Halliburton Agrees to $1.1 Billion Settlement in Deepwater Horizon Litigation

Halliburton Co. has agreed to pay a $1.1 billion settlement to Gulf Coast residents, local governments, and businesses negatively affected by the 2010 Deepwater Horizon oil spill.  The settlement pre-empts legal action against Halliburton from the affected communities, and likely limits the company from any additional liability stemming from the Deepwater disaster.

Settlement Preempts Legal Action

Halliburton’s settlement comes as a US District Court Judge Carl Barbier in New Orleans weighs the degree to which the company, along with BP and Transocean Inc., was liable for the Deepwater spill that devastated the Gulf Coast four years ago.  Judge Barbier’s decision will determine if the companies associated with the Deepwater disaster were grossly negligent and therefore responsible for paying punitive damages to victims of the spill.  All three have paid actual damages for costs incurred by plaintiffs, but punitive damages may be awarded to grant billions of dollars in additional compensation. BP, Halliburton, and Transocean deny gross negligence, but both Halliburton and Transocean have avoided risk of a negative judgment with pre-decision settlements.

The settlement is preemptive move that allows Halliburton to limit its legal damages even if Judge Barbier finds the company was grossly negligent in causing the explosion.  Although the settlement amount is significant, had Judge Barbier determined that the company owed punitive damages to Gulf Coast plaintiffs, the award could have been much higher.  By eliminating the potentially significant impact of Judge Barbier’s ruling, Halliburton is able to wrap up the legal fallout in three equal payments to be made over the course of the next two years.

Under the terms of the settlement, Halliburton did not admit to any legal liability for its role in the Deepwater Horizon spill, but BP has alleged throughout the aftermath that Halliburton shared significant responsibility for causing the tragedy.

Halliburton’s Alleged Role in Deepwater Disaster

When the offshore Deepwater Horizon drilling rig exploded in 2010, 11 people were killed and millions of gallons of oil was pumped into the US Gulf Coast over the course of 78 days.  BP, which leased the rig, has been held primarily accountable, having paid billions of dollars in criminal fines and wrongful death settlements as a result of various legal cases and settlements since the accident.  Despite paying out significant fines, BP has long accused Halliburton of contributing to the disaster by pouring sub-standard concrete in the drill’s supports.  Halliburton has consistently disputed these findings and maintained that it poured the cement consistent with BP’s specifications, and it was Transocean that failed to properly test the material prior to the rig being made active.

Several studies of the Deepwater Horizon spill have confirmed that the cement poured by Halliburton contributed to the massive spill, and over the last four years the company has been locked in a high dollar legal dispute with BP over who was more liable.  In response to the settlement, BP issued the following statement “This settlement marks the very first time — despite three years of official investigations and litigation implicating the company — that Halliburton has acknowledged that it played a role in the accident. The evidentiary record demonstrates that Halliburton recommended and pumped an unstable cement slurry; intentionally destroyed and failed to produce uniquely relevant evidence showing the slurry to be unstable; and failed to properly monitor the well and detect the influx of hydrocarbons.”

Halliburton’s response was consistent with the terms of its settlement, which did not require the company to admit legal liability: “Halliburton denies all allegations of any wrongdoing, fault, noncompliance, liability; denies that it acted improperly in any way; and denies that it caused any damage or loss arising out of, due to, resulting from, or relating in any way to, directly or indirectly, the Deepwater Horizon incident.”

Plaintiffs Satisfied with Halliburton Settlement, look to BP Decision

Plaintiffs benefiting from the $1.1 billion settlement with leaders saying, “Halliburton stepped up to the plate and agreed to provide a fair measure of compensation to people and businesses harmed in the wake of the Deepwater Horizon tragedy.”  The Gulf Coast residents and businesses seeking legal damages will continue to await the ruling on gross negligence from Judge Barbier, which could result in a significant, multi-billion dollar, judgment against BP – the only remaining defendant in the case. 

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