Deepwater Horizon litigation
Encyclopedia
Litigation due to the loss
of the Deepwater Horizon
and resulting oil spill
commenced shortly after the initial loss of the rig in April 2010.
A large number of claims and class action
s have already been filed, although many claims are expected to be met administratively from the fund set up for that purpose under the Oil Pollution Act of 1990, which allows claims to be filed administratively and contemplates their settlement within 90 days.
reported to the United States Congress
that:
At the same time UK media reported that over 130 lawsuits relating to the spill had been filed against one or more of BP, Transocean, Cameron International
, and Halliburton Energy Services
, although it is considered likely by observers that these will be combined into one court as a multidistrict litigation
. Because the spill has been largely lingering offshore, the plaintiffs who can claim damages so far are mostly out-of-work fishermen and tourist resorts that are receiving cancellations. BP and Transocean want the cases to be heard in Houston, seen as friendly to the oil business. Plaintiffs have variously requested the case be heard in Louisiana, Mississippi or Florida. Five New Orleans judges have recused themselves from hearing oil spill cases because of stock ownership in companies involved or other conflicts of interest. BP has retained law firm
Kirkland & Ellis
to defend most of the lawsuits arising from the oil spill.
BP
, which largely self-insures through its own Jupiter Insurance Ltd, was also the subject of early litigation from multiple Lloyd's of London
underwriting
syndicates and other underwriters seeking a declaration that they were not liable to BP under Transocean's insurance policy.
On 16 July, news reports claimed that BP has been attempting to hire prominent scientists from public universities around the Gulf Coast to aid its defense against the lawsuit that the federal government will bring as a result of the spill. BP attempted to hire the entire marine sciences department at one university, but the university declined because of confidentiality restrictions, however several other universities have accepted. In developing its case, the government will draw on the large amount of scientific research conducted by academic institutions along the Gulf, and many scientists being hired by BP serve at those same institutions. The contract prohibits the scientists from publishing their research, sharing it with other scientists or speaking about the data that they collect for at least the next three years, and it requires scientists to agree to withhold data even in the face of a court order
if BP decides to fight the order. It stipulates that scientists will be paid only for research approved by BP. Robert Wiygul, who specializes in environmental law, said that he sees ethical questions regarding the use of publicly owned laboratories and research vessels to conduct confidential work on behalf of a private company. "This is not an agreement to do research for BP. This is an agreement to join BP's legal team. You agree to communicate with BP through their attorneys and to take orders from their attorneys." The contracts have the added impact of limiting the number of scientists who are able to work with federal agencies.
) in U.S. District Court seeking to enjoin the U.S. Department of the Interior from imposing a ban on deep water drilling.
Deepwater Horizon explosion
The Deepwater Horizon drilling rig explosion refers to the April 20, 2010 explosion and subsequent fire on the Deepwater Horizon semi-submersible Mobile Offshore Drilling Unit , which was owned and operated by Transocean and drilling for BP in the Macondo Prospect oil field about southeast of the...
of the Deepwater Horizon
Deepwater Horizon
Deepwater Horizon was an ultra-deepwater, dynamically positioned, semi-submersible offshore oil drilling rig owned by Transocean. Built in 2001 in South Korea by Hyundai Heavy Industries, the rig was commissioned by R&B Falcon, which later became part of Transocean, registered in Majuro, Marshall...
and resulting oil spill
Deepwater Horizon oil spill
The Deepwater Horizon oil spill is an oil spill in the Gulf of Mexico which flowed unabated for three months in 2010, and continues to leak fresh oil. It is the largest accidental marine oil spill in the history of the petroleum industry...
commenced shortly after the initial loss of the rig in April 2010.
A large number of claims and class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
s have already been filed, although many claims are expected to be met administratively from the fund set up for that purpose under the Oil Pollution Act of 1990, which allows claims to be filed administratively and contemplates their settlement within 90 days.
Litigation history
By May 27, 2010, 5 weeks after the initial incident, TransoceanTransocean
Transocean Ltd. is one of the world's largest offshore drilling contractors. The company rents floating mobile drill rigs, along with the equipment and personnel for operations, to oil and gas companies at an average daily rate of US$282,700...
reported to the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
that:
- "Of the approximately 120 lawsuits, more than 80 filed against Transocean are class actions in which individuals and businesses seek payment for financial losses covered by the Oil Spill Pollution Act. Generally, the claimants in these lawsuits are fishermen, hotel operators, landowners, rental companies, restaurants and seafood processors, who claim a current or potential future loss of business in the aftermath of the oil spill. Many of these 80 lawsuits overlap, with lawyers seeking to represent the same classes of people."
At the same time UK media reported that over 130 lawsuits relating to the spill had been filed against one or more of BP, Transocean, Cameron International
Cameron International Corporation
Cameron International Corporation , , is a Fortune 500 company and a global provider of pressure control, processing, flow control and compression systems as well as project management and aftermarket services for the oil and gas and process industries...
, and Halliburton Energy Services
Halliburton
Halliburton is the world's second largest oilfield services corporation with operations in more than 70 countries. It has hundreds of subsidiaries, affiliates, branches, brands and divisions worldwide and employs over 50,000 people....
, although it is considered likely by observers that these will be combined into one court as a multidistrict litigation
Multidistrict litigation
In the United States, multidistrict litigation refers to a special federal legal procedure designed to speed the process of handling complex cases such as air disaster litigation or complex product liability suits....
. Because the spill has been largely lingering offshore, the plaintiffs who can claim damages so far are mostly out-of-work fishermen and tourist resorts that are receiving cancellations. BP and Transocean want the cases to be heard in Houston, seen as friendly to the oil business. Plaintiffs have variously requested the case be heard in Louisiana, Mississippi or Florida. Five New Orleans judges have recused themselves from hearing oil spill cases because of stock ownership in companies involved or other conflicts of interest. BP has retained law firm
Law firm
A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other...
Kirkland & Ellis
Kirkland & Ellis
Kirkland & Ellis LLP is an international law firm with headquarters in Chicago, known for its profitability and its litigation, bankruptcy, intellectual property and private equity departments. Kirkland & Ellis is currently ranked as the ninth most prestigious law firm in the United States by...
to defend most of the lawsuits arising from the oil spill.
BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
, which largely self-insures through its own Jupiter Insurance Ltd, was also the subject of early litigation from multiple Lloyd's of London
Lloyd's of London
Lloyd's, also known as Lloyd's of London, is a British insurance and reinsurance market. It serves as a partially mutualised marketplace where multiple financial backers, underwriters, or members, whether individuals or corporations, come together to pool and spread risk...
underwriting
Underwriting
Underwriting refers to the process that a large financial service provider uses to assess the eligibility of a customer to receive their products . The name derives from the Lloyd's of London insurance market...
syndicates and other underwriters seeking a declaration that they were not liable to BP under Transocean's insurance policy.
On 16 July, news reports claimed that BP has been attempting to hire prominent scientists from public universities around the Gulf Coast to aid its defense against the lawsuit that the federal government will bring as a result of the spill. BP attempted to hire the entire marine sciences department at one university, but the university declined because of confidentiality restrictions, however several other universities have accepted. In developing its case, the government will draw on the large amount of scientific research conducted by academic institutions along the Gulf, and many scientists being hired by BP serve at those same institutions. The contract prohibits the scientists from publishing their research, sharing it with other scientists or speaking about the data that they collect for at least the next three years, and it requires scientists to agree to withhold data even in the face of a court order
Court order
A court order is an official proclamation by a judge that defines the legal relationships between the parties to a hearing, a trial, an appeal or other court proceedings. Such ruling requires or authorizes the carrying out of certain steps by one or more parties to a case...
if BP decides to fight the order. It stipulates that scientists will be paid only for research approved by BP. Robert Wiygul, who specializes in environmental law, said that he sees ethical questions regarding the use of publicly owned laboratories and research vessels to conduct confidential work on behalf of a private company. "This is not an agreement to do research for BP. This is an agreement to join BP's legal team. You agree to communicate with BP through their attorneys and to take orders from their attorneys." The contracts have the added impact of limiting the number of scientists who are able to work with federal agencies.
Moratorium
Hornbeck Offshore Services, joined by several dozen corporations with offshore interests, has filed suit (Hornbeck Offshore Services LLC v. SalazarHornbeck Offshore Services LLC v. Salazar
Hornbeck Offshore Services v. Salazar is an on-going case in United States federal court. In the wake of the Deepwater Horizon explosion and the subsequent oil spill, the U.S. Department of the Interior issued a six month moratorium on exploratory drilling in deep water. Plaintiffs filed suit...
) in U.S. District Court seeking to enjoin the U.S. Department of the Interior from imposing a ban on deep water drilling.
External links
- Ronen Perry, The Deepwater Horizon Oil Spill and the Limits of Civil Liability, Washington Law Review, Vol. 86, pp. 1-68, 2011 (discussing the legal framework)