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BP Trial Phase 3 Penalty Phase

courtroomAs the final Phase (Phase 3 Penalty Phase) of the BP Trial began, the Court set its sights on finally deciding BP’s total civil fine monetary amount. The United States Government is asking for the Court to assess the maximum civil penalty available under the Clean Water Act (“CWA”). BP, relying upon its after-the-fact and oftentimes maligned mitigation and recovery efforts, opposes the maximum CWA penalty.

Under the CWA, each barrel of oil spilled carries with it a fine which can fall in a range of $1100-$4300. Where the final penalty will fall depends on a set of eight (8) factors as set out below:

  1. the seriousness of the violation or violations,
  2. the economic benefit to the violator, if any, resulting from the violation,
  3. the degree of culpability involved,
  4. any other penalty for the same incident,
  5. any history of prior violations,
  6. the nature, extent, and degree of success of any efforts of the violator to minimize or mitigate the effects of the discharge,
  7. the economic impact of the penalty on the violator,
  8. and any other matters as justice may require.

CWA Section 311(b)(8).

Relying upon briefing from both the United States and BP as well as the facts and testimony offered in the previously tried Phase 2 Quantification Stage, the Court recently released Findings of Fact and Conclusions of Law. As part of its Findings of Fact, the following was offered:

The Court finds that 4.0 million barrels of oil released from the reservoir. After deducting the Collected Oil from this amount per the parties’ stipulation, the Court finds for purposes of calculating the maximum possible civil penalty under the CWA that 3.19 million barrels of oil discharged into the Gulf of Mexico.

Phase 2 Findings of Fact and Conclusions of Law, p. 44.

Using the 3.19 million barrels discharged and the maximum per-barrel fine of $4300, BP could face a maximum civil penalty of $13.7 billion in fines.

Therefore, the United States will continue to hammer BP on the seriousness of the violation, i.e. the largest oil spill in the history of the United States with all of its subsequent environmental and economic impacts, all while BP attempts to shield itself with its mitigation efforts i.e. cleanup operations and economic relief.

The Phase 3 Trial began on Tuesday, January 20, 2015 and is expected to continue for a two to three-week period as the Court presides over the testimony and evidence presented by each party’s experts and scholars.



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