Federal Appeals Court Reaffirms BP Liability in Gulf Oil Spill

A federal appeals court panel has reaffirmed its ruling that BP is liable for federal Clean Water Act damages stemming from the 2010 Gulf of Mexico oil spill, the latest loss for the oil giant as it fights court decisions that could ultimately bring $18 billion in penalties.

The three-judge panel of the 5th U.S. Circuit Court of Appeals rejected arguments that there were errors in its June 4 ruling on BP’s Clean Water Act liability. The ruling released Wednesday night is not the final say from the court. BP and its minority partner in the Macondo well, Anadarko Petroleum Corp., have a request pending for the full 15-member court to reconsider the issue.

The June order and Wednesday’s follow-up were issued by Judges Fortunato Benavides, Carolyn Dineen King and James Dennis. They upheld U.S. District Judge Carl Barbier’s ruling holding the well owners are liable.

BP and Anadarko had argued they were not liable because equipment failure on the leased rig Deepwater Horizon caused the April 2010 disaster. An explosion on the rig killed 11 workers and sent millions of gallons of oil spewing into the Gulf in what became the nation’s worst offshore oil disaster.

Barbier has also ruled that BP was “grossly negligent” in the disaster. BP has asked Barbier to reconsider that finding, which, if it stands, would be a factor in whether the water act penalties for the company reach an estimated $18 billion.

Under the Clean Water Act, a polluter can be forced to pay from $1,100 to $4,300 per barrel of spilled oil. The higher limit applies if the company is found grossly negligent – as BP was in Barbier’s ruling. But penalties can be assessed at lower amounts.

Government experts estimated that 4.2 million barrels spilled into the Gulf. BP has urged Barbier to use an estimate of 2.45 million barrels in calculating any Clean Water Act penalties.

Barbier has scheduled a trial in January to help decide how much BP owes in federal Clean Water Act penalties.

BP declined comment on the latest ruling. Anadarko did not immediately respond to a request for comment.

In a June interview, Loyola University law professor Blaine LeCesne said he doubts Anadarko will have to pay much, if anything, in Clean Water Act fines because its partnership gave BP complete control over how the well was drilled and run.