Taylor Energy is taking measures to protect its rights and the environment concerning the response to the MC-20 Incident. In an effort to head off any irresponsible action that could cause considerable environmental damage, and to defend its right to due process following the government’s arbitrary decision to turn its back on a decade’s worth of consensus science, in late 2018, Taylor Energy brought legal action against the Coast Guard and the private contracting firm hired by the Coast Guard to carry out potentially environmentally hazardous actions at the MC-20 site. Taylor Energy also has a longstanding breach of contract litigation pending against the Department of the Interior related to Taylor Energy’s funds being withheld in trust. None of these lawsuits seek to relieve Taylor Energy from its obligations to respond to the MC-20 Incident. Taylor Energy has taken and will continue to take all responsible, science-driven measures to address MC-20.
This lawsuit seeks the Court’s review and setting aside of final agency action, Administrative Order No. 19-001 (“Admin. Order”), which was taken by the Coast Guard in an abrupt reversal of course on its longstanding prior position based predominantly on an unverified theory that contradicts the well-established scientific facts that underlay the Unified Command’s prior response actions at the MC-20 site. The Coast Guard’s recent actions ignored a decade’s worth of comprehensive and consensus scientific studies conducted for the Unified Command. Despite grounding the Admin. Order on this new, unverified theory, the Coast Guard has withheld the underlying data from Taylor Energy, rejecting Taylor Energy’s repeated requests for its disclosure. The Coast Guard’s actions abruptly departed from the repeated scientific conclusions in the Unified Command’s record in response to adverse publicity. In the suit, Taylor Energy seeks an order vacating, holding unlawful and setting aside the Admin. Order, and all actions, findings and conclusions made following its issuance, all as being in violation of the Due Process Clause of the Fifth Amendment to the United States Constitution and as being arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, as required by the Administrative Procedure Act.
Taylor Energy contends that because the Coast Guard’s Administrative Order is invalid, Couvillion Group lacks the authority to conduct any activities at the site. Taylor Energy’s lawsuit against Couvillion seeks damages for Couvillion’s trespass on Taylor Energy’s property (specifically the production platform jacket, which lies on the seafloor and from which Couvillion suspended its containment system). While Taylor Energy is encouraged by the unverified reports on the volumes of oil being collected by the Couvillion containment system, this does not negate the underlying claims Taylor Energy is making.
Taylor Energy filed a breach of contract lawsuit against the Department of the Interior in January of 2016. The lawsuit is a straightforward contract dispute and does not seek to relieve Taylor Energy of its legal obligations to respond to the MC-20 incident.
In 2008, Taylor Energy entered into a contract with the government pursuant to which Taylor Energy funded a trust account with $666,280,000 to secure performance of a series of specific well and facility Decommissioning obligations at MC-20. Taylor Energy filed the suit to seek the return of its funds that remain in the trust account- a sum of approximately $432 million.
The lawsuit asserts that, despite Taylor Energy’s completion of the last decommissioning obligation the government authorized it to undertake under the contract in July of 2011, the government, in 2015, informed Taylor Energy that its position is that the term of the contract is indefinite and that Taylor Energy’s performance of the remaining decommissioning obligations under the contract will occur, if at all, only at some uncertain and indeterminable future date. The government has also informed Taylor Energy that it intends to withhold indefinitely all of Taylor Energy’s funds that remain in the trust account. Under the applicable law, contracts must be performed in good faith and within a reasonable time. By failing to allow Taylor Energy’s performance of the remaining decommissioning obligations under the contract within a reasonable time while withholding Taylor Energy’s funds in trust, the government breached the contract. The lawsuit further asserts that it is legally impossible for Taylor Energy to perform the remaining decommissioning obligations under the contract because to do so would violate statutory and regulatory mandates that prohibit performance of decommissioning activities that may cause undue or serious environmental harm.
In 2019 a federal court dismissed Taylor Energy Company’s claim against the Department of Interior. Due to numerous factual and legal errors in the Court’s reasoning, Taylor Energy has appealed this action to the United States Court of Appeal for the Federal Circuit. The appeal remains pending.
Taylor Energy has filed a lawsuit against the U.S. Government seeking judicial review of the National Pollution Funds Center’s (NPFC) denial of Taylor Energy’s claim in which the Company invoked the act of God defense under the Oil Pollution Act of 1990 (OPA) for reimbursement of certain costs associated with Taylor Energy’s response to the MC-20 incident. Under OPA, Congress determined that the Oil Spill Liability Trust Fund (funded by industry, not tax dollars) should be used to pay for removal costs when a spill is caused solely by an act of God.
According to Taylor Energy’s complaint, the NPFC (which is administered by the U.S. Coast Guard) violated the OPA and Taylor Energy’s rights under the Due Process Clause of the United States Constitution. Taylor Energy is asking the Court to vacate and set aside the NPFC denial of Taylor Energy’s claim and rule that the Company is entitled to the protections afforded by the “act of God” defense under OPA.
An “act of God” is defined by OPA to mean “an unanticipated, grave natural disaster or other natural phenomenon of an exceptional, inevitable and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight.”
The extraordinarily powerful waves that caused the massive progressive seafloor failure upslope of Taylor Energy’s platform were unanticipated and exceptional, and were the sole cause of the loss of Taylor Energy’s platform at MC20 and the resulting discharges of oil.