Courtwatch, BP Edition, Part 2

Courtwatch, BP Edition, Part 1

Part 2:

The main portion of the trial concerns civil liability and Clean Water Act fines, etc.  Ed Crooks of the Financial Times has been covering the trial extensively.  There's also been periodic tweeting/writeups from Mike Schleifenstein and others with the TP.  One TP reporter (Richard Thompson) jumped ship to The Advocate and has headed up their coverage.  

There's been plenty of coverage of the main trial.  Billions of dollars are at stake.  Much hinges on how Barbier rules. Louisiana, for example, is putting most of its hopes of funding coastal restoration on the trial.  

I've attended, off and on, since the first day of the trial.  I've by no means attended nearly as often as the reporters covering the trial.  I usually follow their tweets as much as I can, but they're getting a more complete picture than I can try and portray.  What I do have that few others in the room have is an engineering background; when an expert witness describes how he set up his OLGA model, I'm the only guy in the room whose eyes won't glaze over.  

I'll just add a few insights from the first phase of the trial for now:

* First off, I was shocked at the number of lawyers who were taking advantage of the WiFi to check up on their Facebook pages in the middle of Barbier's courtroom.  I've been told by a friend that those were likely the BP Corporate Counsel who are only attending the trial because they have to.  They're basically around to sign checks and make sure nothing goes too far off the rail.  All of the actual trial litigation is contracted out.  

* Speaking of contracted lawyers, BP decided to recruit their main lawyer on Phase 1 from Bear Bryant's Alabama football team.  Let me tell you, football players make great lawyers.  

No, not really, he made a total mess of the trial.  It was embarrassing how often he was unprepared or late or just plain wrong.  I realize that "whoever wins the most objections" doesn't win a trial and that many objections are brought up knowing they won't be sustained by a judge, but Brock batted below the Mendoza line on objections.  He always seemed to walk around with complete confidence in himself, no matter what, though.  He probably knew how much BP was pumping up his bank account.  Fortunately for BP's shareholders, he was shunted off to the side in the second phase of the trial, but he made a mess of the first phase, in my (non-lawyer) opinion.  

* Dr. Bea testified early in the first phase.  His health is going downhill, but he's still amazing to listen to.  BP attacked him pretty hard at the end of his testimony, but didn't land a single hit (IMO).  

* The most interesting portion of the first phase of the trial was the duel between two expert witnesses: Dr. Bourgoyne and Dr. Alan Huffman.  Dr. Bourgoyne wrote the book on drilling engineering and is Professor Emeritus at LSU in Petroleum Engineering.  Dr. Bourgoyne was BP's expert witness, but the Feds coaxed plenty of testimony out of him highly damaging to BP, IMHO.  Dr. Alan Huffman is a geophysicist and arguably the world's leading expert on pore pressure prediction.  Dr. Huffman was an expert witness for the Feds. What I found extremely interesting was Dr. Huffman and Dr. Bourgoyne went at each other like two bulls in a pasture only big enough for one.  They had multiple rebuttal reports to each other's findings.  Here's one of Dr. Huffman's I found online.  All of the reports are out there if you go searching for them.  It blew me away that you'd have two experts at the top of their field banging away at each other like that.  The thrust of Dr. Huffman's testimony was BP drilled in a reckless manner, even before the failed cement job began.  The thrust of Dr. Bourgoyne's testimony was BP operated with standard industry practice up until the cement job, then there some recklessness occurred (he sort of waffled around on whether he thought it was gross negligence).  He did say  it was the worst job at kick detection he'd seen in his entire life (a good drilling crew will detect a kick in under 6 barrels; on Macondo, over 600 barrels entered the wellbore before any action was taken).  Some of what each said at the time went over my head, but I was actually attending a graduate level petroleum engineering course at the time and would ask the professor in that course for background and could then later put the pieces together better.  I have no opinion in which was more right, but both made great points (neither was all that helpful to BP) and I was honored to have heard both testify.   If you want to listen in person to Dr. Huffman talk about pore pressure prediction and fracture gradient (which was also his primary expertise at the trial), you can go to the Tulane Engineering Forum on April 4th.  When Dr. Huffman and Dr. Bourgoyne were testifying, I had a lot of crappy Subway at my desk, but it was worth it to hear every minute I could.  I learned a lot.

* Judge Barbier's handling of the trial was magnificent in my opinion.  He worked very, very hard to keep all the personalities in line.  This trial could easily have blown up into a giant circus.  He hasn't hesistated to step on toes in order to bring lawyers to heel.  He's also been a marathon runner as far as pushing forward and not taking every little excuse for a recess or an early 2-hour lunch.  His handling of the trial, just from a logistical standpoint, has been masterful.  Furthermore, when he asks witnesses questions, they are short, insightful, and more than once I found him asking a question I wanted asked.  Thus far, he has done just about the best job you could reasonably ask a judge to do.  

Here's a Reuters summary of Phase 1 of the trial. A Wikipedia entry on the BP Litigation.  

I'll try to do an update on the second phase later.  I also hope I've separate my opinion on what occurred vs. what actually occurred well enough.  

Note:  Some minor changes after publishing for clarity.

Courtwatch, BP Edition, Part 1

So, one thing about living in a democracy is that the courts are open to the public.  Anyone can walk right in and (so long as you are well behaved) observe the proceedings.  No star chambers in this country (Welp, maybe NSA excluded).  

Anyway, what I wanted to talk about a case that's very important going on right now.  No, not the Nagin trial.  The various BP trials have been going on for the past few months at the Federal Courthouse on Poydras.  One of the largest, most profitable corporations on earth is on trial and any member of the public can come in and watch the proceedings.  

There have been 4 main public trials thus far:

1- The USCG/MMS Board of Inquiry, held partly at a hotel in Kenner and broadcast on CSPAN.  Not really a trial and the final report isn't (directly) admissible in court, but somewhat similar.  I was at home sick for a few days and watched a substantial portion of it and was amused at expensive corporate defense lawyers trying to file objections during the proceedings only to have the Coastie running the proceedings tell them to sit down and shut up.  One of the BP lawyers in the proceedings popped up quite a bit later.  

2- The main portion of the BP trial is going on at the federal courthouse on Poydras and Judge Barbier is supervising the proceedings.  Barbier has been extraordinarily open with the proceedings, as this Lens report details.  An overflow room with WiFi, live transcripts... Barbier is bringing a very stodgy bench into the 21st Century.  

Phase 1 focused on dividing the liability between the defendants: BP, Halliburton, Transocean, and (to a lesser degree) Cameron and Weatherford.  

Phase 2 focused on how much oil flowed (since many of the fines are on a per barrel basis) and how quickly BP acted in stemming the flow.  One interesting caveat of the second phase: it was everyone vs. BP; Halliburton, Transocean, etc. joined forces with the government to bang on BP.  

Phase 3 has yet to happen.  

No final rulings (liability, flowrate, etc.) out of the main trial have been made to date by Judge Barbier.  

3- The trial of Kurt Mix, a BP engineer who was not involved in drilling Macondo, but was involved with the capping of the well.  He was accused (and convicted) of obstruction of evidence.  There's also the somewhat related guilty plea of a Halliburton manager named Anthony Badalamenti .  

4- The (yet to begin) trial of the two BP company men on the Deepwater Horizon on manslaughter charges (amongst other charges).  February 5th is the start of that trial.  Judge Duval will handle that trial.  

I actually got to attend some of the trials in person.  I'd take off a bit early for lunch, walk over, listen to the trial, and then (depending on how much time I had left), choke down some lunch and walk back.  Some days, particularly during some of the more interesting testimony, I dawdled and was reduced to eating a crappy Subway sandwhich at my desk :-( .  

I'll start with describing the only trial to reach a conclusion first.  Kurt Mix was accused of obstruction of justice by the Feds.  Mix was one of BP's point men on the capping of the well.  He allegedly deleted emails that involved the flowrate estimation and made it harder for the Feds to make their case in Phase 2 of the main trial.  Loren Steffy, the accomplished energy journalist for Forbes and the Houston Chronicle, wrote up this background on the case as Mix's trial was about to start. Steffy wrote that the "Curious Case of Kurt Mix" didn't look like it would go well for the Feds.  

I only attended the Mix trial once, but it was very illuminating.  Judge Duval ran the proceedings.  Whereas Barbier was a bit cerebral, Duval was kind of frumpy and reminded me almost of a plumber.  Duval was fairly laid back in his management of his courtroom.  I walked into the courtroom shortly after reading the Steffy writeup and expected to see the Feds falling on their face and OH BOY WAS I WRONG!  

The prosecution team was led by a young white (Asian? his back was turned) prosecutor that I'd seen in the main trial.  He was sharp as a tack and led a devastating attack on Mix.  The prosecution was using Mix's responses on "radio buttons" relating to document retention in the aftermath of Macondo.  In a way, Mix was testifying against himself.  The prosecutors were outlining all the resources BP made available to help retain documents critical to trial.  The obvious message to the jury was Mix failed to take advantage of everything that was at his disposal.  What was also surprising is the main witness for the prosecution was BP's own in-house counsel for document retention.  A BP lawyer was throwing a BP engineer under the bus!  BP has been in the news lately for allegedly screwing over their own employees on their pensions, so I guess it isn't that surprising that one BP employee would throw another to the wolves like that, but I guess I figure I'd see them look out for their own a little better.  I guess not.  It ain't for nothing the Feds average an almost 90% conviction rate.  I learned subsequently that the lawyer leading Mix's prosecution was based out of DC and not locally.

In contrast to the prosecution lawyers, Mix's own lawyers weren't very impressive at all.  This is just my opinion and I might be wrong, but I got the sense that Mix knew things weren't going well and was leaning over to his lawyers for reassurance, and his lawyers were telling him, 'oh yeah, we've got those Feds on the ropes' (meanwhile, they're getting shellacked).  Memo to engineers: if you do screw something up don't hire your cousin Vinny to defend you.  It's better to be paying off big legal bills after an acquittal than to be spending time in the slammer.  After the conviction on 1 of the 2 counts, Mix's lawyers have filed motion after motion trying to get out from under the conviction, but I get the sense that they're trying to compensate for being so lackadaisical in the courtroom (you know, where it actually could have made a difference for Mr. Mix).  

Going on in parallel to the Mix trial was the plea of Anthony Badalamenti, a manager at Halliburton.  Mr. Badalamenti earned a civil engineering degree at Tulane in 1979 and apparently learned enough about cement to become the manager of Halliburton's Cementing Technology division by the time Macondo hit.  He plead guilty to ordering two subordinates to run simulations on whether or not the number of centralizers used on the Macondo cement job were very important to the performance of the cement job (answer: not very) and then to destroy the results of those tests and not turn them over as a part of the Macondo investigation.  There was a lot of talk about the centralizers during the USCG/MMS BoI, but they ultimately concluded that it wasn't a very big deal.  Halliburton did spend a lot of time promoting the 'BP didn't listen to our advise' theory and using the centralizer to bolster their case.  Badalamenti's actions didn't help, but ultimately didn't effect the outcome.  As a result, Judge Zainey was in a forgiving mood and handed Badalamenti a $1000 fine and probation.  "I'm truly sorry for what I did," said Badalamenti.  That was quite nice of Judge Zainey.  

If Mix had chosen to cooperate more, you have to wonder if he'd have gotten Badalamenti's generous treatment.  If Mix had better lawyers, he might have gotten off, like Steffy and myself was expecting.  Instead, he was the first individual convicted in relation to the Macondo Blowout.  

Note: some minor edits for grammar and spelling.

A day of joy for a Tulane grad...

Zero student loan debt!  Yippee!!!!!!!!!!!!

In my interactions with older coworkers, it's astonishing how little understanding there is amongst their generation at what student loans mean.  There's a lot of misunderstanding at what tuition levels really are at universities (both over-estimating {Tulane has a VERY healthy 'discount rate' that makes the $50K+/yr. tuition more reasonable} and under-estimating {state schools are now beyond the level you can work your way through college}).  There's a lot of misunderstanding about how harsh repayment terms can be (look at these vultures).  

Student loan companies, like Sallie Mae, can go fuck themselves up the ass with a sideways pineapple.  I have a healthy math background and I got snuckered into a pretty poorly structured loan refinance.  I went from a bundle of 4 or 5 loans at 1% or 2% with a 10-year repayment period to a new loan at 6+% with a 20-year repayment period.  Once you get that higher rate and the longer term, you end up paying a boatload more in interest.  It's like the difference between a 15 and 30 year mortgage.  It was only after a couple of years and realizing, 'wait a minute, I should be paying more' did I realize I'd be taken.  If that can happen to a STEM grad, imagine how badly some poor Humanities major can be taken for a ride. 

Here's a Glenn Reynolds WSJ Op-Ed.  It leans too much on the unicorn of "online classes" as a solution, but it's food for thought.