Oil Spill Litigation Update
By John Hawkins (Hawkins, Stracener & Gibson, PLLC)

Thousands of barrels of oil continue to gush into the Gulf of Mexico at the site of the BP Oil disaster every day. Hundreds of lawsuits have already been filed. State and local officials, along with the citizens of the Gulf Coast region, are understandably frustrated beyond measure. A great deal of anger and frustration is focused on BP PLC and the other parties responsible for this disaster. Some people are also frustrated at what is increasingly being viewed as a slow or ineffective response from the U.S. government. Likewise, some people are frustrated at our state and local officials for not doing more. One thing is certain – there will be plenty of blame to go around for many years to come.

Today, BP is scheduled to attempt the latest method to stop the oil from gushing into the Gulf – a method called “top kill” whereby drilling mud and cement is injected into the well in an effort to cap the well. If this latest effort doesn’t work, BP may try another run at putting a containment dome over the well to contain the oil and bring it to the surface – a method that we know has failed once already. BP and U.S. officials fear that the gusher will continue until August when a relief well that is expected to stop the flow is completed.
 
We are called upon as trial lawyers to help in this situation. We realize that, along with BP, the other responsible parties and the government, the eyes of the world are on us too. I don’t think that is lost on any of us, and we have a bunch of fine Mississippi trial lawyers already working on the legal issues that continue to develop in the context of this horrible disaster.  If MAJ members reading this want to be included on the oil spill litigation list serve or take part in conference calls concerning this litigation, I encourage you to contact MAJ and make that request.

One of the important issues to consider is the impact of the Oil Pollution Act on litigation or potential litigation and claimants’ ability to obtain some interim relief from responsible parties such as BP. The OPA generally states that responsible parties such as BP are obligated to pay for damages caused by a disaster such as the oil spill we are experiencing now. The OPA, 33 USC § 2702 provides, in part, as follows:

Sec. 2702. Elements of liability
(a) In general
Notwithstanding any other provision or rule of law, and subject to the provisions of this Act, each responsible party for a vessel or a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines or the exclusive economic zone is liable for the removal costs and damages specified in subsection (b) of this section that result from such incident.

(b) Covered removal costs and damages

(1) Removal costs
The removal costs referred to in subsection (a) of this section are– 
(A) all removal costs incurred by the United States, a State, or an Indian tribe under subsection (c), (d), (e), or (l) of section 1321 of this title, under the Intervention on the High Seas Act (33 U.S.C. 1471 et seq.), or under State law; and
(B) any removal costs incurred by any person for acts taken by the person which are consistent with the National Contingency Plan.

(2) Damages
The damages referred to in subsection (a) of this section are the following:

(A) Natural resources
Damages for injury to, destruction of, loss of, or loss of use of, natural resources, including the reasonable costs of assessing the damage, which shall be recoverable by a United States trustee, a State trustee, an Indian tribe trustee, or a foreign trustee.

(B) Real or personal property
Damages for injury to, or economic losses resulting from destruction of, real or personal property, which shall be recoverable by a claimant who owns or leases that property.

(C) Subsistence use
Damages for loss of subsistence use of natural resources, which shall be recoverable by any claimant who so uses natural resources which have been injured, destroyed, or lost, without regard to the ownership or management of the resources.

(D) Revenues
Damages equal to the net loss of taxes, royalties, rents, fees, or net profit shares due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by the Government of the United States, a State, or a political subdivision thereof.

(E) Profits and earning capacity
Damages equal to the loss of profits or impairment of earning capacity due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by any claimant.

(F) Public services
Damages for net costs of providing increased or additional public services during or after removal activities, including protection from fire, safety, or health hazards, caused by a discharge of oil, which shall be recoverable by a State, or a political subdivision of a State.

(c) Excluded discharges
This subchapter does not apply to any discharge –

(1) permitted by a permit issued under Federal, State, or local law;
(2) from a public vessel; or
(3) from an onshore facility which is subject to the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1651 et seq.).

(d) Liability of third parties

(1) In general

(A) Third party treated as responsible party
Except as provided in subparagraph (B), in any case in which a responsible party establishes that a discharge or threat of a discharge and the resulting removal costs and damages were caused solely by an act or omission of one or more third parties described in section 2703(a)(3) of this title (or solely by such an act or omission in combination with an act of God or an act of war), the third party or parties shall be treated as the responsible party or parties for purposes of determining liability under this subchapter.

(B) Subrogation of responsible party
 
If the responsible party alleges that the discharge or threat of a discharge was caused solely by an act or omission of a third party, the responsible party –
(i) in accordance with section 2713 of this title, shall pay removal costs and damages to any claimant; and
(ii) shall be entitled by subrogation to all rights of the United States Government and the claimant to recover removal costs or damages from the third party or the Fund paid under this subsection.

(2) Limitation applied

(A) Owner or operator of vessel or facility
If the act or omission of a third party that causes an incident occurs in connection with a vessel or facility owned or operated by the third party, the liability of the third party shall be subject to the limits provided in section 2704 of this title as applied with respect to the vessel or facility.

(B) Other cases
In any other case, the liability of a third party or parties shall not exceed the limitation which would have been applicable to the responsible party of the vessel or facility from which the discharge actually occurred if the responsible party were liable.

Prior to filing suit under the OPA, a claim must first be presented to the responsible party pursuant to 33 USC § 2713. Once the claim has been presented “and (1) each person to whom the claim is presented denies all liability for the claim, or (2) the claim is not settled by any person by payment within 90 days after the date upon which (A) the claim was presented, or (B) advertising was begun pursuant to 2714(b) of this title, whichever is later, the claimant may elect to commence an action in court against the responsible party or guarantor or to present the claim to the Fund.” Thus, you have to present your client’s claim and exhaust the OPA remedies prior to filing an OPA cause of action in Court. Please see Gabarick v. Laurin Maritime (America) Inc., 623 F. Supp.2d 741 (E.D. La. 2009)(All actions of claimants that allege damages covered by Oil Pollution Act must first go through OPA claim process prior to any suit against any party); Boca Ciega Hotel, Inc. v. Bouchard Transp. Co., Incl, 51(Fd. 3d 235 (C.A. 11 (Fla.) 1995)(OPA requirement that all claims for removal costs or damages be first presented to parties responsible for spill was mandatory condition precedent to filing of private lawsuits under OPA).
 
There is, however, a provision preserving state law remedies contained within the OPA’s statutory scheme. 33 USC § 2718(a). A reading of the statute and pertinent case law establishes that state law claims related to an oil spill require no pre-suit presentation under the OPA and are not preempted by the OPA. See, Boca Ceiga Hotel, Inc. supra and Tanguis v. M/V Westchester, et al. 153 F. Supp. 2d 859 (2001 A.M.C. 2652, 158 Oil & Gas Rep. 699)(concurrent state court jurisdiction set forth in OPA complements OPA’s non-preemption principals; and, “?OPA explicitly does not preempt state law in the area of oil spill liability and compensation.”), quoting Cynthia M. Wilkinson, L. Pittman, Rebecca F. Dye, Slick Work: An Analysis of the Oil Pollution Act of 1990, 12 J. Energy Nat. Resources & Envtl. L. 181 (1992).

It remains to be seen how the courts will treat cases where the plaintiff has failed to first present a claim and exhaust OPA remedies prior to filing suit. It is submitted that the logical result would be that cases should be stayed pending exhaustion of the OPA remedies to allow the plaintiffs to provide notice and exhaust claims, after which (and in the event claims are not resolved) the stay should be lifted to allow the litigation to proceed. However, those of us who have fought similar issues in the Mississippi Courts over notice of claim issues under Miss. Code Ann. § 15-1-36 in medical negligence or nursing home cases have learned, the hard way, that under current case law failing to comply with the 15-1-36 notice provision results in dismissal of the action even though our legislature did not spell out such a remedy in the statute. Also, 33 USC § 2713 (b)(2) provides that “[n]o claim of a person against the Fund may be approved or certified during the pendency of an action by the person in court to recover costs which are the subject of the claim.” Provided there is no rush to file, it is submitted that the safest course is to first present the OPA claims pursuant to the claims procedure and thereafter file the OPA claim(s) and state law claims in the same suit. Another option that may be advisable would be to file your state law claims and amend in the OPA claims after complying with the pre-suit requirements before filing an OPA action in Court.

Most lawyers paying attention to this litigation also know that there are competing motions now pending before the Judicial Panel on Multidistrict Litigation (JPML) seeking to establish an MDL for these oil spill cases. The conventional wisdom is that an MDL will more likely than not be established and located in one of the Gulf States most severely impacted by the oil spill. There are numerous factors the JPML will consider in deciding where the MDL should be located. There is a hearing in Boise, Idaho, on July 29, 2010 on those issues, after which it is anticipated that these cases will be transferred and consolidated for MDL purposes in one court.  I will see some of you wherever the MDL is located.

I greatly look forward to a robust discussion at the upcoming MAJ convention in New Orleans discussing issues pertinent to representing people and businesses with BP oil disaster claims. There are many Mississippi lawyers with experience and helpful information to share – Robert Wiygul, Buddy and Corban Gunn, Edward Gibson, Ben Galloway, Brian Herrington, Billy Quin, Joey Diaz, Mark Sledge, Charles Gibson, Bobby Moak, Jennifer Wilkinson, Carroll Ingram and our outgoing MAJ President Steve Mullins, to name just a few. I look forward to the exchange and working together so as to better represent our clients.