Trial to Begin for Gulf Oil Spill Litigation
Nearly three years after a deadly rig explosion in the Gulf of Mexico triggered the nation's worst offshore oil spill, a federal judge in New Orleans is set to preside over a high-stakes trial for the raft of litigation spawned by the disaster.
Barring an 11th-hour settlement, U.S. District Judge Carl Barbier will hear several hours of opening statements today by lawyers for the companies involved in the 2010 spill and the plaintiffs who sued them. And the judge, not a jury, ultimately could decide how much more money BP PLC and its partners on the ill-fated drilling project owe for their roles in the environmental catastrophe.
BP has said it already has racked up more than $24 billion in spill-related expenses and has estimated it will pay a total of $42 billion to fully resolve its liability for the disaster that killed 11 workers and spewed millions of gallons of oil.
But the trial attorneys for the federal government and Gulf states and private plaintiffs hope to convince the judge that the company is liable for much more.
With billions of dollars on the line, the companies and their courtroom adversaries have spared no expense in preparing for a trial that could last several months. Hundreds of attorneys have worked on the case, generating roughly 90 million pages of documents, logging nearly 9,000 docket entries and taking more than 300 depositions of witnesses who could testify at trial.
"In terms of sheer dollar amounts and public attention, this is one of the most complex and massive disputes ever faced by the courts," said Fordham Univ. law professor Howard Erichson, an expert in complex litigation.
Barbier has promised he won't let the case drag on for years as has the litigation over the 1989 Exxon Valdez spill, which still hasn't been completely resolved. He encouraged settlement talks that already have resolved billions of dollars in spill-related claims.
"Judge Barbier has managed the case actively and moved it along toward trial pretty quickly," Erichson said.
In December, Barbier gave final approval to a settlement between BP and Plaintiffs' Steering Committee lawyers representing Gulf Coast businesses and residents who claim the spill cost them money. BP estimates it will pay roughly $8.5 billion to resolve tens of thousands of these claims, but the deal doesn't have a cap.
BP resolved a Justice Department criminal probe by agreeing to plead guilty to manslaughter and other charges and pay $4 billion in criminal penalties. Deepwater Horizon rig owner Transocean Ltd. reached a separate settlement with the federal government, pleading guilty to a misdemeanor charge and agreeing to pay $1.4 billion in criminal and civil penalties.
But there's plenty left for the lawyers to argue about at trial, given that the federal government and Gulf states haven't resolved civil claims against the company that could be worth more than $20 billion.
The Justice Department and private plaintiffs' attorneys have said they would prove BP acted with gross negligence before the blowout of its Macondo well on April 20, 2010.
BP's civil penalties would soar if Barbier agrees with that claim.
BP, meanwhile, argues the federal government's estimate of how much oil spewed from the well — more than 200 million gallons — is inflated by at least 20 percent. Clean Water Act penalties are based on how many barrels of oil spilled.
Barbier plans to hold the trial in at least two phases and may issue partial rulings at the end of each. The first phase, which could last three months, is designed to determine what caused the blowout and assign percentages of blame to the companies involved. The second phase will address efforts to stop the flow of oil from the well and aims to determine how much crude spilled into the Gulf.
The trial originally was scheduled to start a year ago, but Barbier postponed it to allow BP to wrap up its settlement with the Plaintiffs' Steering Committee.
Barbier, 68, was nominated by President Bill Clinton and has served on the court since 1998. He had a private law practice, primarily representing small businesses and other plaintiffs in civil cases, and served as president of the New Orleans Bar Association before he joined the bench.
Dane Ciolino, a Loyola Univ. law professor who has represented criminal defendants in Barbier's court, described him as a "no-nonsense" but even-tempered judge.
"He's very good at getting down to the pertinent issues," Ciolino said. "Some judges could be described as impatient, short or gruff. He is none of that."
Despite the bitter disputes at the root of the case, Barbier has maintained a collegial atmosphere at his monthly status conferences with the lawyers, cracking an occasional joke or good-naturedly ribbing attorneys over their college football allegiances.
Cordial with each other in the courtroom, the competing attorneys have saved their harshest rhetoric for court filings or news releases. Despite its settlement with BP last year, the Plaintiffs' Steering Committee attorneys won't be allies at trial with the London-based oil giant. And they still haven't resolved civil claims against Transocean or cement contractor Halliburton.
"These three companies' reckless, greed-driven conduct killed 11 good men, polluted the Gulf for years and left the region's economy in shambles. Any statement to the contrary is self-serving nonsense," Steve Herman, a lead plaintiffs' attorney, said in a recent statement.
A series of government investigations has exhaustively documented the mistakes that led to the blowout, spreading the blame among the companies. Alabama Attorney General Luther Strange said witnesses scheduled to testify at trial will reveal new information about the cause of the disaster.
"I think you're going to learn a lot, particularly about the culture that existed at BP and their priorities," Strange said.