Monday, April 11, 2011

New Activities in BP Litigations

On April 20, 2010, an oil rig operated on behalf of BP at the Gulf of Mexico erupted, causing the largest, most publicized oil spill in recorded history. The economic losses and envioronmental damages were felt in the gulf states and beyond. Some 350 lawsuits were filed, which were eventually consolidated into a multi-district litigation lawsuit (MDL No. 2179) before the Honorable Judge Carl J. Barbier in the United States District Court, for the Eastern District of Louisiana, Case number 2:10-md-02179-CJB-SS.

April 20, 2011, the anniversary of the incident, saw a large amount of litigation activity. Several pleadings were filed on April 20, 2011:

First, BP filed a Cross-Claim against Cameron International Corporation ("CIC"), the manufacturer and maintainer of the “blowout preventer” which was used at the oil rig in the Gulf of Mexico. Based on the allegations in the Cross-Claim, BP is a co-lessee of the Macondo Prospect. BP hired Transocean Inc. to drill an exploratory well for oil and gas. Transocean used the Deepwater Horizon drilling rig. CIC provided the "blowout preventer" unit and maintenance on it. The Cross-Claim alleges that CIC provided an unreasonably dangerous product, that CIC negligently maintained the blowout preventer, the CIC negligently modified the blowout preventer, for contribution, suborogation, and apportionment of liability.

Second, BP filed a Cross-Complaint against Transocean Ltd. and related entities. The Cross-Complaint alleges that Transocean was the owner and operator of Deepwater Horizon, a mobile offshore drilling unit, that on April 20, 2010 the unit exploded and caught fire and it sank two days later, causing an oil spill that continued till July 15, 2010. The Cross-Complaint alleges causes of action for breach of contract, unseaworthiness, negligence, contribution, suborgation, and declaratory judgment against Transocean.

Finally, BP filed an original Complaint against Halliburton Energy Services, Inc. This action is brought in admiralty, and is filed in the United States District Court for the Southern District of Texas, Houston Division, Case number 4:11-cv-1526. The complaint states that it is filed "as a protective companion action" to the two pleadings referenced above, and alleges fraudulent conduct, fraudulent concealment, negligence, contribution and suborgation causes of action.

The Oil Polution Act of 1990, legislated largely in response the the Exxon Valdez incident, provides certain liability limits for oil spill damages. Section 1004 of this Act provides:
"The liability for tank vessels larger than 3,000 gross tons is increased to $1,200 per gross ton or $10 million, whichever is greater. Responsible parties at onshore facilities and deepwater ports are liable for up to $350 millon per spill; holders of leases or permits for offshore facilities, except deepwater ports, are liable for up to $75 million per spill, plus removal costs. The Federal government has the authority to adjust, by regulation, the $350 million liability limit established for onshore facilities."
Plaintiffs' lawyers have been concerned that BP may rely on the above provision to limit its liabilities to only $75 million.

Robin Mashal is a California civil litigation attorney. He may be reached at (310) 286-2000.

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