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BP Trial Starts Over Gulf Spill

Wednesday, February 27, 2013

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Oil giant BP faced its first day in court on Monday (Feb. 25), contending that it should not bear sole responsibility for the 2010 rig explosion and oil spill in the Gulf of Mexico, which spilled four million barrels of oil into the Gulf and killed 11 workers.

The federal court trial is being held in New Orleans with no jury before Judge Carl Barbier.

Barbier will decide whether BP, Transocean, Halliburton, or other companies on the project were grossly negligent. His ruling will affect how much the companies may have to pay in damages.

U.S. Coast Guard

A federal court trial in New Orleans is currently being held to determine the amount of responsibility BP and other companies had in the deadly Deepwater Horizon incident on April 20, 2010.

While BP could face gross negligence charges, Transocean and Halliburton are only responsible for punitive damages, based on an earlier ruling by Barbier.

BP will also have to pay any compensatory damages awarded to plaintiffs who haven't previously settled claims.

In November, the Justice Department announced that BP would pay the largest penalty in U.S. history—$4.5 billion—and plead guilty to 14 criminal charges, including manslaughter. It also announced indictments against three BP employees.

But the company could face additional penalities of as much as $17.6 billion.

The Trial Begins

Approximately 60 lawyers filled the courtroom—so many that Barbier had to create a seating chart, according to reports from CNN.

If charged with gross negligence, BP will meet the steepest fines for damages. Transocean and Halliburton are only responsible for punitive damages, based on an earlier ruling by Barbier.

BP will also have to pay any compensatory damages awarded to plaintiffs who haven't previously settled claims.

In November, the Justice Department announced that BP would pay the largest penalty in U.S. history—$4.5 billion—and plead guilty to 14 criminal charges, including manslaughter. It also announced indictments against three BP employees.

But the company could face additional penalities of as much as $17.6 billion.

Plaintiffs in the case include five Gulf states, individuals, businesses, and the federal government.

The trial is in its first of three phases. The current, and first, phase focuses on how much each company is to blame and the degree of negligence.

The second phase will focus on the flow rate of the oil and is expected to start in September; the third phase, planned for 2014, will consider the damages.

In his opening statement, BP's General Counsel Rupert Brody argued that BP made efforts to acknowledge its role in the spill and pushed the court for lower penalties.

"To date we've spent more than $23 billion in response, cleanup, and payments on claims by individuals, businesses and governments," Brody said. "No company has done more, faster, to meet its commitment to economic and environmental restoration efforts in the wake of an industrial accident."

Courtroom Finger Pointing

On Monday, BP attorney Mike Brock said the blame for the disaster isn't solely BP's. Bad decisions by Transocean, Halliburton, and BP all contributed to the disaster, he said.

Halliburton's attorney, Don Goodwin, said BP ignored the contractor's recommendations about the cement job and that Transocean didn't move fast enough to contain the explosion.

Assistant U.S. Attorney Mike Underhill said that less than an hour before the rupture, BP's top well site leader on the rig called an engineer about a pressure test that indicated problems.

"Eleven souls had 47 minutes to llive the rest of their lives," Underhill said.

Underhill also contested that BP executives could have avoided the explosion if a supervisor would have walked to the drilling area and closed the operations after the negative pressure test.

BP didn't want to delay the drilling to fix the cement problems, Underhill alleged.

Jim Roy, an attorney for plaintiffs who did not take part in an earlier settlement, said BP executives pushed production and profits over safety, Transocean had poor staff training and poor maintenance of seabed equipment, and Halliburton made substandard cement for the well.

BP has also sued Transocean, alleging it failed to maintain the drilling rig and Halliburton, alleging it provided defective cement and concealed flaws in the cement before and after the explosion.

Day Two

On Tuesday (Feb. 26), a University of California-Berkeley engineering professor and former BP safety consultant, Robert Bea, took the stand and said that BP's internal investigation of the incident lacked a key compent of safety management and didn't address possible systematic causes.

BP's study investigated the cause of the explosion and the role the equipment and employees played, but did not address the decisions made by management leading up to the incident, Bea alleged.

BP's attorney, Mike Brock, cross-examined the witness on Tuesday morning, challenging his credibility and emphasizing that the companies suing BP provided information critical of BP's work.

Read the full testimony here: Day One; Day Two

U.S. Air Force

An Air Force C-130 Hercules drops an oil-dispersing chemical into the gulf as part of the response effort.

Previous Charges

Transocean Deepwater Inc., based in Houston, TX, pleaded guilty on Feb. 14 to a violation of the Clean Water Act for its illegal conduct leading to the accident and was sentenced to pay $400 million in criminal fines and penalties, Attorney General Eric Holder said.

The company was also put on five years' probation, the maximum term allowed by law.

Transocean owned and operated the Deepwater Horizon rig that sank after the explosion. BP PLC leased the rig from Transocean to drill the Macondo well.

"Transocean's guilty plea and sentencing are the latest steps in the department's ongoing efforts to seek justice on behalf of the victims of the Deepwater Horizon disaster," said Holder when the sentence was announced. "Most of the $400 million criminal recovery—one of the largest for an environmental crime in U.S. history—will go toward protecting, restoring and rebuilding the Gulf Coast region."

During the guilty plea proceedings, Transocean admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP's well site leaders (known as "company men"), were negligent in failing to investigate fully clear indications the Macondo well was not secure and that oil and gas were flowing into the well, the Environmental Protection Agency reported.

Under the plea agreement, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving the marine and coastal environments, ecosystems and bird and wildlife habitat harmed by the months-long Deepwater Horizon oil spill. An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

In addition, four corporate entities—Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH—agreed to pay a record $1 billion to resolve federal Clean Water Act civil penalty claims.

   

Comment from Joe Isbell, (2/27/2013, 8:31 AM)

The EPA/ US gov see regulations and fines as their club to force companies to meet their standards of excellents.


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