White Collar Alert

Perhaps the most infamous environmental litigation case in history, the 2010 Deepwater Horizon catastrophe has resulted in approximately 3,000 lawsuits (both criminal and civil) and over 100,000 named claimants in federal and state courts nationwide. In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, 2:10-md-02179, Findings of Fact and Conclusions of Law Phase One Trial at pg. 7, Filed Sept. 4, 2014 (Doc. No. 13355).

From a criminal perspective, BP entered into a plea agreement in November 15, 2012, thereby resolving all criminal claims arising out of the disaster. In addition to payment of $4 billion dollars in fines and penalties, the terms of BP’s plea agreement require continuous monitoring and compliance efforts, including the creation of a public website that provides lessons learned and annual progress reports and summaries.

On the civil side, yesterday, September 4, 2014, BP was hit with what some are considering a sweeping victory for the government in the multi-district litigation that is spearheading the civil proceedings against BP, amongst others. Judge Carl Barbier concluded that BP’s reckless actions, gross negligence, and willful misconduct were the proximate cause of the spill and that Transocean Holdings LLC and Halliburton Energy Service, Inc. were negligent and proximate causes of the casualty, but did not act grossly negligent. Id. at 135- 136. Finding BP 67 percent at fault, Judge Barbier wrote, “BP’s negligent acts that caused the blowout, explosion and oil spill … were profit-driven decisions. These instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks.” Id. at 129-130.

While formulating the standard for gross negligence is an issue of law, Judge Barbier’s conclusion that BP’s conduct amounted to gross negligence is, indeed, an issue of fact. Id. at 114. And issue of fact, I might add, that will likely have profound financial consequences for BP. What implications will this ruling have upon other similarly-situated entities? Click here to read more about our maritime colleagues’ take on the effects of Judge Barbier’s opinion.