Liability Issues Abound in Oil Spill Cases

NEW ORLEANS (CN) – A federal judge on Friday granted Transocean’s motion to intervene in its insurance carriers’ obligations toward BP, Anadarko and MOEX, in a status conference on the explosion of Transocean’s Deepwater Horizon oil rig.

     “No one presently objects to Transocean’s motion to intervene, so I will grant Transocean’s motion,” U.S. District Judge Carl J. Barbier said in court during the monthly oil spill status conference.
     In its motion, Transocean, the owner of the Deepwater Horizon rig, says it is liable only for “pollution originating from above the waterline.”
     It seeks a declaration that its “insurers, Ranger and the Transocean Excess Insurers, have no additional-insured obligations to BP, Anadarko and MOEX with respect to pollution claims against BP for oil emanating from BP’s Macondo well.”
     The Transocean-held insurance policies at issue are worth $750 million.
     In a separate issue of liability, last week a group of forensic scientists working for the federal government released results of extensive tests on the failed blowout preventer.
     The federal Joint Investigative Team (JIT) released a 200-page report of their findings.
     The report blamed a bent drill pipe for preventing the blowout preventer from cutting off the flow of oil that led to the Deepwater Horizon fire and explosion.
     The blowout preventer is meant as a last-ditch device to stop oil from flowing in a drilling emergency. The blowout preventer was made by Cameron International and maintained by Transocean.
     Don Haycraft, an attorney for BP, told the court on Friday that BP has filed a motion to conduct further blowout preventer testing.
     Although the report did not assign fault for the failure of the blowout preventer, testing of the blowout preventer and the cement used to seal the well will be important to determine how liability will be apportioned.
     Mike Underhill, lead trial counsel for the United States and the court’s liaison to the JIT, told the court that a contract will be signed today (Monday) in Houston for cement testing.
     During previous status conferences, Underhill said getting a firm to conduct the testing was not an easy task.
     Underhill said the party willing to test the cement is in Houston, but that he could not identify it – not that he knows who the party is anyway, because he does not.     
     BP attorney Andrew Langan told the court there are 358 active cases in the oil spill multidistrict litigation, 2:10-md-2179, pending in the Eastern District of Louisiana before Judge Barbier.
     Jim Roy, an attorney on the Plaintiff Steering Committee, said more than 27,000 individuals have joined the litigation by filling out short-form joinders.
     In February, Barbier signed a confidentiality order that will keep millions of documents related to BP’s 2005 Texas City, Texas refinery explosion out of the Deepwater Horizon litigation.
     BP was fined $87 million by the Occupational Safety & Health Administration in 2009 for failing to fix the safety hazards that led to the explosion. The explosion killed 19 and injured 170 people.
     The next status conference is scheduled for April 29 at 9:30 a.m.

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