BP trial begins Monday with billions of dollars at stake

NEW ORLEANS -- Oil giant BP, barring a last-minute settlement, goes to trial here Monday, with billions of dollars on the line -- for the London-based company as well as the Gulf states that stand to reap a share of the potential $17 billion in fines.

Federal District Judge Carl Barbier in New Orleans will decide whether BP’s actions on the drilling rig Deepwater Horizon were negligent -- as has already been determined in the criminal case -- or grossly negligent, which could force the company to pay significantly higher fines.

The first phase of the nonjury trial will focus on the cause of the April 20, 2010, explosion that killed 11 people and spewed an estimated 4 million barrels of oil into the Gulf of Mexico over 84 days.

Opening arguments are expected to feature more of the verbal jousting that has characterized much of the legal proceedings between BP and the federal Department of Justice.

The company has already pleaded guilty to criminal charges, and last month a judge approved a plea agreement to pay $4 billion in fines, the largest environmental penalty in U.S. history. States affected by the spill receive the lion’s share of the fines to assist in ongoing restoration efforts.

Although settlements have been reached in each of the previous cases, talks in the current case broke down last week. A defiant statement from BP’s chief counsel indicated that the company does not believe that government lawyers can prove a case of gross negligence.

The second part of the trial, expected to begin in late summer, will attempt to determine how much oil was released. That difficult accounting will determine the size of the federal fine, which could be as little as $4.5 billion.

The company would be required to pay $1,100 for each spilled barrel under the Clean Water Act. But that fine would rise to $4,300 per barrel if BP were found to be grossly negligent.

Another, later, determination of environmental damage must also be considered.

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