Deepwater Horizon Ruling Places $18b Bull’s-Eye on BP

Barger & Wolen partner David McMahon was quoted in a Law360 article, Deepwater Horizon Ruling Places $18b Bull's-Eye on BP subscription required), on September 4, 2014, about U.S. District Judge Carl J. Barbier’s ruling which found BP’s actions in the Deepwater Horizon disaster grossly negligent. The ruling holds BP responsible for up to $18 billion in Clean Water Act penalties and leaves open the possibility of billions more in punitive damages.

The 153-page ruling issued September 4th thoroughly laid out why the negative pressure test botched by BP prior to the Macondo well blowout constituted gross negligence and even if it didn't, a series of negligent actions by BP added up to gross negligence.

While negligent acts were committed by individual BP employees, the court seemed to adopt a broader definition of a person under the CWA to include the company as well, said David McMahon, a Barger & Wolen LLP partner who worked on the early phases of the BP litigation.

Essentially, the [judge] suggested that corporate ratification was not required to have the enhanced level of penalties stick,” McMahon said. “That was an interesting analysis.”

While Judge Barbier found that BP and drilling partners Transocean Ltd. and Halliburton Co. were each liable under general maritime law for the blowout, explosion and oil spill, he also said Transocean and Halliburton’s indemnity and release clauses in their respective contracts with BP are valid and enforceable.

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