Ruling could cost BP added $18B; stock slumps

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BP Found 'Grossly Negligent' in 2010 Oil Spill


By JONATHAN FAHEY

NEW ORLEANS (AP) - BP could be looking at close to $18 billion in additional fines over the nation's worst offshore oil spill after a federal judge ruled Thursday that the company acted with "gross negligence" in the 2010 Gulf of Mexico disaster.

U.S. District Judge Carl Barbier concluded that the London-based oil giant showed a "conscious disregard of known risks" during the drilling operation and bears most of the responsibility for the blowout that killed 11 rig workers and spewed millions of gallons of oil over three months.

In the next stage of the case, set to begin in January, the judge will decide precisely how much BP must pay.

Under the federal Clean Water Act, a polluter can be forced to pay a maximum of $1,100 in civil fines per barrel of spilled oil, or up to $4,300 per barrel if the company is found grossly negligent. Barbier's finding exposes BP to the much higher amount.

Even as the oil giant vowed to appeal, BP stock fell $2.82, or nearly 6 percent, to $44.89, reducing the company's market value by almost $9 billion.

"Everybody talks about how big they are, but it's staggering," David Uhlmann, a University of Michigan law professor and former chief of the Justice Department's environmental crimes section, said of the price tag for the spill.

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Ruling could cost BP added $18B; stock slumps
FILE - The Transocean Development Driller III, the rig responsible for drilling the main relief well at the site of the Deepwater Horizon oil wellhead, is seen on the Gulf of Mexico near the coast of Louisiana, in this Aug. 14, 2010 file photo. A relief well drilled nearly 2.5 miles beneath the floor of the Gulf of Mexico has intersected BP's blown-out well, a prelude to plugging it once and for all, the U.S government said late Thursday Sept. 16, 2010. The final seal should happen by Sunday. (AP Photo/Patrick Semansky, File)
Surfers try to catch waves as anglers fish the waters near the jetty in Grand Isle, La., as Tropical Depression Bonnie approaches the coast Saturday, July 24, 2010. Some ships prepared to move back to the site of BP's broken oil well Saturday as the remnants of a weakening Tropical Storm Bonnie rolled into the Gulf of Mexico. (AP Photo/Dave Martin)
Vessels operate at the site of the Deepwater Horizon oil spill in the Gulf of Mexico Saturday, July 17, 2010. BP spokesman Daren Beaudo said Saturday afternoon the company would communicate if the trial was stopped. With no word from BP as 3:25 p.m. EDT passed, video footage showed the well was still plugged. (AP Photo/Dave Martin)
Vessels operate at the site of the Deepwater Horizon oil spill in the Gulf of Mexico Saturday, July 17, 2010. BP spokesman Daren Beaudo said Saturday afternoon the company would communicate if the trial was stopped. With no word from BP as 3:25 p.m. EDT passed, video footage showed the well was still plugged. (AP Photo/Dave Martin)
Tourists watch the surf in Gulf Shores, Ala., after walking through a patch of oil that washed ashore Saturday, July 17, 2010. Tourism has picked up at the beach since BP stopped the flow of oil into the Gulf. (AP Photo/Dave Martin)
A oil cleanup worker rakes the sand in Orange Beach, Ala., Sunday, July 18, 2010. BP hopes to keep using its giant stopper to block oil from reaching the Gulf of Mexico until they plug the blown out well permanently, the company said Sunday. Retired U.S. Coast Guard Adm. Thad Allen outlined a different plan on Saturday, saying that after the test was complete, the cap would be hooked up through nearly a mile of pipes stretching to ships on the surface that will collect the oil. (AP Photo/Dave Martin)
A workboat operates in a heavy oil slick at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
Workboats operate near the Helix Producer, center, at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
Workboats operate near the Transocean Development Drilling Rig II at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
Vessels operate at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
The Helix, rear, operates near a drilling rig at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
Drilling rigs and workboats operate at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
A workboat operates in a heavy oil slick at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
A workboat operates near the Transocean Discoverer Enterprise drilling rig at the site of the Deepwater Horizon incident in the Gulf of Mexico Friday, July 16, 2010. The wellhead has been capped and BP is continuing to test the integrity of the well before resuming production. (AP Photo/Dave Martin)
A newspaper is seen at a newsagent in central London with headline that BP have stopped the oil leak from their stricken well in the Gulf of Mexico, Friday, July 16, 2010. (AP Photo/Sang Tan)
Workers continue to construct a berm system on the northern end of the Chandeleur Islands, La., Thursday, July 15, 2010. A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. (AP Photo/Dave Martin)
Paula Walker pauses as she talks her experience on BP's Deepwater Horizon oil rig Thursday, July 15, 2010 in Houston. Walker was on the rig when it exploded and was evacuated safely. (AP Photo/David J. Phillip)
Paula Walker poses before an interview about her experience on BP's Deepwater Horizon oil rig Thursday, July 15, 2010 in Houston. Walker was on the rig when it exploded and was evacuated safely from the burning rig. (AP Photo/David J. Phillip)
Freshly sorted blue crabs sit in a box in Hopedale, La., Thursday, July 15, 2010. BP finally choked off the flow of oil into the Gulf of Mexico on Thursday, 85 days and up to 184 million gallons after the crisis unfolded _ then began a tense 48 hours of watching to see whether the capped-off well would hold or blow a new leak. (AP Photo/Dave Martin)
Fishermen continue to sort a load of blue crabs after hearing about the Deepwater Horizon oil spill being capped in Hopedale, La., Thursday, July 15, 2010. BP finally choked off the flow of oil into the Gulf of Mexico on Thursday _ 85 days and up to 184 million gallons after the crisis unfolded, then began a tense 48 hours of watching to see whether the capped-off well would hold or blow a new leak. (AP Photo/Dave Martin)
Louisiana Gov. Bobby Jinda, left, walks with St. Bernard Parish President Craig Taffaro, right, and Plaquemines Parish President Billy Nungesser on the northern end of the Chandeleur Islands, La., Thursday, July 15, 2010. The officials were checking on a berm system to protect the island. Jindal said the berm system was working to keep oil off the islands. A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. (AP Photo/Dave Martin)
Louisiana Gov. Bobby Jindal looks over the berm system on the northern end of the Chandeleur Islands, La., Thursday, July 15, 2010. Jindal said the berm system was working to keep oil off the islands. A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. (AP Photo/Dave Martin)
Louisiana Gov. Bobby Jindal, right, talks with workers about the berm system on the northern end of the Chandeleur Islands, La., Thursday, July 15, 2010. Jindal said the berm system was working to keep oil of the islands. A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. (AP Photo/Dave Martin)
Workers continue to construct a berm system on the northern end of the Chandeleur Islands, La., Thursday, July 15, 2010. A tightly fitted cap was successfully keeping oil from gushing into the Gulf of Mexico for the first time in three months, BP said Thursday. (AP Photo/Dave Martin)
The Helix Producer burns off natural gas as it operates in the area of the Deepwater Horizon oil spill on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
Vessels operate in the area of the Deepwater Horizon oil spill on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
A platform burns off excess gas near near the site of of the Deepwater Horizon oil well on the Gulf of Mexico off of the Louisiana coast on Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
A work boat, left, operates near the Q4000 drilling rig, right, in the area of the Deepwater Horizon oil spill on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
Vessels operate in the area of the Deepwater Horizon disaster on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
Beach walkers make their way past puddled oil along the beach in Orange Beach Ala., Wednesday, July 7, 2010. Oil washed ashore with the tide overnight, leaving an ugly stain that brought out dozens of BP workers to clean.(AP Photo/Dave Martin)
Hannah Carroll of Longview, Tex., lies in the sun on the oil stained beach in Orange Beach Ala., Wednesday, July 7, 2010. Oil washed ashore with the tide overnight, leaving an ugly stain that brought out hundreds of BP workers to clean.(AP Photo/Dave Martin)
Oil cleanup workers use absorbent booms to collect oil and tar balls in Orange Beach Ala., Wednesday, July 7, 2010. Oil washed ashore with the tide overnight, leaving an ugly stain that brought out dozens of BP workers to clean.(AP Photo/Dave Martin)
Oil cleanup workers use absorbent booms to collect oil and tar balls in Orange Beach Ala., Wednesday, July 7, 2010. Oil washed ashore with the tide overnight, leaving an ugly stain that brought out dozens of BP workers to clean.(AP Photo/Dave Martin)
Oil cleanup workers outnumber tourists on the beach in Pensacola Beach, Fla., Wednesday, July 7, 2010. Oil washed ashore overnight leaving an ugly stain that brought out hundreds of BP workers to clean.(AP Photo/Dave Martin)
Oil cleanup workers rake oil and sand into piles along the shore in Orange Beach Ala., Wednesday, July 7, 2010. Oil washed ashore with the tide overnight, leaving an ugly stain that brought out dozens of BP workers for cleaning duty. (AP Photo/Dave Martin)
George Barisich poses for a photo on his boat in Chalmette, La., Friday, Feb. 28, 2014. When a BP oil well began gushing crude into the Gulf of Mexico four years ago, fisherman George Barisich used his boat to help clean up the millions of gallons of spew that would become the worst offshore spill in U.S. history. (AP Photo/Gerald Herbert)
George Barisich shows off a spot on his face on his boat in Chalmette, La., Friday, Feb. 28, 2014. When a BP oil well began gushing crude into the Gulf of Mexico four years ago, fisherman George Barisich used his boat to help clean up the millions of gallons of spew that would become the worst offshore spill in U.S. history. (AP Photo/Gerald Herbert)
George Barisich poses for a photo on his boat in Chalmette, La., Friday, Feb. 28, 2014. When a BP oil well began gushing crude into the Gulf of Mexico four years ago, fisherman George Barisich used his boat to help clean up the millions of gallons of spew that would become the worst offshore spill in U.S. history. (AP Photo/Gerald Herbert)
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BP previously agreed to pay a record $4 billion in criminal fines and penalties over the Deepwater Horizon disaster, plus more than $27 billion in cleanup costs and compensation to people and businesses harmed by the spill.

The company made $24 billion in profits last year but could be forced again to sell off some assets to cover the additional fines, analysts said.

Attorney General Eric Holder said Barbier's ruling "will ensure that the company is held fully accountable for its recklessness" and will "serve as a strong deterrent to anyone tempted to sacrifice safety and the environment in the pursuit of profit."

Barbier held a non-jury trial last year to identify the blowout's causes and apportion blame for the disaster, and on Thursday he ruled that BP bears 67 percent of the responsibility, Swiss-based drilling rig owner Transocean Ltd. 30 percent, and Houston-based cement contractor Halliburton Energy Services 3 percent.

BP made "profit-driven decisions" during the drilling that led to the blowout, the judge concluded in his 153-page ruling. "These instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks," he wrote.

Among other things, the judge cited a misinterpreted safety test that should have warned the drilling crew that the well was in danger of blowing out.

In a statement, BP said the evidence did not meet the "very high bar" to prove gross negligence.

James Roy and Stephen Herman, who represented oil spill victims in the trial, said: "We hope that today's judgment will bring some measure of closure to the families of the 11 men who tragically lost their lives, and to the thousands of people and businesses still trying to recover from the spill."

Government experts estimated 4.2 million barrels, or 176 million gallons, spilled into the Gulf. BP urged the judge to use an estimate of 2.45 million barrels, or nearly 103 million gallons, in calculating any Clean Water Act penalties. Barbier hasn't ruled yet on how much oil spilled.

If he goes with the government's estimate, BP could be hit with close to $18 billion in fines.

The crude that gushed from the sea floor killed wildlife, stained beaches and polluted marshes. BP ultimately sealed the well after several methods failed.

BP pleaded guilty in 2013 to manslaughter in the rig workers' deaths. Two BP supervisors aboard the rig are awaiting trial on federal manslaughter charges.

Darlene Kimball, who runs Kimball's Seafood on the docks in Pass Christian, Mississippi, said she hopes Thursday's ruling, and the likelihood of huge penalties, will prompt all oil companies to pay more attention to safety.

"Sometimes something has to happen for people to realize, 'I don't want that to happen with our company. Let's go back and look at how we are doing things,'" she said.

BP faces still another set of potential penalties, under the federal Oil Pollution Act of 1990. Uhlmann said those claims could cost BP more than $10 billion. He said those claims could be difficult to resolve because of varying assessments of how much damage was done to the environment.

"We may not know for years how badly the Gulf of Mexico and its shorelines were damaged by the spill," he said.

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