Gulf oil leak sets off ‘unbelievable array’ of legal issues
- September 17, 2010
- Paladin Law Group® LLP
- 0 Comments
By Donna Leinwand, USA Today
Fishermen and property owners along the Gulf Coast have filed hundreds of lawsuits since April against oil company BP and its contractors amid a legal landscape that has changed dramatically since the Exxon Valdez tanker spill sullied Alaska’s Prince William Sound 21 years ago.
The Valdez spill prompted Congress to pass the 1990 Oil Pollution Act — intended to give fishers and others harmed by such spills a quicker route for settling their claims — and nearly two decades of litigation over that spill also has redefined centuries-old maritime law on the issue.
Now, as hundreds of spill victims test those laws, attorneys say many questions remain about how far the protections will go and how long it will take to compensate the fishers, landholders and beachside cities that have suffered from the spill.
“There are an unbelievable array of issues in this case,” said Stanford law professor Jeffrey Fisher, who argued the Exxon Valdez case for the commercial fishermen and other Alaska businesses before the Supreme Court. “One of the most painful things about the Exxon case was that it took us 20 years to get the case finished and get the money in the pockets of the victims. One can’t help but wonder if the same thing is going to happen here.”
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Transocean — the owner of the Deepwater Horizon drilling rig, which exploded April 20 and sank two days later — already has asked a judge to limit claims against it to $27 million under an 1851 law that limits liability. A judge has suspended more than 100 claims against Transocean until that issue is decided.
“Maritime law back then was meant to protect shipowners. Like oil companies today, they had all the money and all the power,” said Stuart Smith, an environmental attorney in New Orleans.
Smith is working with 12 other law firms to sue BP, which leased the rig, on behalf of Gulf Coast commercial fishermen and other businesses on grounds including public nuisance. “The Valdez situation resulted in what Congress obviously felt was an injustice,” he said.
Hefty damages owed
Under the Oil Pollution Act of 1990, the company the Coast Guard says is responsible for a spill must pay up to $1 billion to clean it up and repair natural resource damage and up to $75 million in economic damages to compensate victims for lost income.
BP and its contractors could be forced to pay even more than that if the federal government’s investigation finds widespread negligence, deliberate misconduct or violations of federal regulations.
The U.S. government also could bring criminal charges under the Clean Water Act, Migratory Bird Act, Endangered Species Act and other laws, Fisher says. The Justice Department did not return a call for comment.
BP American Vice President Darryl Willis last week told the House Judiciary Committee that his company expects to “exceed” the $75 million in damages required by law. He added: “BP’s obligations are not, however, limitless.”
BP began paying claims five days after the April 20 explosion, Willis said. The company has 700 people processing claims and had paid nearly $36 million to more than 12,000 people, he told the House committee. Fishers and shrimpers can get expedited payments of one month’s income until more complete claims can be processed, Willis said.
“The pace and scale of our claims effort is unprecedented,” he said.
Stephen Stone, a laborer for Transocean working on the rig when it exploded, told the House panel he hired a lawyer after a Transocean representative asked him to sign a document saying he was uninjured to get $5,000 for loss of his personal property.
“I never would have expected for my company, Transocean, to … try to tempt or trick me into giving up my legal rights by signing forms without a lawyer present,” Stone said. Transocean spokesman Mike Geczi said the company does not comment on pending litigation.
States plan strategy
Louisiana, Mississippi, Alabama and Florida also can seek compensation.
Mississippi Attorney General Jim Hood said he hopes BP will resolve state claims without a lawsuit, but if not, the state is preparing to sue under state environmental laws. Hood has asked Congress to pass a law that would allow state claims to remain in state courts. He said companies in the past used legal tactics in federal courts to stall litigation.
“The strategy of large corporations is to delay, to drag it out in federal court so states and individual plaintiffs are just worn down and settle,” Hood said.
Shrimpers, oystermen and others whose incomes are harmed by the spill should first take their claims to BP, said Dave Oesting, an Anchorage attorney who was the court-appointed lead counsel for the fishermen and other victims in the Exxon Valdez case. If BP, Transocean or other contractors deny a claim, victims can seek money from a trust fund established by the 1990 law and financed by a federal 5-cents-per-barrel tax on petroleum produced in or imported to the USA.
The lawsuits may take years because of the number of victims and because five states have jurisdiction, said Brian O’Neill, a Minneapolis lawyer who represented victims in the Exxon Valdez case.
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