BP faces billions in fines as spill trial nears
The huge legal bill for the catastrophic 2010 oil spill in the Gulf of Mexico is coming due for BP as a federal trial opens Monday to determine the company’s liability for the blowout of its Macondo well.
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BP likely will argue that it should be much lower because it has spent billions on cleanup already and provided $1 billion for early ecosystem restoration. It's also likely the company will argue the spill's effects were minimized by the Gulf's warm waters, oil-eating bacteria and other factors.Skip to next paragraph
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The company also likely will argue that the Gulf has been soiled by past spills and natural oil seeps, making it hard to pinpoint what is BP damage and what isn't, said Mark Davis, a Tulane University law professor who specializes in water resources.
State and federal lawyers are likely to argue that the damage was extensive and that the Gulf's marine environment is more varied and rich than even that of Prince William Sound, where the Exxon Valdez went aground.
Beyond that, there are more than 110,000 people and businesses – among them large fishing and hotel operations – who have not settled with BP and have outstanding claims against the company.
Technically, people have until April 20, 2013, to file claims against BP, which committed to pay $20 billion to cover damage claims and so far has spent about $7 billion.
What makes this trial so good for plaintiffs – and a nightmare for BP, Halliburton and Transocean – is that the spill was a chronicle of corporate failures. Federal investigators have concluded cost-cutting by BP and shoddy work by all three companies caused the blowout.
"It's the perfect case for plaintiffs' lawyers," said Blaine LeCesne, a tort law specialist at Loyola University New Orleans who's analyzed the case. "They have everything to gain by going to trial."
While the settlement haggling stretches through the weekend, the hundreds of lawyers who have come to New Orleans are primed for battle.
Garret Graves, an aide to Louisiana Gov. Bobby Jindal and a member of a federal and state council assessing damage from the spill, was adamant that any last-minute settlement in the price range of $20 billion would let BP off too easily.
"We're not going to sell short the citizens and we're not going to let BP walk away," Graves said.
Mike Brock, a BP trial lawyer, said BP was ready to prove "that no single action, person or party was the sole cause of the blowout."
At trial, BP will try to spread blame to the other companies and try to convince the judge that what happened at the Macondo well was an accident, not an act of gross negligence or willful misconduct.
"How culpable was BP? How bad were they? How bad was the violation and how sloppy was their conduct?" said Schaeffer, the former EPA official. "There are risks for both sides, but they are significantly greater for BP. They don't want this potential of billions of dollars hanging over them."