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Halliburton & Transocean $1.2 Billion BP Deepwater Horizon Settlement Fund Allocated


Late Thursday Chief Magistrate Judge Joseph C. Wilkinson of the Eastern District of Louisiana issued his recommendation (Neutral Allocation & Reasons) for dividing the combined $1.24 billion fund created when Halliburton and Transocean settled with BP Deepwater Horizon plaintiffs. Halliburton (a cement contractor on the rig) and Transocean (rig owner) were co-defendants, along with British Petroleum, in litigation involving the April 2010 blowout, fire, explosion and subsequent sinking of the Deepwater Horizon in the Gulf of Mexico.

While BP was designated the “Responsible Party” under Oil Pollution Act protocols (and deemed 67% at fault for the disaster), both Halliburton and Transocean were found comparatively negligent to the tune of 3% and 30% respectfully. The companies’ settlement agreements with plaintiffs were confected at different times (Halliburton in 2014 and Transocean in 2015), but are nearly identical in terms (the primary difference being the settlement amounts – Halliburton settled for just over $1 billion and Transocean $212 million).

If Magistrate Judge Wilkinson’s recommendation is approved as expected by Judge Barbier, $337 million of the fund will be distributed (likely pro rata) to members of the Class created pursuant to the 2012 BP Deepwater Horizon Economic & Property Damages Settlement Agreement. This Class consists of hundreds of thousands of businesses and individuals who have filed claims for economic losses associated with the disaster. While our law firm had urged a more favorable allocation to this Class, economic claimants can nevertheless expect their claim values to be enhanced over the coming months by a few tens, hundreds or thousands of dollars.

The lion’s share of the Halliburton and Transocean funds, $902 million, will go toward compensating plaintiffs whose real or personal property was physically oiled. What qualifies as “physical oiling” may be at issue, as the definition includes any person or business that owned or leased property which was “touched by oil, other hydrocarbons, or other substances … used in connection with the Deepwater Horizon Incident” (emphasis added).

“Other substances” would seem to include the nearly two million gallons of chemical dispersant used by BP to disperse the oil into the water column. Of course, these chemicals, once applied to Gulf waters, are invisible to the naked eye. Nevertheless, at least one study has suggested that dissolved oil, hydrocarbons and presumably the associated chemical dispersant (a.k.a. “other substance”) traveled currents down the West Coast of Florida, “touching” waterfront property from Tampa to Ft. Myers. Interestingly (and coincidentally?), this portion of the West Coast of Florida experienced greater economic damage than any other area of the Gulf, including those areas in the northern Gulf that were heavily oiled.

Models show the movement of a tracer element introduced into Gulf currents in June 2010 (left), simulating where hydrocarbons associated with BP’s Deepwater Horizon blowout would travel by the end of September 2010 (right). The September image indicates that oily remnants may have impacted the beach from Tampa south to Sanibel Island. Image courtesy of USF.

Models show the movement of a tracer element introduced into Gulf currents in June 2010 (left), simulating where hydrocarbons associated with BP’s Deepwater Horizon blowout would travel by the end of September 2010 (right). The September image indicates that oily remnants may have impacted the beach from Tampa south to Sanibel Island. Image courtesy of USF.

Judge Barbier has appointed Michael Juneau as Claims Administrator for purposes of determining exactly who can share in the $902 million allocated to those affected by physical oiling. Once that class is ascertained, Mr. Juneau will go about the challenging task of designing a model to fairly distribute the funds. Unfortunately, both the Halliburton and Transocean settlements are silent as to how that should be done.

Fortunately, Mr. Juneau is well qualified to undertake this work. He has served as special counsel to the court-appointed Special Master and/or Claims Administrator in some of the largest multi-district litigation matters in U.S. history, including: In Re: Vioxx Products Liability Litigation, U.S. District Court, Eastern District of Louisiana – MDL-1657 and In Re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, U.S. District Court, Central District of California – MDL-2151. Juneau, a Harvard educated attorney and accountant, is intimately familiar with all aspects of the Deepwater Horizon litigation, as he currently serves as special counsel to the BP Economic Loss and Property Damages Settlement Claims Administrator.

In conclusion, residents and businesses (and some local governments) of the Gulf can expect an additional $1.24 billion influx of funds into the region over the coming months, above and beyond that provided by BP. This is a good thing. Exactly how the monies will be distributed is not yet known, but from an aggregate perspective, it is significant and welcome.


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  1. Kim Litette says:
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    What ever become of the
    Opt out claims. The one that got screw with Quick payment by Kenneth Fienberg. What ever gone become of that for the poor commerical fishermen.

    • Tom Young says:
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      Kim, opt outs and excluded claims may be the next to be resolved. Unfortunately – and I know this provides little solace – patience is the only prescription.

  2. Dave Arnsby says:
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    Tom, once again thank you for your excellent reporting and Data Collection. Opt Out Claims have been sidelined for too long,
    BP encouraged claimants to submit claims to the alternative BP Claims Program only to close it down with 99% of the Claims ignored.
    Will any of these settlement funds be distributed to Opt Out Claimants who have waited for almost 6 years to be compensated. ? David.

    • Tom Young says:
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      Dave, the majority of the Halliburton and Transocean settlement funds ($902 million) will be distributed to those who experienced oiling on their real or personal property.

  3. Ron says:
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    Your brief linked for the “old class” reflects the complexity associated with the task allocating the Transocean (RIG) and Halliburton (HAL) settlements based on “what if” scenarios. I saw the allocation ruling on the court’s website, and I thought the relative payments by HAL and RIG should have played a bigger role in the analysis.

    Here’s why. While I appreciate that many assumptions had to be made, not everything was unclear. Most notably, there was no mystery why HAL’s $1B settlement (80% of the pool to be allocated) was over 4 times larger than RIG’s deal (approx. $240M), even though RIG’s fault share (30%) was 10 times bigger than HAL’s (3%). HAL’s massively larger payment was purely a matter of timing, in that HAL’s deal was finalized before the Phase I fault allocation/punitive damages ruling was issued; thus, HAL’s payment reflected far greater uncertainty about punitive damages exposure than RIG’s did. (The Phase I ruling was the first word on punitive damages exposure; in contrast, as regards any exposure to assigned claims, given the district court’s earlier indemnity rulings, both HAL and RIG understood well before the Phase I ruling that their exposure to assigned claims was highly dubious).

    So the overwhelming majority of the funds to be allocated were paid to resolve to punitive damage exposure, and doesn’t it stand to reason (if only due to sheer numbers of claimants) that the settling defendants’ punitive damage exposure to “old class” was larger than to the new class? If so, it seems like the vast bulk of the settlement funds would have to be allocated to the old class.

    • Tom Young says:
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      Ron – Only those who qualify as members of “New Class” may share in any punitive damages. Now, there is a subset of “Old Class” that also meets the requirements of New Class. The great unknown is how many?

      Conventional wisdom is that only those with Robins Dry Dock standing may qualify for punitives. However, the Halliburton and Transocean settlement agreements sure seem to expand that universe with their definition of membership in New Class being anyone who was “touched by oil, other hydrocarbons, or other substances … used in connection with the Deepwater Horizon Incident.” Based on the image above, New Class could include more than the usual suspects.

  4. Ronnie says:
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    If you received settlement from bp will you also be eligible for haliburton and transocean

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