Feds Move to Block Transocean's Bid To Cap Damages For Gulf Oil Spill

June 2, 2010 — -- Hours after Attorney General Eric Holder disclosed ongoing criminal and civil probes related to the Gulf oil spill, the Justice Department has filed motions to block Transocean from seeking to limit their liability in the unfolding disaster. The documents were filed late Tuesday night in federal court in Houston, Texas.

The motion filed by the Justice Department follows Transocean's May 13 motion to seek limited liability of just $26.7 million. The Justice Department initially signaled to Transocean that it would oppose this in a May 24 letter to Transocean's counsel. Transocean has asked for limited liability under the Limitation of Liability Act of 1851, the same act invoked by the owners of the RMS Titanic when they awarded a paltry $95,000 to the survivors of the Titanic tragedy.

The May 24 letter said, "It is simply unconscionable, in the circumstances of this case, that Transocean is attempting to use this same shield of liability potentially leaving thousands of people who have been damaged by your clients' actions with no remedy."

Transocean owned the Deepwater Horizon, the mobile offshore drilling platform that exploded April 20, killing 11 workers. The explosion triggered the ongoing oil spill that has become the worst environmental disaster in U.S. history.

In the Tuesday filing, the Justice Department said, "Transocean seeks to absolve ('exonerate') itself from liability concerning the Deepwater Horizon explosion, fire, and oil spill, or, alternatively, limit its liability to approximately $27 million. This it cannot do."

"We shall dispense with any lengthy description of the facts of the case," says the Justice Department's motion, "as the Court, and indeed the country, is fully aware of the April 20th explosion, fire, and oil spill involving the Deepwater Horizon."

"Suffice it to say, eleven crewmembers lost their lives in the immediate disaster stemming from the explosion and fire aboard the vessel. As for the oil spill, we shall forego a cascade of words like 'catastrophic' and 'cataclysmic' as they simply do not do justice to the magnitude of economic, health, and environmental devastation wrought upon the nation's waters, across a swath of States, and upon entire communities."