Boston Accident Lawyer Blog

Yes, you read the title of this post correctly: Transocean Ltd., the company that owned the Deepwater Horizon Gulf Oil Rig that blew up last year and proceeded to spew at least 200 millions of gallons of oil into the Gulf of Mexico, is actually awarding financial bonuses to its senior executives for – of all things - the "best year in safety performance in our company's history."

I’ve seen a lot of examples of corporate arrogance, lies, greed and deceit, but this has to rank up there with some of the worst. This company contributed to probably the worst environmental disaster and toxic tort this nation has ever seen, with the full effects not yet even being fully measured or fully felt. Its negligence, documented as being fueled by corporate cost-cutting, resulted in the deaths of 11 oil rig workers. It partnered with two other companies – BP PLC and Halliburton, Inc., who flagrantly and consistently lied to the public and to the government about the true nature and extent of the disaster. It contributed to thousands of people losing their jobs or their careers in the commercial fishing and hospitality industries, who are still suffering economically – and it has the audacity to hand out millions in cash bonuses to its executives. As has been said before, “You can’t make this stuff up.”

In regulatory papers filed with the Securities and Exchange Commission (SEC) last Friday Transocean noted "the tragic loss of life" in the Gulf when the rig operated by BP PLC exploded last April. Large of them, wasn’t that? Despite the devastating fiasco that occurred on their rig, the company got out its bean counters, and found a way to claim that it still had an "exemplary" safety record, because supposedly Transocean “met or exceeded” certain internal (i.e., its own) safety objectives regarding the frequency and severity of its accidents. “Safety” accounts for approximately 25 per cent of senior executives' total cash bonuses at Transocean. Apprarently, greed and negligence account for the other 75 per cent. CEO Steve Newman’s bonus (alone) last year amounted to $374,062. In case you’re curious, the total pay works out as follows: A base salary of $850,000; “perks” of $622,057, which includes housing and vacation allowances (and other things); on top of the $374,062 bonus. Folded into this figure are also Transocean stock options valued at $1.9 million and deferred shares valued at $2 million.

In contrast, the average fisherman’s annual income in Louisiana, which was destroyed as the result of this ecological disaster? About $45,000.00. Annual income for a hotel room attendant, also destroyed from the loss of tourism dollars? About $32,000.00.

A commission appointed by President Barack Obama last year concluded that the explosion which set off the largest offshore oil spill in U.S. history, and which arguably represents the largest toxic tort in memory, was caused by a series of time and corporate cost-cutting decisions made by Transocean, BP and Halliburton Inc. The commission concluded these cost-cutting decisions created an “unacceptable amount of risk.” The response of Transocean and these other two huge, multi-billion dollar corporations to these findings? Denial of almost any and all legal liability. Stonewalling. Obfuscation. The legal process to determine ultimate liability and civil damages will take several years – which is just the way these companies want it. A certain federal law called the Jones Act, which governs liability for a variety of maritime civil actions and injuries, allows these companies to shield themselves from more serious legal and financial liability. The immediate punishment by the government for this gross negligence and corporate arrogance? Let’s put it this way: They’re all still in business. In fact, they’re handing out huge bonuses to their senior executives, for - -of the most insulting things they could claim – a “superior safety record.”

While most people may not have hear of it, the Jones Act is an interesting piece of federal legislation, that incorporated a great deal of tort “reform” in its passage. What this means is that it shielded a lot of maritime business operators from civil liability for various types of damages and personal injuries, and placed caps on the remaining types of damages that were allowed. That law, with all its tort “reforms”, is what is allowing these companies to thumb their noses at the people in the Gulf whose lives were so damaged by this cataclysmic environmental disaster, and at the larger American public.

Remember that the next time you hear someone from the Chamber of Commerce or the local hospital shout that what America needs is more “tort reform.”

I’ve written a considerable amount in the past about how big corporations and insurers regularly engage in cost-benefit decisions that show little regard for the safety and welfare of average Americans and consumers. If anyone has any doubts about this truth, (notwithstanding the myriad factual examples of corporate greed and disregard for Americans’ safety that have been previously offered by me and many other informed writers,) then consider this: TransOcean Corp., the owner of the Gulf oil rig that blew up on April 20 this year, spewing millions of gallons of crude oil into the Gulf of Mexico in the process, has wasted no time whatsoever in racing to federal court in Houston, Texas, to deny and/or limit liability for the incalculable environmental, financial, and physical damages that have resulted from this calamity.

Eleven rig workers are dead, millions of gallons of crude oil are spewing unstopped into one of the world’s most environmentally sensitive fishing grounds, and numerous industries and countless jobs have been impacted long into the future. The economic and financial harm that are likely to result from this spill could easily run into the billions of dollars, and this company has raced into court to deny that it is in any way responsible for this catastrophe, and to in any event limit its liability to a grand total of $26.7 million. Yes, that’s right: $26.7 million. Why the rather peculiar figure of $26.7 million, you might ask? That's the claimed value of the rig sitting at the bottom of the ocean. That's all TransOcean says it should be held laible for - if anything at all - as the result of this calamity. To put it to scale, that’s about 1/100th of what the total damages in this horrific event may eventually come to.

Worse, a federal judge in Houston granted TransOcean’s request, suspending all pending cases against it for the time being. On what basis does TransOcean make this claim? Under an ancient maritime law that allows vessel owners to limit their liability to the value of the vessel and its freight. Known as the Limitation of Liability Act, the law was passed in the mid-1800’s to protect U.S. maritime vessel owners, eliminate risk in some crisis situations, and aid in U.S. competition with foreign ships. Yes, that is the law that TransOcean claims applies to it now, in 2010, in the middle of one of the worst ecological catastrophes on record.

Pretty unbelievable, isn’t it? Not if you’ve been a liability lawyer for any appreciable amount of time. Doubtless trying to shield itself from shame in the process, a TransOcean spokesperson said the company filed the request in court on instruction from its insurers, in order to preserve its insurance coverage. Yet in the filing, TransOcean denies that the explosion and resulting injury and oil spill are its fault. Commenting on the court filing, a TransOcean spokesperson said, “We believe it is necessary to protect the interest of employees, shareholders and the company.” If anyone reading those words believes for one second that TransOcean is engaging in these maneuvers to protect its employees, they may as well join the Flat Earth Society. TransOcean, like all major corporations, is interested in one thing and one thing only: Maximizing their bottom line. Profits, pure and simple. Behind the scenes, almost everything else is secondary and expendable. That's standard operating procedure for large corporations. Money comes fist; morality, far behind.

Houston attorney Kurt Arnold commented that “TransOcean has compounded this terrible tragedy with a shameful legal filing that is intended solely to protect the company's interests.” Arnold has filed several lawsuits resulting from the offshore explosion. “They haven't even said they're sorry, much less take responsibility. Now they're running off to court in hopes of getting a ruling that will limit their liability to what is on the bottom of the ocean. I think the filing is completely frivolous,” Arnold said. A list of 102 lawsuits already filed against the company was filed with the court Thursday. Thankfully, there are some lawyers, anticipating TransOcean's move, that have filed parallel lawsuits — one naming TransOcean and the other against BP, Cameron International and Halliburton for their various roles in the building, maintenance or use of the rig.

I say “thankfully”, as corporations like TransOcean, BP and Halliburton must be held legally accountable for the harm they cause in situations like this (as well as in smaller, much less well-known examples of negligence.) Only when corporate defendants like TransOcean, BP and Halliburton are hit and hit hard with economic damages and judgments, will they alter their behavior and put safety before profits. Whether the negligence involved concerns product liability, worker/employee injuries, or construction site injuries and negligence, corporate greed must be punished, and severely, before corporate America will ever alter its ways.

Trust me, I’ve seen more examples of this in my legal career, than I care to. I assure you, it’s true.