Transocean Obtains Trial Verdict in Oil Spill Case

Drilling company Transocean Ltd. received a favorable ruling from U.S. District Judge Carl Barbier on Sept. 4, 2014 at the conclusion of the trial of the first phase of multidistrict litigation arising from the 2010 Deepwater Horizon rig explosion and oil spill into the Gulf of Mexico.

Judge Barbier’s ruling “effectively eliminates Transocean’s financial risk arising from the below-surface discharge of oil at Macondo,” according to the company’s press release.

Specifically, the key findings for Munger, Tolles & Olson client Transocean include:

  • Contractual indemnity: The court found that BP’s contractual agreement to indemnify Transocean for compensatory damages is valid and enforceable.
  • Liability for punitive damages: The court’s finding that Transocean was not grossly negligent means that the company is not liable for punitive damages.
  • BP’s claims against Transocean: The court ruled that BP’s contractual agreement to release its own claims against Transocean is valid and enforceable. BP had assigned these claims to the Plaintiffs’ Steering Committee (“PSC”), and the ruling upholding the contractual release bars the PSC from pursuing the claims.

Munger Tolles has represented Transocean since 2010, leading the company’s defense in the multidistrict litigation, as well as against claims brought by the U.S. Department of Justice. In January 2013, shortly before the first phase of the trial began, Transocean reached civil and criminal settlements with the government.

The Munger Tolles trial team for phase one was led by Brad D. Brian and included Michael R. Doyen, Luis Li, Daniel B. Levin, Susan E. Nash, Claire Yan, Esther H. Sung, Laura K. Wirth and Kyle A. Casazza.