Monday, September 25, 2023
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Mexican States Appeal|Denial of Oil Spill Claims

NEW ORLEANS (CN) - The 5th Circuit heard oral arguments Monday between an attorney representing Mexican states affected by the Deepwater Horizon oil spill and attorneys for BP, Transocean and Halliburton.

The Mexican states said they need to recover for oil spill damages, including to wildlife and lost taxes, under a claim that is separate from one filed by the Mexican government because the states are autonomous and have separate taxation and needs.

Opposing attorneys disagreed, saying Mexico has no treaty with the U.S. for protection from an oil spill, as is necessary under the federal Oil Pollution Act, and that even if it did, the Mexican states' 2013 claim was not timely filed.

BP's Deepwater Horizon rig exploded 50 miles off the coast of Louisiana on April 20, 2010, unleashing the worst U.S. offshore disaster in history and spilling an estimated 4.9 million barrels of oil into the Gulf of Mexico.

U.S. Circuit Judge Edith Jones said more than once that she believed the oil spill claims from Mexican states should have been consolidated with Mexico's federal claims, and she wondered why they were not.

Enrique Serna, a San Antonio-based attorney who argued on behalf of the Mexican states, underscored the states' independence from the federal government and their need to recover for damages on their own, separate from the federal government's claim.

Under the Oil Pollution Act of 1990, which was enacted following the Exxon Valdez disaster off the coast of Alaska and which is one of two laws that govern the oil spill litigation, a foreign entity may recover for oil spill damages only if it has signed an oil spill treaty for reciprocity with the U.S. government.

The other law governing the litigation is maritime law, which does not specifically require a treaty.

BP attorney Andy Langan said the Mexican states did not even file for damages until 2013, and that their claim was dismissed as untimely by U.S. District Judge Carl Barbier who is overseeing the oil spill litigation.

In addition to Judge Jones, the he three-judge panel was comprised of Chief U.S. Circuit Judge Carl Stewart and U.S. Circuit Judge Steven Higginson.

Jones asked Langan if there was any reason to think the claims of the Mexican states for taxes might be allowed to go forward. Langan said it was possible.

"What about claims for lost taxes in the state of Louisiana?" Judge Jones wondered.

"I hope not," Langan said.

Last week the Supreme Court denied an appeal from 11 Louisiana parishes for damages to wildlife as the result of the oil spill. The parishes said the Louisiana Wildlife Statute gives the state power to impose penalties for harm to wildlife from offshore oil spills beyond what it authorized under federal law. (Parishes in Louisiana are equivalent to counties.)

Up until the Deepwater Horizon disaster, which killed 11 workers and lasted almost three months, the worst recent oil spill in the northern hemisphere was the Ixtoc I blowout on the Mexican coast off the Bay of Campeche in the Gulf of Mexico. Oyster beds affected during that spill still have not recovered.

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