The massive oil spill in the Gulf of Mexico in 2010 produced a huge settlement by BP which has been widely reported. However, lots of folks have forgotten that BP was not the only company bearing fault. Two other companies played a role in the Deepwater Horizon explosion and the oil spill that followed. Halliburton Energy Services, Inc. and Transocean Holdings, LLC were co-Defendants, along with BP.
As the case progressed, the Defendants all sought to assign blame to each other for the nation’s worst environmental disaster in history. While the courts declared BP the “Responsible Party” under the Oil Pollution Act, they found both Halliburton and Transocean relatively negligent for 3 percent and 30 percent, respectively. Ultimately, Halliburton paid out more than $1 billion in settlements while Transocean agreed to a $212 million settlement.
Settlement Structure
Unlike the Deepwater Horizon Economic & Property Damages settlement struck with BP, the Halliburton and Transocean (HESI/TO) settlements will not pay for any economic loss or personal injury claims. Instead, the two settlements, which total to $1,239,750,000, cover claims that claimants could have asserted for punitive damages. They also cover certain assigned claims from the BP settlement. The Court-appointed Allocation Neutral, United States Magistrate Judge Joseph C. Wilkinson, Jr., proposed that the courts distribute HESI/TO settlements to two different classes of claimants:
The New Class
The “New Class” consists of class members whose real or personal property was physically oiled. As a result, general maritime law mandates their entitlement to punitive damages. Importantly, this includes previously excluded groups. Such groups include local governments, menhaden and pogy fishermen, those that opted out of the BP settlement, and BP settlement class claimants such as commercial fishermen, charter boat operators, and subsistence fishermen. This class will receive $902,083,250 (or 72.8 percent) of the combined fund.
The Old Class
The “Old Class” is comprised of businesses and individuals who were previously compensated in the BP settlement. A precondition to that settlement was BP agreeing to assign certain claims to the Old Class that it asserted against Halliburton and Transocean. This class will receive the remaining $337,666,750 (or 27.2 percent) of the fund on a pro-rata basis. The settlement will determine the exact amount according to the amount a claimant already received in the BP settlement.
New Class Distribution Model
We will not learn as much about the potential distributions to Old Class members until BP claims processing wraps up. However, the distribution model for the New Class reveals what these class members can expect to receive. According to HESI/TO Claims Administrator Michael Juneau, the distribution model affords the greatest priority to claim types that have the clearest and longest recognized standing to assert claims for punitive damages under the Robins Dry Dock line of cases. Consequently, the recommended allocation amongst claim categories is as follows:
- 80 percent – Real Property owners
- 0.6 percent – Personal Property owners
- 17.8 percent – Commercial Fishermen
- 0.2 percent – Charterboat Fishermen
- 1.4 percent – Loss of Subsistence Fishermen
Most HESI/TO claimants will not have to submit any new documents. Their claim will automatically transfer to the new HESI/TO settlement program after the courts fully process their claim under the BP settlement. Claimants who did not file a BP claim must submit a claim form and the supporting documents the BP settlement requires. They must also submit proof of their timely preservation of rights pursuant to Pre-Trial Order 60.
Lawyers in our firm’s Toxic Torts Section, who have personally worked on the litigation, believe the proposed distribution model offers a fair and expedient way to resolve claims. Judge Carl Barbier will hold a hearing on Nov. 10, 2016, to determine whether to approve the HESI/TO settlements. This hearing will come two weeks after courts hold a fairness hearing on Oct. 20, 2016.
