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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
1 June 2010

Feds have launched criminal oil spill investigation, AG says [USA]

Author: CNN

U.S. Attorney General Eric Holder said Tuesday the Justice Department has launched a criminal investigation into the massive oil spill spreading through the Gulf of Mexico..."We have begun both a criminal as well as a civil investigation as is our obligation under the law," Holder said. "We have what we think is a sufficient case to have begun a criminal investigation"...Among other things, Holder said Justice Department lawyers are examining possible violations of the Clean Water Act and the Oil Pollution Act...BP responded in a statement that it "will cooperate with any inquiry..." [Senator B. Boxer] said... "What is happening in the Gulf -- eleven people dead, and an entire ecosystem and the jobs that depend on it at risk -- justifies a thorough criminal investigation." [includes video]

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Article
4 May 2010

Transocean prepares for lawsuits

Author: Carola Hoyos, Financial Times

When Steven Newman took over as chief executive of Transocean…he could have had no idea how challenging the role would be…Nine of the 11 crew members who died when the…drilling rig exploded in the Gulf of Mexico on April 20 were Transocean employees. The rig…was also owned by the company. But Mr Newman has not been under the same glaring spotlight as…BP, for whom the Swiss-based Transocean was working at the time of the accident. That is because the law states that BP is responsible for the cost and clean-up of the spilled oil...Transocean says it is not willing to speculate what went wrong…Behind the scenes the company’s lawyers are preparing to deal with a barrage of lawsuits…[also refers to Cameron International, Halliburton]

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Article
30 April 2010

AEHR Statement on the BP Oil Drilling Disaster [USA]

Author: Advocates for Environmental Human Rights [USA]

...The loss of lives and the looming coastal damage caused by the BP oil drilling disaster demonstrate that our government... oil companies...are not prepared to handle the unique complications of a deep water oil disaster...BP’s focus on limiting its liability and fostering positive public relations should not be the focus of our government...AEHR is urging President Obama to take the following action...now...

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Article
25 April 2010

Blowout: BP’s deadly oil rig disaster [USA]

Author: Danny Fortson, Sunday Times [UK]

...[A]t 10pm last Tuesday, [oil rig] Deepwater Horizon’s lights went out...Moments later...the Deepwater Horizon exploded into a fireball...Kurt Arnold, a Houston lawyer with a pending case against Transocean [the firm that owned the rig] said: “The reality is that as we push and push into deeper exploration, deaths and injuries are more of a problem”… It is still unclear what caused the accident but it appears to have been a blowout...Less than 36 hours passed before BP [which had hired the rig] and Transocean were hit with the first lawsuit [filed on behalf of] one of the 11 missing, now presumed dead…It will be months before the cause of the disaster is determined and years before the last payouts are made.

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