BP appeals ‘grossly negligent’ finding in Deepwater Horizon disaster

In September, a federal judge designated BP as the foremost company responsible for the 2010 explosion of the Deepwater Horizon rig and ensuing oil spill.

On Monday, June 1, the oil giant filed a brief in the Fifth Circuit Court of Appeals rejecting Judge Carl Barbier’s finding that it was “grossly negligent.”

BP called upon the higher court in hopes of adverting a $12 billion fine that the government seeks to levy against the company.

“The district court held that BPXP acted with gross negligence and willful misconduct, and is therefore liable for enhanced penalties under the Clean Water Act (“CWA”),” BP’s brief states.

“The court also held that BP was reckless for purposes of general maritime law, and that, although BP is not liable for punitive damages under this Court’s precedent, it would be liable for punitive damages under legal standards that might apply in other circuits.

“As a result of the district court’s judgment, the United States is attempting to impose a civil penalty of more than $12 billion on BPXP.”

BP asks whether Barbier erred in his “gross negligence” ruling, maintaining that it acted with at least “slight care” in relying on apparently competent contractors and numerous safety precautions.

“This appeal also presents the important questions whether the Oil Pollution Act displaces punitive-damages claims at general maritime law, and whether the district court erred in purporting to determine BP’s punitive-damages liability under general-maritime-law standards that have been adopted by other circuits,” the brief states.

In its brief, BP shifts the blame to Transocean, asserting the company was required to monitor and control the well at all times, respond to any “kicks” (inflows of pressurized fluids into the well that could, if not addressed, become a blowout), and properly maintain and operate the blowout preventer to seal the well in the event of a loss of well control.

BP also fingers Halliburton, claiming the company was similarly required to monitor the well at all times and report any problems to Transocean.

“This Court should reverse the district court’s gross-negligence ruling and restore the settled distinction between ordinary negligence and gross negligence that Congress drew in the CWA,” the brief states.

“That distinction is critical, as reflected by Congress’s decision to triple the penalties that can be assessed against a party found to have acted with gross negligence—penalties that, under the district court’s rulings, could approach $13.7 billion in this case.”

Background

Judge Barbier presided over a non-jury trial in New Orleans last year to determine who is to blame and to what extent they are liable for the 2010 explosion of the rig that killed 11 workers and resulted in the release of millions of barrels of oil.

“BP’s conduct was reckless,” Barbier wrote in his Sept. 4 decision. “Transocean’s conduct was negligent. Halliburton’s conduct was negligent.”

The district judge found that BP PLC bears 67 percent of the blame, Transocean Ltd. 30 percent and Halliburton Specialty Services 3 percent.

BP was the owner of the Macondo oil well, while Transocean was the owner of the Deepwater Horizon. Houston-based Halliburton was responsible for sealing the well, which failed and led to the release of oil that flowed for almost three months in the Gulf of Mexico.

BP has already spent several billions of dollars to settle claims from individuals and businesses damaged by the spill.

Under the Act, violations can carry a fine up to $1,100 per barrel spilled, but because Barbier has ruled it was the result of gross negligence, the fines could be up to $4,300 per barrel, the maximum penalty for gross negligence or willful misconduct.

In the ruling, Barbier wrote that BP made “profit-driven decisions” during the drilling of the well.

“These instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks,” he wrote.

Case No. 14-31374