Sunday, February 26, 2012

A "multi-decade history of organisational malfunction and short-sightedness"

I think it would be fair to say that BP and the U.S. federal justice system will both be on trial starting on Monday. (GW)

Deepwater Horizon victims ready for epic court battle with BP

Trial to establish cause and fault for the worst oil spill in US history is set to begin in New Orleans federal court on Monday

By Suzanne Goldenberg

24 February 2012 15.37 EST

After thousands of hours of legal deliberations, the accumulation of 72m pages of documents and the recorded testimony of 303 witnesses, it will fall to an engineering expert who blamed the Gulf of Mexico oil disaster on a "multi-decade history of organisational malfunction and short-sightedness" to frame the case against BP.

The civil trial, which opens before Judge Carl Barbier in a federal court in New Orleans on Monday, is expected to be epic by any definition, unmatched in scale or legal complexity.

But there will be a crucial role for Robert Bea, a professor from the University of California at Berkeley who has spent half a century investigating industrial accidents, to establish the case against BP.

Lawyers familiar with the case said Bea would be called as first witness, after opening statements. Documents filed with the court had initially indicated the first witnesses would be BP executives, and the oil company sought to restrict Bea's testimony in motions filed last month, a common manoeuvre.

Now it emerges Bea will be the first on the stand to establish the causes – and fault – for the worst oil spill in America's history.

His testimony will sound familiar to BP and its partners on the Macondo well. As a consult to the White House commission investigating the 20 April 2010 explosion of the Deepwater Horizon oil rig, Bea produced four reports faulting BP and its partners on the doomed well for having a cavalier attitude towards safety. The reports also said the 20 April 2010 disaster was preventable.

With Bea's testimony, lawyers for some 130,000 plaintiffs hope to make the case that BP and its partners were grossly negligent in the explosion on the Deepwater Horizon.

Eleven men were killed outright, and by the time crew regained control of the well, 87 days later, 4.1m barrels of oil had spewed into the Gulf of Mexico.

Enterprises from shrimp boats to time-share condos were facing ruin. Clean-up crews reported mysterious coughs and rashes. The full extent of damage to the Gulf ecosystem, to the tuna, dolphins and oysters encountered hydrocarbons, and to the fragile wetlands where some of the oil washed up remains unclear.

The trial getting underway in a New Orleans courtroom on Monday morning could cost BP and its partners in the doomed well up to $40bn in damages and penalties. BP has already paid out nearly $7bn to thousands of spill victims. It has also settled with families of most of the 11 men who were killed on the rig.

There are a staggering array of actors: nearly 130,000 individuals who suffered losses in the spill, the federal government, and the governments of Louisiana and Alabama against BP and five other companies.

There are 340 lawyers from 90 different firms working on the plaintiffs' side alone.

Then there are the disputes between the companies. BP, which owned the well; Transocean, which owned the rig; and Halliburton, which cemented the well, are all fighting with one another over how to apportion blame.

And there is the action behind the scenes. As the court date approaches, there has been intense speculation BP would reach a deal with the justice department. BP could face penalties of about $17bn under the Clean Water Act, if it is found guilty of gross negligence.

The speculation increased after the federal government reached a deal with Moex Offshore LLC. The company, which had a 10% share in the BP well, agreed to pay $90m for penalties and clean-up costs.

BP might also want to avoid reliving the oil disaster through coverage of the trial. The oil company has been ramping up its television advertisements in the Gulf over the last few months.

But Ed Sherman, a law professor at Tulane University who has been following the case, said he thought it unlikely BP would reach a deal with all parties, and that he was confident the trial would start as scheduled. "I would be surprised if they do get a global settlement in time," he said.

"BP has not been willing to settle I guess because the price is too high. They would hope in the first weeks or maybe months of the hearing that the evidence would swing in their favour so that they can get a better deal on settling. Or if it goes to Judge Barbier that Judge Barbier will be more lenient with them."

Barbier has allotted nearly seven hours just to hear opening arguments, all on the opening day of trial. He has structured the trial as three distinct phases, and would like to wrap everything up by autumn.

After Bea's appearance, the next witnesses are expected to be Lamar McKay, the chairman and president of BP America, and Mark Bly, BP's executive vice-president for safety, according to court documents.

The first phase, which is expected to last through May, can be distilled into a couple of questions: what caused the blow-out, and who is to blame? Was there gross negligence?

The trial will then examine the efforts to cap the well. How much oil was released into the Gulf, and why did it take so long to stop it? Who is responsible? Was there gross negligence?

Finally, the trial will look at the environmental impacts: where did the oil end up, and what damage did it cause?

Some of the key figures in the tragedy will not appear in court after BP and others filed a series of motions to limit or entirely block testimony. The testimony to Congress by former BP chief executive Tony Hayward will be excluded from the trial.

Transocean's chief executive, Steven Newman, will also not be appearing.

Another key potential witness, Donald Vidrine, who was the BP site leader on the Deepwater Horizon, has refused to testify on medical grounds.

The results of government investigations into the fatal explosion at BP's Texas City refinery in 2005 have also been excluded as having the findings of the commission appointed by Barack Obama to study the oil spill.

But after half a dozen investigations into the oil disaster, the trial could still produce new information.

That could play a key role in determining America's future energy policy, in the Gulf as well as the Arctic – as well as BP's future. "It's in the public interest to have the trial go on and to get all the facts out," said David Pettit, senior attorney at the Natural Resources Defense Council. "The oil spill commission did not have subpoena power. I expect to see a lot more data to come out in trial than we have ever seen before."


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