U.S. high court rejects oil spill contempt case

By Lawrence Hurley

WASHINGTON, Dec 16 (Reuters) - The U.S. Interior Department will not be held in contempt over its actions in the aftermath of the 2010 Gulf of Mexico oil spill after the U.S. Supreme Court declined on Monday to review an appeals court ruling in the government's favor.

The nine justices refused to hear an appeal filed by Hornbeck Offshore Services LLC, a drilling company subsidiary of Hornbeck Offshore Services Inc (NYSE: HOS - news) , and other businesses affected by a moratorium on deep sea drilling that the federal government imposed in May 2010. The federal appeals court ruling that overturned a federal district judge's contempt finding remains intact.

In April 2010, the Deepwater Horizon rig, owned by Transocean Ltd (NYSE: RIG - news) and leased by BP PLC (LSE: BP.L - news) , exploded, causing 11 deaths and a massive oil spill.

The Interior Department's temporary drilling moratorium was immediately challenged by the drilling industry, prompting U.S. District Judge Martin Feldman of the Eastern District of Louisiana to rule in June 2010 that the government could not enforce it.

Despite the court order, the moratorium remained in effect in a modified fashion until October 2010.

The following year, Feldman held the government in contempt for violating his order and said it must pay almost $530,000 in legal fees to the companies that challenged the moratorium.

In an April (Frankfurt: B2B.F - news) 2013 ruling, the New Orleans-based 5th U.S. Circuit Court of Appeals reversed Feldman's ruling. It said that although the government had violated the spirit of his order, its actions did not technically violate it. The companies then sought high court review.

The case is Hornbeck v. Jewell, U.S. Supreme Court, No. 13-56.