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Archive for March, 2015

Baay quoted by AP, Law360, Others on Impact of Court Decision on Chemical Board’s Authority in Transocean Case

Posted on: March 24th, 2015

Comment from Sutherland Asbill & Brennan partner and energy litigator David Baay of Houston was carried by media across the country in stories about the impact of a federal appeals court decision confirming the U.S. Chemical Safety Board’s power to investigate offshore oil spills.

The decision has “some significant ramifications for offshore operators,” Mr. Baay told The Associated Press in a national story headlined, “Court: Chemical Safety Board Can Investigate Offshore Spills.” The result is “that any offshore incident of significance is likely to face one more federal agency among an already crowded field.”

The AP story was posted on dozens of news websites, including The New York Times, ABC News, Yahoo News, CNBC, many local TV websites and newspapers, and the London-based Daily Mail.

The chemical board was investigating the April 2010 explosion in the Gulf of Mexico which sank Transocean Deepwater Drilling Inc.’s rig and led to a massive oil spill. The chemical board had subpoenaed Transocean for thousands of pages of documents. Baay and others on Sutherland’s legal team representing Transocean contended the board was not authorized to investigate marine oil spills.

In September 2014, a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled in favor of the Chemical Safety Board. And on March 12, 2015, the full court rejected Transocean’s request for a rehearing.

In an article headlined, “Transocean loses appeal in safety board subpoena case,” the Houston Chronicle also quoted Mr. Baay: “The Chemical Safety Board — an agency with no rule making or enforcement authority, and one that struggles to survive from year to year — will now be emboldened to investigate any marine spill on an offshore rig that might possibly have a related, unanticipated hazardous emission.”

Mr. Baay added in an interview with Law360 (subscription required): “It’s a bit troubling to these operators, because on the first front you’re dealing with agencies that have real authority, like the DOJ (Department of Justice). The fact that you’re answering to a federal agency that has no power beyond an ability to investigate, it’s a distraction.”

He also pointed out an additional troubling bit of fallout from the 5th Circuit decision in the article by Texas Lawyer (subscription required), “5th Circuit Gives Chemical Board Subpoena Power in Deepwater Horizon Probe.” “One more impact is that the Fifth Circuit ruled in this case that the Deepwater Horizon rig is a stationary source,” he explained. “That is inconsistent with how the Fifth Circuit has classified semisubmersible deepwater drilling rigs in the past.”