Repeat Offender: BP’s History of Environmental Crimes Could Bring Huge Punitive-Damage Award in Gulf Spill Trial


There are many tragic layers to BP’s 200-million-gallon Gulf oil spill, but perhaps the most haunting is that we should have seen it coming, and we should have done more to prevent it. A procession of egregious BP management and safety violations leading up to the spring of 2010 – with laughable slap-on-the-wrist consequences – made a disaster in the deep waters of the Gulf of Mexico almost inevitable.

Tragically, in many ways, America reaped what it sowed on April 22, 2010 when the Deepwater Horizon rig sank to the seafloor, triggering the worst environmental disaster in U.S. history. A devastating event that continues to wreak havoc across the Gulf Coast – in contaminated beaches, sick and depleted fisheries and tens of thousands of ill cleanup workers and coastal residents.

Over the last 40 years, our nation’s permissive regulatory oversight of the oil and gas industry has bred a corporate culture that values profits far more than people or the environment, and nurtures the kind of ever-increasing risk-taking that always ends in disaster. BP’s long history of crimes against the environment – including the biggest-ever oil spill on Alaska’s North Slope in 2006 and a 2009 pipeline rupture near the Lisburne Production Center – culminated in the deaths of 11 rig workers and the release of more than 200 million gallons of Louisiana crude into the Gulf.

Up to this point, BP has had no compelling reason – like the deterrent of stiff fines, hefty punitive damages or executive jail time – to conduct its business in a safe manner. But all of that may be about to change.

Federal prosecutors are taking steps to hold BP accountable for its reckless behavior leading up to the Deepwater Horizon disaster. Here’s how Lisa Demer covered the legal maneuvering in a Nov. 15 Anchorage Daily News (ADN) report:

BP, the biggest oil field operator on Alaska’s North Slope, has failed to fix pervasive management and environmental safety problems and is a repeat environmental offender, federal prosecutors said in a new court filing this week.

The federal government is seeking to revoke BP’s probation on a criminal misdemeanor conviction from 2007 that arose from a huge spill in 2006. A hearing on the probation issue is set to begin Nov. 29.

BP found itself back in court after a subsequent spill in November 2009 on a pipeline near BP’s Lisburne Production Center.

Prosecutors say the 2009 pipeline rupture and oil spill amounts to a new crime that violates the terms of BP’s 2007 probation. The 2009 spill was “completely predictable and absolutely preventable,” prosecutors say.

The timing couldn’t be any worse for BP as the company and its army of attorneys prepare for the start of the massive multi-district litigation (MDL) in New Orleans early next year to determine damages tied to the 2010 Gulf oil spill. It is likely this pattern of flagrant misconduct will factor into establishing punitive damages (i.e., damages awarded to punish or deter defendant behavior). Prior reckless acts can be used against BP in that important part of the legal process. More from the ADN report:

“The 2009 spill vividly demonstrates that BP has not adequately addressed the management and environmental compliance problems that have plagued it for many years, and that continue to result in operational, process safety, and equipment failures,” prosecutors say in the new filing. “BP’s choices have been reckless, and further violations of state and federal law are the result.”

Neither the state nor federal governments have brought new criminal charges against BP for the 2009 spill. That’s not required for a probation violation; instead (U.S. District Judge Ralph) Beistline simply must be “reasonably satisfied” that the oil company broke the law, the federal prosecutors say.

If the judge finds a violation, he could extend the corporation’s probation, or reopen the 2007 criminal case and resentence BP, said assistant U.S. Attorney Aunnie Steward. In that event, prosecutors say they will seek new fines and an additional period of probation, she said.

The court filing, submitted last week, details BP’s atrocious environmental record – establishing a criminal pattern that could bring a huge punitive-damage award in the New Orleans MDL trial in February 2012. The ADN report breaks it down:

“BP’s history of environmental crimes in Alaska begins more than a decade ago,” the new filing says.

In 2000, BP pleaded guilty to a felony for failing to immediately report illegal dumping of hazardous waste by a contractor at its Endicott oil field in Alaska’s Beaufort Sea.

Six years later, in March 2006, BP was again under investigation after the biggest oil spill ever on the North Slope. Some 200,000 gallons leaked from a severely corroded Prudhoe Bay transit pipeline. BP pleaded guilty to a federal misdemeanor.

BP was put on three years of probation and had to pay $20 million in fines and penalties for the misdemeanor, plus $25 million to settle a civil lawsuit brought by the federal government. A separate state lawsuit over that spill is set for trial in the spring.

Meanwhile, outside of Alaska, BP remains under criminal investigation for the 2010 Deepwater Horizon explosion in the Gulf of Mexico that killed 11 people and led to a massive oil spill.

BP has refused to take safety seriously for a long time, with far and away the worst record of all the major oil companies. Here’s more evidence, courtesy of ABC News (June 2010):

Occupational Safety and Health Administration (OSHA) statistics show BP posted 760 “egregious, willful” safety violations – while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation.

In two separate disasters prior to the Deepwater Horizon, 30 BP workers were killed and hundreds have been seriously injured.

In the last three years, according to the Center for Public Integrity, BP refineries in Ohio and Texas accounted for 97 percent of the “egregious, willful” violations handed out by OSHA.

Based on its track record, BP is an unbearably slow learner. The oil giant needs to be taught a lesson that will bring about change at the very highest levels of the corporation and the culture that got us to where we are today on the Gulf Coast. Since the company values profits above anything else, the logical place to hit BP is in the pocketbook.

Punitive damages were made for repeat offenders like BP – for companies that just don’t get it. Punitives are awarded both to punish a defendant for its bad behavior and to deter it from future similar bad behavior. It’s clear to me that if we don’t use punitives aggressively in the Gulf spill trial, we will have disaster revisited upon us – much sooner than many of us might think.

Read Lisa Demer’s full Anchorage Daily News report here:

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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