BP & The Trial of the Century
Air Date: Week of February 10, 2012
The BP trial will determine who's at fault for the Deepwater Oil disaster, and what share of damages each of the companies should pay to the hundreds of injured parties. (Photo: U.S. Coast Guard)
The most complicated environmental trial in history is about to get underway to determine who’s at fault in the Deepwater Horizon oil disaster. Host Bruce Gellerman talks with Martin Davies, maritime law professor and director of the Maritime Law Center at Tulane University, about the trials and tribulations of the BP lawsuit.
GELLERMAN: From the Jennifer and Ted Stanley Studios in Somerville, MA, it’s Living on Earth, I’m Bruce Gellerman. The most complex and quite possibly most costly environmental trial in history is set to start later this month, in a federal court in New Orleans, when the BP Deepwater Horizon case goes before Judge Carl Barbier.
It's been almost two years since 11 workers died in the oil drilling disaster in the Gulf of Mexico. Nearly five million barrels of crude gushed into the sea before the well was capped three months later. BP set up a 20 billion dollar fund for damages; so far it's paid out nearly eight billion, almost exactly what the company declared in profits just last quarter.
The upcoming trial combines hundreds of individual lawsuits, along with federal, state and local government cases, a lot of companies, and 72 million pages of documents.
Professor Martin Davies is director of the Maritime Law Center at Tulane University in New Orleans. He says Judge Barbier has his work cut out for him.
DAVIES: He has a lot of people working for him. A lot of the court's documents, not just in this case but in all federal cases now, are highly automated - there’s a lot of electronic filing. I must say, though, that Judge Barbier has done a remarkable job getting this case on to trial as quickly as he has.
GELLERMAN: Well, it may never get off the ground, there’s speculation by some analysts that BP is going to settle before it ever gets to court.
DAVIES: Yes, I’ve heard that. I’m a little skeptical about that. There are an awful lot of people that they’re going to have to settle with, and if any of them are left standing, the case will go ahead. There may be individual settlements, there have been settlements all along, but a global settlement that sends the whole thing away? I would be surprised, but it’s not impossible.
GELLERMAN: So, in this case, if it does go forward, do they determine who’s at fault and who’s to blame or is it all BP’s fault at this point?
DAVIES: No, in fact, the principal purpose of this trial is to work out who’s to blame. The responsibility of Cameron, and Halliburton and Transocean….
GELLERMAN: So, Transocean, they own the rig. Halliburton, they did the actual drilling. Cameron, what did they do?
DAVIES: Cameron made the blow-out preventer. Um…
GELLERMAN: And that’s the one that failed?
DAVIES: Yes, that didn’t prevent the blow-out. So all of these cases - he’s hearing all of these cases together to allocate responsibility between the defendants, so that it can be determined which of the other defendants, other than BP, has to pay what.
GELLERMAN: So, you had 4.95 million barrels of oil, a huge amount of oil, I guess that’s 20 times more oil than the Exxon Valdez spill.
DAVIES: Yes. An awful lot, it lasted for a long time.
GELLERMAN: But, I understand that one of the goals of this trial is actually to determine exactly how much, because if you can figure out how much oil was spilled then you can determine if there’s any penalties, how much BP has got to pay.
DAVIES: Correct. That will be the second phase of the trial. Judge Barbier has issued a pre-trial order describing the order in which he’s going to hear all of these things. The second is what he’s called the source control phase, which is where he’s going to try and work out exactly how much oil was released into the Gulf of Mexico. What he’s not going to do in this trial is work out any of the damages, what people are entitled to recover, he’s just doing responsibility.
GELLERMAN: Who does the penalty and who does the damages? I guess the penalties under the Clean Water Act could be from 11 hundred dollars to 43 hundred dollars a barrel!
DAVIES: Right. He’s not going to get on to any of that until he’s worked out who’s responsible and how much oil. So, that’s just not being done in any part of this probably yearlong trial, he’ll get to that later.
GELLERMAN: Is a trial like this high drama, or is it a little bit like watching a glacier melt?
DAVIES: (Laughs.) It will be a little bit of both. There will be moments of high drama. But, a lot of it, a LOT of it, will be rather tedious, going through millions of documents, establishing what happened in fairly minute detail, it will be pretty slow going for much of the time.
GELLERMAN: You know, it’s interesting: BP paid out, so far, about 7.8 billion dollars in claims; they had set up a fund of 20 billion dollars. How does that settlement, or that amount of money affect the claims in this lawsuit?
DAVIES: Well, it doesn't really affect them at all other than that it reduces the amount in the fund that’s available to the plaintiffs remaining in this lawsuit. That 20 billion dollars was put in trust to secure all of the claims against BP.
GELLERMAN: So at the end of the day, the end of the trial, the end of the settlement, what ultimately could BP’s cost of this disaster be?
DAVIES: Oh. That’s very hard to estimate, very hard to estimate. In fact, so hard to estimate, I wouldn’t like to try. It will be billions more, though.
GELLERMAN: Now, BP has gone back to drilling in the Gulf of Mexico. They’ve sued, you know, their partners Halliburton, Transocean and Cameron, but they’ve got to work together in the future, right?
DAVIES: Correct, yes. There isn’t always bad blood in litigation. There’s a lot of statements made by the attorneys about the responsibilities of the other parties, but that’s for, well, not just for effect, it’s just sort of positioning you to make a legal argument. It doesn’t necessarily mean that they can’t work together in the future.
GELLERMAN: So, I want to ask you: if you were defending BP, you were their lead attorney, would you tell them to settle or would you tell them to go to court and take their chances?
DAVIES: Um, I think any attorney, on any side, is always looking to try and find a settlement. Most people prefer settlement because they are risk-adverse. You find a number that you are happy with living with, in order to make the thing go away. So I would be looking for settlement. Over 90 percent of civil suits brought settle. The difficulty in this case would be, as I said before, settling with everybody.
I have no doubt that BP will survive and thrive. BP has enormous amount of money and will be able to survive this quite comfortably. In some ways, it’s fortunate that it’s a company like BP who will be able to compensate all the claimants, and has from the very beginning, declared that it will do so to the extent of its liability. They had at least, in theory, the right to limit their liability under the Oil Pollution Act to 75 million dollars. And never for a moment did they suggest that they would try to invoke their right to limit. Now they are, understandably, they are trying to point the finger at other people, such as Halliburton and Cameron, but they will pay.
GELLERMAN: Martin Davies is professor of Maritime Law, and director of the Maritime Law Center at Tulane University. Professor Davies, thanks so much!
DAVIES: My pleasure!
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