Plaintiffs ask judge to impose punitive damages over spill

Plaintiffs claiming harm from the 2010 Gulf of Mexico oil spill pressed a judge Friday to hammer BP, Transocean and Halliburton with punitive damages, insisting that overwhelming evidence shows the companies willfully disregarded the environment and worker safety.

Two months after the end of the first phase of a trial aimed at assigning blame for the blowout of BP’s Macondo well, explosion on the Deepwater Horizon drilling rig and deaths of 11 workers, parties were filing closing arguments in writing under a deadline imposed by U.S. District Judge Carl Barbier of New Orleans.

“BP has characterized the Macondo deep-water drilling operation as a project on the order of exploring in outer space,” plaintiffs’ lawyers said. “When BP or Transocean, and even Halliburton, entrusted critical decisions to low-level, unsupervised or untrained personnel in a project of such inherent magnitude and risk, such delegation was in and of itself willful and reckless.”

The Justice Department, on behalf of the U.S. government, joined the chorus seeking punitive damages against the companies. The government cited, in part, BP’s “dysfunctional management” of the well that blew out and noted an email from a team leader that used words including “paranoia, chaos and insanity” in talking about the project.

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The defendant companies also were filing their proposed findings of fact and conclusions of law.

BP countered in its filing that the evidence shows the disaster resulted from a series of mistakes by multiple parties, not gross negligence by BP. It said it has already paid a heavy price for its responsibility.

“Nonetheless, the government and plaintiffs still are not satisfied,” BP said. “They now ask this
court to subject BP to treble fines under the Clean Water Act and punitive damages under maritime law. This court should deny that request.”

Transocean said in its filing the issue is not whether there were errors.

“Transocean has conceded errors, as have the other defendants,” the company’s said. “The question before the court is whether the errors of the Transocean crew grew out of conscious disregard for duty or safety. That question is not close. The drill crew was not cavalier or reckless about safety.”

Halliburton said BP bears ultimate responsibility for the disaster. “There is no evidence or no legally sufficient evidence to support the required elements of the claims of gross negligence and/or willful misconduct asserted against Halliburton,” the company said in its filing.

The parties will have 20 days to file replies to the flurry of arguments. Then it will be up to Barbier to determine whether the companies were grossly negligent. Billions of dollars are at stake in the outcome.

Barbier could issue a decision quickly, though it also is possible he will wait until after the second phase of the trial, which is set to begin in September and is meant to address the amount of oil that spilled. Barbier’s decision on that issue could trigger billions of dollars more in penalties against BP, as operator of the well, under the Clean Water Act.

Despite on-and-off talks involving some of the parties, there is no indication a settlement will come anytime soon.

BP  already has settled its criminal penalties with the federal government and reached a multibillion dollar civil settlement with thousands of plaintiffs harmed by the spill. But thousands of others opted out and chose to proceed with their civil claims in court. Transocean settled the bulk of its civil claims with the government, but it still faces exposure from individuals and businesses and Gulf states harmed by the spill. Halliburton has not reached any settlements.

London-based BP owned the undersea well that blew out off the coast of Louisiana, triggering the deadly explosion on the Transocean-owned Deepwater Horizon rig. Millions of gallons of oil spewed into the sea for nearly three months before the well was capped. Halliburton supplied the cement that failed to stop oil and gas from flowing up the well.

The closing arguments focused on many of the witnesses who testified during the eight weeks of phase one of the trial.

The state of Alabama said in its filing that “punitive liability boils down to whether the corporation itself can be considered the wrongdoer.” The state’s attorneys suggested the evidence is clear for gross negligence by  BP, Transocean and Halliburton.

The companies, as they have many times over the last three years, were expected to blame each other and argue that any negligence on their part did not rise to the level of gross negligence. Two other companies involved in the Deepwater Horizon rig and Macondo well project, blowout preventer maker Cameron and well fluid provider M-I Swaco, have  been cleared of gross negligence accusations.

Transocean is seeking to limit its liability to the value of the rig that exploded and sank. That would be about $700 million.

BP  already has paid out $25 billion on cleanup costs and compensating victims. It is seeking to limit further exposure from the already costly disaster. Halliburton has remained relatively unscathed in terms of costs associated with the spill, but that could change in a big way with the outcome of the trial.