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
20 July 2013

BP loses bid to suspend Gulf of Mexico compensation payouts [USA]

Author: Katherine Rushton, Telegraph (UK)

The British oil giant struck a deal to pay damages to victims of the oil spill after the Deepwater Horizon oil platform exploded in 2010…However, the deal opened the floodgates to 10,000 compensation claims a month, costing BP far more than the $7.8bn (£5.2bn) it had expected and leaving the oil major with a battle on its hands to try to limit the number of purported victims coming forward…The oil company argues that…two of the lawyers working for the fund appeared to be taking kickbacks from at least one of the law-firms filing requests for compensation…BP had asked for all compensation payouts to be suspended while the matter was investigated…However, on Friday it had its request refused…

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Article
15 July 2013

Anadarko to face sharply narrowed Gulf spill lawsuit -judge [USA]

Author: Jonathan Stempel, Reuters

A federal judge ordered Anadarko Petroleum Corp, which owned part of the blown out well at the center of the 2010 Gulf of Mexico oil spill, to face a lawsuit accusing it of defrauding shareholders, but significantly narrowed the plaintiffs' case. U.S. District Judge Keith Ellison…said that while shareholders had highlighted 28 allegedly misleading statements attributable to Anadarko, they were entitled to sue over only a single "isolated" statement concerning the Macondo well, the majority of which was owned by BP Plc…Shareholders had accused Anadarko of mismanaging its 25 percent stake in the Macondo well, and understating its ability to manage risk and handle liabilities…Anadarko spokesman…said the company was reviewing the decision. It had sought to dismiss the lawsuit…

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Article
11 July 2013

BP, buyer’s remorse and the future of mass tort settlements [USA]

Author: Alison Frankel, Reuters

The oil giant BP has recently done a very good job of casting itself as the victim of greedy plaintiffs lawyers looking to get rich by submitting unwarranted claims for businesses that weren’t actually harmed by the Deepwater Horizon oil spill…BP went to the appeals court after U.S. District Judge Carl Barbier approved the class action administrator’s interpretation of how business economic losses should be calculated under the settlement. In the oil company’s view, Barbier and the administrator, Patrick Juneau, have essentially rewritten settlement terms to invite claims by businesses that suffered no losses attributable to the oil spill…Future defendants will learn from BP’s experience that proof of causation should be a tougher obstacle, or that definitions for even basic accounting terms must be negotiated and spelled out. [Also refers to Halliburton]

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Article
3 July 2013

Thousands join oil spill lawsuit [USA]

Author: Sarah Moore, Beaumont Enterprise (USA)

Lawsuits representing thousands of plaintiffs claiming damages from the 2010 Deepwater Horizon oil spill are stacking up in the Eastern District as filing deadlines in many cases loom. The petitions, naming BP Oil, Halliburton and its subsidiary Sperry Drilling Services, and Transocean as defendants, represent a range of plaintiffs from shrimpers and fishermen to hotels and restaurants as well as those claiming medical damage from the catastrophic explosion and subsequent spill lasting about five months in 2010…According to one petition representing more than 900 hotel owners, the BP oil spill created "a widespread array of negative consequences" damaging individuals and businesses…

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Article
26 June 2013

Deepwater Nightmare Not Over, BP Launches Attack

Author: Gillian Rich, Investor's Business Daily (USA)

The Deepwater Horizon oil spill may have been stopped years ago but the drama continues. BP is no longer on the defensive, paying for positive Gulf Coast ads to help boost tourism to the region, but has turned to an aggressive ad campaign to recover settlement money from local businesses affected by the spill. On Wednesday the company took out ads in three major papers claiming that "trial lawyers and some politicians" encouraged businesses to submit claims for inflated or nonexistent losses…BP also sent out hundreds of letters to lawyers of businesses that received settlement payments that BP views as too large…But…two of plaintiffs' lawyers who negotiated the settlement with BP, told [BP’s lawyer] that his letter "misstates the law and violates BP's obligations under the Settlement Agreement."…

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Article
21 June 2013

Lawyer accused of misconduct resigns from BP case [USA]

Author: Associated Press

A lawyer working for the administrator overseeing a multibillion-dollar settlement from the 2010 BP oil spill in the Gulf resigned Friday after being accused of misconduct…Sutton has been accused of collecting portions of settlement payments from a New Orleans law firm to which he had once referred claims…Before the allegations even surfaced, BP had sued to block what could be billions of dollars in settlement payouts to businesses over the spill. The company has accused Juneau of trying to rewrite the terms of the deal and asserts that he has made decisions that expose the company to fictitious losses that were never contemplated in the settlement…BP set up a compensation fund for individuals and businesses affected by the spill and committed $20 billion…

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Article
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Author: Thibault Lescuyer, Novethic (France) (copyright: www.novethic.fr)

Une nouvelle directive européenne va renforcer les exigences de sécurité sur les plateformes de gaz et pétrole offshore. Mais c'est surtout en Afrique que les questions de réglementation, notamment en cas de sinistre transfrontalier, se posent avec le plus d'acuité. [lire la suite: http://www.novethic.fr/novethic/rse_responsabilite_sociale_des_entrepris...

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Article
21 May 2013

BP moves to stop ‘irreparable harm’ of oil spill payouts

Author: Ed Crooks, Financial Times

BP has stepped up its efforts to challenge what it believes are unjustified compensation payments under the multibillion-dollar settlement it agreed with victims of the 2010 Gulf of Mexico oil spill. The British oil group has doubled the rate at which it appeals against compensation awards to thousands of US businesses and individuals by Patrick Juneau, the independent administrator for claims under the settlement…BP said in a court filing that it had been “ordered to pay hundreds of millions of dollars – soon likely to be billions – for fictitious and inflated losses”. It has launched a legal challenge against the method used by Mr Juneau to calculate compensation…

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Article
13 May 2013

First Class Action Lawsuit Against BP in Mexico

Author: Inter Press Service

A group of Mexican citizens are preparing the first civil lawsuit in the Mexican courts against British oil company BP for the 2010 Gulf of Mexico oil spill...The civil lawsuit encompasses “damages to people living in the area or who own residential and commercial property along the coast, and people indirectly affected”…“Without a doubt, this will set an important precedent. Class action lawsuits have been brought, but in questions relating to consumer, rather than environmental, rights,” said the lawyer, whose firm is representing the plaintiffs…The spill poses a long-term threat to flora, fauna and fishing resources in the Gulf of Mexico, which bathes the coasts of the Mexican states of Tamaulipas, Veracruz and Quintana Roo, and to tourist sites, although the final extent of the damage is unknown, experts say…[Also refers to Pemex, Transocean]

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Article
5 April 2013

Asian Americans Accuse BP of Discrimination [USA]

Author: Sabrina Canfield, Courthouse News Service

Half of the commercial fishermen in the Gulf of Mexico are Vietnamese and Cambodian Americans, but BP discriminated against them during the oil spill cleanup by hiring only 7 percent of boats in its Vessels of Opportunity program from them, 55 fishermen claim…[F]or some of [the]…contractors hired, BP ... breached their contractual obligations to pay these individuals their respective daily fixed rate. ..In addition, BP sprayed more than 1.8 million gallons of hazardous chemical dispersants...Many vessel operators and crewmen were directly within the spray zone of the chemical dispersants without prior warning… They claim that “BP sent out email messages…specifically demanding…not [to] hire vessels owned by Vietnamese and Cambodian Americans."… [also refers to Danos & Curloe Marine Contractors, DRC Emergency Services, Halliburton, Nalco, Transocean]

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