April 20th marks the third anniversary of the 2010 British Petroleum (BP) oil spill in the Gulf of Mexico. Though three years have gone by and some lawsuits have been settled, the company is still facing claims from plaintiffs who were not covered by previous lawsuit settlements and a possible $17 billion fine related to violations of the U.S. Clean Water Act.
Recall that for 87 days in 2010, more than 200 million gallons of crude oil was pumped into the Gulf of Mexico after BP’s Macondo oil rig exploded and killed 11 people, injured 17 and led to the biggest oil spill in U.S. history. The spill affected about 16,000 miles of coastline in Texas, Louisiana, Mississippi, Alabama and Florida.
In addition to the $4 billion BP already owes the U.S. government in criminal penalties for the oil spill, the London-based company has agreed to pay an estimated $8.5 billion in settlements to private party plaintiffs. Any additional damage fees the company owes depends on a decision by U.S. District Judge Carl Barbier.
Judge Barbier has overseen litigation related to the oil spill since 2010. He will decide whether BP or its contractors were grossly negligent, which could lead to either an increase or decrease in the damages and fines for BP.
Part of the United States’ argument against BP is that the company was over budget and behind schedule, which prompted orders from the company to cut corners and ignore safety tests that showed the well was unstable. If found guilty of gross negligence, BP could be liable to the U.S. for more than $17 billion in fines, as well as punitive damages to claimants who weren’t part of the initial settlements.
Part of the reason for the increase in lawsuits related to the oil spill in recent weeks is because there is a three-year statute of limitations on such claims. These claims have been brought not just by the government, but by a range of people and organizations, including casino workers and real estate developers.
On April 17, BP presented its last witness at the nonjury trial over liability for the accident, but Barbier said he wouldn’t issue an immediate decision. Instead, Barbier says he is probably going to give lawyers for BP, its co-defendants, private party plaintiffs and the United States 60 days to submit their arguments and proposed findings. Twenty days also will be allotted for replies, but it’s likely a decision won’t be reached before this summer.
The second phase of the trial is scheduled to begin on Sept. 16, regarding the size of the spill and BP’s efforts to contain it.
John Levy is an attorney specializing in complex litigation, including maritime and environmental law. He says that part of the reason trials like this one are often split up is to push resolutions. Phases help parties involved see the light that is coming at the end of the tunnel, Levey said.
He says decisions the judge makes during these phases of the trial may help simplify and narrow the case going forward. “Certain parties may settle out. Certain issues may settle out.”
In addition to BP, those being held responsible for the spill include Vernier, the Switzerland-based owner of the Deepwater Horizon rig Transocean Ltd., and Houston-based Halliburton Co., which provided cementing services for the project. Cameron International Corp., which provided equipment used on the rig and M-I Swaco, which provided the rig’s drilling fluids were dismissed from liability for the 2010 spill on Feb. 25 by Barbier.
BP has maintained that Transocean failed to maintain the drilling rig and Halliburton’s cementing services were defective. In January Transocean pleaded guilty to a misdemeanor Clean Water Act violation and agreed to pay $1.4 billion, including $400 million in criminal penalties. The company has not resolved the natural resource damages claims.