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THE GULF OIL SPILL: The Trial of Liability, Limitation, Exoneration, and Fault Allocation

On April 20, 2010, during the final phases of drilling an exploratory well at Macondo located approximately 40 miles off the Southeast coast of Louisiana, the Deepwater Horizon drilling rig exploded in the Gulf of Mexico. The explosion and ensuing fire caused the platform to sink in 5,000 feet of water, killing 11 workers and injuring 17 others. Although an attempt was made to activate the blowout preventer (BOP), the BOP failed and approximately 200 million gallons of oil were released into the waters of the Gulf of Mexico before the well was capped on July 15, 2010. This was the largest marine oil spill in the history of the petroleum industry.

This event caused not only the loss of life, but also widespread economic losses to business, trade, tourism, and property. There was significant impact on the economy, as well as the ecology, wetlands, wildlife, coastlines, and natural resources of the Gulf Coast region.

The Deepwater Horizon oil spill prompted the filing of numerous lawsuits against multiple defendants. Major defendants include: BP, lessee of the rig and project developer of the Macondo well; Cameron, manufacturer of the blowout preventer; Transocean, who provided the Deepwater Horizon rig and its crew to BP; Halliburton, the contractor that installed and cemented production casing at the Macondo well; and Anadarko/MOEX, BP’s drilling partners.

The Deepwater Horizon accident was the result of multiple causes that involved multiple parties. The final federal report issued by the Bureau of Ocean Energy Management, Regulation and Enforcement concluded that BP, Transocean, and Halliburton all share responsibility. However, these defendants, including Cameron, have filed cross-complaints against one another.

BP asserted that Transocean was completely responsible, suggesting that every safety system, device, and well procedure on the Deepwater Horizon failed. BP alleged that Cameron’s design and manufacture of the BOP did not meet the standards of a reasonable manufacturer, and that its maintenance and modification did not meet the standard of a reasonable service provider. BP has asserted that Halliburton’s improper conduct, errors, and omissions, including fraud and concealment, caused and/or contributed to the incident.

Halliburton recently filed an amended lawsuit against BP, claiming BP hid critical information about the Macondo well that led to the explosion. They alleged that BP compromised safety for profit, and then conspired in a cover up after the fact to avoid liability. Halliburton has also filed cross-claims against Cameron and other manufacturers of rig equipment, and made claims against responder organizations for contributory negligence.

Transocean has filed multiple cross-claims. Against BP, they seek contractual protections arising from indemnity clauses in the drilling contract executed between the companies, and claims to enforce provisions of its contract imposing full responsibility on BP for the fire, blow-out, or any other uncontrolled oil and gas flow. They asserted strict liability claims against the manufacturers of rig equipment, and breach of warranty claims against Halliburton and M-I Swaco, claiming those contractors failed to perform their duties. Transocean also seeks damages from BP and others for the total loss of the Deepwater Horizon as well as $20 million in additional damages.

Limitation Trial

This litigation is being tried under the Limitation of Liability Act, 46 U.S.C. § et. seq. in federal maritime law and under federal supplementary admiralty rules. Numerous federal and state regulations, including the Oil Pollution Act of 1990 (OPA), 33 U.S.C. § et. seq., and various common law principles, are also at issue.

On February 27, 2012, the trial of liability, limitation, exoneration, and fault will commence in the USDC Eastern District of Louisiana before Judge Carl Barbier. Significantly, the Limitation trial will address maritime claims for negligence and gross negligence, as well as cross-claims between the defendants and their respective liability.

Pursuant to CMO No. 3 it is to be conducted in at least 3 phases:

Primary Defense Issues

1. Violations of offshore safety regulations
2. Improper maintenance
3. Human errors
4. Poor risk management
5. Failure to respond to critical indicators
6. Inadequate well control response
7. Insufficient emergency plans
8. Faulty designs
9. Failed capping efforts
10. Adverse ecological, economic, and health effects

Defense Narratives

1. What is true causation?
2. Who was actually responsible for safe operations at the site?
3. Who was responsible for monitoring the well?

1. Defendant responsiveness and efforts to mitigate damage
2. Ultimate outcomes resulting from the defendant’s real-time and post-spill decisions

DOAR Litigation Consulting

As the only national trial consulting firm with a local New Orleans’ office, DOAR Litigation Consulting is uniquely positioned as your key partner in the Deepwater Horizon litigation. Drawing upon our extensive experience successfully defending complex cases of similar scope and magnitude, our regional expertise and our extensive knowledge of the key Defense issues in this litigation, we have created a targeted website that demonstrates our comprehension of the issues and our capacity to assist litigators in preparation for a what is sure to be one of the most historic bench trials in modern jurisprudence, the Deepwater Horizon Limitation Trial. We invite you to click on the link below, where you will find:

1. Our view of the relevant issues that must be tackled now
2. Sample impactful graphics to support your trial strategy
3. The local issues that are likely to shape the trials’ outcome
4. Services and strategies that could help give you a differentiated edge in achieving success

Click here to access our repository of relevant information.