BP wins appeal against $100m fine

London – BP has successfully appealed a US court’s ruling that it must pay $100 million (£65m) in damages to 10 workers because of the harm they suffered during an incident in April 2007 at its Texas City refinery. A Texas judge on 16 March upheld an appeal by the company, which had argued that the damages awarded last December were ’unjustified, improper and unsupportable.’

The case was the first of some 100 lawsuits scheduled to be brought against BP by more than 140 workers at the refinery. They claim that toxic gases were released during the explosion, which BP has denied.

The plaintiffs in the first case to be heard said breathing in benzene and other harmful chemicals released from a sulphur recovery unit had caused dizziness and sore throats. No long-term or permanent injuries were caused, but one worker passed out at the incident, which happened during repair of two units damaged in a plant-wide shutdown in 2005.

Environmental agencies could find no evidence to support the plaintiffs’ claims. Initially the plaintiffs had asked BP for damages of $5,000 each, but took to the courts when the company refused to budge from its $500 settlement offer. The trial lasted three weeks and the jury took one and a half days to make its decision.

In addition to the $100m in punitive damages to the 10 workers, the jury awarded them a further $326,000 in compensatory damages for the injuries caused.
BP had attempted to counter the claim by saying the plant did not release a toxic substance and it had no control over an event that stemmed from an unidentified party’s negligence. However, the plaintiffs’ counsel said BP failed to identify 70% of toxic releases into the environment and had a poorly maintained workplace that lacked sufficient monitoring to detect toxic chemicals or warn workers of a release.

The Texas City refinery is the third-largest in the US. An explosion on 23 March 2005 killed 15 workers and injured 180 others, prompting extensive civil litigation.
BP paid more than $2 billion to settle hundreds of blast-related lawsuits and a $50m fine to resolve a criminal charge of violating the US Clean Air Act. It also paid $21.4m in fines to the Occupational Safety and Health Administration for safety violations.

Last October, however, the agency issued another $87.4m in penalties for BP’s failure to meet its 2005 agreement to make good the safety violations at the plant. BP is contesting this fine, claiming it is in full compliance with the settlement agreement.

Refinery manager Keith Casey said: “While we strongly disagree with OSHA’s conclusions, we will continue to work with the agency to resolve our differences.”
In contrast, US Secretary of Labor Hilda Solis said BP had not lived up to its commitments with OSHA and “has allowed hundreds of potential hazards to continue unabated.”