BP plc suffered a big blow last Thursday when a federal judge said it owed indemnification to Transocean for any compensatory damages that might arise from the Deepwater Horizon oil spill two years ago. Will BP now suffer the same fate with the other rig-operator at the center of the disaster, Halliburton?
Judge Carl Barbier’s decision does not mention Halliburton, nor would it, given that the opinion turns on the language of contracts signed by BP and Transocean. But since November, Halliburton has pushed its own separate motion in which it asks Judge Barbier to find that BP should cover any losses or claims stemming from the 2010 blowout. Halliburton’s motion says that “many of the issues made the subject of this summary judgment motion have been previously and extensively briefed” by Transocean.” Halliburton and Transocean contracted with BP to build and operate the Deepwater Horizon rig in the Gulf of Mexico.
Judge Barbier has not yet ruled on Halliburton’s request. How different the language in the contracts are—and whether a duty of indemnification is owed under the contracts—was not immediately clear. But Barbier’s holding that any finding of gross negligence on Transocean’s fault would “not bar its claim for contractual indemnity from BP” would seem to support Halliburton’s similar arguments.
Halliburton counsel Donald Godwin of Godwin Ronquillo was in trial Friday and unavailable for comment. But company spokeswoman Beverly Blohm Stafford said in a statement that Halliburton was aware of the Transocean decision.”Halliburton has a similar motion pending in the litigation, and we look forward to the ruling on that motion,” she said.
BP’s counsel, Richard Godfrey of Kirkland & Ellis and Mike Brock of Covington & Burling, did not respond to requests for comment. A company spokesman did not respond to questions about the Halliburton contract. But in a statement, BP emphasized what Judge Barbier’s decision did not do—extend Transocean’s indemnification to punitive damages and civil penalties.
“As we have said from the beginning, Transocean cannot avoid its responsibility for this accident,” BP said in the statement. “By contrast, since the spill we have stepped up, acknowledged our role, and paid more than $7.8 billion in claims, advances, and other payments to individuals, businesses, and governments.”
Still, Transocean has escaped a big chunk of potential claims thanks to Judge Barbier’s ruling. BP has estimated in court filings that the total costs from the litigation and fines could hit $42 billion. Trial is set to begin next month in the consolidated litigation.
Transocean lawyers Rachel Clingman of Sutherland Asbill & Brennan and Brad Brian of Munger Tolles & Olsen did not respond to requests for comment. But Transocean spokesman Lou Colasuonno said the decision “confirms that BP is responsible for all economic damages caused by the oil that leaked from its Macondo well, and discredits BP’s ongoing attempts to evade both its contractual and financial obligations.”
This article originally appeared in The AmLaw Litigation Daily.
