Letting Halliburton Off the Hook


One of the more interesting legal sub-plots from the 400-plus page report from the presidential oil spill commission involves Halliburton, a big-name company that was not among the defendants in a government civil lawsuit filed last month.

Given the clear political implications of a former Halliburton CEO being a former vice-president of the United States (i.e., Dick Cheney), the omission raised eyebrows. The likely legal “justification” for letting the the world’s second largest oilfield services corporation off the hook focuses on the fact that those government lawsuits focus on provisions of the Clean Water Act and the Oil Pollution Act, which in turn focus on “owners and operators” of companies responsible for the spill. Their likely argument is that Halliburton, which may have botched that cement job at the heart of this disaster, was only a sub-contractor and thus not an “operator.”

Of course, oil companies create layers upon layers of sub-contracting and sub-companies to try and limit liability. So it was interesting, in the legal community at least, that Halliburton was left off the defendant list. Typically, you might see potential defendants included, even if they’re removed later on.

Halliburton comes up in the Presidential Commission report, and the New York Times’ Greenwire blog notes that “…Halliburton’s role was highlighted in the report’s fourth chapter, which focuses on the use of cement when drilling the well, which BP subcontracted out to the firm. One of the report’s findings is that Halliburton had conducted tests in February 2010, two months before the disaster, that indicated the foam cement slurry used on the well was unstable.”

The commission report says those tests “… should have prompted the company to reconsider its slurry design” and refers to “insufficient controls in place” at Halliburton that would have ensured that test results were “vetted rigorously.”

So, you make the call: Operator or just another innocent sub-contractor? It will remain one of the more interesting sub-plots, especially as non-governmental legal action advances that might lack the political implications of official government actions. If those cases include Halliburton, and it’s hard to see why they wouldn’t, more people are bound to ask why the government let them off the hook.

The excellent NYT Greenwire report is here: http://www.nytimes.com/gwire/2011/01/13/13greenwire-halliburtons-legal-fate-in-gulf-spill-still-un-26349.html

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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