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US Deepwater Horizon explosion & oil spill lawsuits

Deepwater Horizon Source: US Coast Guard, Creative CommonsOn 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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1 May 2015

USA: 25,000 Mexican fishermen file lawsuit against BP for Mexican Gulf oil spill damages

Author: Verónica Calderón, El País (España)


“Mexican fishermen file US lawsuit against BP for Gulf oil spill damages”, 30 Apr 2015

It’s been five years since a gigantic oil spill in the Gulf of Mexico – caused by an accident on a British Petroleum (BP) deep-sea exploration rig – caused multi-million losses to businesses and an incalculable amount of ecological damage…While the US government ordered BP to pay compensation to Washington and the gulf states of [the United States]…Mexican fishermen, whose livelihoods have also been affected, are yet to see a single penny from the energy giant…Some 25,000 Mexican fishermen…are seeking compensatory and punitive damages in a civil lawsuit…It marks the first class action to be brought by a group of non-US citizens against BP for the oil disaster…

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30 April 2015

USA: Judge says BP oil spill clean-up workers can bring claims before jury over health issues following Gulf of Mexico disaster

Author: Sabrina Canfield, WorkersCompensation.com (USA)

"Oil Spill Cleanup Workers Can Seek Trial", 30 Apr 2015

Workers who developed late-onset medical conditions after cleaning up the 2010 BP oil spill have a right to a jury trial, a federal judge ruled Monday. U.S. District Judge Carl Barbier said...that claimants who were "back ended" into the oil spill litigation - that is, claimants whose symptoms did not exist at the time the medical class settlement was made - have the right to sue BP on their own terms...When the medical class action settlement was reached almost three years ago between BP and plaintiffs the plaintiffs agreed to waive certain ailments that were the result of exposure to oil during the course of helping to clean up the oil spill...But plaintiffs retained their rights to sue down the road if more complicated conditions, such as cancer, arose...Geoff Morrell, BP's senior vice president for U.S. communications and external affairs, said "BP disagrees with the Court's ruling and is considering its options."

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20 April 2015

5 Years After BP Oil Spill, Effects Linger And Recovery Is Slow

Author: Debbie Elliott, NPR (USA)

Five years ago, BP's out-of-control oil well deep in the Gulf of Mexico exploded. Eleven workers were killed on the Deepwater Horizon rig…[T]he blast unleashed the nation's worst offshore environmental catastrophe…More than 3 million barrels of Louisiana light crude fouled beaches and wetlands from Texas to Florida, affecting wildlife and livelihoods. Today, the spill's impacts linger…But BP senior vice president Geoff Morrell says the signs are good for a healthy Gulf…Under federal law, BP will have to pay to restore the damage to natural resources caused by its spill — a scientific assessment that is ongoing and could take years to resolve. BP also faces a court judgment that could top $13 billion in an ongoing liability case. A..[J]udge has ruled that BP's gross negligence and willful misconduct are to blame for the disaster. Morrell says BP has already spent $28 billion on response and cleanup and to pay economic claims to oil spill victims. He says the company has changed its safety procedures…

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20 April 2015

Deepwater Horizon, five years later

Author: Virginian-Pilot (USA)

An offshore oil rig - the Deepwater Horizon, leased by BP - exploded on April 20, 2010, in the Gulf of Mexico, about 40 miles off the coast of Louisiana…The rig was on fire. Oil was leaking from the well on the seabed 5,000 feet below. Two days later, the rig itself collapsed. Eleven people were confirmed dead; 17 were injured…BP said the well was spewing about 1,000 barrels of crude into the gulf. The U.S. government now says it was closer to 60,000 barrels. Each and every day…Oil spilled through the summer. It wasn't until Sept. 19, 2010, that the well was finally sealed…Five years later, BP's liability remains a question for the courts, where the multinational is fighting to lower the amount it will be forced to pay out to the businesses and families destroyed by its spill…Five years after Deepwater Horizon, only one thing is clear: Another disaster will happen. Perhaps it won't be quite as devastating. Perhaps it will be worse.

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18 April 2015

Five years after spill, Gulf waiting for recovery money

Author: Deborah Barfield Berry & Ledyard King, USA Today

Five years after the massive BP Deepwater Horizon oil spill, Gulf Coast communities are waiting for the billions promised to help them recover from the nation's worst environmental disaster…[T]hose funds, on hold until a federal court in New Orleans decides exactly what the company should pay. "It's disappointing that this money has not flowed yet,'' said Brian Moore, legislative director for the National Audubon Society…Sen. Bill Cassidy, R-La., said he expected a lengthy legal process but he's disappointed it has taken so long…[A] law Congress passed nearly three years ago: the RESTORE (Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economies) Act…requires states and communities most affected by the oil spill get 80 percent of the civil fine money levied under the Clean Water Act. BP could face fines as high as $13.7 billion. Gulf Coast lawmakers, local officials and environmentalists cited devastating damage to marine life, the fishing industry and regional tourism in arguing for passage of the RESTORE Act…[Also refers to Transocean]

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20 February 2015

US judge rules that BP should face maximum civil penalty over Deepwater Horizon oil spill, up to $13.7 billion

Author: Amanda Bronstad, National Law Journal (USA)

"BP Faces $13.7 Billion Fine for Gross Negligence", 19 Feb 2015 [subscription required]

BP PLC could face up to $13.7 billion in civil penalties under the U.S. Clean Water Act for its role in the Deepwater Horizon oil spill, according to a federal judge’s ruling on Thursday. U.S. District Judge Carl Barbier of the Eastern District of Louisiana sided with the U.S. Department of Justice that BP’s maximum allowable fine under the Clean Water Act should be $4,300 per barrel—an amount for gross negligence adjusted by the Environmental Protection Agency for inflation…BP spokesman Geoff Morrell wrote in an email that he disagreed with the decision, stating that “neither the EPA nor the Coast Guard has the power to independently inflate the maximum penalty Congress intended.” He continued, “At the very least, fair notice was never provided as to which of those two agencies possessed the authority to inflate the penalty amount.”…[Also refers to Anadarko]


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22 January 2015

US Justice Department seeks $11 billion fine for BP over Gulf of Mexico oil spill

Author: Sabrina Canfield, Courthouse News Service

"DOJ Asks Judge to Put BP Fine at $11 Billion", 21 Jan 2015

...The U.S. Justice Department asked a federal judge on Tuesday to impose a fine of no less than $11 billion on BP for its role in the 2010 Deepwater Horizon disaster...Steve O'Rourke, on behalf of the United States, said BP should face a steep fine because of the "severity" of BP's violations that led to the 2010 oil spill...Although BP's response effort to the spill was the biggest in history, O'Rourke said it wasn't necessarily the best. He said BP was required by law...to clean up the mess it made, and that the company is now trying to take credit for not just the work and resources it expended but also for those put forth by the U.S. and five Gulf States affected - Texas, Louisiana, Mississippi, Alabama, and Florida... At the end of his opening statements, O'Rourke listed quickly prior environmental catastrophes caused by BP...There was "no change in behavior for this company after the four prior plea agreements," O'Rourke said...Mike Brock, on behalf of BP, said "BP was proactive and placed no limit on response,"....[Also refers to Anadarko]

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19 January 2015

USA: BP could face fine of $13.7 billion as judge finds it spilled 3.19 million barrels of oil in Gulf of Mexico

Author: John Schwartz, New York Times

"Judge’s Ruling on Gulf Oil Spill Lowers Ceiling on the Fine BP Is Facing", 15 Jan 2015

...Judge Carl J. Barbier of Federal District Court in New Orleans...[found]...that [BP] actually spilled four million barrels of oil into the gulf but, considering its collection efforts, BP should be held responsible for a net discharge of 3.19 million [barrels]...The estimated number of barrels is substantially less than the five million barrels experts for the federal government estimated (4.19 million after taking collection efforts into account), and substantially more than the 3.26 million the company said had been released (2.45 million after collection)...If the government’s estimate had been used, the penalty could have been as much as $18 billion. Under Judge Barbier’s ruling, the figure could be as high as about $13.7 billion...

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Author: Associated Press

« La Cour suprême rejette l'appel de BP sur le règlement des victimes », 8 décembre 2014

La Cour suprême américaine maintient le règlement de plusieurs milliards de dollars du géant pétrolier BP avec les entreprises et résidants touchés par un déversement de pétrole dans le golfe du Mexique en 2010. Les juges ont rejeté lundi les arguments de l'entreprise…qui prétendait que les cours inférieures avaient mal interprété les termes de l'entente et la contraignait à payer les réclamations gonflées et fausses de certaines entreprises…La société BP voulait que la cour vérifie si tous plaignants réclamant des paiements en vertu du règlement avaient réellement souffert des conséquences du déversement…Une cour de district et une cour d'appel avaient conclu que le règlement que BP avait accepté ne prévoyait pas que les entreprises devaient démontrer qu'elles avaient été directement touchées pour réclamer un montant d'argent…Le règlement n'a pas de montant maximal. BP estimait qu'elle aura environ 7,8 milliards $ US à payer, mais affirme maintenant ne plus pouvoir fournir d'estimation fiable.

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11 December 2014

US Supreme Court rejects BP’s request to review Gulf of Mexico oil spill settlement

Author: Greg Stohr, Bloomberg

"BP Rejected by U.S. Supreme Court on Gulf Spill Payments", 8 Dec 2014

The U.S. Supreme Court refused to review [BP’s] $9.7 billion settlement over the 2010 Gulf of Mexico oil spill…BP argued that the 2012 settlement is being implemented in a way that violates the Constitution and the federal rules governing class action lawsuits. The company said money is going to entities whose losses were unrelated to the spill, including lawyers who lost their licenses and warehouses that burned down before the incident…Plaintiffs have six months to file economic-loss claims over the spill. The suing businesses urged the high court to reject the appeal, saying BP is trying to renege on an agreement because it is proving more costly than anticipated…The high court in June refused to halt the payments while the justices weighed whether to take up the case…BP is separately asking a federal appeals court to undo payments to some victims, arguing that Juneau misunderstood the deal...

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