In re: Oil spill by the oil rig "deepwater horizon" on the Gulf of Mexico, on April 20, 2010, order, Aug. 26, 2011

Harvard Environmental Law Review

Volumn 36, Issue 2, 2012, Pages 533-566

  Selby, Brendan ^a  

^a HARVARD LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

DRILLING RIG; ENVIRONMENTAL LEGISLATION; EXPLOSION; LIABILITY; OFFSHORE STRUCTURE; OIL SPILL;

ATLANTIC OCEAN; GULF OF MEXICO;

EID: 84878653918     PISSN: 01478257     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (90)

1. See NAT'L COMM'N ON THE BP DEEPWATER HORIZON OIL SPILL & OFFSHORE DRILLING, DEEP WATER: THE GULF OIL DISASTER AND THE FUTURE OF OFFSHORE DRILLING vi (2011), available at http://www.gpoaccess.gov/deepwater/index.html.
2. See, e.g., Fleming James Jr., Limitations on Liability for Economic Loss Caused by Negligence: A Pragmatic Appraisal, 25 VAND. L. REV. 43, 43 (1972) ("[A] plaintiff may not recover for his economic loss resulting from bodily harm to another or from physical damage to property in which he has no proprietary interest.").
3. See E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 870 (1986) (stating that when "by definition no person or other property is damaged, the resulting loss is purely economic").
4. See, e.g., Union Oil Co. v. Oppen, 501 F.2d 558, 570 (9th Cir. 1974) (recognizing an oil company's duty to commercial fishermen to avoid negligently disrupting aquatic life).
5. See, e.g., Robert J. Rhee, A Production Theory of Pure Economic Loss, 104 NW. U. L. REV. 49, 49, 50 (2010) ("Despite the historical dynamism of Anglo-American tort law, the rule remains pure and has been unadulterated by the evolutionary forces of the common law.").
6. In Louisiana ex rel. Guste v. M/V Testbank, the Fifth Circuit, en banc, adopted the Robins rule as a pragmatic limitation on the common law doctrine that foreseeable and proximate injuries are generally compensable. 752 F.2d 1019, 1032, 1035 (5th Cir. 1985).
7. However, in Sekco Energy Inc. v. M/V Margaret Chouest, 820 F. Supp. 1008 (E.D. La. 1993), the U.S. District Court for the Eastern District of Louisiana failed to apply the rule on a claim asserting economic loss arising from interference with a company's right to use an oil drilling platform it owned when the company did not sustain physical damage to the platform or other property. Id. at 1011-12 (distinguishing plaintiffs in Robins and Testbank as "one or more steps removed from the principal cause of action").
8. Finally, in Reserve Mooring Inc. v. American Commercial Barge Line, LLC, the Fifth Circuit disavowed Sekco's reasoning, and upheld the bright-line rule. 251 F.3d 1069, 1071 (5th Cir. 2001).
9. The purpose of an MDL is "to avoid duplication of discovery, to prevent inconsistent pretrial rulings, and to conserve the resources of the parties, their counsel and the judiciary." Overview of Panel, U.S. JUDICIAL PANEL ON MULTIDISTRICT LITIG., http://www.jpml.uscourts.gov/panel-info/ overview-panel (last visited June 14, 2012) (on file with the Harvard Law School Library).
10. Id. at*1. The second MDL, In re: BP P.L.C. Sec. Litig., 734 F. Supp. 2d (J.P.M.L. 2010)
11. concerns alleged violations of the Securities Exchange Act, 15 U.S.C. §§ 78A-78P (2006). These claims "share allegations that BP and its executives misled the investing public concerning the company's safety measures and commitment to conducting safe operations
12. In re: BP P.L.C. Sec. Litig., 734 F. Supp. 2d at 1378. This MDL is assigned to Judge Ellison in the U.S. District Court for the Southern District of Texas. Id. at 1379.
13. Pretrial Order No. 11, In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La. Oct. 19, 2010), available at http://www.laed.uscourts.gov/OilSpill/ 10192011Agenda.pdf.
14. Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 947 (E.D. La. 2011).
15. First Amended Master Compl. at 11-12, In re: Oil Spill by the Oil Rig "Deepwater Horizon" on the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La. Feb. 9, 2011), available at http://lieffcabraser.com/media/pnc/0/ media.1150.pdf.
16. See GULF COAST CLAIMS FACILITY, FINAL RULES GOVERNING PAYMENT, ELIGIBILITY AND SUBSTANTIATION CRITERIA, AND FINAL PAYMENT METHODOLOGY (2011) (on file with the Harvard Law School Library).
17. Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 947 (E.D. La. 2011).
18. Order of Aug. 26, 2011, 808 F. Supp. 2d at 952-53 (denying the applicability of 43 U.S.C. § 1333(a)(2)(A)).
19. Id. at 954-55 (citing Moragne v. States Marine Lines, Inc., 398 U.S. 375 (1970)).
20. Florida Pollutant Discharge Prevention and Control Act ("FPDPC"), Fla. Stat.
21. Order of Aug. 26, 2011, 808 F. Supp. 2d at 958
22. see also Curd v. Mosaic Fertilizer, LLC, 39 So. 3d 1221, 1221-22 (Fla. 2010) (holding that commercial fishermen with no proprietary interest can recover under the FPDPC and noting that "the language of the statute allows any person to recover for damages suffered as a result of pollution").
23. There has been debate about the actual favorability of state laws. Compare Shelly F. Spansel, Robins Dry Dock Versus State Laws Governing Liability for Pure Economic Loss: How the Maritime Circuit Should Resolve the Preemption Conflict, 51 LOY. L. REV. 165, 173 (2005) (arguing that because of Louisiana law's "case-by-case," rather than bright-line, approach to pure economic loss, "if Robins does not preempt state law, a Louisiana litigant could potentially recover for pure economic loss")
24. with Benjamin J. Steinberg & Dwayne Antonio Robinson, Making BP's Blood Curd-Le: Duty, Economic Loss, and the Potential Cardozian Nightmare After Curd v. Mosaic Fertilizer, 63 FLA. L. REV. 1245, 1268 (2011) (claiming that "due to the stringent application of the analysis as well as additional common law restrictions
25. Order of Aug. 26, 2011, 808 F. Supp. 2d at 968-69.
26. Order of Aug. 26, 2011, 808 F. Supp. 2d at 960 (citing Exxon Shipping Co. v. Baker, 554 U.S. 471, 489 (2008)) ("First, is there a clear indication that Congress intended to occupy the entire field? Second, does the statute speak directly to the question addressed by the common law? Third, will application of common law have a frustrating effect on the statutory remedial scheme?").
27. (citing Exxon Shipping Co. v. Baker, 554 U.S. 471, 489 (2008)) ("First, is there a clear indication that Congress intended to occupy the entire field? Second, does the statute speak directly to the question addressed by the common law? Third, will application of common law have a frustrating effect on the statutory remedial scheme?"
28. Order of Aug. 26, 2011, 808 F. Supp. 2d at 961-62. Applying the Baker test, the order found, in analyzing OPA's savings provisions, that Congress did not intend to "occupy the entire field." Id. at 961. Moreover, maritime law addresses a "gap" in the statute: the liability of non-Responsible Parties for damages. Id. Finally, maritime claims against non-Responsible Parties did not frustrate OPA's remedial scheme, and maritime claims against the Responsible Party interfered with OPA only with respect to procedure. Id. at 962. Judge Barbier held that OPA displaced maritime claims against the Responsible Party, "but only with regard to procedure." Id. at 969. That is, a gap-filling maritime law remedy may be available, but maritime claims against a Responsible Party must meet OPA's specific "presentment requirements." See 33 U.S.C. § 2713 (2006).
29. Order of Aug. 26, 2011, 808 F. Supp. 2d at 968-69.
30. See infra Part IV.B. The VoO plaintiffs alleged damages arising from participation in a program under which BP chartered vessels to assist in the response to the spill. First Amended Master Compl., supra note 26, at 139-40. The Moratorium plaintiffs alleged damages arising from the government's post-spill decision to impose a temporary moratorium on deepwater drilling. Id. at 29-30. The defendants responded to both sets of claims by arguing that the spill was not the legal cause of the damages in question: injuries to the VoO plaintiffs "occurred as a result of their participation in the VoO program, not as a result of the spill," while the Moratorium claims should be barred because the Moratorium was an "intervening or superseding cause of damage." Order of Aug. 26, 2011, 808 F. Supp. 2d at 965.
31. Id. at 966 (citing CSX Transp., Inc. v. McBride, 131 S. Ct. 2630, 2642-43 (2011), to suggest that judges should not mechanically import common law causation standards into statutes that do not include language that would explicitly trigger their use).
32. Order of Aug. 26, 2011, 808 F. Supp. 2d at 966.
33. See Pretrial Order No. 11, supra note 20, at 19.
34. See, e.g., Ratzlaf v. United States, 510 U.S. 135, 143 (1994) ("A term appearing in several places in a statutory text is generally read the same way each time it appears.").
35. See Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433 (1933) (explaining that presumption of consistent usage of phrases "readily yields whenever there is such variation in the connection in which the words are used as reasonably to warrant the conclusion that they were employed in different parts of the act with different intent.").
36. S. REP. NO. 101-94, at 12 (1989) (emphasis added).
37. See Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 959 (E.D. La. 2011).
38. See, e.g., Keene Corp. v. United States, 508 U.S. 200, 208 (1993) ("[W]here Congress includes particular language in one section of a statute but omits it in another . . . , it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." (citing Kusello v. United States, 464 U.S. 16, 23 (1983))).
39. 135 CONG. REC. 26,851 (Nov. 1, 1989) (statement of Rep. Jones). Though the statement comes from only one representative, the view of the sponsor of a bill carries more weight.
40. Attempts to find clues of congressional intent on causation from more remote or otherwise unreliable pieces of legislative history will not be recounted where they appear strained and more obscuring than helpful. See, e.g., Andrew B. Davis, Pure Economic Loss Claims Under the Oil Pollution Act: Combining Policy and Congressional Intent, 45 COLUM. J. L. LAW & SOC. PROBS. 1, 24 (citing a statement by the House Committee on Public Works that the act creates incentives to avoid economic and ecological damages as evidence that "Congress intended to provide broad recovery")
41. John C.P. Goldberg, Liability for Economic Loss in Connection with the Deepwater Horizon Spill, 30 MISS. C. L. REV. 335, 368 (2011) (citing individual lawmakers who provided examples of hypothetical claimants, such as beachfront property owners and fishermen, who should recover)
42. David W. Robertson, The Oil Pollution Act's Provisions on Damages for Economic Loss, 30 MISS. C. L. REV. 157, 174 n.58 (2011) (accusing Professor Goldberg of taking an "overly narrow view of the legislative history" and relying on a wide range of comments by individual lawmakers proposing hypothetical deserving claimants). 76 See RESTATEMENT (THIRD) OF TORTS: LIAB. FOR PHYSICAL & EMOTIONAL HARM § 26 (2010) ("[A]n act is a factual cause of an outcome if, in the absence of the act, the outcome would not have occurred.").
43. RESTATEMENT (SECOND) OF TORTS § 9 (1965) (referring to the whole causation inquiry as "legal cause").
44. See RESTATEMENT (THIRD) OF TORTS: LIAB. FOR PHYSICAL & EMOTIONAL HARM § 6 (2010) (recognizing the widespread use of the term "proximate cause" but suggesting that the term "scope of liability" would be better).
45. Id. § 29 (2010); see also Warren Seavey, Mr. Justice Cardozo and the Law of Torts, 39 COLUM. L. REV. 20, 34 (1939) ("[T]he reasons for creating liability should limit it.").
46. See, e.g., Petition of Kinsman Transit Co., 338 F.2d 708, 723-26 (2d Cir. 1964) (foreseeability)
47. RESTATEMENT (SECOND) OF TORTS § 433 (1965) (guiding courts to ask "whether the actor's conduct has created a force or series of forces which are in continuous and active operation up to the time of the harm, or has created a situation harmless unless acted upon by other forces for which the actor is not responsible")
48. see also Ashley Cnty. v. Pfizer, Inc., 552 F.3d 659, 671 (8th Cir. 2009) ("Proximate cause is bottomed on public policy as a limitation on how far society is willing to extend liability for a defendant's actions.").
49. Benefiel v. Exxon Corp., 959 F.2d 805, 807 (9th Cir. 1992)
50. (applying proximate cause principles to the causation standard in the Trans-Alaska Pipeline Authorization Act ("TAPAA"), 43 U.S.C. §§ 1651-1656 (2006)).
51. See id. (applying principles drawn from the RESTATEMENT (SECOND) OF TORTS). 820 F. Supp. 1008, 1014-15 (E.D. La. 1993).
52. See Cameron H. Totten, Recovery for Economic Loss Under Robins Dry Dock and the Oil Pollution Act of 1990: Sekco Energy, Inc. v. M/V Margaret Chouest, 18 TUL. MAR. L.J. 167, 176 (1993) ("Sekco sustained no damage to any of its proprietary interests except for the right to drill for oil under their platform. The right to drill, however, is not physical property.").
53. See Sekco, 820 F. Supp. at 1015. 444 F.3d 371, 382 (5th Cir. 2006).
54. Settoon Towing, 2009 WL 4730969 at*1,t*4; 33 U.S.C. § 2702(a) (2006).
55. Petition of Cleveland Tankers, Inc., 791 F. Supp. 669, 679 (E.D. Mich. 1992).
56. In re Taira Lynn Marine Ltd. No. 5, LLC, 444 F.3d 371, 382 (5th Cir. 2006).
57. Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 965 (E.D. La. 2011).
58. See Gatlin, 169 F.3d at 211 (holding that damages specified in section 2702(b) are those that result from a discharge of oil or from a substantial threat of a discharge of oil into navigable waters or the adjacent shoreline).
59. See Ohio v. U.S. Dep't of Interior, 880 F.2d 432, 472 (D.C. Cir. 1989) (finding that the Comprehensive Environmental Response, Compensation, and Liability Act does not foreclose a proximate cause requirement, even where the statute does not explicitly provide for such a requirement).
60. See In re Glacier Bay, 746 F. Supp. 1379, 1384-86 (D. Alaska 1990) (finding TAPAA implicitly abrogated the strict physical damage requirement from maritime law but not deciding whether the statute retained other implicit, causation-based limitations on liability)
61. Benefiel v. Exxon Corp., 959 F.2d 805, 807-08 (9th Cir. 1992) (deciding based on the same provision of TAPAA at issue in Glacier Bay "that Congress in enacting TAPAA did not intend to abrogate all principles of proximate cause").
62. CSX Transp., Inc. v. McBride, 131 S. Ct. 2630, 2642-43 (2011).
63. Cf. In re Glacier Bay, 746 F. Supp. at 1384 (D. Alaska 1990)
64. (citing Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952) ("Statutes which invade the general maritime law are read with a presumption favoring the retention of long-established and familiar principles except when a statutory purpose to the contrary is evident.") (emphasis added)).
65. Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 966 (E.D. La. 2011).
66. Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Protection, 474 U.S. 494, 501 (1986)
67. (quoting Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 266-67 (1979)). "The normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific." Id. The idea that the injury must be part of the harm within the risk that made the actor's conduct tortious is a foundational part of the judicially created causation analysis in tort law.
68. John C.P. Goldberg, OPA and Economic Loss: A Reply to Professor Robertson, 30 MISS. C. L. REV. 203, 204 (2011). Some commentators initially thought that Professor Goldberg's analysis would be the template used to determine payouts from the GCCF
69. see David F. Partlett & Russell L. Weaver, BP Oil Spill: Compensation, Agency Costs, and Restitution, 68 WASH. & LEE L. REV. 1341, 1353 (2011), but the facility's protocol for paying claims appears to be broader than Professor Goldberg suggests the law requires
70. see Protocol for Interim and Final Claims, GULF COAST CLAIMS FACILITY (Feb. 8, 2011), http://www.gulfcoastclaimsfacility.com/proto-4 (on file with the Harvard Law School Library).
71. Benefiel v. Exxon Corp., 959 F.2d 805, 806 (9th Cir. 1992).
72. See also Robert Force, Martin Davies, & Joshua S. Force, Deepwater Horizon: Removal Costs, Civil Damages, Crimes, Civil Penalties, and State Remedies in Oil Spill Cases, 85 TUL. L. REV. 889, 938 (2011) ("[T]he [Goldberg] report's analysis is too narrow because it does not appear to permit recovery by many parties directly involved in providing or servicing primary maritime activities even though those parties rely upon natural resources in conducting their businesses.").
73. See, e.g., Benefiel v. Exxon Corp., 959 F.2d 805, 807 (9th Cir. 1992).
74. See Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Protection, 474 U.S. 494, 501 (1986) (stating the general rule that Congress does not depart from "the interpretation of a judicially created concept" without a show of intent).
75. See, e.g., Robert Mackey, Underwater Video Shows Oil Gushing From Damaged Pipe Into Gulf, THE LEDE, N.Y. TIMES, May 12, 2010, http://thelede.blogs. nytimes.com/2010/05/12/underwater-video-shows-oil-gushing-from-damaged-pipe- into-gulf/.
76. For example, to (try to) make a counterfactual involving a Florida theme park work, Professor Robertson must go to great imaginative lengths, positing a situation in which the spill not only caused no physical damage to tourist beaches, but caused no physical damage generally because it "occurred in a Gulf of Mexico long since so befouled by frequent oil and chemical spills as to have become essentially a dead zone for all purposes save mineral exploration." See David W. Robertson, OPA and Economic Loss: A Response to Professor Goldberg, 30 MISS. C. L. REV. 217, 222 (2011). Thus, he not only re-imagines the spill but also the entire Gulf of Mexico! Even then, his explanation of why the theme park's claim should be excluded under his test is convoluted and unconvincing.
77. Susan Molero Vance & Paul N. Vance, OPA 90 in 2010: A Maritime Perspective, 24 TUL. ENVTL. L.J. 113, 133 (2010).
78. See Force, supra note 154, at 942; see also Press Release, Gulf Coast Claims Facility, Feinberg Announces Clarification Regarding Geographic Proximity (Oct. 4, 2010) (on file with the Harvard Law School Library) (announcing the GCCF's official position that "a geographic test to determine eligibility regarding economic harm due to the oil spill is unwarranted").
79. See WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY, UNABRIDGED 1338 (1981) (defining "loss" as "deprivation" and "the harm or privation resulting from losing or being separated from something or someone"). For example, when one refers to the loss of a fine piece of art that has been stolen, it does not mean that the painting has been damaged or destroyed, and when one refers to the loss of a family member, it does not mean a loss of ownership or a use-right but rather a more general absence or separation.
80. See, e.g., Ratzlaf v. United States, 510 U.S. 135, 143 (1994).
81. CSX Transp., Inc. v. McBride, 131 S. Ct. 2630, 2643 (2011).
82. Order of Aug. 26, 2011, 808 F. Supp. 2d 943, 966 (E.D. La. 2011).
83. See 135 CONG. REC. 26,851, supra note 74 (citing statement by one of the bill's spon-sors that employees of motels depending on tourism should be able to recover, contrary to the result that one would get under Professor Rhee's theory).
84. See Richard A. Epstein, BP Doesn't Deserve a Liability Cap, WALL ST. J., June 16, 2010, http://online.wsj.com/article/ SB10001424052748704312104575298902528808996.html.
85. John Schwartz, Accord Reached Settling Lawsuit Over BP Oil Spill, N.Y. TIMES, Mar. 2, 2012, http://www.nytimes.com/2012/03/03/us/accord-reached- settling-lawsuit-over-bp-oilspill.html.
86. See Preliminary Approval Order, In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La. May 2, 2012), available at http://www.laed.uscourts.gov/OilSpill/ Orders/05022012Order(EconomicSettlement).pdf.
87. See generally Notice of Filing, In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La. May 2, 2012), available at http://www.laed.uscourts.gov/OilSpill/ Orders/05032012(AmendedEconomicSettlement).pdf.
88. John Schwartz, BP Settlement, Milestone for Some Victims, a Setback for Others, N.Y. TIMES, Mar. 19, 2012, http://www.nytimes.com/2012/03/20/us/bp- settlement-leaves-somespill-victims-unhappy.html.
89. See Notice of Filing, supra note 207, at Exhibits 2, 4B.
90. See, e.g., Jonathan Stempel, BP Proposes Gulf Spill Accord Terms, Trial Delay, REUTERS, Apr. 18, 2012, http://www.reuters.com/article/2012/04/18/us-bp- oilspillidUSBRE83H0U120120418.