The much anticipated BP trial began Feb. 25 in New Orleans. British Petroleum faces billions of dollars in civil claims resulting from the 2010 oil spill in the Gulf of Mexico.
Alabama will reap a bonanza, which will go primarily to our beleaguered General Fund. To his credit, Attorney General Luther Strange has taken the helm of the legal battle rather than farming it out to expensive trial lawyers or political cronies as has been done by past AGs.
The spill destroyed Alabama’s entire 2010 tourist season and devastated our significant seafood and fishing industries. Gov. Robert Bentley said, “We just want to make sure we get our fair share.” Bentley further states, “We had more economic damage than probably any state because of the loss of all the tourism we had in 2010. So it’s very important that the people of Alabama are compensated for the losses related to the oil spill.”
Indeed the catastrophe, which killed people on the Deepwater rig and sent millions of gallons of oil streaming into the Gulf, deprived Alabama of millions of dollars in tax revenue.
The case is not being decided by a jury. It is a bench trial presided over by Louisiana U.S. District Judge Carl Barbier. This favors BP. Although Strange did a good job in his opening arguments, BP won a key victory early when Barbier ruled that the oil company should not have to pay damages on oil recovered from the oil site. That automatically reduces BP’s exposure by about $3.5 billion.
In addition, a finding of gross negligence is necessary to reach the maximum civil fine of $17 billion. Gross negligence is a very high bar to meet. BP is hanging its hat on the judge ruling that its actions did not meet that standard. Their argument is that “This was a tragic accident. However, we firmly believe we were not grossly negligent.”
This argument would not fly with a jury made up of Louisianans or Alabamians. The sky would be the limit. However, the decision will be made by a respected federal judge, who will adhere to the rule of law.
Private plaintiff attorneys and U.S. Justice Department attorneys are hammering the British oil company with the consistent argument that they put profits over safety. It was anticipated in some corners that BP would settle the case prior to going to trial but according to Strange nothing has come out of the negotiations that would indicate that BP is ready for a deal.
Most legal experts are surprised that BP has not settled even as the case evolves in its favor. Even though it is a bench trial and the “gross negligence” bar is high, the experts believe the risk of the judge ruling that gross negligence has occurred would be catastrophic for BP. In that case, BP’s offer of $16 billion would be paltry.
BP has already been forced to pay a $4 billion criminal settlement in the Deepwater
Horizon spill. This penalty was assessed due to negligence in the deaths of 11 rig workers. This $4 billion criminal fine is the largest in U.S. history. Alabama will receive $335 million from the criminal settlement. Our share is equal to the amounts appropriated to Mississippi and Florida. Louisiana will get $1.2 billion and Texas will receive $192 million.
In addition to this $4 billion manslaughter criminal penalty, BP has racked up more than $24 billion in spill-related expenses. There are thousands of private suits not counting this current major civil trial in New Orleans. This is without a doubt the biggest environmental case in U.S. history. BP and its drilling partners are going to pay billions.
Although most experts believe the bench trial favors BP, Alabama’s veteran leading plaintiff attorney, Jere Beasley, says there is an upside to a bench trial. “The big difference is you only have to prove your case to one person instead of 12 so you can focus on him. The other way, if you miss one juror, you are in big trouble.” We will see.
See you next week.