The rig owner involved in drilling the ill-fated well that
blew out in the Gulf of Mexico and spewed more than 200 million gallons of oil
will not have to pay many pollution claims because it was shielded in a
contract with well-owner BP, a federal judge ruled Thursday. A Wash DC Environmental Lawyer watches.
The ruling comes as BP, the U.S. southern states affected by
the disaster and the federal government are discussing a settlement over America's
largest offshore oil spill.
BP PLC, Transocean Ltd. and Halliburton Co. have been
sparring over who was at fault for causing the blowout. The out-of-control well
was capped in July 2010. Federal investigators have said that BP bears ultimate
responsibility for the spill, but has faulted all three companies to some
degree. An Amsterdam
Environmental Lawyer watches the case closely.
Thursday's decision may have spared Transocean from having
to pay potentially billions of dollars in damage claims. However, U.S. District
Judge Carl Barbier said the driller still is not exempt from paying punitive
damages and civil penalties that arise from the April 20, 2010, blowout 100
miles off the Louisiana coast. Those penalties could amount to billions of
dollars.
Law experts were split over who is a clear-cut winner. A New Orleans Environmental Lawyer is pretty decided.
BP has been pursuing agreements with multiple parties to
reach settlements that would make an upcoming trial involving hundreds of spill
lawsuits in New Orleans unnecessary, or at least resolve as many of the issues
as possible.
The Justice Department also is involved, working with the
states to create an outline for a settlement that would resolve their
potentially multibillion dollar claims against BP and the other companies
involved in the disaster, Alabama Attorney General Luther Strange told The
Associated Press.
Justice led a meeting last week in Washington among the U.S.
states in an effort to formulate an agreement that would satisfy government and
state claims, including penalties and fines, Strange said. He also indicated if
there is a settlement that officials are discussing what to do with the $20
billion fund set up by BP to pay victims. A Chicago
Environmental Lawyer hopes there’s more to come.
The lead attorneys for individuals and businesses suing BP
were not at the meeting.
According to Strange, a federal magistrate judge has been
asked to expedite settlement discussions. The Louisiana attorney general's
office said in a statement to the AP that it is in settlement discussions with
BP, which would not comment on any deals in the works. A first phase of the
trial is set for Feb. 27 to determine liability for the spill.
"The closer you get to a trial date, the more pressure
builds to reach a settlement," Strange said.
Despite the decision, BP claimed victory and said Barbier's
ruling "at a minimum" left Transocean facing "punitive damages,
fines and penalties flowing from its own conduct." A St.
Louis Environmental Lawyer is wondering what’s next.
Transocean spokesman Lou Colasuonno said in an emailed
statement that the company was pleased to see its position affirmed.
"This confirms that BP is responsible for all economic
damages caused by the oil that leaked from its Macondo well, and discredits
BP's ongoing attempts to evade both its contractual and financial
obligations," he said.
Blaine LeCesne, an associate professor at Loyola University
law school, however, said Barbier's ruling was a "major victory" for
Transocean.
"If anything is going to compel the parties toward
settlement, it's going to be this," he said. "I think BP is in a very
bad position now, and they don't have a lot of leverage."
A University of Michigan Law School professor who served as
chief of the Justice Department's environmental crimes section said the ruling
had no clear-cut winner. David Uhlmann said it prevents BP from collecting
billions of dollars from Transocean to help cover cleanup costs and pay for
claims over economic losses and environmental damage from the spill. But the
decision leaves Transocean facing potentially billions of dollars in civil and
criminal penalties under the Clean Water Act, he added. A Fresno
Environmental Lawyer may agree.
"It's a partial win for each side and a partial loss
for each side," Uhlmann said.
Under a drilling contract, BP and Transocean agreed to
indemnify each other in the case of an accident, with BP taking responsibility
for pollution originating from the well and Transocean for any pollution or
accidents aboard the rig.
However, in court BP argued that the contract did not shield
Transocean if the drilling company acted in manner that was grossly negligent.
Barbier said the contract was a "clear and unequivocal
agreement" to provide "broad indemnity."
"As we have said from the beginning, Transocean cannot
avoid its responsibility for this accident," BP said.
The British oil giant said it had "stepped up" and
admitted its role in the spill and paid billions of dollars in claims.
BP also is eager to resolve its disputes with its partners
on the doomed rig. The companies have sued and countersued each other for
billions of dollars to protect themselves when it comes to paying damages to
victims and penalties to the government.
Months ago, BP offered to resolve its dispute with
Transocean if Transocean paid BP roughly $4.5 billion, according to a person
briefed on the discussions who spoke to the AP on condition of anonymity
because the talks are confidential. Transocean rejected the offer, and there
have been no substantive discussions between the companies about figures since
then, the person said, adding that Thursday's ruling could spur further talks.
A Pittsburgh
Environmental Lawyer is curious.
Eric Schaeffer, who led the Environmental Protection
Agency's civil enforcement office from 1997 to 2002, said Thursday's ruling
will put even more pressure on BP.
"If BP is less able to shift some of those costs to
Transocean, if they understand they are going to bear Transocean's share of
compensatory damages, I'd want to get it settled," Schaeffer said.
"That's no longer a wild card."
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