At the request of Louisiana drilling service companies, ship builders, and dockside businesses, a Louisiana federal judge today granted a motion to preliminarily enjoin the Department of Interior’s May 27 six-month deepwater oil drilling moratorium in the Gulf of Mexico.

U.S. Judge Martin Feldman of the Eastern District of Louisiana found that the public interest warrants granting the injunction.  He said the plaintiffs in Hornbeck Offshore Services LLC v. Salazar (No. 10-1663) that the plaintiffs could prove that the Department’s action was “arbitrary and capricious.”

“An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country,” he said.

Hornbeck Offshore Services LLC filed a lawsuit June 7 against the federal Minerals Management Service and its acting director, Robert Abbey, Department of the Interior and DOI Secretary Ken Salazar under the Outer Continental Shelf Lands Act (OCSLA) and Administrative Procedure Act (APA).

Hornbeck sought an injunction against the moratorium on all drilling, asserting that 27 of the 33 wells falling under the moratorium were in full compliance with existing regulations and permits.  On June 21, Louisiana Governor Bobby Jindal and state Attorney General Buddy Caldwell filed an amicus curiae brief in the lawsuit Hornbeck filed in Louisiana federal court, urging that the ban be lifted, citing economic viability of the region.

Hornbeck operates vessels that perform offshore oil and gas drilling services and conducts exploration and production work in the Gulf’s Outer Continental Shelf.  In its motion for preliminary injunction, Hornbeck says the drilling ban causes instant and future harm to the entire Gulf deepwater industry.  It also contends that the ban will reduce the amount of oil in commerce, drive up oil process and deter new drilling operations in the Gulf.

In an amended complaint, Hornbeck has been joined by shipyards, ship builders, vessel owners, a supplier of methanol used in well activities, and dockside businesses serving deepwater operations by providing fuel, storage space, equipment services, and cleaning and disposal services as plaintiffs.

The Minerals Management Service and Department of Interior dispute that the ban shuts down the Gulf’s oil and gas industry and assert that safety investigations are necessary and another catastrophe would overwhelm the response resources currently in use and the impact to marine life and food sources has not yet been fully examined.

Environmental groups such as the Center for Biological Diversity, Defenders of Wildlife, Florida Wildlife Federation, Natural Resources Defense Council, and Sierra Club have intervened, asserting that their interests and members’ interests in the fish, wildlife and ecosystems of the Gulf of Mexico and interests in ensuring an environmental and safety review of deepwater drilling will be adversely affected if the drilling ban is enjoined.

A hearing was held June 21 on the plaintiffs’ motion for preliminary injunction.

A similar lawsuit has been filed by Diamond Offshore Co.  Transocean Ltd’s president criticized the ban at an oil industry conference held June 22 in London, the Associated Press reported.

For more information on Gulf oil spill lawsuits, email info@litigationconferences.com or view the agenda for HB’s Oil in the Gulf:  Litigation & Insurance Coverage seminar being held this week in Atlanta.