NEW ORLEANS -- BP Plc acted with gross negligence in setting off the biggest offshore oil spill in U.S. history, a federal judge ruled Thursday, handing down a long-awaited decision that may force the energy company to pay billions of dollars more for the 2010 Gulf of Mexico disaster.
U.S. District Judge Carl Barbier held a trial without a jury over who was at fault for the environmental catastrophe, which killed 11 people and spewed oil for almost three months into waters that touch the shores of five states, according to a Bloomberg report. The case also included Transocean Ltd. and Halliburton Co., though the judge didn’t find them as responsible for the spill as BP.
“BP’s conduct was reckless,” Barbier wrote in a decision in New Orleans federal court. “Transocean’s conduct was negligent. Halliburton’s conduct was negligent.”
Barbier apportioned fault at 67% for BP, 30% for Transocean and 3% for Halliburton.
BP, which may face fines of as much as $18 billion, has set aside $3.5 billion to cover those penalties, according to the report. The company had taken a $43 billion charge to cover all the costs related to the spill, according to a July 29 earnings statement. The ultimate cost is “subject to significant uncertainty,” BP said.
Barbier has yet to rule on how much oil was spilled, a key factor in determining the extent of BP’s liability.
The decision nevertheless may expose BP to unspecified punitive damages for claimants who weren’t part of the $9.2-billion settlement the company reached with most nongovernment plaintiffs in 2012. The judge left that unclear in his ruling.
In response, BP said it “strongly disagrees” with the decision and will immediately appeal to the United States Court of Appeals for the Fifth Circuit.
“BP believes that the finding that it was grossly negligent with respect to the accident and that its activities at the Macondo well amounted to willful misconduct is not supported by the evidence at trial,” BP said. “The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court.”
The District Court will hold additional proceedings, which are scheduled to begin in January 2015, to consider the application of statutory penalty factors in assessing a per-barrel Clean Water Act penalty. The Clean Water Act requires the District Court to consider a number of factors in determining an appropriate penalty. The statutory maximum penalty is $1,100 per barrel where the court finds simple negligence and $4,300 per barrel where the court finds gross negligence or willful misconduct.
“During the penalty proceedings, BP will seek to show that its conduct merits a penalty that is less than the applicable maximum after application of the statutory factors,” BP said.
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