What is Phase III of the BP Trial?

Phase III of the BP Trial started this week. But what does this mean? Why are there “phases”, and when will this trial end? All good questions.

The BP trial underway is a civil (not criminal) litigation between the U.S. Department of Justice and BP and other parties responsible for the 2010 Gulf oil spill. BP and others are being held accountable for violations of the Clean Water Act for spilling millions of barrels of oil into the Gulf of Mexico. Because of the RESTORE Act, 80 percent of all fines and penalties resulting from this trial will return to the Gulf Coast for restoration.

Before specifically getting to Phase III, let’s recap the earlier phases. The first two phases of the trial dealt with a) who was at fault for the oil spill and to what extent, and b) how much oil spilled into the Gulf of Mexico. In dividing up who was at fault for the Deepwater Horizon explosion and the resulting oil spill, Judge Carl Barbier found that BP was 67 percent responsible, Transocean Ltd. (the owner of the rig) was 30 percent responsible and Halliburton (the cement contractor) was 3 percent responsible.

In September 2014, Judge Barbier ruled that BP was guilty of “gross negligence” for its actions leading to the blowout, saying BP was making “profit-driven decisions” that led to the rig explosion. In his ruling, he reiterated, “these instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks.” Being found guilty of gross negligence means BP could have to pay a fine of up to $4,300 per barrel of oil spilled. Most recently, Judge Barbier ruled that the amount of oil that spilled into the Gulf was 3.19 million barrels. Do the math (3.19 million barrels x $4,300 per barrel), and that means BP could face Clean Water Act fines up to $13.7 billion.

So, what is Phase III? Phase III is about how much BP will actually have to pay. Note that the fine amounts are “up to” $13.7 billion – this phase of the trial essentially determines the “up to.” Specifically, there are eight penalty factors set out in the Clean Water Act that help determine liability. These are judgments of mitigating circumstances that could impact the overall dollar figure that BP owes.

Ok, what’s next after this? Phase III is the final scheduled phase of the trial. At some point following this phase of the trial (and it could be months later), Judge Barbier will rule on how much BP must pay. BP continues to fight every decision, and it has already said it will appeal the ruling of gross negligence, so the courtroom battle could continue. However many observers hope that with all three phases complete, BP will be more inclined to agree to a settlement with the Department of Justice.

With billions of dollars at stake, and the timing of this money potentially coming as soon as this spring or, unfortunately, not for years if BP is able to continue appealing legal decisions, the current BP trial is critical to the fate of coastal restoration.