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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
27 September 2013

BP battles for billions in new Gulf trial phase [USA]

Author: Terry Wade & Andrew Callus, Reuters

BP will battle to hold down fines that could hit $18 billion (11 billion pounds) in a new phase of the Gulf of Mexico trial that will rule on how much oil it spilled in 2010 and judge its efforts to plug its well. Starting on Monday in New Orleans, this second of three phases of a trial determining responsibilities for the worst marine pollution ever seen in the United States, could - in the worst outcome for the British firm - land BP with a bill five times greater than the $3.5 billion it has set aside for fines…Much depends on how the court rules on a dispute between BP and the U.S. government over how many million barrels of oil were actually spilled, and on just how culpable BP was in failing to stop it for 87 days…[Also refers to Halliburton, Transocean]

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Article
1 October 2013

Judge hears claims BP lied to feds about oil spill [USA]

Author: Michael Kunzelman, Associated Press

The focus of a trial over BP’s massive 2010 oil spill has shifted from the causes of the deadly disaster to the company’s struggle to plug its blown-out well while millions of gallons of crude gushed into the Gulf of Mexico for nearly three months. The trial’s second phase opened…with claims that BP could have capped the well much sooner if it hadn’t ignored decades of warnings about the risks of a deep-water blowout or withheld crucial information about the size of the spill from federal officials. BP attorney…denied those allegations and said the company’s efforts to stop the flow of oil were guided by an overriding principle: “Don’t make it worse.”…The April 20, 2010, blowout triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and spawned the nation’s worst offshore oil spill. BP used a capping stack to seal the well July 15 after other methods failed…[Also refers to Transocean]

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Article
3 October 2013

BP wins reprieve over Gulf spill payouts: U.S. appeals court

Author: Jonathan Stempel, Reuters

BP Plc won a legal reprieve in its effort to force the administrator of a settlement related to the 2010 Gulf of Mexico oil spill to tighten standards in assessing claims, potentially sparing the oil company billions of dollars of extra costs. A divided 5th U.S. Circuit Court of Appeals in New Orleans on Wednesday directed U.S. District Judge Carl Barbier…to take a fresh look at which claims are legitimate…[and] to halt payments on those claims that don't meet stricter standards…The 5th Circuit said Barbier should issue a narrower injunction to allow recoveries by claimants with "actual injury" from the spill, and not punish BP and its shareholders by allowing potentially "hundreds of millions of dollars of unrecoverable awards."…

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Article
28 October 2013

BP Takes Aim at Spill Settlement [USA]

Author: Amanda Bronstad, National Law Journal (USA)

A federal appeals court this month agreed with BP PLC that there were serious problems with the processing of claims on its $9.6 billion Deepwater Horizon settlement, especially because some Gulf Coast businesses apparently were being compensated for economic losses from the oil spill that they never actually suffered. In coming to that conclusion, a split panel of the U.S. Court of Appeals for the Fifth Circuit ran into a separate problem: If they weren't truly victims, why were these claimants included in a class settlement premised on compensating victims of the spill? Wouldn't that undermine the settlement entirely?...A separate three-judge Fifth Circuit panel has set oral arguments on those objectors' challenge for Nov. 4…

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Article
2 November 2013

Ecuadorian Victims' Struggle for Justice Against Chevron

Author: Bianca Jagger, Bianca Jagger Human Rights Foundation, in Huffington Post (USA)

On October 15, a landmark trial opened in a federal court in New York City: Chevron Corp v. Steven Donziger, one of the world's largest oil companies against the attorneys…who represent the 30,000 "Lago Agrio Plaintiffs". The case is the latest in a long and often tragic saga of the Ecuadorian victims struggle for justice…The Ecuadorian communities are fighting for justice for the human rights violations and environmental crimes…In February 2011, Judge Nicolas Zambrano issued a final verdict, ordering Chevron to pay $18.5 billion to the Ecuadorian plaintiffs…Now Chevron has accused the attorney of fraud and racketeering...Chevron brought three collateral actions against the Ecuador judgment in a New York federal court…Don't let this legal imbroglio eclipse the issues which are really at the heart of this case: human rights, justice and environmental protection.[Also refers to BP, Exxon, Texaco (part of Chevron)]

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Article
5 November 2013

BP launches new website defending the company's response to the Deepwater Horizon oil spill [USA]

Author: Mark Schleifstein, NOLA.com - Times-Picayune (USA)

BP has launched a new website to counter critics and provide its own spin on developments involving the April 2010 blowout of its Macondo well, which caused the sinking of the Deepwater Horizon drillship, the death of 11 workers and an 87-day oil spill in the Gulf of Mexico. The website…includes sections providing the company's views on economic and environmental recovery from the spill, its own stories on issues concerning the federal damages lawsuit against the company, information about the company's drilling activities in the Gulf, and responses to critics…"BP was not grossly negligent" [the website states]…The answers also include the company's contention that only 3.26 million barrels of oil were released during the spill, of which 2.45 million barrels ended up in the Gulf waters, compared with a federal government estimate of 4.2 million barrels spilled…[Also refers to Halliburton, Transocean]

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Article
3 December 2013

BP wins reprieve over Gulf of Mexico oil spill payouts

Author: BBC News

Oil giant BP's attempts to limit claims over the 2010 Gulf of Mexico oil spill have been given a boost after a US appeals court ruled in its favour. The court voted for an injunction to suspend any further payments to firms that had not suffered losses as a result of the disaster. BP had argued that the settlement deal it agreed last year was being misinterpreted, allowing firms that had not suffered harm to claim losses…The ruling means that payments to any business that cannot directly trace its losses back to the spill, will now be suspended temporarily…A BP spokesman said the decision supported its views that the court-appointed administrator was misinterpreting the language of the oil-spill settlement.

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Article
20 December 2013

[PDF] Corporate Legal Accountability Quarterly Bulletin – Issue 11, December 2013

Author: Business & Human Rights Resource Centre

Welcome to the 11th issue of the Corporate Legal Accountability Quarterly Bulletin. To assist all those following corporate legal accountability issues, we send this bulletin to highlight key developments, new cases profiled on our site, updates to existing profiles, and other news. Our Corporate Legal Accountability Portal is an online information hub providing resources for non- lawyers as well as lawyers – including victims, advocates, NGOs, businesspeople, lawyers bringing lawsuits against companies and lawyers defending companies. The portal provides impartial, concise information about lawsuits against companies in which human rights abuses are alleged – its aim is to demystify these lawsuits. Each case profile includes materials from both the plaintiffs and defendants, to the extent they are available...[Refers to African Rainbow Minerals, Alstom, Amesys (part of Bull), AngloGold Ashanti, Argor-Heraeus, BP, Bull, CACI, Chevron, Davao Fruits, Ford, Gold Fields, Harmony Gold, HudBay Minerals, IBM, Kaweri (part of Neumann Gruppe), Koh Kong Sugar, Lapanday Agricultural Development, Nestlé, Neumann Gruppe, Texaco (part of Chevron), Titan Corporation (now L-3 Services, part of L-3 Communications), Veolia Environnement, Veolia Transport (part of Veolia Environnement)]

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Article
10 January 2014

Multibillion-dollar BP private claims settlement is upheld by split U.S. 5th Circuit Court panel

Author: Mark Schleifstein, New Orleans Times-Picayune (USA)

A split decision of a three-judge panel of the 5th U.S. Circuit Court of Appeals on Friday upheld a lower court decision approving a multibillion-dollar settlement with BP of private claims stemming from the April 2010 Deepwater Horizon oil spill…[T]he panel dismissed BP's contention that the settlement agreement should be thrown out because the U.S. Constitution prohibits paying claimants who have not suffered an injury, or cannot prove their injuries were caused by the spill…"Today's ruling is an enormous victory for the Gulf, and an important step forward in ensuring that every eligible claimant is fully compensated…" said a statement released by attorneys…who head the Plaintiff Steering Committee representing those who sued BP. BP's website on Friday noted: "…BP is assessing its legal options and the further implications of the 5th Circuit's decision."

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Article
21 January 2014

BP Deepwater oil spill: Ex-Halliburton manager sentenced

Author: BBC News

A former manager at US energy services giant Halliburton who admitted destroying evidence in an inquiry into the largest oil spill in US history has been sentenced to a year's probation…The disaster was caused by an explosion at BP's Deepwater Horizon rig, which killed 11 people. Badalamenti was the cementing technology director for Halliburton, which had been hired to provide cementing services to BP on the Macondo oil well…Separately, Halliburton has pleaded guilty to the unauthorised deletion of data. The contractor is the third of three major companies at the heart of the huge oil spill to admit criminal wrongdoing. BP and rig operator Transocean have already pleaded guilty to charges related to the disaster.

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