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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 November 2012

BP gets record US criminal fine over Deepwater disaster

Author: BBC

BP has received the biggest criminal penalty in US history after agreeing to pay $4.5bn (£2.8bn) to settle criminal charges related to the 2010 Deepwater Horizon disaster…The settlement with the Department of Justice involves BP pleading guilty to criminal charges…"All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region," said Bob Dudley, BP's chief executive…It is thought that a small number of BP staff may be arrested…The 2010 Deepwater Horizon disaster killed 11 workers and released millions of barrels of crude into the Gulf of Mexico over 87 days. [also refers to Transocean, Anadarko, Moex (part of Mitsui) Pfizer]

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Article
15 November 2012

BP to pay record fine for 2010 spill: sources [USA]

Author: Chris Baltimore & David Ingram, Reuters

BP Plc is expected to pay a record U.S. criminal penalty and plead guilty to criminal misconduct in the 2010 Deepwater Horizon disaster through a plea deal reached with the Department of Justice that may be announced as soon as Thursday, according to sources familiar with discussions. Three sources, who spoke to Reuters on condition of anonymity, said BP would plead guilty in exchange for a waiver of future prosecution on the charges. BP confirmed it was in "advanced discussions" with the Department of Justice (DoJ) and the Securities & Exchange Commission (SEC)...The discussions do not cover federal civil claims…The deal could resolve a significant share of the liability that BP faces after the explosion killed 11 workers and fouled the shorelines of four Gulf Coast states. [also refers to Halliburton, Transocean]

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Article
1 November 2012

BP Spill Settlement Opt-Outs to Increase With Deadline Today [USA]

Author: Margaret Cronin Fisk & Laurel Brubaker Calkins, Bloomberg

Lawyers for as many as 10,000 potential plaintiffs pursuing claims over BP Plc’s 2010 Gulf of Mexico oil spill said their clients today will opt out or reject the company’s $7.8 billion settlement reached in March…The agreement, which settled claims of most private party plaintiffs, covers hundreds of thousands of individuals, businesses and property owners who say they were harmed by the largest offshore oil spill in U.S. history. Plaintiffs included in the settlement faced a deadline today to choose to accept the terms of the agreement or pursue claims on their own...The blowout and explosion aboard the Deepwater Horizon drilling rig killed 11 workers and started millions of barrels of crude leaking into the gulf. The accident prompted hundreds of lawsuits against BP; Transocean Ltd., the Vernier, Switzerland-based owner and operator of the rig; and Halliburton Co., which provided cementing services. [also refers to Anadarko, Mitsui]

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Article
29 October 2012

[PDF] Corporate Legal Accountability Quarterly Bulletin - Issue 7

Author: Business & Human Rights Resource Centre

[Full text of October 2012 issue of the Corporate Legal Accountability Quarterly Bulletin. Refers to lawsuits against adidas, Amesys (part of Bull), Anadarko, Anglo Platinum (part of Anglo American), Areva, Blackwater, BP, CACI, Cameron International, Chevron, Copper Mesa Mining, Curacao Drydock, DynCorp, Esmor Correctional Services (part of Correctional Services Corporation), Ford, Global Horizons, Halliburton, L-3, PA Child Care, Paladin, Shell, SNCF, Texaco (part of Chevron), Transocean.]

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Article
4 September 2012

BP sued by 'hoodwinked' funds over Gulf of Mexico spill [USA]

Author: Rebecca Burn-Callander, Management Today [UK]

A consortium of funds...have filed common fraud, statutory fraud and negligent misrepresentation law suits in the state of Texas. The investors claim that they would never have paid top dollar for the firm’s shares had they ‘known the truth’. The investors believe that BP and its then CEO Tony Hayward were involved in a cover-up, both in the years prior to the spill and following the disaster itself. They allege that BP’s ‘safety first’ policy was never as robust as the oil giant claimed, and that efforts were made to conceal the size of the oil spill, and downplay ‘the degree of BP’s likely responsibility for the catastrophe’.

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Article
4 September 2012

UPDATE 1-US lays out examples of 'gross negligence' by BP

Author: David Ingram, Reuters

The U.S. Justice Department is ramping up its rhetoric against BP...for the massive 2010 oil spill in the Gulf of Mexico, describing in new court papers examples of what it calls "gross negligence and willful misconduct." The court filing is the sharpest position yet taken by the U.S. government as it seeks to hold the British oil giant largely responsible for the largest oil spill in U.S. history...The U.S. government and BP are engaged in talks to settle civil and potential criminal liability, though neither side will comment on the status of negotiations...BP rejects the charge. "BP believes it was not grossly negligent and looks forward to presenting evidence on this issue at trial in January," the company said in a statement. A Transocean spokesman had no immediate comment.

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Article
3 May 2012

BP Trial Will Be in January, Louisiana AG Caldwell Says [USA]

Author: Allen Johnson Jr., Margaret Cronin, Bloomberg

The first trial over the BP...oil spill will be scheduled for Jan. 14, Louisiana Attorney General Buddy Caldwell said. The initial trial date, set for March this year, was postponed when BP and lawyers for private parties reached a $7.8 billion partial settlement of claims. BP and the plaintiffs’ lawyers asked U.S. District Judge Carl Barbier, who is overseeing the lawsuits, to postpone any trial on liability until after a Nov. 8 fairness hearing on the settlement. [also refers to Transocean, Halliburton, Mitsui, MOEX (part of Mitsui), Anadarko]

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Article
3 May 2012

Court approves $7.8bn BP spill settlement [USA]

Author: Ed Crooks, Financial Times

BP has received preliminary approval from a court in New Orleans for its estimated $7.8bn settlement with private sector plaintiffs over damages arising from the 2010 Deepwater Horizon disaster in the Gulf of Mexico. Judge Carl Barbier...ruled that the settlement agreed in principle by BP and the plaintiffs’ lawyers in March was “sufficiently fair, reasonable, adequate, and consistent with governing law to warrant...preliminary approval”. He set a date of November 8 for a “fairness hearing” to give final approval to the deal. BP is still facing claims from US federal, state and local governments for damages and penalties that could run into the tens of billions of dollars. [refers to Transocean, Halliburton]

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Article
25 April 2012

Halliburton Objects to Gulf Spill Settlement [USA]

Author: Harry R. Weber, Associated Press

Cement contractor Halliburton is objecting to a proposed $7.8 billion settlement between BP and a plaintiffs group representing more than 100,000 victims of the 2010 oil spill in the Gulf of Mexico. Halliburton said in a filing in federal court in New Orleans...the settlement improperly seeks to assign certain claims that BP has made against Halliburton to the Plaintiffs Steering Committee.

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Article
18 April 2012

BP proposes Gulf spill accord terms, trial delay [USA]

Author: Jonathan Stempel, Reuters

BP...reached settlements to resolve billions of dollars of claims from the 2010 Gulf of Mexico oil spill, and asked a U.S. judge for a long delay in any trial over remaining disputes stemming from the disaster...The...company expects...to pay $7.8 billion to resolve economic, property and medical claims by more than 100,000 individuals and businesses. That payout would make the accord one of the largest class-action settlements in U.S. history. There is no cap, and the ultimate payout may be higher or lower than BP projects...About 109,000 condominium owners, hotel and resort operators, restaurateurs, shrimpers and others may be eligible to recover on economic and property claims, court papers show. [also refers to Transocean, Halliburton]

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