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BP, contractors start trial for worst U.S. offshore oil spill

The long-awaited trial of BP for the biggest U.S. offshore oil spill began on Monday, with governments, businesses and individuals blaming the company for the 2010 disaster that killed 11 rig workers and spilled 4 million barrels of oil into the Gulf of Mexico.

"The primary fault for this disaster lies with BP," Assistant U.S. Attorney Mike Underhill said at the start of the trial over legal culpability for the Deepwater Horizon spill. The trial at the federal district court in New Orleans will be overseen by Judge Carl Barbier with no jury.

Lawyers for other plaintiffs also slammed executives for BP Plc, as did attorneys for two of BP's main co-defendants. BP's lawyer was responding on Monday afternoon.

BP must show its mistakes do not meet the legal definition of gross negligence required for the highest amount of damages. BP has already spent or committed $37 billion on cleanup, payouts, settlements and fines.

Beyond that, potential liabilities stretch into the tens of billions of dollars if Barbier determines BP or the other defendants were grossly negligent. Oil came ashore from Texas to Florida, threatening livelihoods and state economies dependent on seafood and tourism, so the list of plaintiffs is long.

Most observers still expect the case to be settled before the trial results in a verdict.

Underhill said that less than an hour before BP's long-troublesome Macondo well ruptured and caused an explosion, BP's top well site leader on the rig called an engineer in Houston to discuss a critical pressure test that indicated problems.

Company officials did not stop the operation and "11 souls had 47 minutes to live the rest of their lives," Underhill said in his opening arguments after a weekend of talks produced no last-minute settlement.

Underhill said the accident could have been avoided if onshore engineer Mark Hafle and well site leader Don Vidrine on the rig had done their jobs. Vidrine also faces criminal charges in the disaster, as does Robert Kaluza, the other highest-ranking supervisor aboard the rig before the disaster.

Jim Roy, an attorney for other plaintiffs suing well owner BP Plc, rig owner Transocean Ltd, cement services provider Halliburton Co and others, said BP executives at the highest level felt pressure to push output to the limit.

"Production over protection. Profits over safety," said Roy, who represents plaintiffs who did not take part in an $8.5 billion settlement BP struck last year.

Roy also said Transocean opened the door to disaster with poor staff training and poor maintenance of seabed equipment, while Halliburton made substandard cement to plug the well.

Transocean's lawyer, Brad Brian, also came out swinging against BP, saying rig workers trusted the oil company and died betrayed.

Brian said the inaction following the phone call showed Hafle and Vidrine did what they and others at BP had been doing for two months in the face of a risky well: "They did nothing."

He said Hafle spoke for eight minutes with Vidrine, discussed drillpipe pressure and improper alignment of a critical hose, hung up, "and then stayed safely onshore."

Brian noted they made these decisions despite the fact that BP employees called Macondo the "well from Hell" in emails.

Halliburton's lawyer, Don Godwin, made similar arguments about BP but also said Transocean's rig crew should have shut in the well at the first sign of trouble.

"Now is when they want to pass the buck and blame my client for their misdeeds," he said.

Assessing Blame

Barbier, the judge overseeing the trial, has deep roots in the Gulf Coast. Born in New Orleans in 1944, he attended Southeastern Louisiana University and Loyola University New Orleans School of Law. He was a lawyer in private practice for many years in New Orleans before President Bill Clinton tapped him for the federal bench in 1998.

The judge, who has also handled several high-profile cases stemming from Hurricane Katrina, postponed the trial date by more than a month. An army of media have descended on New Orleans to cover the trial, and the delay avoided a clash with the NFL Super Bowl in New Orleans on February 3 or the city's Mardi Gras festival on February 12.

The fact that the case has not yet settled surprises many. "I never thought that they intended to try this case and really cannot afford to do so because the exposure is too potentially catastrophic," said Blaine LeCesne, a professor at Loyola University College of Law in New Orleans.

The trial's first phase focuses on how much each company is to blame and the degree of negligence. Luther Strange, Alabama's attorney general, said he would seek to show all three companies had acted with "gross negligence and willful misconduct."

"We will ask the court at the end of this trial to rule that all three - BP, Transocean, and Halliburton - are liable for punitive damages to the state of Alabama," Strange said.

Simple negligence involves mistakes. Gross negligence involves reckless or willful disregard for human and environmental safety and is difficult to prove, experts say.

BP has consistently denied it was grossly negligent.

Louisiana Attorney General Buddy Caldwell said his state was suffering with more than 212 miles of coast still being polluted by oil "less than 30 miles from the door of this courthouse."

Any punitive damages would come on top of billions in potential fines under the Clean Water Act. The payout by BP so far included a record $4.5 billion in penalties, and a guilty plea to 14 criminal counts to resolve charges from the Justice Department and civil claims from U.S. securities regulators.

BP has sold assets to help cover its spill-related costs, including its older, smaller Gulf of Mexico operations.

The second phase of the trial, expected to start in September, will focus on the flow rate of the oil that spewed from the well. The third phase in 2014 will consider damages.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, No. 10-md-02179, in the U.S. District Court, Eastern District of Louisiana.

[Source: By Kristen Hays, Reuters, New Orleans, 25Feb13]

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