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Second phase of BP Deepwater Horizon oil spill trial begins

The high-stakes outcome could saddle the energy giant with the largest environmental penalty in U.S. history.

September 29, 2013|By Julie Cart
  • The Deepwater Horizon drilling rig burns in the Gulf of Mexico in April 2010.
The Deepwater Horizon drilling rig burns in the Gulf of Mexico in April 2010. (U.S. Coast Guard )

The second phase of the BP Deepwater Horizon oil spill trial begins Monday in New Orleans, restarting a legal juggernaut that could saddle the energy giant with the largest environmental penalty in U.S. history, determine the future health of the Gulf of Mexico and calculate, finally, the amount of crude oil that spewed from the crippled well.

The case — which involves a phalanx of federal and state prosecutors, attorneys for several multinational companies, and highly complex engineering testimony — has been droning on with little fanfare since February. But its high-stakes outcome has riveted both the legal world and the environmental community.

"It's fascinating for reasons of its size and complexity, the accusations of destruction of documents and evidence, and for the legal precedents. It's terrific stuff," said John Levy, a maritime law litigator and partner at the firm Montgomery McCracken.

The first phase of the nonjury trial examined the cause of the April 20, 2010, explosion on the Deepwater Horizon drilling rig about 50 miles off the Louisiana coast. The blowout killed 11 people and gushed crude oil for more than three months until the well was capped.

Multiple witnesses spent weeks providing highly technical testimony detailing the performance of the rig's drilling and safety equipment, as well as the emergency response of on-site personnel.

U.S. District Judge Carl Barbier will use that information when he determines culpability among the partners on the rig: BP, which owned the well; Halliburton, which sealed the wellhead; and Transocean, which owned the Deepwater Horizon drilling vessel.

The companies are major employers in the gulf region, where world attention was transfixed during the tense months after the accident. Media broadcast live undersea images of the well gushing oil and methane gas and photos of oil-drenched pelicans — Louisiana's state bird — struggling to lift out of the miles-wide spill. The Gulf Coast's fishing and tourism industries were upended, beaches and bayous coated with oil.

As the trial has unspooled in an elegant courtroom in downtown New Orleans, numerous parallel legal proceedings have played out. BP has pleaded guilty to criminal negligence and 11 counts of felony manslaughter, and agreed to pay penalties and fines of $4 billion. In addition, the London-based company admitted withholding documents and lying to Congress regarding oil flow rates.

This month, BP asked Barbier to suspend payments in a $7.8-million fund the company had established to settle private economic and medical claims. The company argued there was a "feeding frenzy" of false claims. Barbier had rejected a similar request twice before.

Halliburton pleaded guilty to covering up evidence relating to the amount of oil coming from the well.

Transocean has pleaded guilty to criminal negligence and, in a separate case, agreed to pay $1 billion to settle civil charges.

After a brief summer hiatus, Barbier will now focus on determining how much oil flowed into the gulf and what will it cost the companies. Was it the 2.45 million gallons that BP contends, or the more than 4 million gallons estimated by government scientists?

Depending in part on that calculation, BP could be exposed to as much as $17 billion in fines for violating the Clean Water Act, the largest environmental penalty in U.S. history. A portion of the fines is earmarked for gulf restoration.

In addition, the court will determine whether BP's actions on the rig were negligent or grossly negligent. That distinction is important because it is the difference between a $4.5-billion fine and the maximum $17-billion penalty.

The prosecution must surmount an extremely high bar to meet a gross negligence threshold.

"To find gross negligence, you've got to prove that there's a known significant risk and that the company said, 'To hell with it, let's go anyway,'" Levy said.

For court watchers, every legal move is worth noting.

"It will be studied in law schools; it should be studied in management schools — how to administer this kind of a beast," said Carl Tobias, who studies the federal courts and teaches at the University of Richmond School of Law.

"We don't generally have these kinds of extended trials. You have the legal aspects, you have the science, and you have the cultural part — the water is so essential to so many people in the gulf," Tobias said. "For those in criminal law it will be interesting. It's the biggest environmental crime that's ever been pled to."

For conservation groups, maximum penalties could put other polluters on notice, which they say failed to happen after the Exxon Valdez oil spill in Alaska's Prince William Sound in 1989, the second-largest in U.S. history.

"The value of severe penalties and fines is to serve as a deterrent," said David Muth, director of Mississippi River delta restoration for the National Wildlife Federation. "If BP skates, it hardly sends a good signal."

The environmental damage from the spill has yet to be fully quantified. At one point during the crisis, more than 1,000 miles of coastline were befouled with oil. Scientists are assessing the effects on marine life and coastal wetland systems.

Last week a study by Texas A&M-Corpus Christi found the blowout had damaged marine life for 57 square miles from the blast site, concluding that recovery could take a generation or more.

Tar balls are still found on beaches as far away as Florida. And this summer, a 40,000-pound tar mat — a slab of oil residue mixed with sand — was found on a Louisiana barrier island.

julie.cart@latimes.com

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