One word in spill case could mean billions

As BP and others involved in the 2010 Gulf of Mexico oil spill negotiate possible settlements ahead of a now-delayed trial, billions of dollars in fines and damages could ride on the legal issue of whether BP and other companies acted with gross negligence.

Litigation before U.S. District Judge Carl Barbier of New Orleans combines civil complaints by individuals, companies and governments, and cross-claims among defendants. It was set to go to trial last Monday, but Barbier postponed the trial indefinitely so that other parties could adjust their legal plans after BP settled March 2 with a committee representing plaintiffs.

That settlement didn’t resolve complaints by federal and state governments, and those are the ones most tied to the issue of negligence versus gross negligence.

Legal experts say the government and other plaintiffs probably will be able to prove negligence in the April 20, 2010, blowout of BP’s Macondo well, which triggered the explosion of the Deepwater Horizon drilling rig, killed 11 workers and spilled millions of barrels of crude oil into the Gulf.

Investigations concluded that multiple decisions, including design of the well, the way it was cemented and interpretation of pressure tests, all may have contributed to the blowout.

Difficult to prove

But the burden of proof is much higher for gross negligence – defined as substantial deviation from reasonable care – and there isn’t a lot of case law to guide Barbier, should the issue reach trial, or the parties as they try to settle.

The federal government has made it clear through its court pleadings that it will seek findings of gross negligence against BP and Transocean.

BP, which owned the well, and Transocean, which owned and operated the Deepwater Horizon, deny gross negligence.

Under the federal Clean Water Act, a finding of gross negligence would nearly quadruple the maximum fine per barrel spilled, from $1,100 to $4,300. The government has estimated almost 5 million barrels – 210 million gallons – gushed out before the well was capped nearly three months after the blowout.

David Uhlmann, a University of Michigan law professor and former federal prosecutor who has closely followed the case, said the gross negligence theory might be easier to prove if individual acts of negligence are aggregated to make a case for overall gross negligence.

“It will be difficult for the Justice Department to identify a single act by BP or Transocean that rose to the level of gross negligence,” Uhlmann said.

In an upcoming article for the Michigan State Law Review, Blaine LeCesne, a torts law professor at Loyola University who is following the case closely, argues that rather than focus on the intent behind individual acts, the government should focus on the environment in which those acts took place.

The accumulated acts might rise to gross negligence in an environment with an unusually high degree of potential harm, a general awareness of the danger involved and conduct motivated by strategic financial concerns, LeCesne said.

Exxon Valdez

The most closely related case parties might look to for legal precedent involves 1989’s Exxon Valdez spill. An appeals court upheld a jury decision that the spill resulted from gross negligence because the captain was drunk and asleep when the tanker struck a reef and spilled crude into Alaska’s Prince William Sound.

Given those facts, the court apparently saw no need to define gross negligence in detail.

The Deepwater Horizon accident is more complicated and ambiguous, with multiple players and series of events that may have led to the accident.

“Gross negligence has never played so pivotal a role in a case of this magnitude with these characteristics,” LeCesne said. “Determining gross negligence among multiple contractors with overlapping responsibilities would be exceedingly difficult using the existing muddled definitions of that term.”

Complicating the discussion even more is that a finding of gross negligence could raise the issue of whether government regulators were lax in their oversight.

“One question that surrounds the case is whether BP misled the government,” Uhlmann said. “Much of what BP and the other companies did in the drilling of the Macondo well was approved by federal regulators. In considering whether BP and Transocean were grossly negligent, the court has to consider the extent to which the companies conferred with and obtained approval from the federal government.”