Appeals Court Revives BP’s Fight Over Deepwater Cleanup Workers’ Claims

By Barbara Grzincic
Thursday, January 20, 2022

A federal appeals court on Wednesday revived a fight between BP, two contractors, and an insurance company over who should pay for thousands of personal injury claims brought by cleanup workers after the Deepwater Horizon explosion and fire in 2010.

The 5th U.S. Circuit Court of Appeals reversed most of a lower court’s rulings for contractors National Response Corp and O’Brien’s Resource Management, and for O’Brien’s excess-liability insurer, Navigators Insurance Co.

The decision was not a complete win for BP, however. Circuit Judges Edith Jones, Edith Brown Clement and James Graves Jr ruled that the energy giant was an additional insured on Navigators’ policy, but for $2 million at most – not the $100 million BP had argued. The panel also affirmed the dismissal of a large subset of BP’s claims against O’Brien’s, and remanded the rest to U.S. District Judge Carl Barbier in New Orleans for further consideration.

BP’s attorneys at Kirkland & Ellis and Arnold & Porter Kaye Scholer did not immediately respond to requests for comment.

O’Brien’s and National Response were jointly represented by lawyers at Quinn Emanuel Urquhart & Sullivan and Phelps Dunbar. Navigators’ had its own counsel at Larzelere Picou Wells Simpson Lonero. Those attorneys also had no immediate response.

According to the 5th Circuit, this “latest installment of litigation spilling out of the Deepwater Horizon offshore explosion and fire” involved two types of claims that survived BP’s $7.8 million multidistrict litigation settlement of cleanup workers’ claims in April 2012.

Some workers opted out of the settlement, and sued BP individually. Others participated in the settlement but later took advantage of its “Back End Litigation Option,” or BELO, which allowed them to sue BP for medical conditions that were diagnosed after the settlement was signed. As part of the settlement, BP agreed to waive or modify several defenses to the BELO claims.

By 2019, BP had been hit with 1,800 BELO claims by O’Brien’s employees and about 200 from National Response’s, and a “smaller number” of opt-out claims by workers from both companies.

BP argued that the contractors were required to indemnify it for all of these claims, under the terms of their contracts. Barbier, however, rejected all of its arguments.

The 5th Circuit agreed that BP had breached its contract with O’Brien’s by creating the BELO claims without its consent as part of the 2012 settlement. It affirmed the dismissal of those claims, and sent the rest back to Barbier for “claim by claim” reconsideration.

BP has “provisioned more than $69 billion relating to the spill, including response, cleanup, economic claims, government payments, settlements and restoration,” according to a statement on its website.

The case is O'Brien's Response Management LLC et al v. BP Exploration and Production Inc et al, 5th U.S. Circuit Court of Appeals, No. 20-30364.

For O’Brien’s Response Management and National Response Corp.: Derek Shaffer of Quinn Emanuel Urquhart & Sullivan, Ivan Rodriguez of Phelps Dunbar

For BP: George Hicks Jr of Kirkland & Ellis, R. Stanton Jones of Arnold & Porter Kaye Scholer

Categories: North America Gulf of Mexico Oil Spill Recovery Oil Spill Production Activity Energy Industry News Offshore

Related Stories

Helix Energy Solutions to Buy Alliance Companies to Boost Presence in Gulf of Mexico Decommissioning Space

NOIA: U.S. Gov't Move Against Offshore Oil & Gas Lease Sales 'Devastating to Americans'

Green Groups Sue Canadian Gov't Over Approval of Equinor's Bay du Nord Offshore Oil Project

Current News

Odfjell Technology Nets Wellbore Cleanup Deal with Petronas

Construction Permit Granted for 640 MW Swedish Kriegers Flak Offshore Wind Farm

German Ex-chancellor Schroeder under EU Pressure over Rosneft, Gazprom

Offshore Wind: CIP, AIM Plan to Build Artificial Energy Island in German North Sea

Subscribe for OE Digital E‑News