Expert: Gross or Ordinary Negligence the Central Issue in BP Deepwater Case

The major questions revolve around how much of the blame goes around with BP, Transocean and Halliburton pointing fingers at each other.

Another question: Just how negligent was BP? The answer could mean the difference of $10 billion in damages. The total cost of damages could take years to learn as high rates of carcinogens still remain in the water off the coast and oil still shows up on the shore after major weather events.

Host Carmen Russell-Sluchansky spoke with Loyola University law professor Blaine G. LeCesne to discuss the case.

Download

The BP trial over the 2010 oil spill started today. The oil giant and its co-defendants are facing billions of dollars from lawsuits filed by the Department of Justice, impacted states and additional private plaintiffs.

The major questions revolve around how much of the blame goes around with BP, Transocean and Halliburton pointing fingers at each other.

Another question: Just how negligent was BP? The answer could mean a difference of $10 billion in damages. And what were the total damages, we may have years to wait to see with high rates of carcinogens still being found in the water off the coast and oil still showing up on the shore after major weather events.

To talk about the trial, however, I have on the line Pr. Blaine G. LeCesne. He is the professor of law at Loyola University.

Blaine, thank you so much for coming on the program.

My pleasure!

It is absolutely my pleasure to have you. Very big case, I mean the biggest such case that we have seen in I guess the history of the petroleum industry, right? And this was a massive incident that was on our TVs 24\7 just a few years ago when it was actually happening. Let me ask you, do you get the sense that the trial itself is really indicative, you know, when we are talking about the potential damages, is it indicative of everything that happened back during those fateful days?

Well, yes. The way that the trial is currently structured, it is going to allow the court to determine which of those defendants that you’ve mentioned – the BP, Transocean or Halliburton – actually contributed to the cause of the spill and then apportion fault between them. And those overarching determinations, those findings of facts and conclusions of law will then go into in the course of subsequent proceedings in all of the other cases that have been filed in multidistrict litigation and have been consolidated in the eastern district of Louisiana.

So, this is not a trial in a traditional sense where a court will determine liability and then assess damages, but rather it will determine these preliminary issues regarding the cause of the spill and the apportionment of fault, and whether or not the spill was the result of gross negligence or ordinary negligence, and then those findings will govern the course of subsequent proceedings where damages will be assessed.

Ok, on that, let’s break it down a little bit. BP as I understand, it owned the well, they were in charge basically. The Transocean was operating there, and then Halliburton is involved because apparently they provided the cement that was supposed to be used to seal the… what do you call it, whether they were drilling at the ocean floor there?

Right!

Now, obviously all three are being accused of negligence in this particular case. Is it not the case that, at least that point of fact is foregone to some degree that all are somehow liable?

Potentially all are liable but a reality of a contractual relationship and responsibilities amongst those parties are such that BP had ultimate operational control of the well and was the final arbiter of every major decision. So, even if Transocean and Halliburton as sub-contractors were aware of some of the more risky decision making, ultimately BP had the final say on what would be done and whether further investigation or preemptive measures would be taken.

So, I don’t see that as giving lies to any significant degree of fault on the part of those sub-contractors. And I think that’s reflected in part in the Government’s relatively mild settlement with Transocean on the Clean Water Act fines, I mean it was only $1.4 billion I believe. And in the memorandum in support of that settlement, where they sought the court’s approval, it is pretty clear, both by reason of that relatively low number, as well as some of the statements in that memorandum, that the Government doesn’t believe that Transocean played a primary role in any of the major events that led to the spill.

So, I think BP has an uphill battle with respect to convincing the court to apportion a significant degree of fault on Transocean or Halliburton. And because of a prior ruling in the case even if that happens, the judge has already ruled that BP has to indemnify both Transocean and Halliburton in the event they are held liable for any damage caused by subsurface discharge of the oil, which of course was the majority of the oil that caused the damage in this case.

So, however you look at it, BP is ultimately going to have to pay the tab for the lying share of damages that are assessed, compensatory damages, not punitive damages. But I see a relatively mild potential, at least for Transocean and Halliburton, especially since the two critical decisions implicating those sub-contractors, both of those decisions with respect to Transocean, it was the negative pressure test which indicated that the well was unstable, and of course Transocean was aware of those negative pressure test readings, but they were standing side by side with the BP well site leaders who were also aware. And it was the BP well site leaders who made the final call that no further action was necessary.