Federal Court sets BP Oil Spill trial for October 2011

September 17 2010 | Latest News
Federal judge sets date for trial to split blame for Gulf of Mexico oil spill

Published: Thursday, September 16, 2010

Rebecca Mowbray, The Times-Picayune

At the packed opening hearing of the massive litigation over the Gulf of Mexico oil disaster Thursday, U.S. District Court Judge Carl Barbier scheduled a key proceeding in the litigation -- a trial to determine the proportion of fault among the corporate defendants -- more than a year from now, in October 2011.

Enlarge Ted Jackson, The Times-Picayune PHOTO BY TED JACKSON Oil skimmers try to clean up oil released from the Deepwater Horizon drilling rig explosion in the Gulf of Mexico before it reaches the sensitive wetlands Wednesday, April 28, 2010. Oil Rig Explosion gallery (24 photos)

The initial gathering of hundreds of attorneys from across the country filled the largest room at federal court in New Orleans, plus two overflow courtrooms. It was supposed to be largely administrative, but in debating how to manage the hundreds of cases pegged to the April 20 explosion of the Deepwater Horizon drilling rig and subsequent oil leak, disputes were already taking shape over the interaction of maritime law with the Oil Pollution Act of 1990, the preservation of evidence with the blowout preventer, and how quickly other evidence can be gathered.

While Barbier put off questions of when test trials will occur on indirect economic damage, wrongful death, personal injury and psychological injury cases, he scheduled an all-important maritime proceeding known as a limitation of liability trial.

"The good thing about setting the limitation of liability for trial is that it will be our goal for concluding discovery on who's at fault," said Walter Leger, a maritime attorney who is representing several parishes and individual plaintiffs.

The Limitation of Shipowner's Liability Act is an 1851 maritime law that allows vessel owners to limit their liability to the value of the sunken ship and its freight if they can demonstrate that the corporate office had no knowledge of problems leading to the accident. Transocean Ltd. filed such a pleading in Houston in May seeking to limit its legal exposure to $26.8 million, the value of the sunken rig and its cargo, and try to gain control of all of the litigation in a friendly environment close to its U.S. corporate office. Last month, the proceeding was transferred to New Orleans as part of the effort to centralize all litigation over the disaster.

While it remains to be seen whether Transocean will be able to prove that it had no idea things were going awry on the Deepwater Horizon last spring, the trial will also ask the court to determine the proportion of fault among the various corporate defendants in the case, settling key questions early about what went wrong and who has to pay.

The existence of the limitation of liability proceeding also broke a stalemate between plaintiff attorneys and defense attorneys about how quickly the discovery of evidence should unfold.

Plaintiff attorneys, led by New Orleans attorney Steve Herman and Lafayette attorney Jim Roy, pushed for as much access to corporate records and inquiries as possible, as soon as possible. An interim committee of defense attorneys representing rig owner Transocean, well lease holder BP, minor partners in the well Anadarko Petroleum Corp. and MOEX, cementing company Halliburton, and blowout preventer manufacturer Cameron

International, meanwhile, sought to limit discovery to materials that have already been given to Congress and the U.S. Marine Board of Investigation until after key legal questions are settled and potential plaintiffs have been weeded out by satisfactorily resolving their claims through the Gulf Coast Claims Facility run by Washington attorney Kenneth Feinberg.

But shortly before the hearing on Thursday, Kerry Miller, a New Orleans attorney representing Transocean, broke ranks with other defense counsel. He said that if his company was going to prepare for a limitation of liability trial a year from now, discovery needed to occur more quickly than his rivals envisioned.

While Barbier did not decide what material will be open for discovery and when, he seemed to accept this premise. "I do think that discovery needs to begin moving forward. The scope of the discovery, we can discuss," he said.

With the subject of evidence and liability at the center of discussion, the government's handling of the blowout preventer, which was raised from the well head 5,000 feet below the surface of the water on Sept. 4, and which is expected to be a key piece of evidence about what went wrong on the rig, became another flashpoint.

Miller complained to the court in filings that the government violated the terms the parties had reached about preservation of evidence by failing to flush the control pods of the blowout preventer to reduce the potential for corrosion. "Every day counts as far as preserving evidence," Miller said.

Meanwhile, Miller noted, the blowout preventer is sitting outside NASA's Michoud Assembly Facility in eastern New Orleans because a special dock has to be built to handle it and the inside of the building has to be renovated to house the material and create an system for disassembling and analyzing it. Miller asked that a front page of Wednesday's Times-Picayune with a picture of the giant device sitting outside be entered into the court record.

Stepping to the microphone, Michael Underhill, a Justice Department attorney representing the U.S. government, said that he heard the complaints about the control pod about a half hour after the pleadings were filed in court. He said that the government is committed to preserving evidence, and encouraged people to call him if they have reason to believe there are problems.

Herman, meanwhile, pushed for access to environmental samples and other evidence collected by the government for use in determining natural resource damages and fines, so that the plaintiffs can assess what sampling and testing has been done. Underhill expressed concern, saying that it's not so simple, and it feels like "they're trying to divvy up our estate." But Barbier said he would allow the plaintiffs to serve subpoenas on government entities, as long as they give the government and the defendants 15 days notice of what they're asking for.

Meanwhile, Underhill and Allan Kanner, an attorney for the state of Louisiana, urged Barbier to establish a special zone in the litigation for government-related claims, which they argue are distinct from what the plaintiff and defense committees are proposing. Kanner said that the concerns over proper use of the samples are an example of the government's unique position in the litigation.

In a recent court filing, the Justice Department said that the U.S. government is in a unique position through its role as trustee for many natural resources, as the party responsible for collecting taxes and royalties, handling disbursements for oil spill clean-up and pursuing claims under federal laws such as the Clean Water Act. The government will be in different postures at various points in the litigation, and believes that it would be inappropriate to the placed under the auspices of a plaintiffs liaison counsel.

The State of Louisiana, which filed suit against Transocean on Wednesday, raised similar concerns. Kanner said they've been having trouble working with plaintiff and defense counsel to get them to endorse the idea of a government track. "I candidly think we've hit a brick wall, but I'm happy to try again," Kanner told Barbier.

As the proceedings were wrapping up, Luan Tran, an attorney representing many Vietnamese plaintiffs, asked if the court could follow BP and the Feinberg fund's example, and translate key rulings in the case into Vietnamese, Cambodian and Spanish to make sure that everyone can follow the proceedings.

The next status hearing will be Friday, Oct. 15 at 9:30 am.

Rebecca Mowbray can be reached at rmowbray@timespicayune.com or 504.826.3417.

© 2010 NOLA.com. All rights reserved.