17 Mar 2022
Oil spills from tanker ship accidents have damaged and destroyed natural ecosystems in Alaska, the Galapagos Islands, the Gulf of Mexico, and other places. The amount of oil spilled during these accidents ranged from several hundred tons to several hundred thousand tons which had a great impact on the ecosystem and workers’ health. Oil spills lead to devastating consequences for society; economically, socially, and environmentally. As a result, it also leads to extreme media and political controversy. Multiple actors engage in a political struggle regarding how the government should react to oil spills and what measures should be taken. Despite significant improvements in national and foreign policies on oil spill prevention in recent decades, major oil spills continue to occur. In the ocean basin of the Gulf of Mexico, an oil rig exploded horrifically with tragic results. Millions of oil barrels were spilled into the water, causing extreme catastrophic damage to the ecosystem and to the economy of the region. Does the question lie as to who covered the cleanup costs? How much did the petroleum company cover? These significant issues were subjected to major litigation. The process was governed by a perceptible background of laws. Understanding the facts and the laws applied is a crucial step along with recognizing the liabilities of civil and criminal regimes. Below is a detailed case study of the Deepwater Horizon and its legal impacts.
Case Study: Deepwater Horizon Oil Spill Background information
When the Deepwater Horizon rig, owned by the offshore oil drilling company Transocean, leased by the oil company BP was in its final stages of exploratory drilling at the Macondo Prospect in the Gulf of Mexico was when the disaster struck. The rig exploded on the 20th of April 2010, wherein a surge of natural gas blasted, killing 11 employees, injuring 17, and causing the worst oil spill in the history of the U.S. The massive spillover caused extensive environmental degradation and rendered hundreds of native species uninhabitable by thousands of miles of coastal land. Tens of thousands of aquatic animals have died in an ecosystem that is estimated to contain more than 8,300 distinct species. This involves numerous fish, birds, mollusks, crustaceans, turtles, and aquatic mammals, all of them native to the region and still struggling in the Gulf for the most part with the oil-contaminated climate. The widespread consequences of the growing oil slick included multiple stakeholders. First, BP Oil’s shareholders had been thoroughly disappointed because they have invested in a company that has caused thousands of lives too much harm and has caused substantial financial losses. For a stretch of 87 days, four million barrels of oil spilled from the ruined Macondo well before eventually being capped on 15 July 2010. On the 15 December 2010, the United States lodged a lawsuit with district court against BP Exploration & Production and other defendants allegedly responsible for the spill. Trial Immediately after the incident, private parties, and government entities-initiated proceedings for a record of more than 3,000 cases involving more than 100,000 complainants or plaintiffs. On the 10th of August 2010, for most federal cases, the pretrial proceedings were consolidated by the Judicial Panel on Multidistrict Litigation with the U.S. District Court. Further, a suit under admiralty law was brought by a consortium of Transocean companies, which included the owner, operator, and employer of the Deepwater Horizon rig and crew to limit their liabilities.
Legal Implications
The U.S. District Judge Carl Barbier concluded, among other things, that the word “gross negligence” in the Clean Water Act should be applied. The district court determined that BP’s gross negligence and “willful misconduct” led to the oil spill. The Court, therefore, engaged in a lengthy dispute about the applicable meanings of these two concepts since the Clean Water Act and the Oil Pollution Act do not define them. Eventually, the Court concluded that gross negligence was the excessive deviation of attention or the inability to show even little care and that willful misconduct was an act knowingly performed with such knowledge that the performance might result in injury. The Court refused to take the argument where it had to ratify the irresponsible conduct of employees in order to make the corporation or the company’s “managerial agent” grossly negligent. The Court has instead found that a company is vicariously liable for gross negligence and willful misconduct of its employees in line with the enhanced penalty provisions of the Clean Water Act. The Judge ruled that BP was not conscious of known risks and BP’s rejection of the claim that the oil spill was similarly the responsibility of all parties. The ruling stated that the employees of BP took risks that resulted in America’s largest environmental tragedy and that the company was noticed that certain primary BP actions were motivated mainly by the need to save time and resources instead of ensuring the well was secure. In addition to this, BP. had pleaded guilty for 14 criminal counts, with $4 billion in criminal fines and penalties, for its unlawful actions and contributing to the Deepwater Horizon tragedy, was fined the highest criminal penalty in the U.S. history. Many of the cases resulted in BP paying about the U.S. $69 billion in various settlements, fines and costs. This includes a substantial $18.7 billion deal with the state and federal governments to resolve both civil claims and environmental restoration costs. A settlement with private plaintiffs including that resulted in the payout for economic damages and the destruction of property of over $12 billion. The other defendants, such as Transocean and Halliburton, including but not limited to in the lawsuit, also paid billions to settle their respective liabilities to states, private plaintiffs, and other defendants, including but not limited to Transocean and Halliburton. Visit our website to keep to know about the latest updates of laws and regulations.