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BP, Gulf spill partners sue each other for billions

Friday, April 22, 2011

MIAMI -- After being hammered for a year over the Gulf of Mexico oil spill, BP is going on the offensive with multibillion-dollar lawsuits seeking to shift at least part of the blame to those who owned the ill-fated rig or designed a failed safety device or supplied cement that didn't hold.

Those companies -- Transocean, Cameron International and Halliburton -- each filed lawsuits of their own, and it will now be up to the courts to divvy up fault.

BP, which has rebounded remarkably in the year since the April 20, 2010, disaster, will face an uphill battle in trying to shed the albatross of the Gulf oil spill. The lawsuits filed late Wednesday were likely just opening salvos in what's expected to become lengthy negotiations over assigning responsibility and, more importantly, liability. And experts said the companies in the end will most likely reach deals to divide the responsibility and costs.

But the perception that the companies were seeking to dodge blame did not sit well with many of those most affected by the worst offshore oil spill in U.S. history.

"On this end, they haven't taken care of us. I don't care who gets the blame," said Melissa Lacoste, working Thursday at her brother's shrimp business in Theriot, La. and voicing a familiar complaint about the slow process for getting compensated for spill-related losses. "I think it's all of them."

And Darryl Malek-Wiley, a field organizer for the Sierra Club, called BP's lawsuits a public relations ploy.

"I think BP has from day one thought more about its public image and PR than about doing what's right," he said.

Product failures

In its lawsuits, BP sued rig-owner Transocean for more than $40 billion because "every single safety system and device and well control procedure" failed on the Deepwater Horizon rig.

That's a remarkable figure because it more or less matches what BP estimates will be its entire liability for paying claims and cleaning up in the wake of the spill. However, its ultimate liability could be even higher, especially if its officials are found to be criminally negligent in pending trials and investigations.

BP contended that Cameron, maker of the blowout preventer that failed to do its job, produced an "unreasonably dangerous product." And it said Halliburton's "unstable" cement job failed to block the spill that ultimately spewed 170 million gallons of crude into the Gulf of Mexico.

All three companies filed lawsuits on Wednesday, which was both the one-year anniversary of the spill and the deadline for filing such lawsuits. The offensive from BP comes as its survival as a company seems assured, with its stock now just 20 percent below its pre-spill value.

Transocean, which hopes to limit its liability to just $27 million, called BP's lawsuit "desperate" and "unconscionable." It said BP jeopardized the rig through risky cost-saving moves. Cameron declined to comment on the case except to say BP was meeting its legal deadline. Halliburton, for its part, said its work on the Macondo well was performed "under BP's direction and according to their plan."

Despite the strong words, attorneys and other legal experts said Thursday that the corporate claims and counterclaims likely will produce a settlement dividing blame among these major energy companies, which continue to work with each other all over the world. In fact, on March 1, Cameron announced a new global agreement with BP for undersea work, despite BP's criticism of its blowout preventer.

"They'll sit down and try to resolve it," said Tampa attorney Steve Yerrid, who advised former Florida Gov. Charlie Crist on issues relating to the Gulf oil spill. "These guys are in business together. There will be some division of responsibility, everyone has a percentage."

If an agreement is reached, it would pave the way for hundreds of lawsuits filed by fishermen, businesses, property owners and others to move forward more quickly, said Miami attorney Ervin Gonzalez, who represents plaintiffs in those cases and has a leadership role in the overall litigation.

"It's exactly what we want. We want cases decided. We want fault determined," Gonzalez said. "It gives us an opportunity to see how fault is going to be divvied up among the culprits."

In written statements, BP cited findings of a presidential oil spill commission blaming the blowout on a series of failures involving all the Deepwater Horizon players.

"BP filed suit as part of the legal process to ensure that all parties involved in the Macondo well are appropriately held accountable for their roles in contributing to the Deepwater Horizon accident," the BP statement said.

As of Thursday, BP has already paid out more than $3.9 billion to people and businesses through a separate, $20 billion claims process administered by attorney Kenneth Feinberg. And the Justice Department announced Thursday that BP voluntarily agreed to pay $1 billion immediately toward environmental restoration projects in the five Gulf states, essentially a down payment that officials said will speed up the work's timetable.

"This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands and wildlife habitat back to health," said Interior Secretary Ken Salazar.

Still, the amounts paid to date are small compared to the potential costs to BP through jury verdicts and punitive damages. The actions BP is taking against its partners could lessen its burden in the civil lawsuits, and it still faces potential penalties in government lawsuits and criminal prosecutions stemming from the spill.

BP is tabbed with ultimate responsibility for the spill under federal pollution law.

New Orleans U.S. District Judge Carl Barbier has set a February 2012 trial date for the corporate blame battle, which began when Transocean filed an action seeking to limit its liability to the value of the Deepwater Horizon as it now sits on the bottom of the ocean. That's allowed under longstanding federal maritime law, but only if Transocean can prove it wasn't negligent, among other things.

Most legal experts doubt Transocean will prevail on the limitation case. By filing the lawsuits by Wednesday's deadline, BP and the other companies put themselves in a position to negotiate a deal on blame.

"BP is responsible under the law. But if you look at the true facts of what happened, BP didn't build the rig. BP didn't man the rig. Everybody's blaming BP, but they may be only 30 percent liable," said Daniel Becnel, a Louisiana attorney who represents people in both the lawsuits and the BP claims fund. "They are going to reach a deal. They're not going to shoot each other."


Associated Press writers Harry R. Weber, Kevin McGill and Mike Kunzelman contributed to this report.


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