The massive oil spill that occurred in the Gulf of Mexico in 2010 resulted in a huge settlement by BP and that has been widely reported. With the passage of time, however, lots of folks have forgotten that BP was not the only company bearing fault in the explosion aboard the Deepwater Horizon oil rig and the subsequent oil spill. Halliburton Energy Services, Inc. and Transocean Holdings, LLC were co-Defendants, along with BP, in litigation. As the litigation progressed, the Defendants all sought to assign blame to each other for the nation’s worst environmental disaster in history. While BP was designated the “Responsible Party” under the Oil Pollution Act, both Halliburton and Transocean were also found comparatively 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.

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 could have been asserted for punitive damages as well as certain assigned claims from the BP settlement. The Court-appointed Allocation Neutral, United States Magistrate Judge Joseph C. Wilkinson, Jr., proposed that the HESI/TO settlements be distributed to two different classes of claimants:

The “New Class” consists of class members whose real or personal property was physically oiled and, as a result, would be entitled to punitive damages under general maritime law. Importantly, this includes previously excluded groups (such as local governments, menhaden/pogy fishermen), individuals/entities that opted out of the BP settlement, and BP settlement class claimants such as commercial fisherman, charterboat operators, and subsistence fishermen. This class is set to receive $902,083,250 (or 72.8 percent) of the aggregate fund.

The “Old Class” is comprised of thousands of business and individuals who were previously compensated in the BP settlement. A precondition to that settlement was BP agreeing to assign to the Old Class certain claims it asserted against Halliburton and Transocean. This class is set to receive the remaining $337,666,750 (or 27.2 percent) of the fund on a pro rata basis according to the amount a claimant received in the BP settlement.

Although we will not learn as much about the potential distributions to Old Class members until BP claims processing wraps up, 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 because their claim will automatically transfer to the new HESI/TO settlement program after their claim is fully processed under the BP settlement. Claimants who did not file a BP claim will be required to submit a claim form and supporting documents required by the BP settlement as well as proof of that claimant’s timely preservation of rights pursuant to Pre-Trial Order 60.

Lawyers in our firm’s Toxic Torts Section, who have 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 the fairness hearing is held on Oct. 20, 2016.

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