Scores of Lawsuits Filed Following the Deepwater Horizon Oil Spill

The Deepwater Horizon oil spill off the Gulf Coast has been dubbed the worst oil spill in decades.  The disaster started on April 20, 2010 when a blowout caused an offshore rig to explode and sink.  Reports estimate that 1.6 million gallons of oil have already been leaked into the water since then, with approximately 210,000 gallons leaking each day.  This may be the most serious oil disaster in U.S. history, after the 11 million gallon Exxon Valdez oil spill in 1989.

Fingers are pointed everywhere as impacted citizens, businesses, and entire industries seek someone to blame for the economic losses stemming from damage caused to the environment and wildlife.  Lawsuits have been filed by the dozen and are reportedly well over 50 in number.

Private suits have been filed by families of deceased and injured rig workers.  Class action suits are numerous and have been filed by those industries which have been affected, mostly those involving maritime activities such as the fishing, boating, and shrimp industries.  Losses to the fishing industry are projected to be anywhere from $2.5 to $3 billion.  Owners of land and property near the Gulf are also bringing lawsuits for losses in the tourism and vacation industries.

Legally speaking, the United States government recently named BP as the primary party responsible for the incident.  As the main developer of the oil project, BP will be held accountable for the costs associated with cleaning up the mess.  BP currently accepts responsibility for the cleanup but denies that the accident was their fault because the rig was operated by personnel of Transocean Ltd.

Determining liability for the incident is going to be tricky.  Although Transocean was operating the Deepwater Horizon, BP has been leasing the rig for other projects dating back to 2002.  The rig has a history of spills, fires, and mishaps which occurred under BP’s watch.  A major suit was filed on April 30 on behalf of the Louisiana Environmental Action Network.

Other companies targeted for lawsuits are: Transocean Ltd., owners of the rig; Halliburton Energy Services, Inc., responsible for cementing the underwater well which is now leaking oil underwater; and Cameron International Corp., seller of equipment for the well.

The first small legal battle has already been won by fishermen, which demonstrates both how far reaching and how diverse the legal action surrounding this incident is.  Since many fisheries are closed down due to the incident, BP has been in the process of recruiting local Louisiana fishermen for paid volunteer contributions in the cleanup efforts.  A Louisiana district judge swiftly struck down BP agreements regarding pay because they were overbroad.

So does this mean that the major companies involved will be found liable?  I think that it is more than likely; it’s probably just a matter of determining the amount of damages they will have to pay.  As mentioned, the spill has been compared to the Exxon Valdez incident, and may even eclipse the Alaska incident in its severity.  The Exxon case resulted in actual damages of $287 million.  Punitive damages began at $5 billion but through several appeals were lowered to somewhere around $507 million.  In a separate settlement, Exxon also had to pay $63 million to a seafood group known as the Seattle Seven.  If the lawsuits are anything like the Exxon cases, BP and other companies may have to pay even larger amounts for damages.

Besides damages, this incident could have other legal effects as well- it could result in stricter laws governing oil spills and other environmental disasters.  This is what happened with the Exxon case; after the 1989 spill, Congress passed the Oil Pollution Act of 1990.

The Oil Pollution Act will be instrumental when the Deepwater Horizon incident is litigated.  The Act requires all oil drilling companies to have a plan to prevent spills, as well as containment and clean up plans in the event of a spill.  The Act will also limit punitive damages for BP to $75 million, although they may be required to pay more in actual damages.

I think the most tragic part of this incident is that all the lawsuits in the world and billions of dollars will not undo the damage that has already been done to the environment.  And new laws cannot really guarantee that such spills will not occur in the future, as history has proven.  Cleanup and containment for this particular one could take anywhere from 2-3 months.  Concerned readers can follow daily scientific updates with the National Oceanic and Atmospheric Administration (NOAA), and The Oil Drum has issued a very detailed report of the oil spill.