Billions at stake for BP as trial into 2010 Gulf oil spill opens
Published Monday, February 25, 2013 10:52AM EST
Last Updated Monday, February 25, 2013 10:52PM EST
NEW ORLEANS -- With billions of dollars at stake, a trial to figure out how much more BP and other companies should pay for the nation's worst offshore oil spill began Monday with the federal government saying the oil giant put profits ahead of safety and deserves most of the blame for the 2010 disaster in the Gulf.
Justice Department attorney Mike Underhill said the catastrophe resulted from the London-based company's "culture of corporate recklessness."
"The evidence will show that BP put profits before people, profits before safety and profits before the environment," Underhill said in opening statements at the civil trial. He added: "Despite BP's attempts to shift the blame to other parties, by far the primary fault for this disaster belongs to BP."
BP planned to outline its case later in the day.
Eleven workers were killed when a drilling rig leased by the oil company exploded on April 20, 2010, and millions of gallons of crude spilled into the Gulf of Mexico.
BP has already pleaded guilty to manslaughter and other criminal charges and has racked up more than $24 billion in spill-related expenses, including compensation for businesses and individuals, cleanup costs and $4 billion in criminal penalties.
But the federal government, Gulf Coast states and individuals and businesses hope to convince a judge that the company and its partners in the ill-fated drilling project are liable for much more in civil damages under the federal Clean Water Act and other environmental regulations.
U.S. District Judge Carl Barbier is hearing the case without a jury and -- barring a settlement -- will decide months from now how much more money BP and the other companies must pay.
The trial began after attempts to reach an 11th-hour settlement failed. Disagreements have emerged not only between BP and the plaintiffs, but among the affected Gulf states themselves.
During opening statements, attorney Jim Roy, who represents individuals and businesses hurt by the spill, said BP executives applied "huge financial pressure" to "cut costs and rush the job." The project was more than $50 million over budget and behind schedule at the time of the blowout, Roy said.
"BP repeatedly chose speed over safety," Roy said, quoting from a report by an expert who may testify.
Roy said the spill also resulted from rig owner Transocean's "woeful" safety culture. He said the owner of the Deepwater Horizon drilling rig failed to properly train its crew. Roy also said Halliburton, which designed the cement barrier that was supposed to prevent oil and gas from flowing up the well, deserved some of the blame for providing BP with a product that was "poorly designed, not properly tested and was unstable."
BP's partners in the drilling project pointed the finger at the oil company and at each other.
Brad Brian, a lawyer for Transocean, said the company had an experienced, well-trained crew on the rig. He said the Transocean workers' worst mistake may have been placing too much trust in the BP supervisors on the rig.
"And they paid for that trust with their lives," Brian said. "They died not because they weren't trained properly. They died because critical information was withheld from them."
A lawyer for Halliburton defended the company's work and tried to pin the blame on BP and Transocean.
"If BP had shut in the well, we would not be here today," Halliburton lawyer Donald Godwin said.
Underhill, the Justice Department attorney, heaped blame on BP for cost-cutting decisions made in the months and weeks leading up the disaster. He said two BP rig supervisors, Robert Kaluza and Donald Vidrine, disregarded abnormally high pressure readings that should have been glaring indications of trouble.
Kaluza and Vidrine have been indicted on federal manslaughter charges.
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 from 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 University law professor Howard Erichson, an expert in complex litigation.
One of the biggest questions facing the judge is whether BP acted with gross negligence.
Under the Clean Water Act, a polluter can be forced to pay a minimum of $1,100 per barrel of spilled oil; the fines nearly quadruple to about $4,300 a barrel for companies found grossly negligent, meaning BP could be on the hook for nearly $18 billion.
The judge plans to hold the trial in at least two phases. 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 try to determine how much crude spilled into the Gulf.
BP argues the government's estimate of how much oil spewed from the well -- more than 200 million gallons -- is inflated by at least 20 per cent.
The spill fouled marshes, killed wildlife and closed vast areas to fishing. Scientists warn that the disaster's full effect on the Gulf food chain may not be known for years. But they have reported dying coral reefs and fish afflicted with lesions and illnesses that might be oil-related.