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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8 June 2011

Senate panel opens door for BP rig workers' families to sue [USA]

Author: Maria Recio, McClatchy Newspapers

The Senate Commerce Committee…approved a bill to help the families of the 11 victims of…Deepwater Horizon blowout by changing outdated federal maritime laws, one going back to the 1850s, to make it possible to recover damages from BP, rig operator Transocean and rig subcontractors. The Deepwater Horizon Survivors' Fairness Act would amend the Jones Act and the Death on the High Seas Act to allow the victims' families to claim non-compensatory damages, such as pain and suffering and loss of companionship. Both laws prohibit such claims. The bill also would change the Shipowners' Liability Act of 1851, which limits a vessel owner's liability to the value of the vessel and its freight.

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13 June 2011

Second seaman sues BP over accident between oil spill clean up boats [USA]

Author: Alejandro de los Rios, Louisiana Record

A second lawsuit has been filed…in relation to an accident between two ships that were hired by BP to help with clean up of last year's oil spill in the Gulf of Mexico....Both suits name 18 defendants including BP...Twenty Grand Offshore...Tidewater Marine...the boats involved and their captains. The plaintiffs are seeking damages in excess of $50,000 in both suits. Adams suffered injuries "to his entire body, joints, bones, ligaments, and muscles, and all of said injuries have been a source of physical pain and mental anguish and have resulted in residual dysfunction, limitation of motion and physical impairment of function," the suit claims...The suit claims the ships involved were negligent in failing to provide a safe environment for works, as well as failing to provide adequate crew training.

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21 June 2011

BP in $75m Gulf spill settlement with contractor

Author: Adam Jones, Financial Times

The UK oil and gas group has agreed to indemnify the US arm of Weatherford International, a Switzerland-based oilfield services company, against compensation claims linked to the accident – although it has not gone so far as to protect it from any fines or punitive damages it might suffer. As part of the settlement between the two companies, Weatherford is paying BP $75m, which the British company is passing on to the $20bn trust it has established to meet compensation claims. Weatherford made a coupling device, or “float collar”, used in the Macondo well which blew up, killing 11 people and leaked oil into the Gulf of Mexico. The company, which is listed in the US, France and Switzerland, said the payment would be met from insurance policies.

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22 June 2011

Transocean: BP decisions led to Gulf disaster [USA]

Author: Harry R. Weber, Associated Press

The owner of the rig that exploded in the Gulf of Mexico last year largely blames oil giant BP for the disaster in an internal investigation report...that goes a long way in bolstering the Swiss firm's arguments in responding to pending lawsuits and expected government fines. The Transocean report said the April 20, 2010, Deepwater Horizon explosion and resulting oil spill was sparked by a succession of well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of its failure. Transocean said many of the decisions were made by well owner BP in the two weeks before the incident...BP's own internal report on the disaster blamed a cascade of failures by multiple companies for the disaster. Government investigations also have spread around the blame.

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7 July 2011

BP oil spill: Tom Bergin's book challenges view that Hayward was hard done by [USA]

Author: Rowena Mason, Telegraph [UK]

[Tom Bergin's book argues that Tony Hayward, former Chief Executive of BP] was central to a flawed corporate culture with insufficient attention to safety..."Hayward was right when he complained that he received a broken inheritance [from his predecessor, Lord Browne] but his changes failed to address the fundamental flaw at BP: a structure that encouraged managers to put short-term financial goals ahead of the long-term health of the business and its employees," Bergin argues...This particular story is about BP and does not look at any simultaneous safety failings at other companies involved in the accident. But examining just this one party, it concludes BP was "utterly wrong" to place all immediate blame for the accident on its contractor Transocean, the owner of the exploded rig...[The book] also accuses BP of failing to be "honest and transparent" in the aftermath.

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15 July 2011

BP Well Partner Must Take Claims to Arbitration, Judge Rules [USA]

Author: Allen Johnson Jr., Margaret Cronin Fisk, Bloomberg

BP...can halt litigation with minority business partner the companies can arbitrate liability over costs of last year’s oil- well blowout in the Gulf of Mexico, a judge said. Anadarko sued BP, asking a federal judge in New Orleans to declare it isn’t responsible for damages and cleanup costs created by the worst offshore oil spill in U.S. history...BP asked U.S. District Judge Carl Barbier to stall the lawsuit, contending that a partnership agreement required the companies to first attempt arbitration to resolve disputes. Barbier...sent the claim to arbitration...Today’s decision “does nothing to diminish our claims,” John Christiansen, Anadarko’s spokesman, said...“It simply addresses the venue in which they may be resolved.”...“Anadarko has blatantly disregarded its responsibilities to the residents of the Gulf Coast by failing to pay its fair share of the costs relating to the accident and resulting spill,” Dean [spokesman for BP] said...“BP remains focused on ensuring that Anadarko lives up to its obligations.” [also refers to Mitsui]

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22 July 2011

U.S. delays final report on BP oil spill probe

Author: Ayesha Rascoe, Reuters

A U.S. team probing the causes of last year's massive BP oil spill has delayed the release of its final report in order to more fully weigh the evidence, investigators said...The government's findings on the spill that killed 11 workers and ravaged the Gulf coast last summer has been widely anticipated by investors for clues on possible legal ramifications BP…and its partners may face from the disaster. The U.S. Coast Guard and Bureau of Ocean Energy Management was expected to release the results of their joint investigation next Wednesday, but the team said they need more time to "ensure that all evidence is properly weighed and considered."…More charges could be brought, however, and the report's findings could also affect lawsuits that BP and its contractors have filed blaming each other for the biggest offshore oil spill in U.S. history. [refers to Anadarko, Mitsui, Transocean]

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12 August 2011

Judge outlines plan for trial over Gulf oil spill [USA]

Author: Associated Press

A federal judge on Friday outlined his plan for conducting a trial designed to assign percentages of fault to the companies sued over last year's deadly Deepwater Horizon rig explosion and Gulf oil spill. U.S. District Judge Carl Barbier, who oversees tens of thousands of claims spawned by the disaster, said the trial scheduled to start Feb. 27, 2012, will be held in three phases. The first phase will focus on causes of the well blowout, rig blast and release of oil. Barbier called this the "incident phase." The second phase deals with efforts to stop the gusher and quantify how much oil spilled from the well owned by BP...The third phase will include testimony about spill cleanup. Barbier will preside over the trial without a jury. [also refers to Transocean]

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31 August 2011

[PDF] The Alien Tort Claims Act and Trans-Boundary Corporate Environmental Abuse: A Case Study of the Gulf Oil Spill

Author: Haley St. Denis, Yale Journal of International Affairs

The Alien Tort Claims Act (ATCA) is a U.S. statute enabling aliens to sue in American civil courts for certain egregious human rights violations. It has come to be the tool wielded for most international human rights litigation against corporations. This article explores the potential ATCA liability resulting from corporate trans-boundary environmental abuse through consideration of BP and the 2010 Gulf oil spill. This hypothetical “case” demonstrates that though an ATCA claim against BP would likely fail based on the ultimate concentration of damage to U.S. territory, had the damage primarily hit foreign waters, shores and communities, the prospects of bringing an ATCA claim are real and present. Further, the symbolic repercussions of such a claim could develop both international law and industrial standards.

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2 September 2011

Halliburton Sues BP Over Deepwater Crisis [USA]

Author: Michael Kunzelman, AP

BP...has engaged in a "cover up scheme" to hide its culpability for the deadly rig explosion that spawned last year's massive oil spill in the Gulf of Mexico, one of the oil giant's partners in the drilling project claims in a newly filed lawsuit. Halliburton['s]...suit...accuses BP of concealing critical information about the deepwater well that blew out on April 20, 2010...In response to the suit, which seeks unspecified monetary damages, BP spokesman Scott Dean accused Halliburton of trying to deflect blame and divert attention from its role in the disaster. Dean said "multiple independent investigations" have identified "serious problems" with the cementing of the well.

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