BP Gulf oil spill trial opens

Trial began Feb. 25 in the US District Court for the Eastern District of Louisiana between individuals affected by the 2010 Deepwater Horizon oil spill and British Petroleum (BP). The other corporations involved are the rig owner Transocean and well cement services provider Halliburton. The parties bringing suit against BP include the US Department of Justice (DoJ), states bordering the Gulf Coast, and individuals who did not agree to an earlier settlement agreement. The trial is to be conducted in phases with the first part focusing on determining what caused the blowout of the well and assign percentage blame on the companies involved. Other issues that are to be resolved are BP’s level of negligence in conjunction with the incident and the amount of oil that escaped into the Gulf of Mexico, both elements are critical to determine BP’s penalties under the Clean Water Act (CWA).

The commencement of the trial against BP and other corporations is the most recent development in a long series of legal battles that have arisen from the Deepwater Horizon Crisis. In January a judge for the US District Court for the Eastern District of Louisiana accepted a plea agreement between BP and the DoJ for the company’s criminal liability in the 2010 Deepwater Horizon oil spill. Earlier in January, Transocean Ltd. pleaded guilty to “negligently discharging oil into the Gulf of Mexico,” in violation of the CWA, and will pay $1 billion in civil penalties and $400 million in criminal penalties for its role in the Deepwater Horizon spill. In December a federal judge approved a final class settlement between BP and those who experienced economic and property loss stemming from the spill.

From Jurist, Feb. 25. Used with permission.

NOTE: The $4.5 billion settlement reached in November, approved by the court last month, was in the criminal case against BP. The $7.8 billion settlement reached in December came in a civil suit for economic and property damage. The new trial is a second civil suit concerning damage to natural resources and health claims.

  1. BP not liable for 810,000 barrels of oil deemed collected
    A judge for the US District Court for the Eastern District of Louisiana  on Feb. 19 ruled that 810,000 barrels of oil collected by BP immediately following the Deepwater Horizon oil spill will not be used in calculations to determine damages under the Clean Water Act. US District Judge Carl Barbier determined those 810,000 barrels qualified as “collected,” as they were funneled through the “blow-out preventer” and collected immediately by BP without coming “into contact with any ambient sea water.” The decision could reduce the potential penalty that BP will pay by as much as $3.5 billion based on CWA guidelines which impose a maximum fine of $4,300 per barrel if it is determined that BP’s behavior was “gross negligence.” BP welcomed the ruling and suggested they would remain vigilant in its efforts to fight any penalties they feel are excessive.

    From Jurist, Feb. 20. Used with permission.

  2. Halliburton in the news…
    Few details, but from Reuters, July 25:

    Halliburton Co has agreed to plead guilty to destroying evidence related to the 2010 Gulf of Mexico oil spill, and will pay the maximum possible statutory fine, the U.S. Department of Justice said on Thursday.

    The plea agreement requires court approval, and also requires the Houston-based company to be subject to three years of probation and to continue its cooperation with the government’s ongoing criminal probe.

    Halliburton also made a voluntary $55 million payment to the National Fish and Wildlife Foundation that is not subject to court approval of the plea agreement, the Justice Department said.

    A spokeswoman for Halliburton did not immediately respond to requests for comment.

  3. More details on Halliburton guilty plea
    Halliburton stands accused of destroying the results of an internal investigation into the Deepwater Horizon well’s construction to determine what caused the accident. As part of the plea agreement, Halliburton has agreed to admit its criminal conduct, pay a fine and be subject to three years of probation. Halliburton has also agreed to cooperate with the government’s ongoing criminal investigation. (Jurist, July 26)

  4. BP ordered to pay $130 million to oil spill claims administrator
    Judge Sally Shushan of the US District Court for the Eastern District of Louisiana on AUg. 7 ordered British Petroleum (BP) to pay the third quarter and some fourth quarter expenses for the gulf oil spill claim administration program. The budget and fees for the program totaled over $130 million. This order comes as the FBI probes allegations by BP that the disbursement process has been corrupted. Although Shushan acknowledged that BP raised legitimate concerns about claims administrators approving false filings for a percentage of the payouts, she concluded that the program could not be halted on short notice based on the allegations alone. BP appealed immediately, but US District Judge Carl Barbier, who is overseeing the spill litigation, upheld the decision within hours. The claim administration program is expected to continue operations while the court-appointed administrator and several former employees are investigated for fraud.

    From Jurist, Aug. 8. Used with permission.

  5. Ex-BP engineer convicted

    Former BP drilling engineer Kurt Mix was convicted by a US court in New Orleans of deleting text messages from his cellphone to obstruct a federal investigation of the company's massive 2010 oil spill in the Gulf of Mexico. (AP, Dec. 18)

  6. Judge: BP must pay spill settlement

    A federal appeals court ruled on Jan. 10 to uphold a district court ruling approving BP's settlement with parties who claim to have suffered financial loss due to the 2010 Deepwater Horizon oil spill. BP argued that the settlement should not be enforced as District Judge Carl Barbier for the Eastern District of Louisiana, who gave the initial ruling, failed to determine if the claimants in the settlement included individuals who were not injured by the oil spill. The three-judge appellate panel for the Fifth Circuit Court of Appeals decided that this was not sufficient grounds to invalidate the settlement and affirmed Barbier's ruling. "[C]lass certification is not precluded simply because a class may include persons who have not been injured by the defendant's conduct," the court stated in the majority opinion. BP has estimated the settlement will cost it about $7.8 billion.

    From Jurst, Jan. 11. Used with permission.

  7. BP asks SCOTUS to stay ruling in settlement dispute

    BP on May 28 aked (PDF) the US Supreme Court to stay a March ruling requiring the company to make massive settlement payments as a result of the 2010 Deepwater Horizon oil spill. BP contends that the decision by the US Court of Appeals for the Fifth Circuit  to deny an injunction of the settlement agreement allows many business economic loss (BEL) claimants to collect payments that are not traceable to the damage caused by the Deepwater Horizon accident and oil spill. BP believes that such BEL claimants are not proper class members under the terms of the settlement. In the application, BP argued the consequences of a removal of the injunction would result in "irreparable injury" to the company and "countless awards potentially totaling millions of dollars will be irretrievably scattered to claimants that suffered no injury traceable to BP's conduct." 

    From Jurist, May 30. used with permission.

  8. Supreme Court declines to review BP oil spill case

    The US Supreme Court on Dec. 8 declined (PDF) to review a settlement with BP resulting from the 2010 Deepwater Horizon disaster. The case arises from the March decision by the US Court of Appeals for the Fifth Circuit. BP claims that under the terms of the settlement they are forced to pay businesses and individuals who could not prove that their injuries were caused by the oil spill in 2010. BP argued upon appeal that if these claimants could not prove causation for their injuries then the ruling and settlement is a constitutional violation of Article III and federal law addressing class actions. After the order issued by the high court, BP stated, "[o]n behalf of all our stakeholders we will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered. In doing so, we hope to prevent further exploitation of our commitment to compensating all those legitimately harmed by the spill."

    In August, a federal district court in Louisiana ruled that BP was grossly negligent and bears a majority of the blame for the 2010 Deepwater Horizon disaster.

    From Jurist, Dec. 9. Used with permission.