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BP Scores Twice in Oil Spill Litigation | Courthouse News Service

July 20, 2011 By Leave a Comment

BP won two rounds in its massive oil spill litigation when the federal judge overseeing the cases ruled that lead plaintiffs in property damage lawsuits cannot include racketeering claims, and that a lawsuit from BP business partner Anadarko Petroleum must be arbitrated.

U.S. District Judge Carl Barbier granted BP’s motion to dismiss a consolidated oil spill complaint brought under the RICO Act, calling plaintiffs’ inability to show a direct link between BP business practices and the economic damages sought the “fatal flaw in their RICO claims.”

The plaintiffs claimed that damages to property and business losses caused by the oil spill would not have happened if BP had not “defrauded government regulators in connection with the safety of its drilling operations, its ability to respond to any oil spill, and its response to the spill at the Macondo well.”

Judge Barbier ruled that a direct relationship between the alleged fraud and the plaintiffs’ injuries was required for a RICO complaint to stand.

That ruling does not affect the hundreds of other lawsuits seeking property damages, personal injury and other economic losses still pending in Barbier’s court.

via Courthouse News Service.

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UK liability limits to double after BP spill | FT.com / UK / Business

August 15, 2010 By Leave a Comment

Britain’s oil companies face the doubling of the maximum payment for third-party costs resulting from pollution, amid concerns that the current limits are inadequate after BP’s massive oil spill in the Gulf of Mexico.

In the UK, individual companies are responsible for environmental or other material damage if their installations fail. There is no legislative cap on their liabilities for any clean-up.

But if they default on their payments, then under a voluntary industry agreement the rest of the industry guarantees to deal with the costs for any pollution damage and for the reimbursement of public authorities. The current liability limit is $120m per incident and UK Oil and Gas, the industry association, is proposing to raise that to $250m (€196m, £160m) in the wake of the BP disaster.

Scrutiny of offshore drilling safety regimes has intensified since the explosion of the Deepwater Horizon rig on April 20 that killed 11 workers and led to 4.9m barrels of oil spewing into the waters of the gulf. No new oil has flowed into the gulf since July 15, when the well was capped. BP announced last week that its own costs for cleaning up the spill and compensation payments had risen to $6.1bn so far.

UK Oil and Gas said that the proposed increase would be voted on at an emergency meeting by signatories to the Offshore Pollution Liability Agreement, or Opol, on Wednesday. Under the agreement, which was signed in 1974, each member undertakes to maintain a financial obligation to Opol of $120m for any one incident, thus guaranteeing the payment of any claim from a party that cannot meet its own obligations.

via FT.com / UK / Business – UK liability limits to double after BP spill.

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‘To Preserve and Collect’: Oil Spill a Discovery Nightmare for Lawyers | Corporate Counsel

June 4, 2010 By Leave a Comment

The legal strategies for BP and other companies involved in the Deepwater Horizon disaster have yet to be revealed. But one thing is certain. Their in-house legal departments are in the midst of an expensive and Herculean task — discovery.

“All of these organizations are well aware of the need to preserve and collect key information,” said Jim Wagner, CEO of DiscoverReady, a discovery management service. “But few organizations have ever confronted the scale of discovery that they are likely to have to undertake.”

The companies are under document hold demands, subpoenas, and other requests from federal agencies, including the Justice Department, which announced this week that it has begun civil and criminal investigations into the massive oil spill in the Gulf of Mexico. They’re also subject to court orders in pending litigation.

So the companies’ legal teams are likely sifting through and collecting massive amounts of data in both electronic and paper form, information that may go back decades. There may be physical evidence to collect, which may be have been destroyed. Meanwhile, the companies’ lawyers are also likely dealing with cross-border privacy issues that make the discovery process even more complex.

“Welcome to discovery 101 in 2010,” said Laura Kibbe, who helped build Pfizer Inc.’s e-discovery system in 2005 as senior counsel. In the 1990s, she was also an in-house attorney at Texaco, where she dealt with the legal aftermath of oil spills. She’s now senior vice president of document review services at Epiq Systems.

“Even under the best of circumstances, discovery is a labor-intensive, time-consuming process,” Kibbe said. “And it never goes as fast as government investigators or corporate counsel would like.”

Figuring out what data is out there, and who has it, is the first step. That entails conducting interviews with employees and working with IT professionals to see what data can be retrieved and from where.

Producing these documents under intense public scrutiny adds one more layer of complexity, legal experts said. The companies will have to be transparent and communicate regularly with government agencies about their processes. That will be key to the companies’ legal defense, and their public image.

“Any mistakes they make will be magnified 100 times,” said Craig Carpenter, general counsel of Recommind, Inc., an e-discovery software provider.

via ‘To Preserve and Collect’: Oil Spill a Discovery Nightmare for Lawyers.

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U.S. Opens Criminal Inquiry Into Oil Spill – NYTimes.com

June 2, 2010 By Leave a Comment

The Obama administration said Tuesday that it had begun civil and criminal investigations into the massive oil spill in the Gulf of Mexico, as the deepening crisis threatened to define President Obama’s second year in office.

Attorney General Eric H. Holder Jr. said in New Orleans that he planned to “prosecute to the fullest extent of the law” any person or entity that the Justice Department determines has broken the law in connection with the oil spill. On Wall Street, the Dow Jones industrial average fell 120 points shortly after Mr. Holder’s announcement as energy stocks tumbled on expectations of the federal investigations. BP lost 15 percent of its market value during the day’s trading.

BP and government officials said flatly for the first time that they had abandoned any further plans to try to plug the well, and would instead try to siphon the leaking oil and gas to the surface until relief wells can stop the flow, most likely not before August.

Mr. Holder’s comments, which echoed those of Mr. Obama earlier in the day in the Rose Garden, reflected deepening frustration within the administration at the inability to stop the spill, along with wide concern that the government and the president appear increasingly impotent as oil laps at the shorelines of Louisiana, and now Alabama and Mississippi.

via U.S. Opens Criminal Inquiry Into Oil Spill – NYTimes.com.

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Transocean Says It Will Honor Legal Obligations – WSJ.com

May 28, 2010 By Leave a Comment

Transocean Ltd., owner of the Deepwater Horizon rig, will meet all of its legal obligations related to the massive oil spill in the Gulf of Mexico, the drilling contractor’s chief executive said Friday.

Separately, ExxonMobil Corp. said it has suspended drilling operations at the Hoover Diana well in the Gulf after the U.S. ordered a halt to current drilling in the area. Marathon Oil Corp. also said the company is in the process of abandoning the Innsbruck well in the Gulf.

President Barack Obama ordered Thursday the halt of activities at about 33 exploratory wells in the deep waters of the Gulf and also extended a moratorium on new drilling in the area to six months. The drilling ban will be in place until the underlying cause of the largest spill in the U.S. history is understood.

The Switzerland-based Transocean has been in the spotlight since April 20, when the Deepwater Horizon exploded, killing 11 workers. The rig sank two days later and thousands of barrels of oil a day have gushed out of a broken pipe on the sea floor. BP PLC, which leased the rig and is responsible for the clean-up, has begun injecting drilling mud into the well in an effort to plug the leak.

Lawmakers have criticized the Transocean’s shareholder-approved $1 billion dividend payment and have called for a Justice Department investigation. At the same time, a ban on drilling in the Gulf of Mexico threatens the company’s U.S. operations, which account for about 25% of its revenue.

“The payment of the dividend will not affect the company’s ability to meet its legal obligations,” Steven Newman said during the conference call.

The company said it can still pay this dividend despite Thursday’s announcement of a six-month moratorium on deepwater drilling.

via Transocean Says It Will Honor Legal Obligations – WSJ.com.

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