Alabama will reap a bonanza, which will go primarily
to our beleaguered General Fund. To his credit, Attorney General Luther Strange
has taken the helm of the legal battle rather than farming it out to expensive
trial lawyers or political cronies as has been done by past AGs.
The spill destroyed Alabama’s entire 2010 tourist
season and devastated our significant seafood and fishing industries. Gov.
Robert Bentley said, “We just want to make sure we get our fair share.” Bentley
further states, “We had more economic damage than probably any state because of
the loss of all the tourism we had in 2010. So it’s very important that the
people of Alabama are compensated for the losses related to the oil spill.”
Indeed the catastrophe, which killed people on the
Deepwater rig and sent millions of gallons of oil streaming into the Gulf,
deprived Alabama of millions of dollars in tax revenue.
The case is not being decided by a jury. It is a
bench trial being presided over by Louisiana U.S. District Judge Carl Barbier. This
favors BP. Although Strange did a good job in his opening arguments, BP won a
key victory early when Barbier ruled that the oil company should not have to
pay damages on oil recovered from the oil site. That automatically reduces BP’s
exposure by about $3.5 billion.
In addition, a finding of gross negligence is
necessary to reach the maximum civil fine of $17 billion. Gross negligence is a
very high bar to meet. BP is hanging its hat on the judge ruling that its
actions did not meet that standard. Their argument is: “This was a tragic
accident. However, we firmly believe we were not grossly negligent.”
This argument would not fly with a jury made up of
Louisianans or Alabamians. The sky would be the limit. However, the decision
will be made by a respected federal judge, who will adhere to the rule of law.
Private plaintiff attorneys and U.S. Justice
Department attorneys are hammering the British oil company with the consistent
argument that they put profits over safety. It was anticipated in some corners
that BP would settle the case prior to going to trial but according to Strange
nothing has come out of the negotiations that would indicate that BP is ready
for a deal.
Most legal experts are surprised that BP has not
settled even as the case evolves in its favor. Even though it is a bench trial
and the “gross negligence” bar is high, the experts believe the risk of the
judge ruling that gross negligence has occurred would be catastrophic for BP.
In that case, BP’s offer of $16 billion would be paltry.
BP has already been forced to pay a $4 billion
criminal settlement in the Deepwater Horizon spill. This penalty was assessed
due to negligence in the deaths of 11 rig workers. This $4 billion criminal
fine is the largest in U.S. history. Alabama will receive $335 million from the
criminal settlement. Our share is equal to the amounts appropriated to
Mississippi and Florida. Louisiana will get $1.2 billion and Texas will receive
$192 million.
In addition to this $4 billion manslaughter criminal
penalty, BP has racked up more than $24 billion in spill related expenses.
There are thousands of private suits not counting this current major civil
trial in New Orleans. This is without a doubt the biggest environmental case in
U.S. history. BP and its drilling partners are going to pay billions.
Although most experts believe the bench trial favors
BP, Alabama’s veteran leading plaintiff attorney, Jere Beasley, says there is
an upside to a bench trial. “The big difference is you only have to prove your case
to one person instead of 12 so you can focus on him. The other way, if you miss
one juror, you are in big trouble.” We
will see.
See you next week.
About the author: Steve Flowers is Alabama’s leading
political columnist. His column appears weekly in more than 70 Alabama
newspapers. Steve served 16 years in the state legislature. He may be reached
at http://www.steveflowers.us.
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