A federal court judge Thursday upheld his previous decision that BP was grossly negligent in the 2010 Deepwater Horizon spill.
In September, U.S. District Court Judge Carl Barbier ruled that BP had committed gross negligence that led to a well blowout causing the largest oil spill in U.S. history and killing 11 people.
Barbier assigned the company 67 percent of the fault for the accident.
Switzerland-based rig owner Transocean was assigned 30 percent of the fault and Texas-based services provider Halliburton was assigned 3 percent of the fault.
The penalty phase of the trial is set to start in January.
BP could face up to $18 billion in penalties for violations of the Clean Water Act.
The decision is the latest in a series of legal defeats for BP.
Last month, BP tried to challenge Barbier’s gross negligence ruling, arguing that the decision relied on inadmissible testimony.
Barbier shot the challenge down, concluding that BP had reintroduced the testimony while cross examining an expert witness.
Earlier this week, the judge also refused to fire the administrator of Deepwater damage settlement claims Patrick Juneau after BP argued Juneau had failed to disclose conflicts of interest.
BP has earmarked $42 billion to pay for cleanup costs.
So far, the company has paid about $28 billion for cleanup, penalties, fines and compensation.