Florida company can sue Transocean and Halliburton in Delaware

A federal judge in Delaware has granted the Florida-based St. Joe Co. permission to seek damages against Transocean, Halliburton and MI SWACO over the Gulf oil spill.

U.S. District Judge Leonard Stark issued a 30-page ruling March 15 in the District Court of Delaware in response to a defendant motion to stay the action and remove it to federal court.

Delaware attorneys Edmond Johnson, James McMillan and James Levine filed the petition for damages in October 2010.

St. Joe was a pulp and paper company that turned to real estate investment in 1996. It owned approximately 577,000 acres of land, of which approximately 70 percent were on or within 15 miles of the northwest Florida coast, the company says.

Because of the oil spill, St. Joe's stocks "plummeted more than 40 percent," their lawsuit claims.

"St. Joe's intrinsic enterprise value, its earning power, and the worth of its significant land holdings, are all inextricably tied to the continued environmental vitality of the Gulf," the suit states.

St. Joe's claims that Transocean has "direct responsibility for the Deepwater Horizon disaster" and that it and BP engaged in a "profits before safety" maxim.

Transocean is liable for "gross and culpable negligence" and for "abnormally dangerous activity," the suit claims.

The defendants had initially sought to remove the case to federal court and to join it with the BP oil spill multidistrict litigation (MDL) taking place in the Eastern District Court of Louisiana.

Stark found that "St. Joe would be unfairly prejudiced by the delay that would necessarily result form a stay."

Stark acknowledged that a denial of stay would result in hardship for Transocean, but that he "does not perceive this hardship to be particularly great."

Transocean said it would suffer prejudice from having to litigate issues from the oil spill in Louisiana and Delaware.

The case should have been removed to the MDL because it raises issues under the federal Oil Pollution Act, Transocean said.

Start disagreed with Transocean's arguments, saying that "St. Joe only raises claims based on Florida state law." Stark agreed with St. Joe's argument that "a preemption defense cannot be the basis for removal."

The ruling puts the St. Joe litigation on a different judicial track than the rest of the claims arising from the BP oil spill.

On March 16, the Wall Street Journal wrote that the decision means "St. Joe and plaintiffs in the oil spill litigation in general secure advantages."

The St. Joe litigation will likely move along faster than the MDL being overseen by U.S. District Judge Carl Barbier and thus give Transocean more incentive to settle, the Journal reported.

"And if the first case winds up in a big settlement, that likely will set the tone for how the federal litigation goes," the paper reported.

Federal Case N10C-10-099