The DEEPWATER HORIZON Blowout And Oil Spill – Who Is Suing And Being Sued, How, Where And Why?
August, 2010
by John M. Hynes and Paige M. Neel
The April 20, 2010 DEEPWATER HORIZON oil rig blowout and subsequent oil spill has generated over 300 lawsuits in federal and state courts in eleven different states. Thus far, there are lawsuits filed in Florida, Alabama, Texas, Mississippi, South Carolina, Kentucky, Tennessee, California, New York, Oklahoma and Georgia. Motions to consolidate were brought by plaintiffs and defendants before the U.S. Judicial Panel on Multidistrict Litigation. BP requested that the cases be assigned to the Honorable Lynn Hughes of the Federal District Court in Houston. Houston is the U.S. operational headquarters of BP. Not surprisingly, most plaintiffs, including the United States Government, objected to the proposed Houston venue and countered with a request that the Federal District Court in New Orleans be selected even though 7 of the 12 judges sitting in New Orleans have recused themselves from hearing any cases because of industry investments. On August 10, 2010, the Panel on Multidistrict Litigation released its decision ordering the massive body of litigation be heard in New Orleans before U.S. District Judge Carl Barbier. The ruling may be regarded as a win for plaintiffs as the cases will be tried in a jurisdiction that tended to favor their interests even before its citizens were impacted by the spill.
There are numerous personal injury and wrongful death actions brought on behalf of the workers who were killed or injured in the initial explosion and fire. However, the vast majority of cases are brought as class actions for property damage or business interruption on behalf of a variety of people, associations, and companies affected by the oil spill, including fisherman, fisheries, seafood suppliers, resorts, charter boat services, restaurants, bars, marinas, boat and yacht dealerships, and real estate interests. Actions have been brought by the States of Louisiana and Alabama. Transocean's insurers have filed a declaratory judgment action asserting that BP is not an additional insured under its policy. There is even an action filed on behalf of endangered sea turtles that are allegedly being killed by oil cleanup operations. There are also shareholders derivative actions filed against BP, its former CEO, Anthony Hayward, individual members of the Board of Directors and its chairman H. Lamar McKay, as well as unnamed insurance companies who provided insurance to BP, Transocean, Halliburton and Cameron.
In lawsuits seeking recovery on behalf of those directly affected by the spill, the currently named defendants include:
BP, PLC; BP Prods. N.A., Inc.; & BP Am., Inc. - "holders of a lease granted by the Minerals Management Service that allows BP to drill for oil and perform oil-production-related operations at the site of the blowout, and on April 20, 2010 operated the oil well that is the source of the oil spill." See U.S. Dist. Ct. E.D. La., Case No. 2:10-cv-01229-SSV-SS.
Transocean, Ltd. & Transocean Offshore Deepwater, Inc. - "owners and/or operators of the Deepwater Horizon, a semi-submersible mobile drilling rig, which was performing completion operations for BP, BP Products and BP America . . . ." Id.
Halliburton Energy Servs., Inc. - "engaged in cementing operations of the well and well cap and, upon information and belief, improperly and negligently performed these duties, increasing the pressure at the well and contributing to the fire, explosion, and resulting oil spill." Id.
Cameron Int'l Corp. f/k/a Cooper Cameron Corp. - "manufactured and/or supplied the Deepwater Horizon's blow-out-preventers that failed to operate upon the explosion, which should have prevented the oil spill." See U.S. Dist. Ct. E.D. La., 2:10-cv-01345-MLCF-ALC.
BP Exploration & Prod., Inc. - a co-owner of the lease for the well site. Id.
Anadarko E&P Co. LP - a co-owner of the lease for the well site. Id.
Moex Offshore 2007 LLC - a co-owner of the lease for the well site. Id.
M-I, LLC - supplier of drilling fluids. Id.
Once discovery is undertaken, the number of defendants will likely grow exponentially as other potentially liable parties are identified. Moreover, the ongoing cleanup operations may generate additional claims possibly including toxic torts involving those exposed to the crude oil for prolonged periods. This will most likely be the longest and largest legal action in history with many more lawsuits to be filed in the coming months.
The complaints on behalf of those affected by the spill are generally brought as class actions asserting causes of action for negligent trespass, intentional trespass, negligence, gross negligence, nuisance, negligence per se, wantonness and strict liability for ultra-hazardous activity. Some of the cases assert causes of action under the Oil Pollution Act, 33 U.S.C. 2702, although the Act requires that a demand for compensation be made on the responsible party and that suit cannot be filed until 90 days after the demand is made. A few lawsuits have gone so far as to allege a criminal conspiracy between BP and Transocean asserting a cause of action under the Racketeering Influence and Corrupt Organizations Act (RICO), a statute originally enacted to combat the mafia.
In initial findings, BP has denied that it owned or operated the DEEPWATER HORIZON offshore drilling rig, but that Transocean owned and operated the rig. Transocean has in turn filed a petition seeking to limit its exposure under maritime law to the value of the rig. This litigation is in its infancy and although the EXXON VALDEZ oil spill was a disaster of much lesser proportion, its resultant litigation lasted 15 years. This litigation may be measured in generations rather than years.
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