$1.4 Billion Transocean Settlement May Set New Legal Standard

Jan 4, 2013

A federal judge will be asked to approve a proposed $1.4 billion settlement linked to the BP oil spill in 2010. Rig owner Transocean has reached a deal with the Department of Justice that appears to be creating legal precedent.

The owner of the Deepwater Horizon oil rig that exploded and killed 11 workers is agreeing to pay $1 billion in civil penalties. It’s also willing to pay another $400 million in criminal penalties to a misdemeanor violation of the Clean Water Act. It comes after BP agreed to a $4.5 billion settlement. Law professor Carl Tobias of the University of Richmond says the huge penalties are indications of new legal standards for environmental cases.

“A number of these settlements, I think, are extremely unusual, and in terms of the government’s past efforts to bring especially criminal cases against environmental defendants. And I think the amounts for which they settle some of these cases are path-breaking. And so, yes, in lots of ways there’s much new ground that’s being plowed.”   

Louisiana Democratic Senator Mary Landrieu says most of the Transocean settlement will be spent in the Gulf states affected by the spill. A trial is set for next month to determine if BP committed acts of gross negligence in violation of the Clean Water Act. That finding could cost BP more than $20 billion.