Transocean seeks dismissal of spill-related punitive damage claims

Transocean, which owned the Deepwater Horizon drilling rig destroyed in the deadly blowout that led to the 2010 Gulf of Mexico oil spill, has asked a judge to dismiss certain private and government claims arising from the disaster.

In federal court documents filed Tuesday,   the Switzerland-based oil field services company argued that a court decision earlier this year frees it from claims under the 1990 Oil Pollution Act for crude spilled beneath the Gulf’s surface — in this case from the deep-water Macondo well that blew out April 20, 2010.

U.S. District Judge Carl Barbier ruled in February that under the provisions of the Oil Pollution Act, BP and Anadarko Petroleum, as co-owners of the Macondo Well, are responsible for all compensatory damages, which cover actual losses.

Transocean argues that because Barbier removed it from liability for compensatory damages, it can’t be liable for punitive damages — intended to punish polluters — because they are tied to compensatory damages.

“Punitive damages must be based on compensatory damages, and Transocean has no liability for subsurface discharge,” company lawyers wrote in the motion.

In the case involving the 1989 spill by the tanker Exxon Valdez in Alaska—which spurred passage of the Oil Pollution Act—the U.S. Supreme Court ruled that punitive damages would be awarded on a one-to-one ratio with compensatory damages, but suggested that the ratio in future awards would depend on the level of culpability.

Punitive damages in offshore cases have their origin in maritime law that was in effect long before the Oil Pollution Act, and Barbier hasn’t ruled on how maritime law might affect punitive damages in the Deepwater Horizon case.

He indicated in a prior ruling that maritime punitive claims are possible, depending upon the facts of the case.

In an August 2011 decision on how the Oil Pollution Act legislation affected maritime claims, Barbier noted that the Act doesn’t mention punitive damages.

“While punitive damages are not available under OPA, the Court does not read OPA’s silence as meaning that punitive damages are precluded under general maritime law,” Barbier wrote.