BP Wins Delay of Gulf Oil Spill Trial

By Jonathan Stempel | May 4, 2012

A trial to assign blame and damages that could total tens of billions of dollars for the 2010 Gulf of Mexico oil spill has been put off until January, in a setback for the U.S. government, which wanted to try its case this summer.

U.S. District Judge Carl Barbier in New Orleans on Thursday scheduled a trial for Jan. 14, 2013, more than 10 months after it had originally been scheduled.

The decision means the federal government and Gulf Coast states, which also wanted a summer trial, may have to wait longer to recover money from BP Plc and its drilling partners.

It is unclear how the new timetable will affect strategy, or whether it might spur the federal government to press harder for settlements and help local residents seeking money for cleanup or restoration.

“This may spur the government to settle,” said Edward Sherman, a professor at Tulane University Law School in New Orleans. “The Obama administration may want to show its stuff before the November elections.”

However, Carl Tobias, a University of Richmond law professor specializing in product liability, said the delay might make it harder for governments to reach acceptable settlements.

“A delay could give the governments more time to strengthen their bargaining positions, but they lose leverage that comes with having a trial scheduled in the near term,” he said.

$7.8 BILLION SETTLEMENT WINS INITIAL OK

A comprehensive trial to resolve claims involving BP, drilling partners Transocean Ltd. and Halliburton Co., federal and state governments, private plaintiffs and others had been scheduled for Feb. 27. It was put on hold while BP negotiated with the private plaintiffs.

Barbier’s order came one day after he granted preliminary approval to BP’s estimated $7.8 billion settlement to resolve economic, property and medical claims by 125,000 individuals and businesses harmed by the spill. He set a Nov. 8 fairness hearing to consider objections before granting final approval.

The April 20, 2010 explosion of the Deepwater Horizon drilling rig killed 11 workers and triggered the largest U.S. offshore oil spill from the ruptured Macondo well, in which BP held a 65 percent stake.

Transocean owned the rig, and Halliburton provided cementing services. About 4.1 million barrels of oil were spilled and not cleaned up, the U.S. government has estimated.

U.S. Department of Justice spokesman Wyn Hornbuckle declined to comment. The offices of Alabama Attorney General Luther Strange and Louisiana Attorney General James “Buddy” Caldwell had no immediate comment.

Ellen Moskowitz, a BP spokeswoman, declined to comment.

Transocean spokesman Lou Colasuonno said that company has “utmost confidence” in its case. Halliburton spokeswoman Beverly Stafford did not respond to a request for comment.

WILL TRIAL REALLY HAPPEN?

BP had urged that a trial on remaining Gulf spill issues be delayed until after the Nov. 8 fairness hearing, to help ensure that any “overlapping or parallel actions” would not distract from administering the settlement with private plaintiffs.

But the governments objected, saying such a delay would be unfair to residents and the broader public interest.

BP previously took a roughly $37.2 billion charge for the spill. The London-based company’s potential liability for violating the federal Clean Water Act alone could reach $17.6 billion if it were found to have acted with gross negligence.

Other companies in the case are Anadarko Petroleum Corp., which owned 25 percent of the Macondo well; Cameron International Corp., which made a blowout preventer, and Schlumberger NV’s M-I Swaco venture, which provided mud services. All have settled with BP.

Mitsui & Co’s MOEX USA unit, which owned 10 percent of the well, has also settled with BP, and in February agreed to pay $90 million to settle with the federal government.

About 311 witnesses have been deposed and 90 million pages of documents have been produced in the case, court papers show.

“You wonder whether there will ever be a trial,” said Tobias, the University of Richmond law professor. “The farther we move past the actual event, it may complicate matters for all sides. Memories fade and evidence could grow stale.”

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

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Latest Comments

  • May 6, 2012 at 10:42 pm
    Nan says:
    Does a delayed trial mean justice is delayed?
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