Court To Seek Who's Responsible For Gulf Oil Spill
RACHEL MARTIN, HOST:
What's been billed as one of the biggest trials in legal history begins tomorrow in New Orleans. At issue - who is responsible for the Deepwater Horizon disaster. Eleven men died when the drilling rig exploded in April nearly two years ago. Millions of gallons of oil gushed into the Gulf of Mexico when crews lost control of the well deep below. At stake are billions in penalties and fines for BP and other companies that helped it drill the well.
Joining us now are NPR's Debbie Elliott and Jeff Brady. They covered the explosion and the oil spill back when it happened, and they will now be in New Orleans to cover the trial. Welcome to the program, both of you.
JEFF BRADY, BYLINE: Thank you.
DEBBIE ELLIOTT, BYLINE: Glad to be here, Rachel.
MARTIN: First to you, Debbie. Could you lay out for us who are the parties involved in the lawsuit?
ELLIOTT: This is really a very giant and complicated case. You've got hundreds of lawsuits, and you got thousands of plaintiffs who have all sued over the spill. We're talking personal injury here, lost income and environmental damage. So individuals and businesses are suing people like seafood harvesters and processors, hotel and condo owners, waitresses, tour boat operators - anyone whose livelihood was disrupted by the oil in the Gulf.
But the case also includes claims that are coming from first, the federal government, and the five Gulf states, and even some local governments. Now, those claims are mostly about damage to the natural resource and the cost of dealing with this spill - cleaning up coastlines, cleaning up marshes - as well as recovering economic losses. Because if you think about it, if you're a little, small town on the Gulf Coast, you've lost a lot of tax revenue while this was unfolding.
MARTIN: So that's just the plaintiffs. Jeff, tell us more about the companies who are defending themselves. BP is obviously the biggest, right?
BRADY: That's right. BP is the biggest. Also, BP was the operator of the well, and that means that the buck really stops with BP. Even though there were contractors involved, BP hired all of them and ultimately, is responsible for what happened at the well site.
It's also the largest company, as we said. It has the deepest pockets by far, with a market valuation of about $150 billion. And you look at some of the other companies involved: Halliburton - it performed the cement job at the well, it's valued at about $35 billion; Transocean, the company that owned the Deepwater Horizon rig, it's about a $16 billion company. This spill will ultimately cost somewhere around $40 billion. So while that takes a big chunk out of BP, it's more than some of these smaller companies are even worth.
You know, BP has maintained that some of its contractors were at fault. And it's been trying to spread some of the blame, and some of the cost. One of the things that the first phase of the trial is supposed to determine is what's called fault allocation. And that's what percent of the total fault is assigned to each company. So, not only do you have all of these companies defending themselves against all those plaintiffs, they're also fighting among themselves to determine how much each of them will have to pay.
MARTIN: Hmm, complicated. Debbie, there's already been a lot of attention on this incident over the past couple of years - investigations upon investigations into how it happened, who's to blame. Are we expected to learn anything new throughout this trial?
ELLIOTT: You know, that's the question, and I think the answer is probably yes. And I think you're going to get a much more comprehensive, detailed picture of exactly what was happening at every step along the way. Again, trying to wrap our heads around the scope of this thing - more than 300 witnesses, and some 20,000 exhibits, have been prepared for the trial. Now, there's a group of lawyers, called the plaintiffs' steering committee, who are kind of preparing for this case. And I spoke with Ron Jones, a Montgomery attorney who was on that committee. And he said, definitely expect new details in court.
RON JONES: There will be things that will come out regarding BP and Transocean and Halliburton and Cameron, that are not very well-known at all; about the culture of BP, if you will, and the things that went on leading up to the explosion, that probably will be shocking to a lot of people.
ELLIOTT: Now, what the plaintiffs are going to be trying to show with this information is gross negligence. That's the threshold here for liability.
MARTIN: So there are some really big issues here - a lot of very serious questions. Jeff, is this trial expected to take a really long time?
BRADY: It is. The trial is scheduled to take place in three different phases, kind of following the various phases of the disaster itself: what led up to it, the oil spill itself, and then to cleanup. And the first, of course, is set to begin tomorrow. And the purpose there is to determine who is at fault ,and what percent each party will have to pay.
That could take several months. BP's CEO, Bob Dudley, was warning his investors a couple weeks back that it could take a couple weeks before BP even gets to present its case. First up are the plaintiffs, including the state and federal governments involved; then Transocean; and then BP. Overall, if this trial plays out as planned, legal proceedings could last well into next year.
MARTIN: Hmm. And Debbie, in big cases like this, there's always a chance that various parties could settle - right? - even before a judge rules. Could that happen here?
ELLIOTT: Many experienced trial lawyers and observers say that's exactly where this is headed. It will settle. Now, the question, though, is whether this will be some giant, global settlement that satisfies all of these parties at the table. You know, there are some very diverse interests here, as we spoke about. You've got governments; you've got waitresses. So how do you make everybody happy?
So one scenario that has been put forth is that this will settle out in different chunks, if you will. And already just in the past couple of weeks, we've seen a minority partner in the well agree to pay $90 million to settle its claims with the federal and state governments. So that's likely to be how we see it settle - is bits and pieces at a time, if they can't come to one big, global agreement on what to do.
And we should note in the conversation here that BP has already settled with about 194,000 claimants already, through that compensation fund that it set up right after the oil spill, and it's paid out more than $6 billion to date.
MARTIN: NPR's Debbie Elliott and Jeff Brady. They'll be reporting this week from New Orleans as the Deepwater Horizon trial gets under way there. Thanks to both of you for joining us.
BRADY: You're welcome.
ELLIOTT: Thank you. Transcript provided by NPR, Copyright NPR.