1. Why did the court find BP liable for enhanced penalties under the CWA and OPA?

2. At the time of the court’s decision, BP had already paid out $28 billion in cleanup costs and economic claims. Should there be any cap on BP’s liability, even if it forces the company into bankruptcy?

3. Consider the enhanced penalty provisions in the CWA and OPA. Enhanced penalties are common in criminal statutes to punish conduct and deter behavior that the public considers particularly egregious (e.g., hate crimes). Do violations of environmental laws rise to that standard of egregiousness? Does the public actually benefit from enhanced penalties or, in regard to events such as Deepwater Horizon, is this more of a political reaction to media coverage?

The Deepwater Horizonwas a nine-year-old semi-submersible, mobile, floating, dynamically positioned drilling rig that could operate in waters up to 10,000 feet deep. The rig was owned by Transocean, Inc., and was chartered and operated by BP from March 2008 to September 2013. It was drilling a deep exploratory well roughly 41 miles off the Louisiana coast when high-pressure methane gas from the well expanded into the drilling riser and rose into the drilling rig, where it ignited and exploded, engulfing the platform with 126 crew members on board. Eleven people were killed and 17 others were injured. The Deepwater Horizonsank two days after the explosion.

Subsequent investigations revealed that BP managers misread pressure data, failed to administer appropriate tests for integrity of the well, and gave their approval for rig workers to replace drilling fluid in the well with seawater. However, the sea-water was not heavy enough to prevent gas that had been leaking into the well from firing up the pipe to the rig and causing the explosion. While acknowledging responsibility for the accident, BP argued that the blame should be fully shared with Trans-ocean, the owner of the Deepwater Horizonoil rig, and Halliburton, a contractor that oversaw a critical step in closing up the well. Transocean and Halli-burton denied any liability.

The government charged BP, Transocean, and Halliburton with, among other charges, a violation of the Clean Water Act (CWA) and Oil Pollution Act (OPA). It also asked the court to impose enhanced penalties based on the “recklessness” and “willful conduct” provisions of the CWA and OPA. The impact of such a finding would result in BP being liable for four times the maximum penalties. 

Although the case dealt with dozens of legal issues, including maritime law and the common law of torts, the court’s conclusion as to BP’s liability for willful and reckless conduct was clear. The court
ruled that BP had acted with conscious disregard of known risks. The court pointed to the actions of BP employees at the time of the incident and found that they took risks that led to the environmental disaster. In particular, the court ruled that the evidence indicated that the results of a pressure test should have prompted quick action to prevent an impending blowout. The court ruled that the company was reckless and determined that several crucial conversations between BP employees indicated a willful course of conduct that fit squarely into the statutory definitions of “reckless” or “willful” in the CWA and OPA. The court also found that Trans ocean and Halliburton’s conduct was negligent, but not reckless.

“The Court finds that a prudent well operator in BP’s position, knowing what BP knew at the time, would have run a [integrity test for the cement seal], even if its decision tree concluded otherwise and its drilling and cement contractors did not tell it to do so. The fact that BP did not opt for the [test] when the necessary people and equipment were already on location leads the Court to believe BP’s decision was primarily driven by a desire to save time and money, rather than ensuring that the well was secure.”

Aftermath: Despite BP’s initial promise to appeal, BP, the U.S. Justice Department, and five gulf coast states announced that the company agreed to pay a record settlement of $18.7 billion in 2015. To date, BP’s cost for the cleanup, environmental and economic damages, and penalties has reached $54 billion.