By Laurel Brubaker Calkins and Margaret Cronin Fisk – May 25, 2010
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A morning storm passes over the oil-soaked Gulf coast at Elmer’s Island, on May 25, 2010. Photographer: John Moore/Getty Images
BP America Chairman and President Lamar McKay, left, and Transocean Ltd. President and CEO Steven Newman, participate in a House Transportation and Infrastructure Committee hearing on Capitol Hill on May 19, 2010. Photographer: Mark Wilson/Getty Images
Transocean Ltd. can’t use a 150-year- old statute to cap its liability against claims arising from the Gulf of Mexico oil spill, lawyers for victims of the disaster said at a hearing in federal court in Houston.
The Oil Pollution Act of 1990, passed after the 1989 Exxon Valdez oil spill in Alaska, supersedes the older law in this situation, attorneys for the Louisiana Environmental Action Network and the United Commercial Fisherman’s Association said in court papers, citing earlier decisions. Even under the old law, the negligence of BP and Transocean would make it inapplicable, plaintiffs’ lawyer Kurt Arnold told U.S. District Judge Keith P. Ellison.
“Give me depositions of the top five or six BP guys” who were working on the rig “and this limitation will be over,” Arnold told Ellison at today’s hearing. “We can bust this limitation sooner rather than later.”
Transocean asked Ellison on May 13 to cap its financial liability at $26.7 million under a maritime statute that limits a vessel-owner’s exposure to the value of its ship and cargo. Transocean owned the Deepwater Horizon drilling rig that exploded and sank last month while drilling an offshore lease owned by BP Plc.
Transocean’s lawyer, Ron White, asked Ellison to wait until all claims are filed to make any decisions on substantive matters.
“All we’re seeing so far are snapshots,” White said. “You have to look at the big picture.”
“Is that a luxury we have in this case?” Ellison asked. He previously set a claims deadline in his court for November.
BP, which owns the underwater lease, and Transocean face more than 130 lawsuits filed by thousands of commercial fishermen, property owners and tourism-related businesses claiming harm from oil leaking from the damaged subsea well. The oil threatens the coastline of four states and has led to closure of almost 20 percent of the Gulf’s fishery, the U.S.’s second-largest.
“All you have to do is turn on CNN and you’ve got the big picture,” said Scott Bickford, an attorney for plaintiffs suing Transocean and BP. “When you look at what these companies have wrought on the people and coastline of Louisiana, we don’t need to wait.”
Yesterday, lawyers representing 15 workers killed or injured in the April 20 rig explosion, challenged Transocean’s liability limitation and asked Ellison to require the company to deposit cash or a surety bond equal to “the full value of all vessels” in Transocean’s fleet.
Arnold, the rig workers’ lawyer, said in the filing that the maritime statute Transocean is relying on to argue that its liability should be capped can also be interpreted as allowing victims to file claims against the Deepwater Horizon and “additional vessels within the flotilla, which were under a common operational control, supervision and enterprise.”
Transocean has the world’s largest rig fleet, with 138 mobile offshore drilling units, according to its website. According to the company’s annual report to shareholders, the carrying value of Transocean’s property and equipment was $23 billion as of Dec. 31.
Guy Cantwell, a Transocean spokesman, declined to comment on Arnold’s interpretation of the maritime statute or the fleet’s value.
If Ellison agrees that Transocean may limit its liability under the statute, Arnold asked the judge in court papers to include insurance proceeds the company received for the sunken rig in the limitation calculation. This month, Transocean said it had collected $481 million from a $560 million insurance policy on the rig.
Lawyers and Ellison didn’t discuss that request at today’s hearing.
The case is In Re The complaint and petition of Triton Asset Leasing GMBH, 4:10-cv-01721, U.S. District Court, Southern District of Texas (Houston).
To contact the reporters on this story: Laurel Brubaker Calkins in Houston at email@example.com; Margaret Cronin Fisk in Southfield, Michigan, at firstname.lastname@example.org.