Some basic research reveals that the CWA was passed in 1972 to address ANY pollution (not just oil spills) into US navigable waters. This law had its roots in a 1899 federal statute that protected the country's water, and it's been amended in 1981 and 1987. It's unclear whether any amendments that would "be seen as fair to the oil industry" have been proposed since the Macondo incident, but I doubt but such proposals would be popular. Rather, I suppose they'd would be seen as pandering.
Does anyone know if any amendment(s) to the CWA have even been proposed by any legislator(s) in the wake of the Macondo incident and its aftermath? If not, why not? Is there NOBODY in congress who sees things the way some on this board do? Or maybe the notion that an offshore operator's (or vessel owner's) voluntary post-spill conduct should wipe out or at least directly offset its CWA liability, or should eliminate its exposure to an enhanced per-barrel penalty regardless of whether its pre-spill conduct was innocent, negligent or even grossly negligent, wouldn't get much traction in congress.
Maybe so, but that's an argument for changing the law, which is something for congress to deal with. The job of the courts is to enforce the law in cases properly brought before them (unless it's unconstitutional).
I suppose his decision will be most heavily influenced by the findings he made in his 9/4/14 Phase I ruling about BP's conduct leading to the blowout. Although BP has appealed from that decision, its appeal won't be heard until long after the trial judge issues his penalty ruling. His present task is to decide the per-barrel fine to be assessed against BP (and also Anadarko), within the statutory range of $1,100/bbl to $4,300/bbl. If he uses the minimum figure for BP despite his Phase I decision, it's hard to imagine a scenario that would ever justify more than the minimum. I'm not saying he will issue the maximum fine, but I don't understand BP's rationale for the statements in its recent earnings report conference calls to the effect that its "provision" for the fine is at the minimum end of the range.
"Ohio sues BP over tank clean up reimbursements" (The complaint is hyperlinked to the bizjournals article.)
Basically, the Ohio AG charges BP with falsely attesting that it had no insurance when it submitted reimbursement claims to the state's underground storage tank (UST) fund, and recovering $33M from that "last resort" fund so far, with another $22M in UST claims still pending, while simultaneously collecting ("double dipping") under its insurance policies issued by its captive insurers that cover such losses. According to reports, a BP spokesman said the UST claims were submitted in good faith and the company will fight the lawsuit.
That had to be a different BP spokesman than Geoff Morrell, who sees things in black and white, at least in the context of BP's settlement with gulf coast claimants, and says things like: "Under the law and basic principles of fairness, these payments were made in error and should be returned, and the Fifth Circuit should reverse the District Court's refusal to order the repayment of the windfall awards."
@bnwild56: The pipe (or casing) string was not a hanging pendulum; if it was, the suspended string would have been under tension. Rather, it was slender column embedded in debris at its base embedded that bowed (buckled) laterally while under extreme compression, as explained in paragraph 88 of the 9/4/14 Phase I decision: "The bottom of the production casing was set into debris at the bottom of the well. This applied substantial compressive force to the production casing, causing it to buckle " (See also footnote 33 and paragraph 152.)
@bnwild56: The BOP's role in the blowout/release event was addressed at length in the 9/4/14 Phase I decision (on pages 90-102). On page 100, the court ruled that "Transocean [was] responsible for failing to maintain the BOP and consequently violated 30 CFR 250.446 [the federal regulation requiring BOP inspection and maintenance]". I suppose that's why Transocean had to inspect and certify all of the BOPs in its fleet after the incident. As to your question of how or why the "problem with the BOP's maintenance and proper functioning" became BP's fault, the answer is that court also ruled that this BOP maintenance problem didn't cause the release. Rather, as the court explained on pp. 100-101, the reason for the was that the BOP "partially closed but did not seal [the well] on April 2010" because the drill pipe had buckled "against the side of the well bore" so "the BSRs [blind shear rams] could not fully shear through the pipe and seal the well." As explained elsewhere in the decision, BP was responsible for the off center (buckled) pipe.
We'll see. But considering that it took over 4 years from the Macondo incident (and a full-blown trial) for a ruling on the disputed "gross negligence" question, seems like it's a little early to characterize the fault level associated with last week's WVA train derailment for CWA enforcement purposes (assuming that statute even applies to any party whose "gross negligence" might theoretically have contributed to the cause of the derailment).
As usual, the headlines badly overplayed what really happened in this week's ruling. BP asked the trial judge to disregard a series of EPA regulations that applied an inflation index, over time, to increase the per-barrel penalties for CWA violations from their original statutory range of $1,000-$3,000 to the present level of $1,100-$4,300. The judge's order carefully examined the CWA statute itself, and the EPA regulations issued in response to that statute, and found that the regulations in question were properly authorized and issued by EPA as directed by congress. The decision was not some vendetta against BP (and Anadarko, which wanted the minimum per-barrel fine to be $1,000 rather than $1,100), and the court recognized that disregarding the EPA regulations as requested by BP and Anadarko would have meant that many other regulations issued by federal agencies at the direction of congress would likewise be invalid.
I don't think BPXP's civil CWA fine will exceed $11.7B because, while the US nominally asked for the maximum fine (previously $18B, but now $13.7B) in its Phase III pretrial brief, it also acknowledged that the court could apply a credit or discount based on various statutory factors and urged that any such credit be limited to $2B.
As usual, the headlines badly overplay what really happened in yesterday's ruling. BP asked the trial judge to invalidate a series of EPA regulations that, over time, had increased the per-barrel penalties for CWA violations from their original statutory range of $1,000-$3,000 to the present level of $1,100-$4,300. The judge's order carefully examines the CWA statute itself, and the EPA regulations issued in response to that statute, and rules that the EPA regulations in question were properly authorized and issued as directed by congress. This decision was not some vendetta against BP (and Anadarko, which wanted the minimum per-barrel fine to be $1,000 rather than $1,100), and to rule otherwise would have meant that many other regulations issued by federal agencies at the direction of congress would likewise be invalid.
According to the Texas Supreme Court, BP cannot raid Transocean's liability insurance policies for $750M of coverage for Macondo liabilities, leaving this asset (insurance protection) intact for Transocean. That ruling paves the way for Transocean to recover most of its presumably substantial Macondo defense expenses from that insurance, or from BP itself according to the indemnity provisions in the BP-Transocean drilling contract.
What's t worry about? BP took a free shot at grabbing $750M of coverage for its massive spill liabilities from Transocean's liability insurers. It lost that bid because even though those policies identified BP as an "additional insured" as required by the BP-Transocean drilling contract, that same contract allocated liability for subsurface spills to BP (but liability for above surface spills rested with Transocean). Since this was a subsurface spill, BP has to eat its liability (and Transocean's liability) under the drilling contract, and can/t pass it through to Transocean's insurers. That isn't surprising. Eventually, BP will have to reimburse Transocean for most of its defense expenses too, but that will be peanuts compared to BP's other Macondo liabilities.
"The gross negligence fails on these three basic concepts." "It is just confusing." "So what is the real out rage to warrant the [gross negligence] findings against BP?"
You ridicule the ruling, express confusion, and then ask how it is warranted. The answer begins with reading it, or at least the relevant parts of it. For example, take a look at Sections B.i. ("Legal Standard Re:'Gross Negligence' and 'Willful Misconduct'" beginning on p. 114), B.ii. ("Findings Re: 'Gross Negligence' and 'Willful Misconduct' (Single Act)" beginning on p. 121) and B.iii ("Findings Re: 'Gross Negligence' and 'Willful Misconduct' (Multiple Negligent Acts)" beginning on p. 129).
My point is not that the ruling is indisputably correct, but rather that it is not irrational.
This judge has no more a predicament than any other judge in our system. His job is to rule on cases or issues brought before him, not to decide who to charge and for what, and then prosecute those claims (that's the job of the attorneys for the plaintiffs, or for the government, in the case of the CWA penalties) or to defend against them (that's the job of the defense attorneys). He just rules on the contested issues before him. If any defendant thinks a law it's charged with violating is unconstitutional or otherwise doesn't apply them, that argument is made to the judge and he rules on it. But as far as I know, none of the Macondo defendants sued for CWA violations (BP, Anadarko and Transocean) ever argued that the CWA was unconstitutional. And if any Macondo defendant thought it was a legitimate defense to argue that they are "innocent" or their penalty should be moderated because, as you suggest, GM isn't exposed to CWA penalties for faulty ignition switches, they would have made that argument. But they didn't because it would have been absurd; if you ever get ticketed for speeding it is no defense to say that someone else got away with robbery somewhere.
And do you seriously think that some of the Macondo defendants are "innocent parties"? Well before trial, BP and Transocean pled guilty to criminal charges (11 felony manslaughter counts for BP, and a criminal misdemeanor count by Transocean), and HAL pled guilty to obstruction. Then BP voluntarily agreed to an uncapped settlement with the class plaintiffs; does that sound like something a party who thinks it's innocent would do? At the trial, BP acknowledged its negligence, but argued that it was not alone and that no defendant was grossly negligent. I appreciate that you refuse to read the Phase I ruling, but as I have said, while reasonable people can debate whether BP's fault amounted to gross negligence, nobody who reads the facts could seriously contend that BP was an "innocent party".
Regarding a lack of evenhandedness, I suppose you're referring to the Clean Water Act, which presents the largest penalty exposure arising from the incident. Since the CWA applies to owners/operators of facilities from which oil was released, the DOJ sued BP, Anadarko and Transocean. Who you think was improperly "exempted" by the court? Since HAL owned no facilities from which oil was discharged, it wasn't even exposed under that statute, and although Transocean disputed its CWA exposure, it chose to settle that dispute for $1.4B ($1B civil + $400M criminal). If you think HAL (or Transocean, or even Anadarko) somehow escaped "extenuating fines" like the one BP faces under the CWA I suppose you should blame that on Congress, which wrote that law, or on the DOJ, which decided who to prosecute for violating it, but not on the judge, whose job is to apply the law to the facts in cases properly brought before him.
You think the court's Phase II ruling about the number of barrels released was a meaningless detail? The CWA fine is the simple product of A x B, where A is the number of barrels released and B is the per barrel penalty. So the effect of that 1/15/15 ruling was to reduce the maximum fine (to be determined in Phase III) by over $4B as compared to the figure requested by the gov't in its Phase III brief.
No, it is not clear-cut. But a conclusion of "who knows?" was not an option. The judge's job was to consider all the evidence and arguments presented by the competing parties and then answer the questions presented. He acknowledged the difficulty of assigning numbers. For example, in the "quantification segment" of his 1/15/15 Phase II decision, he said: "There is no way to know with precision how much oil discharged into the Gulf of Mexico. There was no meter counting off each barrel of oil as it exited the well. The experts used a variety of methods to estimate the cumulative discharge. None of these were perfect. Because data from the well is limited, every expert had to make some assumptions while performing his calculations." Even so, after describing the highly technical evidence in detail he ruled that 4.0 million barrels of oil were released from the reservoir, 3.19 million of which were uncollected. (Notably, those figures were significantly less than what the DOJ and its experts had argued for.)
I respect you for taking the time to read it. As you can see, it was not a quick, shoot-from-the-hip decision, or an easy one.
Beats me what the major cause was. Maybe the negative pressure test fiasco? Maybe the "buckled" drill pipe not being centered in the casing? But then the question is who's fault is that? I tend to agree with BP's trial argument -- that the accident was the result of a cascading combination of causes, and the "fault" for creating (or not preventing) them rests with multiple parties, including itself, whose conduct didn't measure up. As for allocating that fault, all I know is that the answer is not obvious. But what is clear to me is that this judge sat through a long trial and listened to testimony given under oath by witnesses from all sides about the facts they witnessed or (in the case of expert witnesses) their competing opinions. His job was to sift through that mountain of information and determine what the cause was (or the causes were), who was responsible and in what percentages, and how to characterize that fault (i.e., negligence, gross negligence, willful misconduct, etc.) because under the law certain exposures (e.g., CWA penalties, and punitive damages, which he denied) turned on those characterizations. Nobody who reads what you read could seriously believe that the answers were "axiomatic" or "self-evident".
You think a judge should recuse himself because one side or the other doesn't like some of his decisions? Then no judge could handle any long or difficult case. If BP didn't challenge him when he was assigned to the matter, why would (or should) he voluntarily decline it.
As for your doubt that he would "understand the fine points of performing a high risk in real time operation such as this", if you would at least read his highly detailed opinion it might address that concern.