BP ruling raises liability stakes for high-risk industries

Fri Sep 5, 2014 9:12pm EDT
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By Mica Rosenberg

NEW YORK (Reuters) - A U.S. court ruling that dramatically ramped up BP Plc's potential penalties for the 2010 Gulf oil spill could create new liability risks not just for deep water drillers but also for other industries like mining and nuclear power generation.

U.S. District Judge Carl Barbier in New Orleans, Louisiana, on Thursday found that BP was guilty of "gross negligence" ahead of the rig explosion in the Gulf of Mexico. The April 20, 2010 blast killed 11 workers and spewed millions of barrels of oil for nearly three months.

The "gross negligence" designation could quadruple BP's federal financial penalties, adding as much as $18 billion to the bill for worst offshore environmental disaster in U.S. history.

BP said it would appeal the decision, arguing that "the law is clear that proving gross negligence is a very high bar that was not met in this case."

Legal experts said that if Barbier's interpretation is upheld and adopted by other courts, it may leave a range of industries more exposed to potentially greater penalties.

"Other regulated industries are also going to be looking at what are the standards that courts are going to impose on their actions," said Jessica Owley, an environmental law expert at SUNY Buffalo Law School. These include activities that may accidentally pollute waterways or cause environmental harm, like nuclear power, fracking and paper processing, Owley and other legal experts said. These businesses may also be subject to penalties under federal statutes like the Clean Water Act and the Oil Pollution Act.

Barbier's ruling remains a long way from setting a wide-ranging legal precedent. Considering the stakes, the case could drag on for years, ultimately landing before the U.S. Supreme Court.


Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon, off Louisiana, in this April 21, 2010 file handout image.  REUTERS/U.S. Coast Guard/Files/Handout