In the post-trial Findings of Fact and Conclusions of Law issued on September 4, 2014, after Phase One of the BP oil spill trial, the United States District Court for the Eastern District of Louisiana found BP Exploration & Production, Inc. (BP) liable for gross negligence and willful misconduct in causing the blowout of BP’s Macondo well and the resulting oil spill. The Phase One ruling exposes the company to up to $18 billion in penalties under the Clean Water Act (CWA). The court found that BP’s contract parties, Transocean Ltd., the owner of the mobile offshore drilling unit Deepwater Horizon (Deepwater Horizon),and Halliburton, the cement contractor for the Macondo well, were liable as well but merely negligent. On April 20, 2010, a blowout, explosion, and fire occurred aboard the Deepwater Horizon. The fire burned for two days, after which the oil rig capsized and sank into the Gulf of Mexico. For 87 days, millions of gallons of oil discharged into the Gulf of Mexico until the well was capped on July 15, 2010.

In November 2012, BP agreed to a record $45 billion penalty to resolve criminal and securities claims resulting from the spill. In February 2013, the first phase of a three part case to address civil claims commenced before U.S. District Judge Carl Barbier, concluding in April 2013. Phase One, known as the Incident Phase, addressed fault determinations relating to the loss of well control, the explosion and fire, the sinking of the Deepwater Horizon, and the release of oil from the Macondo well. In its recent Phase One findings, the Court presented several conclusions of law, most significantly its finding subjecting BP to enhanced civil penalties under the Clean Water Act, as Judge Barbier determined that the discharge of oil was the result of BP’s gross negligence and willful misconduct. In evaluating the evidence, the Court focused on the recklessness of BP’s personnel in continuing to drill despite negative pressure tests indicating that the well was not under control. A further complex series of negligent actions by BP increased the risk of losing control of the well and contributed to the finding of gross negligence. Although the Court also found Transocean and Halliburton liable under general maritime law for the blowout, explosion, and oil spill, it determined that their actions were merely negligent. The Court ultimately apportioned 67 percent of the fault to BP, 30 percent to Transocean, and 3 percent to Halliburton. Despite this allocation, the Court went on to conclude “that Transocean’s and Halliburton’s indemnity and release clauses in their respective contracts with BP are valid and enforceable against BP.” As such, most of the contractors’ liability will shift to BP by virtue of the contractual indemnities.