Deepwater Horizon Litigation: The Rise and Fall of the Economic Damages Settlement

Abstract

On April 20, 2010, an explosion onboard the Deepwater Horizon oil rig killed eleven crew members and spilled nearly 5 million barrels of oil into the Gulf of Mexico (the “Oil Spill”). It became the largest oil spill in U.S. history, with oil gushing from the site until mid July. By early June, oil had washed up on the shores of several Gulf Coast states including Mississippi, Alabama, and Florida. The Oil Spill impacted tourism, the fishing industry, and wildlife with significant implications for the lives and livelihoods of tens of thousands.

By August 2010, the Oil Spill was at the center of more than 300 lawsuits filed in federal and state courts in eleven states. Named defendants included the four global corporations with a working ownership interest in the Macondo Prospect, BP Exploration & Production (65%), MOEX Offshore (10%), Anadarko E&P (22.5%), and Anadarko (2.5%), and subcontractors that provided services and supplies for the site’s drilling-related activities, including Halliburton and Transocean. On August 10, 2010, the Multidistrict Litigation Panel consolidated and transferred a number of these complaints to the Eastern District of Louisiana under the authority of Judge Carl J. Barbier. Barbier organized the claims into pleading bundles, including a bundle comprising solely of private claims alleging property and economic damages arising from the Oil Spill. This paper focuses on these economic and property damage claims.

Keywords: BP Oil Spill, environmental litigation, complex litigation, Deepwater Horizon, ADR, settlements, litigation alternatives, environmental law