Scathing letter from Dept of Justice forced Transocean to drop $27 million liability limit

[charlesg]

http://www.reuters.com/article/idUSTRE64R60D20100528

U.S. pressure leads Transocean to revise liability bid
Jeremy Pelofsky

WASHINGTON (Reuters) - The Obama administration told Transocean Ltd. in a letter this week it was "simply unconscionable" for the drilling firm to try to limit its liability in the Gulf of Mexico oil spill accident, prompting the company to revise its court petition.

Transocean asked a U.S. court in Houston on May 13 to limit its liability to just under $27 million. That sparked outrage by the Obama administration, which is grappling with the consequences of oil spurting into the Gulf and ruining the fragile ecosystem. Transocean cited the 1851 Limitation of Liability Law in its petition, infamously used by the owners of the luxury cruise liner Titanic to protect them from claims by the ship's survivors and families of those who perished on the vessel.

In a scathing May 24 letter to the company, obtained by Reuters under a Freedom of Information Act request, the Justice Department demanded Transocean exclude from its request expected liability claims by federal and state governments that could reach billions of dollars. "It is simply unconscionable, in the circumstances of this case, that Transocean is attempting to use this same shield of liability (used in the Titanic case), potentially leaving thousands of people who have been damaged by your clients' actions with no remedy," wrote Tony West, assistant attorney general for the Justice Department's civil division. He said the Oil Pollution Act of 1990 - passed in the wake of the Exxon Valdez spill - and subsequent case law excluded oil spills from the 1851 Limitation of Liability Law. "Given the foregoing, we ask that you agree to modify the court's monition to the extent that it could be construed to cover the claims of the United States or the States," he said.

Transocean's lawyers filed a letter with the court the day after West's letter and the company reiterated on Friday that did not intend to block claims under the 1990 law. "We have clarified that to the ... court and to the Department of Justice," the company said in a statement. Other claims that could be pursued include those by workers injured on the rig or by the families of those killed...

[Ruby the Liberal]

1. Wonderful!! I posted about this when they filed. Covered under an 1851 maritime law my ass.

Nice try on behalf of the attorneys, though. A+ for research.

[Gothmog]

2. Thanks for sharing this

I have a copy of the order from the Houston Federal Judge that was issued prior to this letter. People are still being told to file any claims with the Houston court by Nov. 14 or risk having such claims barred. I will be curious to see what happens here

[Poll_Blind]

3. Good. Now Transocean's weasel lawyers will try to find loopholes in the 1990 Act.

But such is the nature of a paid zealot.

PB

[truedelphi]

4. Any port in a storm. And iany port in a calamity. n/t