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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 December 2010

New Party to Suits in Gulf Spill: The U.S.

Author: Evan Perez, Dionne Searcey, Wall Street Journal

The Justice Department...is expected to seek to join civil lawsuits stemming from the Gulf of Mexico oil spill, the first major federal legal action in the disaster...By joining the private litigation, Justice Department lawyers are positioning themselves to play a major role in the coming litigation, including depositions of key witnesses...That could aid the government's continuing probe into the disaster aimed at building a civil and possibly a criminal case against the companies involved...A steady trickle of plaintiffs in the civil suit have dropped their cases and turned to the [claims] fund in recent weeks and numbers are expected to increase as the case slowly works its way through the court process. [refers to BP, Transocean]

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Article
15 December 2010

Obama administration sues BP, others over Gulf spill

Author: Jeremy Pelofsky, James Vicini, Reuters

The Obama administration...launched a legal battle against BP Plc and its partners by suing them for the worst offshore oil spill in U.S. history, which could cost the companies billions of dollars..."While today's civil action marks a critical step forward, it is not a final step," U.S. Attorney General Eric Holder told reporters at a news conference. "Both our criminal and civil investigations are continuing..." he said...The suit...was filed in a New Orleans federal court which is considering private lawsuits against BP and the others for the spill...In response to the lawsuit, BP said it is "solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit."..."BP will answer the government's allegations in a timely manner and will continue to cooperate with all government investigations and inquiries," the company said...The lawsuit accused the companies of violating safety and operating regulations in the period leading up to the disaster...After the lawsuit was filed, [BP's] partners said the blame and liability laid squarely on BP..."The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator," Transocean said in a statement...[also refers to Anadarko, Cameron, Exxon, Halliburton, MOEX, Mitsui, QBE Underwriting/Lloyd's, Lloyds of London]

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Article
13 December 2010

BP oil spill victims get 3 options for compensation

Author: Maria Recio, McClatchy Newspapers

Kenneth Feinberg, the head of the Gulf oil spill fund, said Monday that victims of the BP oil spill will have three options for final compensation from the Deepwater Horizon blowout, and two of them require claimants to forgo legal challenges...Under option one, the fund would make a final lump-sum payment based on documented damage, but claimants give up the right to sue. Under option two, claimants would get interim quarterly payments but reserve their legal recourse. Under option three, applicants who already have received emergency funds would get a quick payout...but they would have to give up the right to sue.

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Lawsuit
2 December 2010

US Deepwater Horizon explosion & oil spill lawsuits

Author: Business & Human Rights Resource Centre

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 22April, 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 September2010 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 October2010 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 June2010 statement, Anadarko claimed that the accident was a “direct result of BP’s reckless decisions and actions”.  

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.

Article
28 October 2010

Panel Says Firms Knew of Cement Flaws Before Spill [USA]

Author: John Broder, Washington Post

Halliburton officials knew weeks before the fatal explosion of the BP well in the Gulf of Mexico that the cement mixture they planned to use to seal the bottom of the well was unstable but still went ahead..., the presidential commission investigating the accident said on Thursday. In the first official finding of responsibility for the blowout..., the commission staff determined that Halliburton had conducted three laboratory tests that indicated that the cement mixture did not meet industry standards. The result of at least one of those tests was given on March 8 to BP, which failed to act upon it, the panel’s lead investigator...said...Although [he] did not specifically identify the cement failure as the sole or even primary cause of the blowout, he made clear...that if the cement had done its job..., there would have been no accident...Halliburton has said repeatedly in public testimony that it tested and used a proper cement formula and that BP’s flawed well design and poor operations caused the disaster...A BP spokesman said the company would have no comment. [also refers to Transocean]

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Article
26 September 2010

Experts question BP's take on Gulf oil spill

Author: Dina Cappiello, AP

Engineering experts probing the Gulf of Mexico oil spill exposed holes in BP's internal investigation as the company was questioned Sunday for the first time in public about its findings. BP's lead investigator acknowledged that the company's probe had limitations...[T]he National Academy of Engineering panel noted that the study avoided organizational flaws that could have contributed to the blast...BP's study found eight separate failures led to the oil rig accident. The report blamed BP and other companies, including Transocean, the rig's owner, and Halliburton Co., which was hired to do the cement work...When asked why Halliburton continued to work on the well despite some of these red flags, Roth said, "We didn't see it to be an unsafe operation as it was being executed."

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Article
20 September 2010

BP well dead, but its effects live on: Gulf residents and oil industry still have many challenges ahead [USA]

Author: Brett Clanton & Tom Fowler, Houston Chronicle

Sunday's death knell for BP's Macondo well heralded a milestone worth noting but was largely symbolic given the ongoing personal, economic, legal and environmental fallout from the accident...Gulf businesses and communities continue to struggle with damage caused by the spill, including unknown long-term effects on fishing, tourism and the region's ecosystem. "It's good news in one way, but it's surely not solving our problems," said Dean Blanchard, owner of a seafood wholesaler in Grand Isle, La., who says fishing bans stemming from the spill have nearly bankrupted his business...In addition to hundreds of civil lawsuits, a number of federal investigations are under way...[also refers to Halliburton, Transocean]

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Article
14 September 2010

BP lacked 'basic safety' in North Sea before Gulf of Mexico oil spill, HSE investigation finds

Author: Rowena Mason, Telegraph [UK]

BP was subject to an investigation in the North Sea which found new staff were not trained to “basic safety standards” – six months before its Gulf of Mexico accident. The Health and Safety Executive (HSE) began its inquiry after a complaint by a worker on the Clair rig off the Shetlands, near to where BP is about to begin deepwater drilling...The conclusions, sent to BP executives in a letter in October last year, found “training of some new personnel to basic safety standards was ineffective”...It comes as Tony Hayward, the chief executive of BP, prepares to be questioned on Wednesday by a panel of MPs on UK deepwater drilling...A BP spokesman said: “Clair has an excellent safety track record and has recently achieved six years of operation without any injury that has resulted in a day away from work.”...[also refers to Seawell]

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Article
14 September 2010

U.S. to file civil suit against oil companies in Gulf spill

Author: Richard Serrano, Seattle Times [USA]

The Department of Justice announced Tuesday that it expected to file a civil suit against the oil companies involved in the massive oil spill in the Gulf of Mexico for violation of federal environmental laws...The action by the Department of Justice could ultimately lead to heavy civil fines against BP or Transocean...Or, if federal laws were deliberately broken, the investigation could result in federal criminal charges against the companies, officials said...Elizabeth Ashford, a spokeswoman for BP, said the company wouldn't comment. But the companies have pledged repeatedly to clean up the spill, restore the environment and pay restitution to business owners and residents hurt by the spill...The Justice officials said their main concern was whether the federal Oil Pollution Act or the Clean Water Act were violated.

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Article
8 September 2010

Transocean, Halliburton Share Blame in Spill, BP Says

Author: Joe Carroll and Jim Polson, Bloomberg

BP Plc faulted its own engineers for a fatal drilling disaster that triggered the largest U.S. oil spill and said rig owner Transocean Ltd. and contractor Halliburton Co. also share the blame. BP’s internal investigation of the April 20 Deepwater Horizon rig disaster cited at least eight errors of judgment and equipment failures...Halliburton spokeswoman Teresa Wong and Transocean spokesman Guy Cantwell said the companies will comment later.

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