A federal judge in New Orleans has ruled that BP is responsible for paying third party damages asserted against oil rig owner Transocean, even if the cause of the damages to the third parties was the negligence, including gross negligence, of Transocean. The Order from District Judge Barbier is attached here. The basis of the Court's ruling is the contractual indemnity provision between BP and Transocean, allocating certain liabilities for injuries, accidents, and pollution from the operation of the rig.
This litigation of course arises from the April 20, 2010 explosion and fire of the Deepwater Horizon rig in the Gulf of Mexico and the subsequent oil spill from the sea floor.
The Court also ruled that BP is not required to compensate Transocean for any punitive damages levied against Transocean, nor is BP required to reimburse Transocean for any potential fines under the Clean Water Act.
The Court deferred ruling on whether BP's indemnity obligation could be voided by Transocean's acts that could be construed to have breached the drilling contract, and thereby prejudiced BP's rights. The Court did not rule on this issue as it involved factual determinations which cannot resolved by Summary Judgement under Fed. R. Civ. P. 56.
Showing posts with label indemnity. Show all posts
Showing posts with label indemnity. Show all posts
Friday, January 27, 2012
Monday, December 12, 2011
STB to Determine if Rail Tariff requiring HazMat Indemnity from Shippers is Reasonable
The Surface Transportation Board (STB) announced its decision today to determine if a railroad's requirement of indemnity from shippers for hazardous material liability is reasonable.
The STB has accepted the Petition by the Union Pacific to determine if it is reasonable to include in its tariff, or shipping rates, for hazardous materials shipments, a requirement that the railroad be indemnified from liabilities arising from haz mat incidents caused by the shipper's negligence. The tariff-based indemnity provisions relate to the loading, sealing, and securing the commodity, or the condition of the equipment tendered by the shipper (known in the industry as the packaging). The UP's tariff does not indemnify it from liabilities cause by its own negligence or fault.
Procedurally, this issue is similar to a former ex parte docket item the Board had pending for some time (Docket EP-677). That docket was closed, after significant comment by carrier and shipper interests, in favor of an actual controversy rather than what the Board at the time considered a policy statement in the abstract.
Even though the petition before the Board is the UP's request to consider its tariff imposing indemnity requirements on its shippers, the Board has opened the proceeding to comment from the public, outside of the original parties to the petition. According to the Board's Order, anyone interested in joining the proceeding is to file with the Board by December 27, 2011.
Ultimately, this proceeding picks up where prior docket EP 677 left off to some extent in that the Board now has a live case to decide the reasonableness of rail carriers imposing indemnity obligations on the shippers of hazardous materials.
The STB has accepted the Petition by the Union Pacific to determine if it is reasonable to include in its tariff, or shipping rates, for hazardous materials shipments, a requirement that the railroad be indemnified from liabilities arising from haz mat incidents caused by the shipper's negligence. The tariff-based indemnity provisions relate to the loading, sealing, and securing the commodity, or the condition of the equipment tendered by the shipper (known in the industry as the packaging). The UP's tariff does not indemnify it from liabilities cause by its own negligence or fault.
Procedurally, this issue is similar to a former ex parte docket item the Board had pending for some time (Docket EP-677). That docket was closed, after significant comment by carrier and shipper interests, in favor of an actual controversy rather than what the Board at the time considered a policy statement in the abstract.
Even though the petition before the Board is the UP's request to consider its tariff imposing indemnity requirements on its shippers, the Board has opened the proceeding to comment from the public, outside of the original parties to the petition. According to the Board's Order, anyone interested in joining the proceeding is to file with the Board by December 27, 2011.
Ultimately, this proceeding picks up where prior docket EP 677 left off to some extent in that the Board now has a live case to decide the reasonableness of rail carriers imposing indemnity obligations on the shippers of hazardous materials.
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