Deepwater Horizon litigation

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 actions 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, Transocean reported to the United States Congress 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, 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 reported that 23,000 individual claims had already been filed, of which 9,000 had been settled. 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 US $700 million 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.

Moratorium

Main article: Hornbeck Offshore Services LLC v. Salazar

Hornbeck Offshore Services, joined by several dozen corporations with offshore interests, has filed suit (Hornbeck Offshore Services LLC v. Salazar) 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)