NEW ORLEANS (CN) – More than 100,000 oil-spill claimants may seek punitive damages from BP and other defendants, but not attorney fees, a federal judge ruled. But U.S. District Judge Carl Barbier dismissed all lawsuits brought under state law, finding that oil-spill claims fall under jurisdiction of the federal Oil Pollution Act.
Barbier also dismissed plaintiffs’ request for declaratory relief which would bar BP from requiring them to sign away their right to sue other oil-spill defendants for damages after settling for a “speedy and efficient recovery” from BP.
“The … obvious flaw in plaintiffs’ request for declaratory relief is that nothing prohibits defendants from settling claims for economic loss. While OPA [the Oil Pollution Act] does not specifically address the use of waivers and releases by responsible parties, the statute also does not clearly prohibit it. In fact, as the court has recognized in this order, one of the goals of OPA was to allow for speedy and efficient recovery by victims of an oil spill.”
Judge Barbier issued a 39-page ruling related to the B1 bundle. The ruling grants in part and denies in part party requests made related to the bundle.
The B1 pleading bundle includes all claims for private or “non-governmental economic loss and property damages” and pertains to claims for economic damages filed by fishermen, seafood processors and distributors, recreational and commercial businesses, plant and dock workers and those who worked for BP’s Vessels of Opportunity program, among others who allege financial trouble as a result of the massive April 2010 spill.
“Plaintiffs allege claims under general maritime law, the Oil Pollution Act of 1990 … and various state laws. Under general maritime law, plaintiffs allege claims for negligence, gross negligence, and strict liability for manufacturing and/or design defect. Under various state laws, plaintiffs allege claims for nuisance, trespass, and fraudulent concealment, and they also allege a claim for strict liability under the Florida Pollutant Discharge Prevention and Control Act, Fla. Stat. § 376.011, et seq. Additionally, plaintiffs seek punitive damages under all claims and request declaratory relief regarding any settlement provisions that purport to affect the calculation of punitive damages,” Barbier wrote.
The “Order and Reasons (As to Motions to Dismiss the B1 Master Complaint)” states that “admiralty jurisdiction was invoked by this incident. … Therefore, general maritime law applies to the claims of the B1 plaintiffs. Moreover, OPA applies of its own force, because that act governs, inter alia, private claims for property damage and economic loss resulting from a discharge of oil in navigable waters. … Because OPA and/or general maritime law applies to the B1 plaintiffs’ claims, state law may not be adopted as surrogate federal law under OCSLA [Outer Continental Shelf Lands Act] § 1333(a)(3)(A). …
“But this case does not concern conduct within state borders (waters). This casualty occurred over the Outer Continental Shelf – an area of ‘exclusive federal jurisdiction’ – on waters deemed to be the ‘high seas.’ …
“Thus, to the extent state law could apply to conduct outside state waters, in this case it must ‘yield to the needs of a uniform federal maritime law.'”
Five pages later, Barbier writes: “Defendants seek to dismiss all general maritime claims, contending that when Congress enacted OPA, it displaced pre-existing federal common law, including general maritime law, for claims covered by OPA. Defendants argue that OPA provides the sole remedy for private, non-governmental entities asserting economic loss and property damage claims. They urge that when Congress enacts a comprehensive statute on a subject previously controlled by federal common law, the federal statute controls and displaces the federal common law. Defendants further argue that under OPA, plaintiffs are allowed to pursue their claims for economic damages solely against the designated ‘Responsible Party’ and that OPA does not allow claims directly against non-Responsible Parties.
“Prior to the enactment of OPA in 1990, a general maritime negligence cause of action was available to persons who suffered physical damage and resulting economic loss resulting from an oil spill. General maritime law also provided for recovery of punitive damages in the case of gross negligence, Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), and strict product liability for defective products, E. River S.S. Corp., Inc., 476 U.S. 858 (1986). However, claims for purely economic losses unaccompanied by physical damage to a proprietary interest were precluded under Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927). The Fifth Circuit has continuously reaffirmed the straightforward application of the Robins Dry Dock rule, explaining that ‘although eloquently criticized for its rigidity, the rule has persisted because it offers a bright-line application in an otherwise murky area.’ …
“One relevant exception to the Robins Dry Dock rule applies in the case of commercial fishermen. See Louisiana v. M/V Testbank, 524 F. Supp. 1170, 1173 (E.D. La. 1981) (‘claims for [purely] economic loss [resulting from an oil spill and subsequent river closure] asserted by the commercial oystermen, shrimpers, crabbers, and fishermen raise unique considerations requiring separate attention . . . seamen have been recognized as favored in admiralty and their economic interests require the fullest possible legal protection.’).” (Brackets, ellipses and parentheses in original.)
Barbier added: “The B1 master complaint alleges economic loss claims on behalf of various categories of claimants, many of whom have not alleged physical injury to their property or other proprietary interest. Pre-OPA, these claimants, with the exception of commercial fishermen, would not have had a viable cause of action and would be precluded from any recovery by virtue of Robins Dry Dock. Accordingly, claims under general maritime law asserted by such claimants are not plausible and must be dismissed.
The judge wrote that “only a handful of courts have had the opportunity to address whether OPA displaces general maritime law.”
He added that “more recent Supreme Court precedents cause this court to question the notion that long-standing federal common law can be displaced by a statute that is silent on the issue. See Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) (holding that the CWA did not displace a general maritime remedy for punitive damages) and Atlantic Sounding Co. v. Townsend, U.S. , 129 S. Ct. 2561 (2009) (holding that the Jones Act did not displace the availability of punitive damages for a seaman’s maintenance and cure claim). [Parentheses in original.]
“However, the Court finds that the B1 Master Complaint states a viable cause of action against the non-responsible parties under general maritime law on behalf of claimants who either allege physical damage to a proprietary interest and/or qualify for the commercial fishermen exception to Robins Dry Dock. In brief, these claims are saved and not displaced by OPA for the following reasons.
“First, when reading OPA and its legislative history, it does not appear that Congress intended to occupy the entire field governing liability for oil spills, as it included two savings provisions – one that preserved the application of general maritime law and another that preserved a state’s authority with respect to discharges of oil or pollution within the state. 33 U.S.C. §§ 2718, 2751.
“Second, OPA does not directly address or speak to the liability of non-responsible parties to persons who suffer covered losses. Although OPA contains provisions regarding the responsible party’s ability to seek contribution and indemnification, Id. §§ 2709, 2710, it is silent as to whether a claimant can seek redress directly from non-responsible parties. Prior to OPA’s enactment, commercial fisherman and those who suffered physical damage had a general maritime law cause of action against these individuals.
“Third, there is nothing to indicate that allowing a general maritime remedy against the non-responsible parties will somehow frustrate Congress’ intent when it enacted OPA. Under OPA, a claimant is required to first present a claim to the Responsible Party. …
“Thus, claimants’ maritime causes of action against a Responsible Party are displaced by OPA, such that all claims against a responsible party for damages covered by OPA must comply with OPA’s presentment procedure.”
With regard to punitive damages, Judge Barbier found that OPA “is silent.”
“OPA is … silent as to the availability of punitive damages … thus, while punitive damages are not available under OPA, the court does not read OPA’s silence as meaning that punitive damages are precluded under general maritime law.”
But attorney fees are not recoverable.
“The court concludes that plaintiffs’ complaint does not allege a plausible claim for attorneys’ fees under either general maritime law or the bad faith exception, and this claim must be dismissed.”
A footnote states: “This ruling is not intended to preclude possible claims for attorneys’ fees available by statute or federal rule, or some other non-statutory exception to the American Rule, such as common-fund fees, or situations where a party willfully violates a court order. See Boland, 41 F.3d at 1005.”