Third and Final Phase of the BP Trial Brought to a Close on February 2, 2015

By Will Lindsey 

This is the second post about phase III of trial. To read part I, click here.

The third and final phase of the BP trial ended on Monday, February 2, 2015. Based on the evidence presented in this phase, U.S. District Judge Carl Barbier will decide the Clean Water Act civil penalty that both BP and Anadarko, a 25 percent non-operator in the Macando well, will pay. The United States is seeking the maximum Clean Water Act penalty of up to $13.7 billion from BP and an amount more than $1 billion from Anadarko.

Throughout the trial, Judge Barbier was relatively quiet, occasionally inserting questions or points of clarification. Towards the end of the trial, however, Judge Barbier suggested on numerous occasions that some of the testimony BP was presenting was duplicative. This was especially true during the testimony of a BP exploration & production executive, Richard Morrison. As Mr. Morrison was testifying about the extent of BP’s response efforts after the spill, Judge Barbier interrupted at least twice to suggest that it was testimony that he had already heard from previous witnesses.

Judge Barbier also interrupted during the testimony of one of Anadarko’s witnesses. For its second witness, Anadarko called Kenneth Arnold, an expert in the field of safety in drilling operations. Mr. Arnold testified that requiring additional duties of non-operators, such as Clean Water Act civil penalties, could lead to confusion and ultimately a lower level of safety in drilling operations. This argument aligns with Anadarko’s overall theme – that there was no act committed by Anadarko as a non-operator, and thus assessing a Clean Water Act civil penalty against the company would not serve to deter future behavior. Judge Barbier stepped in here, however, suggesting that a policy argument such as this should be made before Congress and not in the courtroom. Despite allowing Anadarko to proceed with Mr. Arnold’s testimony, Judge Barbier noted that Congress had already clearly decided to make an “owner or operator” liable for discharges under the Clean Water Act.

The United States has several strong arguments weighing in favor of a high Clean Water Act civil penalty. The first is that there were numerous stakeholders involved in the spill response, including the U.S. Coast Guard and a number of federal agencies. Each of these entities expended time, resources and expertise in responding to the spill. Given that one of the factors that Judge Barbier will consider in assessing the civil penalty is the success of efforts to minimize or mitigate the effects of the discharge is, it is important that BP not get credit for the entirety of the spill response actions that were taken, as indeed BP was not responding to the spill in isolation. The second big point weighing in favor of a higher penalty is that lowering the civil penalty based on previously paid penalties, such as criminal penalty assessed against BP, would ultimately dilute the effect of these penalties.

During opening statements, Judge Barbier asked the parties if there was any precedent for requiring that a Clean Water Act civil penalty be paid over a specified amount of time rather than as a single lump sum. The United States indicated that there was at least one such instance in a Clean Water Act suit. This indicates, at least to some degree, that Judge Barbier is considering the option of assessing a high civil penalty against the company.

Due to the enactment of the RESTORE Act, 80 percent of the penalties resulting from this phase will go to the Gulf Coast for restoration. This funding cannot come soon enough given the high price tag that many coastal restoration projects carry with them. Ultimately, the funding stemming from this trial could mean the difference in reversing the trend of coastal wetland loss that has been impacting the gulf coast for decades.

It is unclear when exactly Judge Barbier will come out with a penalty ruling. But recent polling indicates that 70 percent of Americans believe BP should pay the maximum allowed under the Clean Water Act for its role in one of the largest oil spills in American history. It is imperative to both the Gulf and the nation that BP be held fully accountable.