Long-Awaited BP Oil Spill Trial Begins; No Deal Yet

By | February 25, 2013

BP executives more focused on cost-cutting and oil production than safety should be held responsible for the Deepwater Horizon disaster in the Gulf of Mexico in 2010, the worst offshore oil spill in U.S. history, a lawyer told a courtroom on Monday as a long-awaited legal showdown began in New Orleans.

Jim Roy, speaking for plaintiffs suing well owner BP Plc , drilling rig owner Transocean Ltd., cement services provider Halliburton Co. and others, said BP executives at the highest level felt pressure to push output to the limit.

“Production over protection. Profits over safety,” Roy said.

Roy was the first of many lawyers scheduled to speak during a day of opening statements in the non-jury trial before U.S. District Judge Carl Barbier. The first phase of the trial focuses on how much each company is to blame for the disaster and the degree of negligence.

Most observers expect the case to be settled before it goes to a verdict, although talks over the weekend failed to reach an accord.

“BP is in a very tight bind. I never thought that they intended to try this case and really cannot afford to do so because the exposure is too potentially catastrophic,” said Blaine LeCesne, a professor at Loyola University College of Law in New Orleans.

Lined up against the defendants are the U.S. Justice Department, several Gulf Coast states, and plaintiffs represented by Roy that did not take part in an $8.5 billion settlement that BP struck last year.

The stakes are enormous, with potential liabilities stretching into the tens of billions of dollars if Barbier determines that BP or the others were grossly negligent.

Simple negligence involves mistakes. Gross negligence involves reckless or willful disregard for human and environmental safety and is a difficult standard to prove, experts say.

Gross negligence opens the door to punitive damages against BP, Transocean and Halliburton – above potentially billions in fines under the Clean Water Act.

The April 2010 explosion at the Macondo well about 50 miles south of Louisiana killed 11 men, sank Transocean’s Deepwater Horizon drilling rig and unleashed more than 4 million barrels of crude into the Gulf of Mexico.

Oil came ashore from Texas to Florida, threatening livelihoods and state economies dependent on seafood and tourism.

BP has spent or committed $37 billion on cleanup, restoration, payouts, settlements and fines. That includes a record $4.5 billion in penalties, and a guilty plea to 14 criminal counts to resolve criminal charges from the Justice Department and civil claims from the U.S. Securities and Exchange Commission.

The company has sold $38 billion in assets to help cover its spill-related costs, including its older, smaller Gulf of Mexico operations.

The second phase of the trial, slated for September, will focus on the flow rate of the oil that spewed from the well. The third phase in 2014 will consider damages.

Topics USA Energy Oil Gas Mexico

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