Halliburton 2011 Annual Report Download - page 108

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Litigation. Since April 21, 2010, plaintiffs have been filing lawsuits relating to the Macondo well
incident. Generally, those lawsuits allege either (1) damages arising from the oil spill pollution and
contamination (e.g., diminution of property value, lost tax revenue, lost business revenue, lost tourist
dollars, inability to engage in recreational or commercial activities) or (2) wrongful death or personal
injuries. We are named along with other unaffiliated defendants in more than 400 complaints, most of
which are alleged class actions, involving pollution damage claims and at least nine personal injury
lawsuits involving four decedents and at least 21 allegedly injured persons who were on the drilling rig at
the time of the incident. Another six lawsuits naming us and others relate to alleged personal injuries
sustained by those responding to the explosion and oil spill. Plaintiffs originally filed the lawsuits described
above in federal and state courts throughout the United States, including Alabama, Delaware, Florida,
Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas, and Virginia. Except for
certain lawsuits not yet consolidated (including two lawsuits that are proceeding in Louisiana state court,
one lawsuit that is proceeding in Louisiana federal court, two lawsuits that are proceeding in Texas state
court, two lawsuits that are proceeding in Florida federal court, and four lawsuits in Florida state court for
which we have not been served), the Judicial Panel on Multi-District Litigation ordered all of the lawsuits
against us consolidated in the MDL proceeding before Judge Carl Barbier in the United States Eastern
District of Louisiana. The pollution complaints generally allege, among other things, negligence and gross
negligence, property damages, taking of protected species, and potential economic losses as a result of
environmental pollution and generally seek awards of unspecified economic, compensatory, and punitive
damages, as well as injunctive relief. Plaintiffs in these pollution cases have brought suit under various
legal provisions, including the OPA, the CWA, the MBTA, the ESA, the OCSLA, the Longshoremen and
Harbor Workers Compensation Act, general maritime law, state common law, and various state
environmental and products liability statutes.
Furthermore, the pollution complaints include suits brought against us by governmental entities,
including the State of Alabama, the State of Louisiana, Plaquemines Parish, the City of Greenville, and
three Mexican states. Complaints brought against us by ten other parishes in Louisiana were dismissed with
prejudice, and the dismissal is being appealed by those parishes. The wrongful death and other personal
injury complaints generally allege negligence and gross negligence and seek awards of compensatory
damages, including unspecified economic damages and punitive damages. We have retained counsel and
are investigating and evaluating the claims, the theories of recovery, damages asserted, and our respective
defenses to all of these claims.
Judge Barbier is also presiding over a separate proceeding filed by Transocean under the
Limitation of Liability Act (Limitation Action). In the Limitation Action, Transocean seeks to limit its
liability for claims arising out of the Macondo well incident to the value of the rig and its freight. Although
the Limitation Action is not consolidated in the MDL, to this point the judge is effectively treating the two
proceedings as associated cases. On February 18, 2011, Transocean tendered us, along with all other
defendants, into the Limitation Action. As a result of the tender, we and all other defendants will be treated
as direct defendants to the plaintiffs’ claims as if the plaintiffs had sued each of us and the other defendants
directly. In the Limitation Action, the judge intends to determine the allocation of liability among all
defendants in the hundreds of lawsuits associated with the Macondo well incident, including those in the
MDL proceeding that are pending in his court. Specifically, the judge will determine the liability,
limitation, exoneration and fault allocation with regard to all of the defendants in a trial, which is scheduled
to occur in three phases, that is set to begin in late February 2012. The three phases of this portion of the
trial are scheduled to cover the liabilities associated with the blowout itself, the actions relating to the
attempts to control the flow of hydrocarbons from the well, and the efforts to contain and clean-up the oil
that was discharged from the Macondo well. We do not believe that a single apportionment of liability in
the Limitation Action is properly applied, particularly with respect to gross negligence and punitive
damages, to the hundreds of lawsuits pending in the MDL proceeding.