Transocean fails to quash subpoenas
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April 16, 2013
Transocean fails to quash subpoenas

The statutory authority of the U.S. Chemical Safety Board (CSB) to subpoena information from Transocean Deepwater Drilling, Inc., in conjunction with the Deepwater Horizon catastrophe in the Gulf of Mexico in April 2010 was upheld by a U.S. district judge in Houston.  The court’s order was a defeat for Transocean, which had petitioned to quash five CSB subpoenas.

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‘Broad look’ at accident

Established under Section 112(r)(6) of the Clean Air Act (CAA), the CSB is an independent federal agency charged with investigating serious chemical accidents.  The CSB says it has been taking a “broad look” at the causes of the Gulf tragedy.  Issues it has been investigating include how the industry and the regulating agencies learned or did not learn from previous incidents, the lack of human factors guidance for offshore production, the reliance on manual safety controls instead of automated systems, organizational issues that can impair effective engineering decisions, and implementation of effective corporate governance and sustainability standards to address safety and environmental risk. 

But when the CSB issued subpoenas to Transocean, which owned the Deepwater Horizon rig, the company raised multiple arguments in a petition to court about why the CSB should neither be investigating the accident nor ordering Transocean to hand over certain information. 

Air releases

Among the arguments Transocean raised against CSB’s subpoenas are that the CAA specifically states that the CSB is not “authorized to investigate marine oil spills, which the National Transportation Safety Board [NTSB] is authorized to investigate.”  But District Judge Lee H. Rosenthal points out that several sentences later the same section states that “[i]n no event shall the Board forego an investigation where an accidental release causes a fatality or serious injury among the general public, or had the potential to cause substantial property damage or a number of deaths or injuries among the general public.”

“Congress directed that the CSB not ‘forego’ investigating accidental releases with such actual or potential consequences, leaving open the possibility that the CSB is authorized to investigate marine oil spills that are sufficiently grave,” stated Rosenthal in her order.  Rosenthal also sided with the government’s explanation that the CSB is not investigating an oil spill; rather the CSB is investigating the release of gases from the blowout and explosion, which keeps the investigation within CSB’s authority.

Not a U.S. vessel

Transocean also argued that the location of the rig—50 miles offshore—could not cause the release of gases into the ambient air, which would affect the public, one requirement for a CSB investigation.  But the court stated that remoteness of this type did not legally prevent equally remote onshore facilities from being investigated.  The Transocean argument also does not account for the releases to the air may quickly travel long distances to reach populated areas, said the judge. 

Among its other arguments, Transocean asserted that its rig was a “vessel of the United States,” thus prohibiting CSB’s authority, which applies only to stationary sources.  But the court found that the rig did not meet the legal definition of a “vessel of the United States” because itwas Swiss-owned, registered under the flag of the Marshall Islands, and ineligible for U.S. documentation, registration, or numbering.  The rig was also not a vessel because it was physically attached to the seabed and engaged in drilling activities for an extended period before the blowout.

Rosenthal found that these and other factors undermined Transocean’s contention that the accident was wholly within NTSB’s investigatory domain, and therefore, the CSB did not have the authority to investigate and subpoena information. 

Click here for Rosenthal’s order.

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