A federal judge has approved a Transocean Ltd. subsidiary’s criminal plea as part of a $1.4 billion settlement with the U.S. Justice Department over liability for the 2010 Deepwater Horizon oil spill.
Brad Brian, a partner at Los Angeles-based Munger Tolles & Olson, entered the plea on behalf of Transocean Deepwater Inc. The company pleaded guilty on January 3 to one misdemeanor count of violating the U.S. Clean Water Act by contributing to the discharge of oil into the Gulf of Mexico.
Transocean agreed to pay $400 million in criminal penalties to the U.S. government—an amount second in size only to BP PLC’s $4 billion plea agreement, which U.S. District Judge Sarah Vance in New Orleans approved on January 29. BP pleaded guilty to 14 criminal charges.
The first $100 million of Transocean’s fine must be paid to the U.S. government within 60 days of sentencing. Transocean agreed to pay another $150 million within two years to the National Fish and Wildlife Foundation, and $150 million to the National Academy of Sciences over four years. Transocean is subject to probation for five years, during which it must report to the U.S. government about compliance matters.
U.S. District Judge Jane Triche Milazzo in New Orleans approved the deal on February 14.
Brian declined to comment, and another Transocean attorney, Kerry Miller of Frilot in New Orleans, did not return a call for comment. Spokesmen for Transocean and the Justice Department did not respond to requests for comment.
"Transocean deeply regrets the incalculable consequences of the blowout, including the loss of life and injury, the suffering of families and friends and colleagues, and the devastating impact of the ensuing spill on the Gulf Coast region," Transocean’s attorneys wrote in a February 8 court document supporting the plea deal. "Transocean has demonstrated its acceptance of responsibility by studying the event carefully for lessons learned, by cooperating with the United States’ investigation, and by entering into the Plea Agreement and the simultaneous civil consent decree."
The court papers noted that Transocean had provided "substantial cooperation" during the government’s investigation of the spill and had been working under BP’s authority at the time of the accident. Additionally, nine of the 11 workers who died from the rig’s explosion were employees of Transocean, a much smaller company than BP.
The approval does not address an additional $1 billion in civil penalties and injunctive relief under the Clean Water Act that Transocean has agreed to pay within two years as part of a consent decree with the U.S. government. The company agreed to enhance its oversight of drilling operations, improve oil spill training and invest $10 million in technology focused on drilling safety. U.S. District Judge Carl Barbier, overseeing the multidistrict litigation over the Deepwater Horizon oil spill, is expected to rule on that portion of the agreement before the February 25 trial in New Orleans in the remaining spill litigation, according to an attorney familiar with the case who requested anonymity.
The remaining claims include the Justice Department’s action for civil penalties under the Clean Water Act against BP and lawsuits filed by thousands of individuals and businesses, as well as the states of Alabama and Louisiana, for economic damages against Transocean. On December 20, Barbier approved a separate settlement in which BP agreed to pay $7.8 billion to settle the individual and business claims.
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