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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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Article
15 March 2013

BP seeks to block payment of business claims under Gulf spill settlement [USA]

Author: Associated Press

BP sued Friday to block what could be billions of dollars in settlement payouts to businesses over the 2010 Gulf of Mexico oil spill. The London-based oil giant accused the court-appointed administrator for the settlement, Patrick Juneau, of trying to rewrite the terms of the deal. BP said Juneau violated the settlement in the way he used a complex formula to determine the payments to businesses…Friday's court filing asked [Judge] Barbier to block payments to any businesses whose awards are part of the January decisions. As an alternative, BP asked to block payments to businesses in certain industries, including agriculture, construction, professional services, real estate, manufacturing and retail…"Objective formulas, the possibility of 'false positives,' and giving claimants flexibility to choose the most favorable time periods are all consequences BP accepted when it decided to buy peace through a global, class-wide resolution," Barbier wrote…

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Article
21 March 2013

BP asks judge to sanction its Deepwater Horizon cement contractor over missing samples [USA]

Author: Associated Press

In a late-night court filing, BP PLC lawyers cited Halliburton’s alleged destruction of cement samples as grounds for U.S. District Judge Carl Barbier to rule that the contractor’s cement design on the drilling project was unstable before the April 2010 blowout of BP’s Macondo well...BP says its inability to test the missing samples has harmed its ability to defend itself at the trial…Last week, Halliburton lawyer Donald Godwin said the company believes the newly discovered material has no bearing on the case…“Halliburton also admitted that the ‘Kodiak well cement’ had in fact been brought onshore from the Deepwater Horizon when the rig was at the Macondo well,” BP lawyers wrote. [P]laintiffs’ attorney…said the Kodiak cement contained an additive, a defoamer that “destabilizes and is incompatible with foam cement.”…

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Article
4 April 2013

Cameron Dismissed From All Claims in BP Gulf Spill Case [USA]

Author: Allen Johnson Jr., Margaret Cronin Fisk & Jef Feeley, Bloomberg Business Week

Cameron International Corp. (CAM) won dismissal from all claims arising from BP Plc’s 2010 Gulf of Mexico oil spill after a judge said there was no evidence showing the company was at fault for the disaster. Cameron, which made the so-called blowout preventer designed to stop explosions in BP’s oil well, was named in multiple lawsuits claiming the equipment was defective. Witnesses testifying at a New Orleans trial over fault for the disaster have said the blowout preventer wasn’t properly maintained by the Transocean (RIG) Ltd. crew manning the drill rig. U.S. District Judge Carl Barbier in New Orleans had earlier ruled out punitive damages against Houston-based Cameron, finding no proof of gross negligence. He dismissed all remaining claims yesterday…[Also refers to Halliburton, M-I Swaco (part of Schulmberger), Transocean]

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Article
5 April 2013

Asian Americans Accuse BP of Discrimination [USA]

Author: Sabrina Canfield, Courthouse News Service

Half of the commercial fishermen in the Gulf of Mexico are Vietnamese and Cambodian Americans, but BP discriminated against them during the oil spill cleanup by hiring only 7 percent of boats in its Vessels of Opportunity program from them, 55 fishermen claim…[F]or some of [the]…contractors hired, BP ... breached their contractual obligations to pay these individuals their respective daily fixed rate. ..In addition, BP sprayed more than 1.8 million gallons of hazardous chemical dispersants...Many vessel operators and crewmen were directly within the spray zone of the chemical dispersants without prior warning… They claim that “BP sent out email messages…specifically demanding…not [to] hire vessels owned by Vietnamese and Cambodian Americans."… [also refers to Danos & Curloe Marine Contractors, DRC Emergency Services, Halliburton, Nalco, Transocean]

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Article
5 April 2013

Judge rejects BP’s bid to block settlement payouts to businesses affected by Gulf oil spill [USA]

Author: Associated Press

A federal judge on Friday rejected BP’s request to block what could be billions of dollars in settlement payouts to businesses that claim the company’s 2010 oil spill in the Gulf of Mexico cost them money. Before the ruling, U.S. District Judge Carl Barbier already had upheld court-appointed claims administrator Patrick Juneau’s interpretation of settlement terms governing payments to businesses affected by the spill. Barbier said he saw no reason to change his March 5 ruling on the same matter and issue a preliminary injunction that would block Juneau from making payments to businesses. “We think it rewrites the contract. We think it rewards people who have no losses,” BP attorney…said…BP estimated a year ago that it would spend roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. The company now says it can’t give a reliable estimate for the total value of the deal.

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Article
13 May 2013

First Class Action Lawsuit Against BP in Mexico

Author: Inter Press Service

A group of Mexican citizens are preparing the first civil lawsuit in the Mexican courts against British oil company BP for the 2010 Gulf of Mexico oil spill...The civil lawsuit encompasses “damages to people living in the area or who own residential and commercial property along the coast, and people indirectly affected”…“Without a doubt, this will set an important precedent. Class action lawsuits have been brought, but in questions relating to consumer, rather than environmental, rights,” said the lawyer, whose firm is representing the plaintiffs…The spill poses a long-term threat to flora, fauna and fishing resources in the Gulf of Mexico, which bathes the coasts of the Mexican states of Tamaulipas, Veracruz and Quintana Roo, and to tourist sites, although the final extent of the damage is unknown, experts say…[Also refers to Pemex, Transocean]

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Article
21 May 2013

BP moves to stop ‘irreparable harm’ of oil spill payouts

Author: Ed Crooks, Financial Times

BP has stepped up its efforts to challenge what it believes are unjustified compensation payments under the multibillion-dollar settlement it agreed with victims of the 2010 Gulf of Mexico oil spill. The British oil group has doubled the rate at which it appeals against compensation awards to thousands of US businesses and individuals by Patrick Juneau, the independent administrator for claims under the settlement…BP said in a court filing that it had been “ordered to pay hundreds of millions of dollars – soon likely to be billions – for fictitious and inflated losses”. It has launched a legal challenge against the method used by Mr Juneau to calculate compensation…

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Article
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Author: Thibault Lescuyer, Novethic (France) (copyright: www.novethic.fr)

Une nouvelle directive européenne va renforcer les exigences de sécurité sur les plateformes de gaz et pétrole offshore. Mais c'est surtout en Afrique que les questions de réglementation, notamment en cas de sinistre transfrontalier, se posent avec le plus d'acuité. [lire la suite: http://www.novethic.fr/novethic/rse_responsabilite_sociale_des_entrepris...

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Article
21 June 2013

Lawyer accused of misconduct resigns from BP case [USA]

Author: Associated Press

A lawyer working for the administrator overseeing a multibillion-dollar settlement from the 2010 BP oil spill in the Gulf resigned Friday after being accused of misconduct…Sutton has been accused of collecting portions of settlement payments from a New Orleans law firm to which he had once referred claims…Before the allegations even surfaced, BP had sued to block what could be billions of dollars in settlement payouts to businesses over the spill. The company has accused Juneau of trying to rewrite the terms of the deal and asserts that he has made decisions that expose the company to fictitious losses that were never contemplated in the settlement…BP set up a compensation fund for individuals and businesses affected by the spill and committed $20 billion…

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Article
26 June 2013

Deepwater Nightmare Not Over, BP Launches Attack

Author: Gillian Rich, Investor's Business Daily (USA)

The Deepwater Horizon oil spill may have been stopped years ago but the drama continues. BP is no longer on the defensive, paying for positive Gulf Coast ads to help boost tourism to the region, but has turned to an aggressive ad campaign to recover settlement money from local businesses affected by the spill. On Wednesday the company took out ads in three major papers claiming that "trial lawyers and some politicians" encouraged businesses to submit claims for inflated or nonexistent losses…BP also sent out hundreds of letters to lawyers of businesses that received settlement payments that BP views as too large…But…two of plaintiffs' lawyers who negotiated the settlement with BP, told [BP’s lawyer] that his letter "misstates the law and violates BP's obligations under the Settlement Agreement."…

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