US Deepwater Horizon explosion & oil spill lawsuits

Deepwater Horizon Source: US Coast Guard, Creative Commons

In 2010, hundreds of lawsuits were filed against companies involved in the explosion of the offshore drilling rig Deepwater Horizon which killed 11 workers and injured 17. Plaintiffs have a range of concerns, from requesting compensation for their injuries to economic harm resulting from the explosion. Several U.S. government criminal investigations have been launched as well. BP agreed to pay $4.5 billion dollars to the US Deparment of Justice and Securities and Exchange Commission. BP will also pead guilty to 14 criminal charges and will pay an additional $1.26 billion fine to the US Department of Justice. 

 

On 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
11 April 2012

Brazil Judge Blocks Injunction Against Chevron

Author: Pierre Bertrand, Intl. Business Times

A judge in Rio de Janeiro state in Brazil blocked a request that Chevron...and Transocean's...operations in that country be halted following two offshore oil spills...Chevron and Transocean are facing two civil lawsuits in Brazil and upwards of $22 billion in environmental fines after 3,000 barrels of oil seeped from the ocean floor in November 2011. Brazilian prosecutors sought to bar the two companies from continuing their operations in the country...Judge Guilherme Diefenthaeler of the Second Federal Region's appellate division, however, struck down the request for an injunction against the companies, saying it would encroach on the legal authority of Brazil's oil regulator...Chevron has previously denied it was negligent, and announced...it was pleased with the court's decision. [also refers to BP]

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Article
11 April 2012

U.S. to Produce Documents BP Requested on Gulf Spill

Author: Margaret Cronin Fisk, Bloomberg

The U.S. will produce more than 100 documents requested by BP...over the 2010 Gulf of Mexico oil spill, government lawyers said. BP claimed the government was withholding evidence that would show the oil spill from the Macondo well in the Gulf of Mexico was smaller than claimed. BP said...it had identified 10,000 documents that relate to estimates of the April 2010 spill. The U.S. said...that it is “willing to produce the 100 documents identified by BP” in court papers on the oil flow and “work with BP to produce the remaining, similar documents” designated as privileged. Privileged documents don’t have to be turned over in the pretrial evidence-gathering process. BP should also turn over its internal documents about the size of the spill, government lawyers said. “It would be unfair for BP to seek production of the United States’ internal flow estimates while claiming that BP’s own flow rate analyses are protected,” they said...

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Article
3 April 2012

Chevron, Transocean face second $11 billion Brazil lawsuit

Author: Jeb Blount, Reuters

A Brazilian federal prosecutor...launched his second 20 billion real ($10.9 billion) lawsuit against U.S. oil company Chevron...and driller Transocean...doubling the stakes against the companies as critics call him as overzealous. The new lawsuit...is related to an oil leak discovered on March 4 in Chevron's offshore Frade field northeast of Rio de Janeiro...The...lawsuit...seeks to prevent Chevron and Transocean from operating in Brazil, transferring Brazilian profits overseas, obtaining government-backed finance and moving equipment from the country..."The filing of the second lawsuit is another in a series of outrageous actions brought by the same district attorney who previously filed both a criminal and civil case, all of which are without merit," Chevron said..."Transocean acted responsibly appropriately and quickly putting safety first. We'll continue to strongly defend our company, our people and the quality of our services," Transocean...said...[also refers to BP]

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Article
2 April 2012

Asian-American Boat Owners Accuse BP of 'Despicable' Racism [USA]

Author: Sabrina Canfield, Courthouse News Services [USA]

BP "specifically demanded" that the companies overseeing its Vessels of Opportunity oil spill clean-up program not hire Vietnamese- and Cambodian-Americans, a class estimated at 4,000 professional fishermen claims in Federal Court. The fishermen say in their complaint that BP's co-defendants "DRC Emergency Services LLC and Danos and Curole Marine Contractors LLC colluded in this despicable order by limiting the number of Vietnamese and Cambodian Americans that they hired."...The complaint states that "even though over half of all active commercial fishermen affected by the BP Oil Spill were Vietnamese and Cambodian Americans, less than 10 percent of all the vessels hired for the V.o.O program were owned by Vietnamese and Cambodian Americans. It is estimated that of the 5,000 marine vessels hired, only around 350 vessels belonged to Vietnamese and Cambodian Americans." The class claims this was directly attributable to BP's discrimination.

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Article
30 March 2012

BP: U.S. hiding evidence on size of Gulf oil spill

Author: Jonathan Stempel, Reuters

BP...has accused the U.S. government of withholding evidence that may show the 2010 Deepwater Horizon oil spill in the Gulf of Mexico was smaller than federal officials claimed, a key issue in determining the oil company's liability. A reduction in the size of the spill would lower the maximum civil fine BP could be forced to pay under the U.S. Clean Water Act, a sum now estimated as high as $17.6 billion. The government is one of many plaintiffs suing BP over the April 20, 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill. In a filing...with the U.S. district court in New Orleans, BP said more than 10,000 documents the government is refusing to turn over "appear to relate to flow rate issues" at the company's ruptured Macondo well...Wyn Hornbuckle, a U.S. Department of Justice spokesman, declined to comment.

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Article
21 March 2012

Transocean Holders’ Suits Over Rig Explosion Dismissed by Judge

Author: Jef Feeley, Bloomberg [USA]

Transocean…owner of the oil rig leased to BP…that…spewed…oil into the Gulf of Mexico, won dismissal of investor claims…that Chief Executive Officer Steven Newman made “materially false and misleading statements” about the company’s safety record…The suits also allege the CEO failed to disclose problems…later…linked to the…explosion…“To allow lead plaintiffs’ claims to proceed…would…permit a claim based on fraud by hindsight,” [Judge] Buchwald said…[also refers to BP, Vernier]

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Article
11 March 2012

BP oil spill health settlement details are still a mystery [USA]

Author: Rebecca Mowbray, Times-Picayune [USA]

In the BP oil spill case, the health settlement negotiated...between BP and attorneys for private plaintiffs in the oil spill litigation makes tens of thousands of new people eligible for care and compensation from the disaster...But law professors, environmental health specialists and health care practitioners say it all depends on the yet-unknown details of the agreement, which is expected to be filed in court in mid-April...The biggest questions about the health settlement appear to be whether everyone who needs treatment qualifies, and whether anyone who has a heart attack or develops cancer later on will be able to convince BP that they're sick because of exposure to oil or dispersants...The health portion of the settlement between BP and plaintiff attorneys is available to the estimated 90,000 cleanup workers and other spill responders, as well as residents of coastal communities who lived there for at least six months. It is not clear who qualifies as a spill responder. [also refers to Nalco]

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Article
8 March 2012

Court takes over BP oil spill claims [USA]

Author: Michael Kunzelman, MSNBC [USA]

U.S District Judge Carl Barbier's order calls for a court-appointed administrator to take over from the Gulf Coast Claims Facility led by Kenneth Feinberg...The move is part of a proposed multibillion-dollar settlement between BP and plaintiffs' attorneys representing more than 100,000 individuals and businesses...BP agreed to pay up to $20 billion to compensate commercial fishermen, charter captains, property owners, hotels and others who claim they suffered economic losses after the spill. The GCCF has processed about 221,300 claims and paid out more than $6 billion from the fund...The judge appointed Lynn Greer...Virginia-based attorney, to fill in for Feinberg and serve as transition coordinator. Patrick Juneau, a Lafayette-based attorney, will take over for Greer and serve as the court-appointed administrator for economic loss claims if Barbier gives preliminary approval to the settlement announced...BP said it expects to pay out $7.8 billion in the settlement, but plaintiffs' attorneys say the deal is uncapped.

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Article
6 March 2012

BP vs. Gulf Coast: It’s Not Settled Yet

Author: Antonia Juhasz, Nation [USA]

The settlement proposal between BP and some 120,000 individuals and businesses includes key provisions long sought by those most economically and physically devastated by the gulf oil disaster...What this settlement does not address, and what may yet go to trial at any time in New Orleans, are all of the charges brought by state governments and the federal government against the companies...Only when all of the charges have been either brought to trial or settled will we know if BP, Halliburton, Transocean, Cameron and all of the companies responsible for the largest ecological disaster in US history have been duly punished, if the people and places of the gulf are to be fully compensated for their losses, if the full truth of the critical failures that led to this disaster—failures that stretch across the entire oil industry and into the Obama administration—have been both revealed and resolved, and if the fines and penalties are large enough to ensure that such a disaster will never occur again...The accounting for the Deepwater Horizon disaster is far from over; in many ways, it has only just begun.

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Article
5 March 2012

BP Reaches Estimated $7.8 Billion Deal With Spill Victims

Author: Jef Feeley, Bloomberg

BP...may face as much as $17.6 billion in civil pollution fines and possibly billions of dollars more in criminal penalties as its settlement with businesses and individuals harmed by the 2010 Gulf of Mexico oil spill shifts the focus to government claims...BP said March 2 it would pay an estimated $7.8 billion to resolve private plaintiffs’ claims for economic loss, property damage and injuries. The settlement, to be paid from a $20 billion trust for spill victims set up in 2010, doesn’t resolve federal and state government environmental damage claims. BP has set aside $37 billion to cover spill costs...U.S. officials are open to the possibility of “a fair and just settlement,” Wyn Hornbuckle, a spokesman for the Justice Department, said...[T]he government is “fully prepared” to try environmental claims over the spill to “hold the responsible parties accountable for the damage suffered in the Gulf region,” Hornbuckle said...[also refers to Transocean, Halliburton]

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