Gross Negligence under the US Clean Water Act and General Maritime Law: In re: Oil Spill by the Oil Rig 'Deepwater Horizon' in the Gulf of Mexico, on April 20, 2010, (MDL 2179) 'Findings of Fact and Conclusions of Law Phase One Trial', Rec. Doc. 13,355, -

• Author: Dr. Alexandra Wawryk - Dr. Katelijn Van Hende
• Position: School of Energy and Resources, University College London, Australia - Law School, University of Adelaide, Barrister and Solicitor of the Supreme Court of South Australia
• Pages: 122-136

(2014) 28 ANZ Mar LJ

122

Gross Negligence under the US Clean Water Act and General Maritime

Law: In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of

Mexico, on April 20, 2010, (MDL 2179) ‘Findings of Fact and Conclusions

of Law Phase One Trial’, Rec Doc 13,355, --- F Supp 2d --, 2014 WL

4375933 (ED La, 4 September 2014).

Dr Katelijn Van Hende* and Dr Alexandra Wawryk**

This case note discusses the recent judgm ent of the United States District Court of Louisiana in relation to

liability for the blowout of the Macondo well and loss of the Deepwater Horizon in the Gulf of Mexico in 2010.

This judgment, in what is called the ‘Phase One Trial’, in the case In re: Oil Spill by the Oil Rig “ Deepwater

Horizon” in the Gulf of Mexico, on April 20, 2010, was handed down by the Court on 4 September 2014.

The various legal proceedings concerning liability for the catastrophe are complex, with many claims, counter-

claims and cross-claims among the companies involved. In order to understand the purpose and scope of these

particular court proceedings, and thus the relevance and importance of the judgment, Part 1 of this review

briefly describes the background to the incident, including the parties involved and the major statutes and

sources of law giving rise to liability and claims for compensation. Part 2 sets out the Court’s findings of fact in

relation to the causes of the blowout and explosion and the Court’s conclusions of law. Part 3 concludes the

article.

1 Background to the Incident

1.1 Background Facts

The Deepwater Horizon incident occurred on the 20th of April 2010, w hen a blowout, explosions and fire

occurred aboard the Mobile Offshore Drilling Unit (MODU) called the Deepwater Horizon (hereafter, the

‘Horizon’). At the time of the incident, the Horizon was in the process of temporarily abandoning the Macondo

well, which was drilled on the outer continental shelf of Louisiana. The blow-out preventer (BOP) failed to

prevent hydrocarbons – oil and gas – from seeping from the well onto the Horizon. The explosion and fire

occurred when the gas found an ignition source. Eleven men died and at least seventeen others were injured.

Several vessels attempted to extinguish the fire, but the Horizon burned continuously until mid-morning on the

22nd of April, when it capsized and sank into the Gulf of Mexico. Due to the descent of the rig, the marine riser

(a pipe that connects the rig to the BOP) collapsed and broke. As a result, millions of gallons of oil discha rged

into the Gulf of Mexico over the followin g 87 days after the incident. The well was capped and the discharge

halted on the 15th of July 2010. In mid-September, a relief well intercepted the Macondo well and permanently

sealed it with cement.1

1.2 Key Players

BP Exploration and Production Inc (BPXP) was the primary leaseholder of Mississippi Canyon Block 252 (MC

252), within which the Macondo well was drilled. BPXP held a 65% interest in a joint venture arrangement to

drill the Macondo w ell, with Anadarko Pe troleum Corp holding a 25% interest and MOEX Offshore 2007 LLC

(Mitsui Oil Exploration of Japan) holding a 10% interest. As joint venturers, these three companies faced

liability over loss and damage resulting from the blowout and subsequent explosion.

BP America Production Company contracted with Transocean Holdings LLC to drill the Macondo well. BP

America Production Company and BPXP together are often referred to as ‘the BP entities’, or simply ‘BP’.

The ‘Transocean entities’, collectively referred to as ‘Transocean’, are also key parties. There are 4 Transocean

companies, all of which are subsidiaries of Transocean Ltd. Triton A sset Leasing GmbH owned the Deepwater

Horizon. Transocean Holdings L LC chartered the Horizon from Triton Asset Leasing GmbH and held the

* School of Energy and Resources, University College London, Australia.

** Law School, University of Adelaide, Barrister and Solicitor of the Supreme Court of South Australia.

1 See for the above facts, In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, (MDL 2179)

‘Findings of Fact and Conclusions of Law Phase One Trial’, Rec Doc 13,355, --- F Supp 2d --, 2014 WL 4375933 (ED La, 4 September

2014).(hereafter referred to as the ‘Judgment’).