Gambles in spill case move closer to resolution

NEW ORLEANS — The three main companies linked to the deadly rig blast and massive oil spill in the Gulf of Mexico in 2010 rolled the dice when they went to trial rather than settle a web of civil suits and claims over the disaster.

The dice are still in play, but the potentially costly gamble moved a step closer to resolution Wednesday when a federal judge concluded the first phase of a complex trial over the 2010 disaster.

U.S. District Judge Carl Barbier hasn’t said when he will decide whether BP, Transocean and Halliburton were grossly negligent – a finding that could subject the companies to billions of dollars in punitive damages.

That was a key issue in the first phase of the trial, along with the question of how the court should apportion blame for the disaster among the three companies.

Barbier gave the lawyers nearly three months to file written conclusions and reply briefs. That cushion could lure the parties back to the table to negotiate a deal, though attorneys involved in the case tell the Houston Chronicle there is no evidence that is happening at the moment.

In the meantime, Barbier could rule on matters that would play into his decision, including a request by BP for sanctions against Halliburton for not turning over for nearly three years samples of cement that may have been used on the blown-out Macondo well.

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Barbier also could decide on Transocean’s request to limit its liability to the value of the Deepwater Horizon rig that exploded and sank. That would be about $700 million.

Blaine LeCesne, a law professor at Loyola University in New Orleans who has followed the case, said he has no doubt the companies will make another go at a settlement. There’s too much at risk not to, he said.

“Now would be the perfect time,” LeCesne said. “Once the determinations are issued by the court, that alters the landscape considerably and the opportunity to settle is much less likely, especially if you are on the losing end of those determinations.”

He added, “Each side is going to weigh its chances now that they have seen the other side’s case.”

Either way

David Uhlmann, a former federal prosecutor who has followed the case and is now a law professor at the University of Michigan, said the judge’s decision could go either way.

“The best time to settle the case would have been before the trial, but all incentives for settling the case in February remain present today,” Uhlmann said. “The trial has moved closer to a decision on the gross negligence question, but it hasn’t reduced the risk for either side.”

Phase two of the trial, which will address the amount of oil that spilled, is to begin in September.

BP struck a confident tone in a statement Thursday by spokesman Geoff Morrell.

“While the final decision rests with the court, we believe that the evidence and testimony presented at trial confirm that BP was not grossly negligent,” the statement said. “The trial record shows that BP was safety-minded and exercised sound engineering judgment.”

BP also said, as it did numerous times during the eight weeks of testimony in the first phase of the trial, that it believes the disaster resulted from multiple actions by multiple companies that should share responsibility for what happened.

But LeCesne said that argument only goes so far, since it was BP’s well that blew out and it was BP that was leasing the rig that exploded. BP also made key decisions about the cement in its well.

A key admission

BP also admitted in a plea agreement with the federal government to resolve criminal charges that it lied about the amount of oil that was flowing from its well in the weeks after the blowout. That admission could weigh into the trial’s second phase, when the British oil giant is expected to argue that government calculations overstate the amount spilled.

Halliburton lawyer Don Godwin declined to comment Thursday. A Transocean spokesman did not respond to a request for comment.

Timeline: The Gulf oil spill’s legal war

Plaintiffs’ attorney Steve Herman said he believes his team presented overwhelming evidence of gross negligence by all three companies.

“Interestingly, it was the companies’ own employees that made some of the most damning statements at trial. There is more than enough blame to go around for this tragedy,” Herman said in a statement Thursday.

Much of the focus has been on BP since its Macondo well blew out 50 miles off Louisiana, triggering an explosion on Transocean’s Deepwater Horizon that killed 11 workers. Halliburton provided the cement used to plug the well.

Saturday is the three-year anniversary of the disaster.

Added scrutiny

Testimony during the eight-week trial, however, put Halliburton and Transocean under the microscope more than they have been at any time since the blowout.

In particular, Halliburton acknowledged not turning over cement samples that plaintiffs argue should have been available more than two years ago, and a worker admitted he was instructed to destroy records of cement testing he did after the accident.

And a maritime expert testifying for BP as the first phase wound down Wednesday created uneasy moments for Transocean.

The drilling contractor’s lawyer, Brad Brian, was unable to shake the expert, Andrew Mitchell, from his assertion that the captain of Transocean’s rig made critical mistakes after it became clear the well was out of control, mistakes the witness argued exacerbated the situation.

At one point, Brian suggested the captain was heroic for cutting free a lifeboat that was stuck after he jumped into the ocean from the rig while it was on fire.

“In my opinion, if he did the job in the first place, he wouldn’t have been in the water with a knife,” Mitchell said.

Read ongoing FuelFix coverage of the legal trials surrounding the Gulf of Mexico oil spill: