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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
10 September 2014

Chevron racism toward Ecuador highlighted by court decision in BP case

Author: The Chevron Pit

[Business & Human Rights Resource Centre invited Chevron to respond.  Response provided.] A legal decision handed down last week…found that BP's "gross negligence" caused the Deepwater Horizon blowout in the Gulf of Mexico…Judge Barbier's finding underscores the obvious racism behind Chevron CEO John Watson's claim that the company's $9.5 billion judgment in Ecuador represents some sort of gouging by that country's courts. While BP pays for its spill, Chevron has managed to obtain effective impunity…BP's liability for the less impactful Gulf spill in the U.S. is now five times higher…than Chevron's in Ecuador. Yet Chevron's contamination in Ecuador is more widespread, has lasted far longer, was deliberate, has severely impacted indigenous groups, and is afflicting the world's most delicate ecosystem…[L]et's speak the unpleasant truth about environmental racism in the oil industry today. The truth is that in Ecuador, the victims of Chevron's contamination are Ecuadorian indigenous peoples and poor villagers. In the U.S., the victims are Americans…[Also refers to Andarko Petroleum] 

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Author: La Voix de l'Amérique (Etats-Unis)

"BP fustigé pour sa « négligence »", 10 septembre 2014

Un juge américain a statué jeudi que le géant pétrolier britannique BP a commis une faute grave dans l'explosion d'une plate-forme pétrolière dans le Golfe du Mexique qui a coûté la vie à 11 travailleurs et provoqué une vaste marée noire en 2010. L’arrêt…confronte BP à des amendes pour « dommages et intérêts » qui pourraient atteindre 18 milliards de dollars…[L]e juge a estimé que…[BP] a été « imprudent » dans la gestion de sa plate-forme pétrolière, Deepwater Horizon…Le groupe britannique a réagi en se déclarant « fortement en désaccord » avec le jugement et en annonçant son intention d’interjeter appel…[M]ardi, le groupe américain de services pétroliers Halliburton avait accepté de verser 1,1 milliard de dollars pour mettre fin, à l'amiable, à un recours en nom collectif lié aux dommages causés par la marée noire de 2010…[qui] concernait des…pertes dans le secteur de la pêche commerciale après la marée noire…

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Article
26 September 2014

US Judge dismisses BP’s claim to recover payouts in US Deepwater Horizon explosion & oil spill lawsuit

Author: Associated Press

"Judge orders BP to stick by Deepwater Horizon payouts agreement", 24 Sep 2014

BP wanted its money back – hundreds of millions of dollars of it – but a federal judge said Wednesday that the oil giant must stick by its agreement with the companies it compensated for business losses due to the 2010 Gulf oil spill. BP argued that a flawed funding formula in their settlement with alleged victims of the spill enabled many businesses to collect on questionable claims, and that they should be forced to return the money.US District Judge Carl Barbier agreed several weeks ago to change the formula for any future payments, but he ruled Wednesday that a deal is a deal when it comes to the money BP has already paid out…Barbier said he would rule later on the issue of compensation for cleanup workers whose chronic medical problems weren’t diagnosed until after the deal’s cutoff date of 16 April, 2012…

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Article
17 November 2014

US judge rejects BP's motion to amend "gross negligence" judgement regarding Deepwater Horizon oil disaster

Author: Kevin McGill, Associated Press

"BP gross negligence ruling: Federal judge rejects attempts to amend judgment", 13 Nov 2014

A [US] judge...is sticking to his ruling that...BP's conduct in the 2010 Gulf of Mexico oil rig disaster amounted to "gross negligence." It could mean close to $18 billion in federal penalties...U.S. District Judge Carl Barbier...rejected BP's call to...amend his...September...judgment or hold a new trial...BP attorneys argu[ed] that a key finding that led to the "gross negligence" ruling was based on testimony about cement used...before the...explosion of...Deepwater Horizon...BP asserted that...testimony...had been excluded from...trial...Barbier said there was no basis for BP's claim that the testimony was unfair or prejudicial...BP spokesman...said...that the company disagrees...and will appeal the September ruling...Barbier has scheduled a January trial to determine how much in...fines BP will face...[A] polluter can be forced to pay a maximum of...$4,300 per barrel of spilled oil [if] the company is found grossly negligent...

 

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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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Article
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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Article
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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Article
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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Article
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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Article
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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