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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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27 February 2011

BP payments may not save Indians' livelihoods

Author: Cain Burdeau, Associated Press

Louisiana's American Indian fishing villages…want Feinberg to compensate them not just for lost wages but for a way of life that relied on the bounty of the marshes and now is in jeopardy…Tribal leaders say they're worried many members won't be compensated fairly, so they've brought on a New York City law firm to help the tribes navigate the difficult claims process…Feinberg told those at his first meeting with Indian tribes Friday that he wanted to pay them claims for the value seafood and hunting plays in their everyday lives - so-called "subsistence claims."…"It's a claim that my lifestyle has been adversely impacted by my inability to any longer live off the resources that I hunt or catch," he said. "What I could go hunt or fish I now have to go buy.”

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26 February 2011

Panel Report on Gulf Spill Is Delayed [USA]

Author: Associated Press

A federal panel investigating the cause of the Deepwater Horizon explosion and the resulting oil spill will not finish its final report by the first anniversary of the disaster as it had hoped. Delays in testing the blowout preventer that failed to stop the spill forced the panel — a joint effort by the Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement — to seek another deadline extension…

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17 February 2011

Oil spill response system launched [USA]

Author: Sheila McNulty, Financial Times

Oil companies on Thursday launched a spill containment system in the Gulf of Mexico in a bid to restart the issuance of permits stalled after BP’s fatal Macondo well disaster. ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips unveiled the interim containment system, which they said was open to all operators in the gulf. A second response system, by Helix Energy Solutions Group, is to be ready at the end of March. The move comes in the wake of the first bankruptcy to emerge from the slowdown in drilling imposed by regulators in the Gulf of Mexico...Randy Stilley, Seahawk’s chief executive...[said]: “The decision by regulators to arbitrarily construct unnecessary barriers to obtaining permits...has had an adverse impact...on the sector as a whole.’’...[The] Bureau of Ocean Energy Management, Regulation and Enforcement said it was investigating an incident on Apache Corporation’s natural gas production platform off Lake Charles, Louisiana, on February 16 in which a worker died...

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2 February 2011

US judge: oil claims official not independent of BP

Author: AFP

The administrator of BP's $20 billion oil spill compensation fund has been influenced by the British oil giant and must stop telling victims he is independent, a US federal judge said. US District Judge Carl Barbier of New Orleans ordered BP to refrain from referring to the Gulf Coast Claims Facility (GCCF) -- a fund set up by the oil firm at the White House's urging -- or its administrator Ken Feinberg as independent. The firm must also inform those filing claims for compensation from the disastrous spill that they have the right to consult with an attorney of their choice and can join some of the hundreds of lawsuits pending against BP if they do not accept a final payment, according to the ruling.... Barbier wrote..."While BP may have delegated to Mr Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts support a finding that the GCCF and Mr Feinberg are not completely 'neutral' or independent from BP."

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26 January 2011

Mississippi official seeks court oversight of BP fund [USA]

Author: Laurel Brubaker Calkins & Allen Johnson, Bloomberg

Mississippi Attorney General Jim Hood asked the judge overseeing oil-spill litigation against BP P.L.C. to take an oversight role to “correct deficiencies” in the $20 billion spill-claims fund run by Kenneth Feinberg. Mr. Feinberg has been criticized by spill victims' lawyers for his administration of the claims process through which BP has said it would pay “all legitimate claims” filed by people and businesses damaged by the worst offshore oil spill in U.S. history. Critics contend Mr. Feinberg has delayed or denied claims without adequate explanation and established protocols that encourage cash-strapped claimants to accept small, quick payments to avoid years of litigation...Mr. Feinberg's fund “is nothing more than a surrogate for BP in the administration of the claims process that BP is required to provide” under federal law, Mr. Hood said...Amy Weiss, a spokeswoman for Mr. Feinberg, declined to comment...Last month, lawyers representing spill victims suing BP and other companies involved in the Gulf oil spill accused Mr. Feinberg of “playing a shell game” by failing to disclose his ties to BP and the $850,000 in monthly compensation his firm gets from BP to run the fund.

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25 January 2011

BP Broke Civil Racketeering Law in Gulf Oil Spill, Lawyers Say in Lawsuit

Author: Laurel Brubaker Calkins, Allen M. Johnson Jr.

BP Plc was accused by lawyers for victims of the worst offshore oil spill in U.S. history of breaking civil racketeering laws by engaging in a pattern of violations that led to the disaster. “BP engaged in a pattern of fraudulent conduct directed at regulators from the inception of the Macondo project, continuing through and after the spill and to this day,” Stephen Herman and James Roy, lawyers for hundreds of oil-spill victims, said [...] in a filing in federal court...Herman and Roy are liaison counsel for a committee representing plaintiffs in more than 400 lawsuits over damages for personal and economic injuries...BP is the only company named as a defendant in the spill victims’ master civil RICO complaint...Herman and Roy claim...that BP knowingly broke U.S. environmental laws, skirted federal rules and regulations governing offshore oil and gas extraction, and misrepresented its ability to stop and clean up a deepwater spill...[also refers to Transocean, Halliburton]

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13 January 2011

Transocean Settles First Deepwater Horizon Death Case

Author: Laurel Brubaker Calkins, Margaret Cronin Fisk, Bloomberg

Transocean Ltd. settled a lawsuit filed on behalf of one of 11 crew members killed when the company’s Deepwater Horizon drilling rig exploded April 20 in the Gulf of Mexico. The terms weren’t disclosed...“The Kleppingers have settled all of their claims arising out of the death of Karl Kleppinger Jr. against any current or possible defendants,” Steve Gordon, the family’s lawyer, said today in an interview. “The Kleppingers’ claim against BP has concluded.”...“The terms are confidential,” Ellen Barry, a Transocean spokeswoman, said in a phone interview...

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5 January 2011

BP, firms made risky decisions before spill-report

Author: Ayesha Rascoe, Reuters

BP and its partners made a series of cost-cutting decisions that ultimately contributed to the oil spill that ravaged the Gulf of Mexico coast over the summer, the White House oil spill commission said...Created by President Barack Obama in the midst of the BP spill, the panel is the first government-sanctioned group to wrap up its probe of the causes of the drilling disaster...Although the commission lacks authority to establish policy or punish companies, its conclusions could have a bearing on future criminal and civil cases relating to the spill...The commission also concluded the Gulf spill was not an isolated incident caused by "rogue industry or government officials"...BP said in a statement that it supports the commission's efforts to determine the causes of the accident...Halliburton disputed the commission's accusations about its cement testing...The commission "selectively omitted information we provided to them," Halliburton said...Transocean said the company's workers were "well trained" and considered among the best in the business. The company also said that consistent with industry standards, the final procedures on the rig were directed by BP engineers.

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21 December 2010

[audio] When an Environmental Accident Becomes a Crime

Author: Neil Conan, Talk of the Nation, National Public Radio [USA]

Last week, the U.S. Department of Justice announced civil suits against BP and other companies associated with the massive oil spill in the Gulf of Mexico…Many advocates say that environmental disasters like the BP spill and the 1989 Exxon Valdez disaster are clearly crimes and that senior corporate officials should face felony charges and time in prison…How should we hold corporations accountable for environmental violations?...We begin with David Uhlmann,…a director of environmental law and policy program at the University of Michigan Law School…Joining us…to share a defense attorney's perspective on the environmental crime is Warren Hamel, co-chair of the SEC and White Collar Defense Practice Group at Venable LLP…[L]et's bring another voice into the conversation, David Guest, he heads the Florida office of Earth Justice, a national nonprofit environmental law firm. [also refers to Halliburton, Pfizer, Transocean]

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17 December 2010

U.S. Judge Orders Transocean to Turn Over Records [USA]

Author: Allen Johnson Jr., Andrew M. Harris, Bloomberg

Transocean...must turn over safety records to the U.S. government, a federal judge ruled. U.S. District Judge Carl Barbier in New Orleans today ordered the Vernier, Switzerland-based firm to turn over records pertaining to any other rigs or vessels it had in the gulf on the date of the accident...Richard Hymel, a Transocean lawyer, called the request “a fishing expedition” for records that were “irrelevant” to the incident. The company already produced safety records for the Deepwater Horizon, he told Barbier at today’s hearing...“Our focus is on finding the cause, preventing future accidents and improving industry standards,” Transocean said...in an e-mailed statement. “While we do not believe this ruling and discovery will advance those goals, we will, as always, respect and comply with the court’s instructions.”...Guy Cantwell, a Transocean spokesman, said Dec. 15...“The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator.”

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