U.S. judge upholds BP 'gross negligence' Gulf spill ruling

By Jonathan Stempel

(Reuters) - A U.S. judge weighing how much BP Plc (BP.L) should be punished for the 2010 Gulf of Mexico oil spill on Thursday refused to overturn his own finding that the oil company's conduct was "grossly negligent."

The decision by U.S. District Judge Carl Barbier in New Orleans means BP could still face close to $18 billion of penalties for violating the federal Clean Water Act.

It marks the latest setback in BP's effort to curb costs from the April 20, 2010, explosion of the Deepwater Horizon rig, which led to 11 deaths and the largest U.S. offshore oil spill. The trial is expected to resume in January.

Barbier had on Sept. 4 ruled that BP committed gross negligence and was 67 percent at fault for the spill.

The gross negligence finding roughly quadrupled the maximum civil penalty that BP could face under the Clean Water Act.

BP later argued that this ruling relied on inadmissible testimony from an expert for Halliburton Co (HAL.N), which provided cementing work at the spill site.

But the judge disagreed, saying BP "opened the door to this testimony" through a cross-examination of the expert.

"BP's assertions that it was 'unfairly surprised' and 'prejudiced' by the court's reliance on this testimony lack any basis in fact or law," Barbier wrote in an 11-page order. "Rather, it seems BP was a 'victim' of its own trial strategy."

On Monday, Barbier rejected BP's bid to oust Patrick Juneau, an administrator overseeing payouts to businesses and individuals claiming damages from the spill.

BP has complained that Juneau's awards, made under a 2012 settlement agreement it signed, are too generous and are going to claimants who were not harmed. An appeal by BP related to that settlement is pending before the U.S. Supreme Court.

BP spokesman Geoff Morrell said the company disagrees with Barbier's order, and will appeal his Sept. 4 decision.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

(Reporting by Jonathan Stempel in New York; Editing by Grant McCool and Ken Wills)