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The Supreme Court of the United States makes major headlines only a few times a year, but when it does, it usually makes enough to stir up enough controversy to last well into its next session. In the past week alone the justices, in their infinite wisdom, have ruled against individual states rights with respect to the Obamacare health plan and – as a separate issue – marriage of same sex couples. Make no doubt about it, the decisions were not about what the public and the media at large believe. They were about overruling individual states’ rights that are clearly granted under the U.S. constitution. Perhaps a tax on tea wasn’t that bad after all.
This morning the court announced that it would not hear cases 14-1217 and 14-1167, BP Exploration and Production, Inc. v. U.S. and Anadarko Petroleum Corp v. U.S.
This effectively ends the appeal process for BP and Anadarko as it essentially established the earlier decisions of U.S. Circuit Court Judge Carl Barbier that found both companies negligent and BP grossly negligent in the 2010 Deepwater Horizon explosion and resulting oil spill. [See previous ADVFN articles: “BP Shares Plunge on Court Ruling” (09/05/14), “U.S. Judge Rules Against BP – Again” (24/09/14), and “BP Respond (sic) to U.S. Supreme Court” (12/08/14).]
BP shares (LSE:BP.) (NYSE:BP) fell 2.29% to 427.55 on the London Exchange and 2.64% to 40.26 on the New York Exchange. Anadarko shares (NYSE:APC) fell in similar fashion by 2.43% to 79.38. Prior to the tragedy on 10 April 2010, BP had been trading at 623.40 in London and at 57.07 in New York (both as recorded on 01 March 2010).
The common argument set forth by both oil companies in their separate cases was that they should not be responsible for oil spilled as a result of failed equipment on the drilling rig. The rig was own by Transocean Ltd. (NYSE:RIG). BP and Anadarko shared joint ownership in the well. Judge Barbier ruled that the well owners, not just the equipment owner/operate should be held responsible.
Transocean has already paid out over $1 billion in civil penalties to the U.S. government. As we pointed out in our story on 24 September 2014, Judge Barbier has relentlessly pursued BP as though he were the Hound of Heaven, denying any relief, even from alleged fraudulent claims in the amount of $185 million that BP had been force to pay to 208 claimants.
It would appear that, as of the SCOTUS refusal to hear the case, BP and Anadarko have exhausted all avenues of relief. Once again, the two companies will have to face Barbier, as he is the sole judge who will determine the amount of penalties to be assessed. Anadarko is expected to have to lay out something in the area of $1 billion, but BP could be looking at as much as $13.7 billion on top of the $42 billion it has already incurred in accumulated costs related to the spill.
Barbier’s decisions and SCOTUS’ refusal to hear the BP and Anadarko cases are outrageous, if not scandalous. The Deepwater Horizon incident is, rather, an opportunity for a few people to become political heroes and a government agency (the EPA) to once again line its pockets through the full force of the U.S. Clean Water Act. Unfortunately, it is what it is. The last I knew both BP and Anadarko were hoping for the best and preparing for the worst. Let’s hope that they have prepared well.
