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Louisiana Challenges BP’s Interpretation|of Liabilities Under the Oil Pollution Act

NEW ORLEANS (CN) - An attorney for BP on Friday asked a federal judge to reject a legal memorandum about the Gulf oil spill that Louisiana filed "without warning." U.S. District Judge Carl Barbier, overseeing the consolidated litigation, allowed the brief, but warned the state that it "doesn't have the right to violate schedule management orders."

BP attorney Andrew Langan said the state's 67-page "unauthorized" document was not filed under auspices of the plaintiff steering committee, which is in charge of all plaintiff-related matters in the consolidated litigation.

But Allan Kanner, an attorney for the state, said he had filed an intent with the court, and when he heard no objection, he filed the document.

"The State of Louisiana might have hundreds of millions of dollars in moratorium and other issues," said Kanner, whose firm, Kanner & Whiteley, is assisting Louisiana Attorney General James "Buddy" Caldwell.

Judge Barbier was less than enthusiastic. He asked how Kanner's position could differ from the plaintiff steering committee's, and said that a notice of intent is not adequate warning that a brief will be filed.

"If we're merely rearguing matters, as Mr. Langan said, then he doesn't need to read it," Kanner said.

Barbier said that his concern was not for Langan's heavy reading list but for his own. Though he allowed the brief, he scolded Kanner as he did so.

"Why doesn't Louisiana think it has to play by the same rules as everybody else in this litigation?" Barbier asked.

Kanner's long brief takes issue with BP's and Transocean's attempt to limit their liability through narrow interpretation of the Oil Pollution Act. In it, he says the state's involvement with enforcing liability is necessary because Louisiana is shouldering the bulk of physical damages from the oil spill, and because billions of dollars are at stake.

"Defendants argue that Louisiana's laws and maritime claims are preempted by the Clean Water Act (CWA) by fundamentally misconstruing the act's purpose and suggesting that the release of almost 5 million barrels was permitted discharge," the state's brief states.

The document states that BP's program, "pre-Gulf Coast Claims Facility ('GCCF') is universally perceived to have failed," and that if claimants aren't allowed to settle their claims in court, the claims process will drag on endlessly.

The document argues that all damages arising from the Deepwater Horizon oil spill - from unpaid wages for cleanup workers to oil workers who were hurt by the moratorium - are damages that BP and Transocean must pay, under the Oil Pollution Act.

"The State of Louisiana in the epicenter of the environmental and economic harms suffered as a result of the Deepwater Horizon catastrophe and resulting oil spill," the document states. "The state and its people have suffered substantial economic damages as a result of the spill and the associated response efforts. Likewise, Louisiana's coastal environment and ecosystem are continuing to suffer extensive injuries that could fundamentally alter Louisiana's most defining natural resources for generations. The damages that defendants have caused are as insidious as the oil itself, still appearing and mounting daily without an apparent end in sight.


"Nonetheless, defendants have filed a series of motions to dismiss requesting that this court dismiss - based on the face of the pleadings and without factual inquiry - broad categories of claims and damages arising from the spill. Because certain relief requested in these motions would significantly impact the State of Louisiana, would deprive Louisiana of the application of its own laws, and would serve to shift billions of dollars of damages from the defendants to the public, the State of Louisiana hereby seeks to be heard and respectfully requests that the court reject the defendants' motions."

Fifty-one pages, later, the Memorandum of Law adds: "Defendants' conduct here, as it relates to the Deepwater Horizon rig explosion, Macondo well blowout, and spilling of almost 5,000,000 barrels of oil, was well beyond negligence. The allegations and evidence support a finding of intentional, willful or grossly negligent conduct."

In addition, Louisiana claims, "BP and other responsible parties have failed to establish a working claims procedure as contemplated under OPA. BP's program, pre-Gulf Coast Claims Facility (GCCF) is universally perceived to have failed."

On page 38 of the memo, Louisiana states: "Under the circumstances of this spill, strict compliance with OPA presentment may be all but impossible. OPA requires a claimant to present a request in writing for a sum certain for compensation for damages or removal costs resulting from the incident. 33 U.S.C. § 2701(3). A 'sum certain' for each type of damages and evidence to support each claim is generally required. Given the unprecedented size of the spill, the scope of the cleanup process, the complexity of the legal issues, and the impossibility of quantifying sum-certain damages for harm that is still occurring and the extent of which will be unknowable for many years to come, the matter is best addressed through the judicial process. See U.S. v. M/V Cosco Busan, 557 F. Supp. 2d 1058, 1061 (N.D. Cal. 2008)."

Louisiana also argues that "Under any circumstance, the requirements of presentment are not applicable to governmental entities. The economic claims of governments will include multiple and complicated injuries across broad economic sectors and over what is likely to be a several year time frame. Governmental entities should not be required to present claims for economic impacts repeatedly. The court should reject defendants' argument to the contrary. ...

"OPA explicitly permits a government party to sue at any time to recover removal costs, regardless of whether an OPA presentment has been made. Under the exceptional present circumstances, this court should allow government claims for damages brought in conjunction with claims for removal costs to proceed, even in the absence of pre-suit presentment."

The state made it clear that it interprets the Oil Pollution Act differently than BP does.

"OPA requires 'but for' causation. Accordingly, 'moratorium' claims, as well as Vessels of Opportunity claims and other response-related claims, clearly fall within the purview of OPA's liability and damage provisions," according to the memo.

The state also takes issue with BP's interpretation of its cleanup program, and liabilities attendant upon it. BP called it the Vessels of Opportunity (VoO) program.

"Defendants' suggestions that damage occasioned as a result of the VoO program should be rejected as such damages resulted from the spill," the state wrote. "Plaintiffs who suffered damage as a result of their participation in the VoO program have a valid claim under OPA because such damages resulted from response actions necessitated by the incident and oil spill. The VoO program was part of defendant BP's response to the incident and oil spill and was coordinated with the Coast Guard in compliance with the National Contingency Plan to provide local boat operators an 'opportunity to assist with response activities, including transporting supplies, assisting wildlife resources, and deploying containment and sorbent boom. However, BP's actual contracting with VoO parties was not overseen by the Coast Guard to any extent. Now, BP alleges that [VoO plaintiffs fail to state a claim under OPA because their damages 'are a result of the VoO program participation, not a result of the oil spill.' (BP's brief, at 25) BP appears to be taking the position that the response efforts related to the incident and oil spill are somehow independent of the incident and oil spill, and damages resulting from those response actions somehow do not result from the incident and spill.

"BP's argument attempts to sever the causal link between the incident and spill on the one hand, and the response efforts to that incident and spill on the other hand, thereby precluding responsible party liability for any damages caused by response actions. BP's argument is based on a strained interpretation of the 'result from such incident' language in OPA's liability provision and, as discussed supra, is incongruous with OPA's text, legislative history and relevant jurisprudence. Furthermore, any interpretation of OPA that precludes responsible party liability for damages resulting from response actions directly contradicts federal regulations promulgated for the Natural Resource Damage Assessment ('NRDA') process in accordance with 33 U.S.C. § 2702(b)(2)(A)."

(Parenthetical reference to BP's brief in original.)

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