US Deepwater Horizon explosion & oil spill lawsuits

Deepwater Horizon Source: US Coast Guard, Creative Commons

In 2010, hundreds of lawsuits were filed against companies involved in the explosion of the offshore drilling rig Deepwater Horizon which killed 11 workers and injured 17. Plaintiffs have a range of concerns, from requesting compensation for their injuries to economic harm resulting from the explosion. Several U.S. government criminal investigations have been launched as well. BP agreed to pay $4.5 billion dollars to the US Deparment of Justice and Securities and Exchange Commission. BP will also pead guilty to 14 criminal charges and will pay an additional $1.26 billion fine to the US Department of Justice. 

 

On 20 April 2010, the offshore drilling rig Deepwater Horizon exploded and caught fire in US waters of the Gulf of Mexico.  11 workers were killed in the explosion and 17 injured.  The rig was owned by Transocean on lease to BP, which was the main operator and developer of the site, with Anadarko Petroleum and MOEX Offshore (part of Mitsui Oil Exploration) as minority co-owners.  Work on the well had been performed just before the explosion by Halliburton.  The “blowout preventer” was built by Cameron International.  On 22 April, the rig sank.  Oil leaked from the ruptured well head until 15 July when it was temporarily stopped; approximately 4.9 million barrels of oil had leaked into the Gulf.  On 19 September 2010, the US government declared the well “effectively dead”.  Oil directly affected coastal areas in Louisiana, Mississippi, Alabama, Florida and Texas.  People dependent on fishing and tourism have been severely affected, along with those in other industries, including some farther from the Gulf Coast.  Concerns have also been raised in relation to health hazards for clean-up workers and coastal residents, including harms allegedly caused by chemicals used to disperse the oil (made by Nalco).  Coverage of the human rights impacts of the disaster is available here.

The explosion and spill have given rise to many lawsuits.  By early December 2010, hundreds of lawsuits had been filed against the companies involved; this number is likely to increase further.  Lawsuits have been brought in both federal and state courts (for a selection see below).  People claiming to have suffered economic harm from the spill can also seek compensation through the Gulf Coast Claims Facility.  There are two possible claims through the Claims Facility; emergency payments and long-term settlement.  Emergency payments do not prevent the claimants from suing for additional or future losses; however, if a long-term settlement offer is accepted and received, the claimant forgoes the right to sue BP.  More information on the Claims Facility is available here.

Several U.S. Government investigations have been launched into the oil spill including civil and criminal probes conducted by the Justice Department.  The criminal investigation looks into whether improper relations between corporate officials and federal regulators contributed to the accident and breaches of environmental laws.  On 15 December 2010, the US Justice Department filed a civil lawsuit against BP, Transocean, Anadarko, MOEX (part of Mitsui Oil Exploration) and the insurer of the rig QBE Underwriting/Lloyd’s Syndicate 1036 (part of Lloyds of London).  The lawsuit will be included in the consolidated proceedings and includes claims under the Clean Water Act and the Oil Pollution Act.  BP says that it will answer the allegations in a timely manner and will continue to cooperate with government investigations.  BP’s partners in the well, Anadarko and MOEX, as well as Transocean, say BP is to blame for the spill and should be held liable.  On 15 November 2012 BP announced it had reached a $4.5 billion settlement with the US Department of Justice and Securities and Exchange Commission.  BP agreed to plead guilty to 14 criminal charges and to pay a $1.26 billion fine to the Department of Justice.  The company will also pay $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences.  BP will also pay $525 million to the Securities and Exchange Commission.

BP has a general policy not to comment on pending litigation, but information about their response to the explosion and spill is accessible on this part of BP’s website.  The site includes a section on claims and links to BP’s internal investigation of the accident.  On 18 October 2010, BP filed a statement with Court saying they will pay all legitimate claims, regardless of the Oil Pollution Act’s limits on liability.  The filing specifically states that “by making this statement, BP and its affiliates are not admitting anything about their conduct”, and expressly denies gross negligence.  On 13 May 2010, Transocean filed a federal court petition (full text here) seeking to limit its liability arguing it did not cause the disaster and should not be responsible for injuries and damages.  On 24 August 2010, the petition was transferred to the federal Multidistrict Litigation consolidated proceedings until further notice.  According to Bloomberg, Transocean commented in September 2010 that it is awaiting clarity on the “complex litigation landscape” and will then “defend its position vigorously”.  Further information on Transocean’s position is available on a section of its site.  In an October 2010 press release, Halliburton argued that the responsibility for the disaster lies with BP, which failed to perform a key test on the cementing.  In May 2010 testimony to Congress, Cameron’s President and CEO outlined Cameron’s general position.  When contacted by Bloomberg in May 2010, a Cameron spokesperson referred to company policy not to comment on litigation.  In a June 2010 statement, Anadarko claimed that the accident was a “direct result of BP’s reckless decisions and actions”.  On 4 September 2014, the judge in the federal Multidistrict Litigation proceedings issued a ruling finding BP grossly negligent and guilty of wilful misconduct in the Deepwater Horizon disaster.  The judge also found Halliburton and Transocean guilty of negligence.

Below are profiles of a representative selection of lawsuits against companies raising human rights concerns that arise out of the explosion and spill.  This is not a comprehensive listing of lawsuits bringing human rights claims.

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Article
22 June 2011

Transocean: BP decisions led to Gulf disaster [USA]

Author: Harry R. Weber, Associated Press

The owner of the rig that exploded in the Gulf of Mexico last year largely blames oil giant BP for the disaster in an internal investigation report...that goes a long way in bolstering the Swiss firm's arguments in responding to pending lawsuits and expected government fines. The Transocean report said the April 20, 2010, Deepwater Horizon explosion and resulting oil spill was sparked by a succession of well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of its failure. Transocean said many of the decisions were made by well owner BP in the two weeks before the incident...BP's own internal report on the disaster blamed a cascade of failures by multiple companies for the disaster. Government investigations also have spread around the blame.

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Article
21 June 2011

BP in $75m Gulf spill settlement with contractor

Author: Adam Jones, Financial Times

The UK oil and gas group has agreed to indemnify the US arm of Weatherford International, a Switzerland-based oilfield services company, against compensation claims linked to the accident – although it has not gone so far as to protect it from any fines or punitive damages it might suffer. As part of the settlement between the two companies, Weatherford is paying BP $75m, which the British company is passing on to the $20bn trust it has established to meet compensation claims. Weatherford made a coupling device, or “float collar”, used in the Macondo well which blew up, killing 11 people and leaked oil into the Gulf of Mexico. The company, which is listed in the US, France and Switzerland, said the payment would be met from insurance policies.

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Article
13 June 2011

Second seaman sues BP over accident between oil spill clean up boats [USA]

Author: Alejandro de los Rios, Louisiana Record

A second lawsuit has been filed…in relation to an accident between two ships that were hired by BP to help with clean up of last year's oil spill in the Gulf of Mexico....Both suits name 18 defendants including BP...Twenty Grand Offshore...Tidewater Marine...the boats involved and their captains. The plaintiffs are seeking damages in excess of $50,000 in both suits. Adams suffered injuries "to his entire body, joints, bones, ligaments, and muscles, and all of said injuries have been a source of physical pain and mental anguish and have resulted in residual dysfunction, limitation of motion and physical impairment of function," the suit claims...The suit claims the ships involved were negligent in failing to provide a safe environment for works, as well as failing to provide adequate crew training.

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Article
8 June 2011

Bay Medical Center Receives 1.4 Million Dollars In BP Settlement [USA]

Author: Sandra Osborne, News Channel 7 [USA]

BP will pay Bay Medical Center 1.4 million dollars for damages sustained because of last year’s Deepwater Horizon oil rig explosion and the...oil spill. Hospital officials say they saw fewer patients because there were fewer tourists at the beach last summer. Bay Medical’s C.E.O., Steve Johnson says this settlement will avoid legal costs and help the hospital move past the financial setback. "It has taken an inordinate amount of work on our part and staff time getting together the data necessary to support our claim with BP. We're very fortunate to see this part of the process come to a close," said Johnson. Hospital officials expect they’ll receive the money from the settlement this week. They will use the money on daily hospital operations.

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Article
8 June 2011

Senate panel opens door for BP rig workers' families to sue [USA]

Author: Maria Recio, McClatchy Newspapers

The Senate Commerce Committee…approved a bill to help the families of the 11 victims of…Deepwater Horizon blowout by changing outdated federal maritime laws, one going back to the 1850s, to make it possible to recover damages from BP, rig operator Transocean and rig subcontractors. The Deepwater Horizon Survivors' Fairness Act would amend the Jones Act and the Death on the High Seas Act to allow the victims' families to claim non-compensatory damages, such as pain and suffering and loss of companionship. Both laws prohibit such claims. The bill also would change the Shipowners' Liability Act of 1851, which limits a vessel owner's liability to the value of the vessel and its freight.

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Article
1 June 2011

Anadarko Liable by Law for Gulf Oil Spill, U.S. Lawyers Say

Author: Margaret Cronin Fisk & Laurel Brubaker Calkins, Bloomberg

Anadarko…is liable under federal oil pollution laws for environmental damage caused by the April 2010 blowout of the Macondo well and the Gulf of Mexico oil spill that followed, the U.S. government said. The exploration and production unit of Anadarko, which owned most of the company’s 25 percent stake in the BP…well, asked a federal judge in New Orleans to dismiss it from a Justice Department lawsuit. The government claimed environmental-law violations in the largest offshore oil spill in U.S. history. It also sued other companies involved in the well, including BP. The government asked U.S. District Judge Carl Barbier to deny Anadarko E&P Co.’s motion to drop it from the case and find [it]…and its affiliate liable under the Oil Pollution Act and the Clean Water Act.

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Article
26 May 2011

Oil Spill Hearing to Focus on Sickness and Other Claims BP Wants to Dismiss [USA]

Author: Sabrina Canfield, Courthouse News Services

A Friday hearing will focus on motions to dismiss claims in the Gulf of Mexico oil spill, including claims from cleanup workers who say they are sick from exposure to toxic chemicals. Thousands of plaintiffs have filed hundreds of claims for personal injuries, property damages and other causes stemming from the April 20, 2010 explosion of BP's Deepwater Horizon drill rig that killed 11 people and dumped millions of barrels of oil into the Gulf of Mexico. Almost all of the claims have been consolidated in New Orleans Federal Court under U.S. District Judge Carl Barbier. [refers to Transocean, Halliburton, Cameron International, Nalco]

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Article
20 May 2011

BP agrees to $1 billion settlement with Moex [USA]

Author: Associated Press

Moex…one of BP's minority partners in the blown-out Deepwater Horizon well, has agreed to pay the British oil company $1.065 billion to settle all claims between the companies over the accident in the Gulf of Mexico. BP said…that it would continue to pursue its other minority partner, Anadarko, the rig operator Transocean and cement contractor Halliburton to pay their share of billions of dollars in cleanup costs, oil-spill damages and pollution fines. BP Chief Executive Bob Dudley said…"MOEX is the first company to join BP in helping to meet our shared responsibilities in the Gulf, and Mitsui, through MOEX USA…is showing great corporate citizenship in standing behind its affiliate and making a contribution to meet the costs of this tragic accident".

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Article
10 May 2011

BP Rejects Claims for Drill-Ban Losses, Cleanup-Boat Damages [USA]

Author: Laurel Brubaker Calkins, Margaret Cronin Fisk, Bloomberg

BP…said it isn’t responsible for damages to boats that participated in its oil-spill cleanup program or for the losses of Gulf Coast businesses idled by the U.S. deep-water drilling moratorium. The U.S. Oil Pollution Act, which requires companies to compensate people and businesses harmed by an offshore spill, makes clear that liability is “limited to damages directly caused by a covered oil spill and that indirect or derivative losses are not compensable,” BP said in papers filed...in federal court in New Orleans. BP’s filing came in response to post-spill claims included among 350 consolidated lawsuits by thousands of businesses and individuals...[H]undreds of boat owners and contractors who participated in cleaning up the BP spill filed a master complaint seeking compensation for unpaid wages, vessel damage and physical injuries from contact with the spilled oil or chemical dispersants used to break up the oil. BP...asked the federal court in New Orleans overseeing spill suits to dismiss claims by these plaintiffs under the Oil Pollution Act.

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Article
7 May 2011

Lawmakers file batch of spill bills [USA]

Author: Jeremy Alford, Houma Courier [USA]

Lawmakers filed their final round of legislation for the ongoing regular session…and included is a batch of bills and resolutions targeting last year’s unprecedented oil spill in the Gulf of Mexico. Among the more controversial may be a proposal that would make “null, void and unenforceable” all settlements and releases executed by BP that lets the energy giant off the hook for “any future medical care or related benefits for any latent illness or disease medically proven to be caused by the BP oil spill.” That means coastal residents who have already settled with BP but later come down with an ailment caused the dispersant or escaped oil would be able to get more money out of the company — despite the original agreement prohibiting such measures. [also refers to Transocean, Halliburton, Cameron International]

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