Halliburton 2013 Annual Report Download - page 74

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environmental and products liability statutes. Furthermore, the pollution complaints include suits brought against us by
governmental entities, including all of the coastal states of the Gulf of Mexico, numerous local governmental entities, the
Mexican State of Yucatan, and the United Mexican States.
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.
Plaintiffs originally filed the lawsuits described above in federal and state courts throughout the United States. Except
for a relatively small number of lawsuits not yet consolidated, 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.
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. While the Limitation Action has been formally consolidated into the MDL, the
court is nonetheless, in some respects, treating the Limitation Action as an associated but separate proceeding. In February
2011, Transocean tendered us, along with all other defendants, into the Limitation Action. As a result of the tender, we and all
other defendants are being treated as direct defendants to the plaintiffs' claims as if the plaintiffs had sued 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 intends to determine the liability, limitation, exoneration, and fault allocation with regard to all
of the defendants in a trial, which to date has occurred in two phases. We do not believe that a single determination 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.
The defendants in the proceedings described above have filed numerous cross claims and third party claims against
certain other defendants. Claims against us seek subrogation, contribution, indemnification, including with respect to liabilities
under the OPA, and direct damages, and allege negligence, gross negligence, fraudulent conduct, willful misconduct, fraudulent
concealment, comparative fault, and breach of warranty of workmanlike performance. Additional civil lawsuits may be filed
against us. In addition to the claims against us, generally the defendants in the proceedings described above, including us, filed
claims, including for liabilities under the OPA and other claims similar to those described above, against the other defendants.
Our claims against the other defendants seek contribution and indemnification, and allege negligence, gross negligence and
willful misconduct. Several of the parties have settled claims among themselves, and claims against some parties have been
dismissed. We have also filed an answer to Transocean's Limitation petition denying Transocean's right to limit its liability,
denying all claims and responsibility for the incident, seeking contribution and indemnification, and alleging negligence and
gross negligence.
Judge Barbier has issued an order, among others, clarifying certain aspects of law applicable to the lawsuits pending in
his court. The court ruled that: (1) general maritime law will apply, and therefore all claims brought under state law causes of
action were dismissed; (2) general maritime law claims may be brought directly against defendants who are non-“responsible
parties” under the OPA with the exception of pure economic loss claims by plaintiffs other than commercial fishermen; (3) all
claims for damages, including pure economic loss claims, may be brought under the OPA directly against responsible parties;
and (4) punitive damage claims can be brought against both responsible and non-responsible parties under general maritime
law. As discussed above, with respect to the ruling that claims for damages may be brought under the OPA against responsible
parties, we have not been named as a responsible party under the OPA, but BP Exploration has filed a claim against us for
contribution with respect to liabilities incurred by BP Exploration under the OPA. The rulings in the court's order remain subject
to each applicable party's right to appeal. Certain parishes in Louisiana are currently appealing the dismissal of their state law
claims under the order.
In April 2012, BP announced that it had reached definitive settlement agreements with the PSC to resolve the
substantial majority of eligible private economic loss and medical claims stemming from the Macondo well incident. The PSC
acts on behalf of individuals and business plaintiffs in the MDL. According to BP, the settlements do not include claims against
BP made by the DOJ or other federal agencies or by states and local governments. In addition, the settlements provide that, to
the extent permitted by law, BP will assign to the settlement class certain of its claims, rights, and recoveries against Transocean
and us for damages, including BP's alleged direct damages such as damages for clean-up expenses and damage to the well and
reservoir. We do not believe that our contract with BP Exploration permits the assignment of certain claims to the settlement
class without our consent. The MDL court has since confirmed certification of the classes for both settlements and granted final
approval of the settlements. We objected to the settlements on the grounds set forth above, among other reasons. The MDL
court held, however, that we, as a non-settling defendant, lacked standing to object to the settlements but noted that it did not
express any opinion as to the validity of BP's assignment of certain claims to the settlement class and that the settlements do not
affect any of our procedural or substantive rights in the MDL. BP has been challenging certain provisions of its settlement of
economic loss claims in the MDL court and before the United States Fifth Circuit Court of Appeals. We are unable to predict at