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Transocean Seeks Limited Liability In Suits
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Transocean Seeks Limited Liability In Suits

Law

Transocean Seeks Limited Liability In Suits

Transocean Seeks Limited Liability In Suits
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The company that owns the oil rig that exploded in the Gulf of Mexico has asked a federal court to put a limit on the money it might be forced to pay out in more than 100 lawsuits. The company seeks to cap damages at $27 million. But Transocean already has been paid more than $400 million by its own insurance company for the loss of the rig.

LYNN NEARY, Host:

While the oil continues to spew from the ocean floor, the companies involved in the disaster are trying to cap their legal costs. The company that owns the destroyed oil rig has invoked maritime law to try to limit the damages it would have to pay to those who suffer losses.

NPR's Joseph Shapiro explains.

JOSEPH SHAPIRO: The owner of that rig, Transocean, is already named in more than 100 lawsuits. The claims are for billions of dollars. But Transocean took a step that would limit what it would pay out, to no more than $27 million. It's asking a federal court in Houston for what's called a limitation of liability. The amount is based on a complex legal formula for the value of the oil rig, now on the bottom of the Gulf of Mexico.

SHAPIRO: Twenty six million dollars is a lot of money, but it's pretty small given the number of claims that will be made against them.

SHAPIRO: That's Martin Davies. He's a professor of maritime law at Tulane University, and he says there's more at stake than just the limit on paying damages.

SHAPIRO: Because it means that they fight the case once - not, you know, 11 or 20 or 50 times in different courts.

SHAPIRO: Transocean, in a statement, said it wanted to create a more orderly court process. And the legal maneuver puts all the lawsuits in one court. Also, to the company's advantage, the case would be heard in federal court - not a state court, where the case would go before a jury, and the plaintiffs could expect higher damage awards.

Transocean, a Swiss company, used the U.S. law that was created in 1851. Back then, ocean voyages were dangerous and ship owners needed to be encouraged to take on such a risky, although potentially profitable, business. Today, multinational companies run the shipping industry, and very few big ships fly under the American flag. Davies says that creates a quirk from that old law.

SHAPIRO: What happens these days is it will protect the interests of a foreign ship owner at the expense of American plaintiffs.

SHAPIRO: These are not lawsuits over the cleanup of the oil spill. Oil company BP says it will pay for all of those costs, even though a federal law dating back to the Exxon Valdez spill in Alaska in 1989 limits those damages to $75 million. Transocean faces lawsuits from property owners who've lost their business - like commercial fishermen, seafood companies, restaurants and charter- boat companies. There are wrongful death lawsuits from some of the families of the 11 dead crew members. And there are claims from survivors, like Christopher Choi(ph), who saw friends die.

M: I can't hardly sleep at night without waking up with nightmares.

SHAPIRO: Choi is 23. He holds hands with his wife and talks about how he's being treated for acute stress disorder.

M: She's seen me having - jumping and breaking out in sweats and shaking in my sleep just from any noise. The air conditioner outside my house, when it kicks on, it's out by - outside the window. Every time it kicks on, I jump and I wake up and, you know, just freaking out.

SHAPIRO: Choi is suing for mental anguish, future medical costs, and loss of wages. Transocean's action would limit how much Choi could get. Last week, Transocean said it's already received a partial settlement from its own insurance company for the destroyed oil rig. That angers Jeff Seely, a Houston maritime lawyer who represents Choi and the family of one of the men killed in the explosion.

M: Transocean has already accepted $411 million from their insurance company for this rig. They are the only people who have been compensated for this tragedy. The decedents haven't been the compensated. The injured people who still are suffering, all the fishermen out in the Gulf that can no longer work haven't been compensated.

SHAPIRO: Seely and other attorneys say they'll fight Transocean's attempt to limit liability. Based on past suits, they've got about a 50-50 chance of succeeding, but it won't be easy. First, they'll need to prove that Transocean knew about the problems that caused the oil spill, and that the company could have acted to prevent it.

Joseph Shapiro, NPR News.

NEARY: And you can follow our continuing coverage of the oil spill on the NPR news app, which is available on most mobile devices.

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