Judge blames BP for oil well blast

Gross negligence ruled, paving way for $18B in fines

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A federal judge ruled Thursday that BP was grossly negligent in the 2010 Gulf of Mexico oil well blowout that killed 11 workers, spilled millions of barrels of oil into the Gulf of Mexico and soiled hundreds of miles of beaches.

“BP’s conduct was reckless,” U.S. District Judge Carl Barbier in New Orleans wrote in his sternly worded decision. He also ruled that Transocean, the owner of the rig, and Halliburton, the service company that cemented the well, were negligent in the accident. But the judge put most of the blame on BP, opening the way to fines of as much as $18 billion.

In a 153-page, densely technical decision, Judge Barbier described how BP repeatedly ignored mounting warning signs that the well was unstable, making decisions that he says were “primarily driven by a desire to save time and money, rather than ensuring that the well was secure.”

Judge Barbier painstakingly recreated the hurried effort to temporarily shut a problematic well, deemed by some to be “the well from hell,” and showed how a series of problems, many of which were suspected by the rig’s crew, led to the blowout. Even after noting these anomalies, BP crew members ignored test results that should have reinforced caution, and, if heeded, could have prevented the disaster even in its final minutes, he wrote.

BP has long acknowledged responsibility for the accident, but has said it should be fully shared with the companies that operated the Deepwater Horizon rig and improperly sealed the well with cement.

While acknowledging that there was blame to share, Judge Barbier in most cases said the fault finally lies with BP, either because it was responsible for the most fundamental problems or because contractual relationships made clear that BP was the responsible party.

Ultimately, according to the judge, the company that owned the lease to the well and was responsible for overseeing all of the drilling work displayed gross negligence, which in legal terms means it was responsible for willful misconduct. Judge Barbier apportioned 67 percent of the blame for the spill on BP, 30 percent on Transocean and 3 percent on Halliburton.

BP quickly put out a statement saying it “strongly disagrees with the decision” and will immediately appeal to the 5th U.S. Circuit Court of Appeals in New Orleans.

“Today’s ruling dramatically increases BP’s liability for civil penalties under the Clean Water Act and further sullies BP’s already badly damaged reputation,” said University of Michigan law professor David Uhlmann, a former chief of the Justice Department’s environmental crimes section. “BP has long claimed that it was only negligent, and that other companies were equally to blame for causing the Gulf oil spill. Judge Barbier’s ruling makes clear that BP knowingly took risks that caused the worst environmental disaster in U.S. history, and that BP was the worst culprit.”

In its statement, BP said the ruling “is not supported by the evidence at trial.” The statement continued, “The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court.”

BP’s stock fell around 5 percent after the ruling was announced.

Judge Barbier still must rule on how much oil was spilled in the accident to determine the eventual fines the companies must pay. There is a wide spread between the estimates of the federal government and those of BP. All of Judge Barbier’s rulings can be expected to be appealed.

Under the Clean Water Act, the maximum penalty is $1,100 per barrel spilled where the court finds simple negligence and $4,300 per barrel where the court finds gross negligence or willful misconduct. BP said that during the penalty phase of the trial, it will “seek to show that its conduct merits a penalty that is less than the applicable maximum after application of the statutory factors.”

A coalition of the federal government, five Gulf states and hundreds of individuals and businesses have sued BP and the service companies in a legal struggle that began almost from the day the spill occurred. Earlier this week, Halliburton reached a $1.1 billion settlement with the plaintiffs, resolving almost all of the company’s financial exposure.

BP has already paid out $28 billion in claims for oil spill costs, and the company has been forced to sell off assets around the world.

A trial to decide financial penalties is scheduled to begin in January, the third phase of a nonjury proceeding. Anadarko, which owned a 25 percent stake in the well, could also be fined for Clean Water Act penalties. Transocean already agreed to pay $1.4 billion to settle government charges, and also faces potentially higher penalties in Judge Barbier’s court.

BP already pleaded guilty to manslaughter and other charges and agreed to pay $4 billion in criminal penalties. BP reached a settlement with plaintiffs but has battled in court over interpretations of the settlement, claiming undeserving plaintiffs were receiving payments. Last month, the company requested that the Supreme Court throw out part of the settlement of claims for damages, after a federal appeals court upheld the settlement.

After Thursday’s ruling, lawyers for the plaintiffs expressed relief. “We hope that today’s judgment will bring some measure of closure to the families of the 11 men who tragically lost their lives, and to the thousands of people and businesses still trying to recover from the spill,” said lawyers James Roy and Stephen Herman. “The court has now laid bare the full extent of the level of BP’s misconduct.”

United States - North America - BP Plc - Gulf of Mexico - Halliburton Co


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