Courtroom showdown starts; BP could pay billions more for Gulf spill
NEW ORLEANS (CNN) — The stage is set for a titanic courtroom showdown here between BP and federal and state governments over whether the oil giant must shell out billions more for the 2010 Gulf oil spill.
Almost three years after the Deepwater Horizon oil rig exploded, killing 11 people and causing one of the worst environmental disasters in U.S. history, BP is fighting to limit the financial penalties it faces while the company’s critics hope to see a landmark punishment.
A civil trial that started Monday and is expected to stretch for months will first focus on the actions that led up to the explosion and then determine the civil financial penalties BP and others must pay.
The oil giant has already pleaded guilty to criminal charges and agreed to a record-setting $4 billion fine for the spill.
That’s only a fraction of what BP owes, according to attorneys representing plaintiffs in the case — a group that includes five Gulf states, individuals, businesses and the federal government.
“Evidence will show BP placed huge financial pressure to cut costs, cut corners, and rush the job,” attorney James P. Roy, who represents the coalition of plaintiffs, said during opening arguments on Monday.
Alabama Attorney General Luther Strange said the oil giant “was blinded by their bottom line.”
“The spill was tragically inevitable due to BP’s corporate culture,” Strange said. “The evidence will show that, at BP, money mattered most.”
Details in the case will be key as the judge weighs whether BP and others were grossly negligent.
That one word — grossly — is worth billions of dollars in the calculation of civil damages under the U.S. Clean Water Act, which could total between $4.5 billion and $17 billion.
If BP is found to be “grossly negligent,” it could be fined as much as $4,300 per barrel of oil spilled into the Gulf of Mexico. If it’s found “negligent,” the company could be fined about $1,100 per barrel.
BP has said it will “vigorously” defend itself against allegations of gross negligence.
“This was a tragic accident, resulting from multiple causes and involving multiple parties. We firmly believe we were not grossly negligent,” Rupert Bondy, group general counsel of BP, said in a written statement.
Attorneys will also likely square off over how much oil gushed into the gulf, another key figure that will be used to calculate how much money BP owes.
Officials have said 4.9 million barrels of oil spilled, while BP says that number is overblown and that authorities should use a maximum figure of 3.1 barrels of oil when calculating the fine.
The trial will also determine what fines the company faces under National Resource Damage Assessment, which aims to restore environmental damage caused by the spill.
Environmental groups want to see those fines — which will put a specific price tag on damage to plants and wildlife — total around $25 billion.
With so much money at stake, each side has brought an army of lawyers to the fight. With almost 60 lawyers filling the courtroom, the judge created a seating chart for all the attorneys.
Lawyers representing the federal government and other plaintiffs sat on one side, while the BP lawyers and other companies’ lawyers sat across the room.
Three overflow courtrooms were also packed on Monday.
Transocean, which owned and operated the Deepwater Horizon rig, and Halliburton, which was contracted by BP to cement the well that was the source of the spill, could also face penalties in the civil trial.
But leading up to the high-profile case, much of the sharp criticism from environmentalists has focused on BP.
“The damage done here is real, both to the environment and to the people,” said Brian Moore of the National Audubon Society. “And BP should not have the chance to get off cheaply on this.”
In his statement before the trial began, Bondy said BP would push for the court to consider lower penalties, arguing that BP made efforts to do the right thing and “immediately stepped up” and acknowledged its role in the spill.
“To date we’ve spent more than $23 billion in response, cleanup, and payments on claims by individuals, businesses, and governments,” he said. “No company has done more, faster, to meet its commitment to economic and environmental restoration efforts in the wake of an industrial accident.”