Environmental Law Matters

On September 4, 2014, District Court Judge Carl Barbier issued his "Findings of Fact and Conclusions of Law - Phase One Trial" in the Deepwater Horizon oil spill litigation. In his 153 page opinion, Judge Barbier found BP liable for gross negligence and willful misconduct under the Clean Water Act, which is also known as the Federal Water Pollution Control Act. Judge Barbier focused largely on the many dangerous decisions that were taken on the Deepwater Horizon shortly before the explosion. BP subsequently filed a motion in which it asked Judge Barbier to reconsider his opinion. On November 13, 2014, Judge Barbier denied BP's motion for reconsideration. Judge Barbier's finding of gross negligence and willful misconduct has a significant financial impact on BP. The Clean Water Act imposes a penalty of $4,300 per barrel of oil spilled when there is a finding of gross negligence. A finding of simple negligence, which BP expected, would have resulted in a $1,100 per barrel fine. In the next phase of the litigation, Judge Barbier will determine how many barrels were spilled. The U.S. government estimates that 4.2 million barrels were spilled. BP estimates that 2.45 million barrels were spilled. If the Court accepts the government's estimation, BP's penalty exposure will be $18 billion in fines under the Clean Water Act - an amount that far exceeds the $3.5 billion BP reportedly set aside for that purpose.