations in California.

“Safe storage of gasoline is not only common sense, it is essential to protecting the integrity of California’s groundwater resources,” Harris said in a statement. “California’s hazardous waste laws safeguard public health and this lawsuit ensures proper maintenance of the tanks that store fuel beneath California’s communities.”

Harris on Tuesday joined the U.S. Department of Justice and 12 other states and the District of Columbia in announcing lawsuits against Standard & Poor’s for inflating its ratings of structured finance investments, which Harris said caused California’s public pension funds and other investors to lose billions of dollars.

The complaint was filed in San Francisco Superior Court, and alleges that the McGraw-Hill Cos. Inc. and Standard and Poor’s Financial Services LLC violated the False Claims Act and other state laws by using a ratings process based on what senior executives described as “magic numbers” and “guesses.”

Investors relied on S&P and its competitors to rate these securities because they had access to only general descriptions of the assets backing their investments, which often included mortgages. California’s public pension funds also relied on S&P because they are often required to buy securities that received a coveted “AAA” rating, signaling that the investment was top-tier and bore minimal risk, according to Harris.

The California Public Employees Retirement System (PERS) and the California State Teachers Retirement System (STRS) – two of the nation’s largest institutional investors – lost roughly $1 billion from the investments.

Harris filed the BP and ARCO complaint on Feb. 1 in Alameda County Superior Court. The complaint alleges that since October 2006 the BP companies and ARCO have improperly monitored, inspected and maintained underground storage tanks used to store gasoline for retail sale. The complaint alleges that the defendants tampered with or disabled leak detection devices, and failed to test secondary containment systems, conduct monthly inspections, train employees in proper protocol, and maintain operational alarm systems, among other violations. The lawsuit also alleges that the defendants improperly handled and disposed of hazardous wastes and materials associated with the underground storage tanks at retail gas stations throughout the state.

The complaint follows a recent statewide investigation led by Harris’s office, which found violations of hazardous materials and hazardous waste laws and regulations at BP gas stations in 37 counties across the state.

In January 2012, the Attorney General’s office filed a similar lawsuit against Phillips 66 and ConocoPhillips.

Topics Lawsuits California

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