We herald the New Year with a Shell Oil exploratory rig run aground on a frigid Alaskan island as well as the promise of introduction in court of incriminating e-mails said to prove BP managers knowingly lied about the extent of spillage in the last oil rig disaster – that one in warmer, Gulf of Mexico waters.
While the Alaskan rig carries a mere 150,000 gallons of diesel fuel and lubricants, the explosion and destruction of BP’s Deepwater Horizon and the break in its pipeline to its Macondo well pumped 62,000 barrels of crude oil per day into the Gulf in the early days following the explosion.
BP told the US Coast Guard that Macondo was leaking a paltry 1,000 barrels per day, despite internal BP expert estimates that the leak was actually pumping between 60,000 and 140,000 barrels per day. Although BP has since pled guilty to related federal criminal charges – including 11 counts of manslaughter in the deaths of its rig workers – and paid billions of dollars for environmental clean-up and to compensate fishermen and others harmed by the disaster, one set of victims has yet to receive justice: the shareholders who actually own BP and were allegedly lied to and misled by their managers about the extent and quality of the company’s safety program and its ability to contain the Deepwater Horizon catastrophe.
Shut Out of Federal Courts, US Public Employee Retirement Systems Challenge BP Management on Pattern of Criminal Negligence and Deceit in State Court
But – in yet another example of the damage done by the Supreme Court’s anti-US-investor, pro-fraud defendant Morrison decision – a lower federal court cited it in ruling that while US BP shareholders who purchased their securities on the New York Stock Exchange could proceed with claims in federal court, US BP investors who purchased their shares on the London Stock Exchange cannot use federal courts – even though they, too, are US citizens or pension funds and the allegations concern wrongdoing in US waters. By limiting the rights of US citizens to seek justice in US courts when foreign entities defraud them, the Supreme Court in Morrison turned on its head more than 50 years of American jurisprudence.
Excluded from federal court, the Alameda County Employees’ Retirement Association of California, the Employees’ Retirement System of the City of Providence, Rhode Island, and State-Boston Retirement System filed lawsuits in Texas state court alleging they lost millions of dollars during the period November 29, 2006, through June 25, 2010, due to false and misleading statements made by BP managers. A commission appointed by President Obama concluded the Deepwater Horizon disaster was preventable and due to a BP culture of negligence (recently determined to be criminal), which extended over many years.
Deepwater Horizon was not BP’s first preventable disaster. In 2002, for instance, a BP-owned Gulf drilling rig (Ocean King) experienced a gas blowout its crew could not contain. The rig was abandoned, exploded and caught fire, causing more than $2 million of damage. A US Department of Interior investigation found BP had installed noncompliant equipment contributing to the explosion. and the shareholder complaint alleges that its engineers had ignored foreknowledge of the very gas pocket they were drilling through when the explosion occurred.
Three months after Ocean King, another leakage of gas and mud occurred in the Gulf when workers were unable to plug a well. The next year (2003), another BP Gulf well leaked gas when the drilling rig drifted away from the well, severing the pipe. Safety equipment failed to staunch the flow.
In July 2005, BP narrowly escaped a big Gulf disaster when its giant Thunder Horse rig almost capsized during a hurricane due to the backwards installation of a valve. Later, serious underwater cracks were discovered in the pipeline of that mile-deep well.
Also in 2005, an explosion and fire at BP’s Texas City refinery along the Gulf coast killed at least 14 people and injured more than 100.
A 2006 leak caused by corrosion in BP’s pipeline on Alaska’s North Slope that led the company to plead guilty to violating the Clean Water Act and pay a $20 million criminal fine.
Bush Aide James Baker Found BP Safety Negligence from “Top to Bottom”
Pressure from US regulators led BP to appoint a study group headed by former Bush family adviser and then Secretary of State James Baker to investigate and make recommendations for corporate changes. The shareholders’ lawsuit cited the Baker Panel’s findings (as quoted by the later presidential commission investigating the Deepwater Horizon disaster):
BP management had not distinguished between occupational safety – concern over slips, sprains, and other workplace accidents – and process safety: hazard analysis, design for safety, material verification, equipment maintenance, and process-changing reporting. And the [Baker P]anel further concluded that BP was not investing leadership and other resources in managing the highest risks.” More specifically, the Baker Panel found that: “from the top of the company, starting with the Board and going down … BP has not provided effective process safety leadership and has not adequately established process safety as a core value … [The company exhibits] a lack of operating discipline, toleration of serious deviations from safe operating practices, and apparent complacency toward serious process-safety risk.
Soon After Deepwater Horizon Explosion, BP Chose Path of “Deceit”
“Despite this clear pattern of preventable disasters in the years leading to the Deepwater Horizon catastrophe, BP management consistently claimed it was committed to the highest safety standards, could manage its risks and correct any problems, even while its corporate culture consistently placed cutting costs above protecting lives and the environment,” said Jason S. Cowart, Esq. of Pomerantz Grossman Hufford Dahlstrom & Gross LLP,, the attorney handling the retirement funds’ case against BP.
Cowart maintains that BP could have come clean with investors about the seriousness of the disaster immediately following the 2010 explosion. Instead, he said, BP was “doubling down on their campaign of deceit” to protect its stock price amid investors’ concerns about the spill’s financial impacts on the company.
Will the Merits of the Case Matter?
It remains to be seen whether the defendants will succeed in dismissing the case with technical jurisdictional challenges that have nothing to do with the merits. Defendants’ challenges are only made possible by the Morrison decision in 2010.
If the BP defendants succeed, US retirement funds serving millions of American state and local government workers on both our Atlantic and Pacific coasts will have no way to recover many millions of dollars lost to BP management wrongdoing in US waters.
It is past time for Congress to overturn the pro-defendant, anti-US investor Morrison Supreme Court decision.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy