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Deepwater Horizon owner Transocean seeks liability limit

Transocean, owner of the Deepwater Horizon rig that exploded and sank last month killing 11 and creating a growing oil spill, today got a Houston judge to stay pending cases against the company.

U.S. District Judge Keith Ellison today issued an order suspending cases against Transocean because the company filed a request to limit its liability in the lawsuits filed against it to $26.7 million.

Lawyers involved in the myriad of lawsuits filed against Transocean, rig leaser BP and others said they expected Transocean would take advantage of the Limitation of Liability Act, a maritime law that allows a vessel owner to limit liability to the value of the vessel and its freight.

The law dates back to the mid 1800s when it was passed to protect U.S. vessel owners, eliminating some risk in crisis situations and aiding competition with foreign ships.

Guy Cantwell, a spokesman for Transocean, said the company filed this request on instruction from its insurers and to preserve its insurance.

"We believe it is necessary to protect the interest of employees, shareholders and the company," Cantwell said. He said one goal of this filing is to consolidate a system of claims against Transocean.

Lawyers involved in the litigation say that Transocean’s request, if successful, could result in Ellison’s court sucking up some other litigation that names Transocean and stems from this same incident. A list of 102 lawsuits already filed against the company was filed with the court today.

"Transocean has compounded this terrible tragedy with a shameful legal filing that is intended solely to protect the company’s interests," said Houston lawyer Kurt Arnold who has filed several lawsuits resulting from the offshore explosion.

"They haven’t even said they’re sorry, much less take responsibility. Now, they’re running off to court in hopes of getting a ruling that will limit their liability to what is on the bottom of the ocean. I think the filing is completely frivolous," he said

Some lawyers, like Tony Buzbee, anticipating this move have filed parallel lawsuits, one against Transocean and another against BP, Cameron International and Halliburton for their various roles in the building, maintenance or use of the rig.

Buzbee said he thinks Transocean’s attempt to limit its liability will fail. He said that to win, Transocean has to prove that management on shore had no knowledge of the circumstances that caused the explosion. Buzbee said he has a witness who says Transocean and BP knew about abnormal pressure tests before the explosion.

"What it does provide them is a central forum to slow down the cases and to try to leverage a global resolution," Buzbee said.

Lawyers on both sides of the case have already asked federal authorities to set up a multi-district litigation court to hear pre-trial matters on federal lawsuits stemming from the oil spill.

Plaintiffs lawyers in Louisiana have asked that pre-trial matters in spill-related cases be heard by one of a handful of federal judges in New Orleans. BP has asked that the cases be heard by Houston-based U.S. District Judge Lynn Hughes.

 

Mary Flood
Houston Chronicle
May 13, 2010