In a recent ruling handed down in Federal District Court in New Orleans, Federal District Judge Carl Barbier assigned the majority of the responsibility to BP for the 2010 explosion of Deepwater Horizon. Judge Barbier found the discharge of oil to be the result of BP’s “gross negligence” and “willful misconduct” under the Clean Water Act, which subjects BP to enhanced civil penalties. The ruling found BP responsible for 67 percent of the blowout, explosion, and subsequent oil spill, while the remaining percentage was divided among Transocean and Halliburton at 30 percent and 3 percent, respectively.
“BP’s conduct was reckless. Transocean’s conduct was negligent. Halliburton’s conduct was negligent,” wrote District Judge Barbier in his 153-page ruling.
While it has been estimated that BP could face fines of up to $18 billion, the Judge’s ruling noted that BP cannot be held liable for additional punitive damages under general maritime law. Usually, general maritime law which permits the imposition of punitive damages for reckless, willful, and wanton conduct. However, due to a unique jurisdictional rule in Louisiana, Texas, and Mississippi, the imposition of punitive damages under general maritime law has been severely limited, though not entirely abandoned. Indeed, punitive damages are still available for reckless, wanton conduct in the Fifth Circuit, though, the bar is much higher. In addition to proving the defendant’s “reckless, willful, and wanton conduct,” an award of punitive damages must also demonstrate systemic recklessness. “The maritime rule in the Fifth Circuit is generally insufficient to visit punitive damages upon the employer. Rather, the conduct must emanate from corporate policy or that a corporate official with policy-making authority participated in, approved of, or subsequently ratified the egregious conduct,” the ruling states. In the absence of such a corporate policy, Judge Barbier found that BP cannot be held liable for punitive damages under general maritime law. BP plans to appeal the decision.