Court reaffirms BP is liable in Gulf oil spill
Headline Legal News
A federal appeals court panel has reaffirmed its ruling that BP is liable for federal Clean Water Act damages stemming from the 2010 Gulf of Mexico oil spill, the latest loss for the oil giant as it fights court decisions that could ultimately bring $18 billion in penalties.
The three-judge panel of the 5th U.S. Circuit Court of Appeals rejected arguments that there were errors in its June 4 ruling on BP's Clean Water Act liability. The ruling released Wednesday night is not the final say from the court. BP and its minority partner in the Macondo well, Anadarko Petroleum Corp., have a request pending for the full 15-member court to reconsider the issue.
The June order and Wednesday's follow-up were issued by Judges Fortunato Benavides, Carolyn Dineen King and James Dennis. They upheld U.S. District Judge Carl Barbier's ruling holding the well owners are liable.
BP and Anadarko had argued they were not liable because equipment failure on the leased rig Deepwater Horizon caused the April 2010 disaster. An explosion on the rig killed 11 workers and sent millions of gallons of oil spewing into the Gulf in what became the nation's worst offshore oil disaster.
Barbier has also ruled that BP was "grossly negligent" in the disaster. BP has asked Barbier to reconsider that finding, which, if it stands, would be a factor in whether the water act penalties for the company reach an estimated $18 billion.
Under the Clean Water Act, a polluter can be forced to pay from $1,100 to $4,300 per barrel of spilled oil. The higher limit applies if the company is found grossly negligent — as BP was in Barbier's ruling. But penalties can be assessed at lower amounts.
Government experts estimated that 4.2 million barrels spilled into the Gulf. BP has urged Barbier to use an estimate of 2.45 million barrels in calculating any Clean Water Act penalties.
Barbier has scheduled a trial in January to help decide how much BP owes in federal Clean Water Act penalties.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.