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May 14, 2010

Transocean seeks to limit liability in Deepwater Horizon suits

Transocean has filed a motion in the U.S. District Court for the Southern District of Texas seeking "exoneration from or limitation of their liability, if any, in respect of any and all loss of life, injury, loss, destruction or damage or for any other matter arising out of, done, occasioned or incurred" in the loss of the Deepwater Horizon.

Transocean is invoking the Limitation of Liability Act, under which a vessel owner's vicarious liability only extends to the value of the vessel, unless the owner had knowledge of the negligent acts of the captain or crew. If a corporation owns the vessel, the corporation is not entitled to limit its liability if the negligence was that of an executive, manager, or other supervisor with authority.

According to the filings, Transocean puts the value of the Deepwater Horizon at just $27 million.

New York City tried to invoke the Limitation of Liability Act in the multiple law suits it faced after the October 15, 2003 incident in which the Staten Island ferry Andrew J. Barberi slammed into a pier. The District Court ruled that the City was privy to the negligent acts which caused the accident and, thus, could not limit its liability.

The Buzbee Law Firm, which represents 10 injured rig workers who were aboard the Deepwater Horizon when it exploded on April 20, condemned Transocean's move to limit its legal liability.

Managing Partner Tony Buzbee said: "Transocean has accepted more than $430 million in insurance proceeds related to the Deepwater Horizon explosion and oil spill, but has asked a Houston federal court to limit its liability to only $27 million, citing an arcane law that dates back to the 1800s. This is a despicable action contorts the intent of the Limitation of Liability Act, which allows a vessel owner to limit its liability to the post-accident value of the vessel. This dishonors the families of the 11 men who were lost on April 20, but also those who were injured on the rig, and the many more affected by the oil spill."

Buzbee, who has tried numerous limitation actions, added, "The first step is to challenge the paperwork filed by Transocean today. We will then ask the Court to be allowed to question Transocean executives, including the CEO whose previous claims regarding employee loyalty and rig safety will be severely scrutinized."

The Buzbee Law Firm, which represents a Halliburton cementing hand who was involved in the cementing job on the Deepwater Horizon, says it intends to provide testimony that both Transocean and BP officials knew that one of the two pressure tests performed prior to the explosion was abnormal, but work continued on the rig. This evidence, according to Buzbee, should be sufficient to defeat Transocean's effort to limit its liability.

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