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May 12, 20101969-12-31 18:33:30
It’s like robbing a cradle. All that is sacred sits precariously, helplessly, and innocently wrapped-up and resting with the comfort that it is protected by those who have promised to guard it; then, in a blink, the innocence is lost and all are left to weep. Louisiana’s wetlands, barrier islands, fish, shrimp, crabs, oysters, pelicans, birds, and the rest of our unique biodiversity have been stolen from us in the blink of an eye – and for what? Could it possibly be true that all of this is because BP was too cheap to install the right blowout protection (BOP) valve?! We are the stewards of our fragile eco-system and we let BP and its partners use it, but they have robbed the cradle and now it’s time for them to pay the price.
I’ll now take off my angry fisherman hat and put on my maritime lawyer hat and give everybody a little good news. We all know that disasters like this aren’t unprecedented, in 1989 the EXXON VALDEZ poured over 10.8 million gallons of oil into the pristine waters of Alaska and there have been countless other smaller incidents of pollution. As a result, the law has a way of dealing with these issues. Because of the facts of this incident, claimants could choose to sue for recovery under the general maritime law or the Oil Pollution Act of 1990.
The advantage of making a general maritime claim is that punitive damages may be available to those claimants. However, the group of people able to make claims under the general maritime law will be small. Fortunately, there is another vehicle which provides recovery for claims resulting from an oil spill. After VALDEZ, the government passed the Oil Pollution Act of 1990 (referred to as “OPA”). This was done in the wake of the disastrous consequences to the environment and local businesses. OPA should allow recovery for those who are affected by the oil spill but who cannot come under the gambit of the general maritime law. A word of caution though, OPA has not been subjected to a lengthy and heavy litigation history and case law precedent is moderately thin. Accordingly, this incident will likely represent the most significant examination of the intricacies of OPA. As a result, it is likely that it will be within this litigation that lines are drawn as to where compensation will end under OPA. The issue of where that point lies will likely be the subject of litigation for the next few decades.
GENERAL MARITIME LAW CLAIMS
Addressing the pure admiralty claims, the Courts have held that the foreseeability of harm limits a defendant’s liability for damages. This has become known as the Robins Dry Dock rule and mandates that “pure economic losses” are not recoverable under maritime law. In other words, if you didn’t sustain any type of physical damage – i.e. oil on your boat, dock, property, etc., you could not recover any money. However, the courts have carved out an exception to that rule which has become known as the Oppen exception.
The Oppen exception was a case from the Federal Ninth Circuit (Louisiana is in the Federal Fifth Circuit) which held that commercial fishermen were exempted from the economic loss rule and could recover for pure economic losses due to damage to natural resources. However, the definition of a “commercial fisherman” is a bit tricky. Clearly, people who engage in the legal commercial harvest of oysters, shrimp, crabs, fish etc. qualify as “commercial fisherman”; but are charter boat captains considered “commercial fishermen?” The answer is probably so.
In the VALDEZ cases, charter fishing guides were lumped into the same category as nature guides and were denied recovery because of the Robins Dry Dock rule. However, in 1992 the Honorable Judge Nauman Scott of the Western District of Louisiana examined the same issue and came to a different conclusion. Specifically, the Judge addressed a case involving a claim by Hackberry Rod & Gun Club for loss of profits due to contamination by PPG. The Court ultimately relied on Louisiana State law to allow Hackberry to recover, a decision which has been widely criticized. However, within the decision the Court also addressed general maritime law and the Robins Dry Dock rule as it related to fishing guides. Addressing the Robins Dry Dock issue, a portion of the decision which has not been criticized, the Judge held that:
Accordingly, we believe that [Hackberry Rod & Gun Club] is entitled to an exception to the rule of Robins Dry Dock as were the commercial fishermen in Oppen and Testbank at the District Court.
Based on the interpretation of the law by Judge Scott, it seems likely that charter fishermen may be covered under the umbrella of the Oppen commercial fishermen exception and can recover for pure economic losses.
In conclusion, it is clear that commercial fishermen have viable maritime claims and it seems likely that fishing guides will have viable maritime claims, as well. Unfortunately, the law is clear that everyone else from marina owners to tackle dealers and seafood wholesalers to seafood retailers are strictly and conclusively denied recovery under the general maritime law by virtue of the Robins Dry Dock rule. Again, the advantage of making a claim under the general maritime law is the possible availability of punitive damages which are not available under OPA.
OIL POLLUTION ACT OF 1990
As discussed earlier, the Oil Pollution Act of 1990, which was enacted as 33 U.S.C. §§ 2701 et seq., was passed post-VALEDZ to ensure that oil polluters would be held responsible for their actions and provides for damages (money) to certain classes of “claimants.” The OPA damages provision preempts the general maritime law and, therefore, is not subjected to the Robins Dry Dock exception. Pursuant to OPA, responsible parties are strictly liable for the discharge of oil:
Notwithstanding any other provision or rule of law, and subject to the provisions of this Act, each responsible party for a vessel or 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) that result from such incident.
Subsections (b)(2)(B), (C), and (E) of 33 U.S.C.A. § 2702 specifies the OPA covered damages, referred to in 33 U.S.C.A. § 2702(a), which allow claimants to recover the following damages from parties responsible for the discharge of oil:
(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.
(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.
Most local businesses will claim OPA damages under 2702(b)(2)(E) “Profits and earning capacity.” Damages for lost profits or impairment of earning capacity due to the injury, destruction, or loss of real property, personal property, or natural resources may be recovered by any “claimant.” Pursuant to OPA the claimant need not be the owner of the damaged property or resources to recover for lost profits or income; thereby avoiding the Robins Dry Dock rule.
In order to maintain a claim for lost profits or loss of earning capacity under OPA, the claimant must establish:
(1) That real or personal property or natural resources have been injured, destroyed, or lost;
(2) That the claimant's income was reduced as a consequence of injury to, destruction of, or loss of the property or natural resources, and the amount of that reduction;
(3) The amount of the claimant's profits or earnings in comparable periods and during the period when the claimed loss or impairment was suffered, as established by income tax returns, financial statements, and similar documents. In addition, comparative figures for profits or earnings for the same or similar activities outside of the area affected by the incident must be established; and
(4) Whether alternative employment or business was available and undertaken and, if so, the amount of income received.
Regarding the amount of money a claimant is entitled to receive, the court will consider all income that a claimant received as a result of the incident and any saved overhead and other normal expenses not incurred as a result of the incident. In other words, if a claimant is engaged in the cleanup and is compensated then that amount reduces the claimant’s monetary damages. Also, if a business ceases advertising or releases employees, those “normal expenses” reduce the amount of damages to which the claimant is entitled.
The amount of compensation allowable is limited to the actual net reduction or loss of earnings or profits suffered. Calculations for net reductions or losses must reflect adjustments for all income resulting from the incident and from alternative employment or business undertaken; potential income from alternative employment or business not undertaken, but reasonably available; any saved overhead or normal expenses not incurred as a result of the incident; and federal, state, and local taxes.
Simply put, OPA will provide the preferred (or only) vehicle for compensation for many of those affected by the oil spill.
MITIGATION OF DAMAGES
The Court never provides litigants with a free ride and requires all claimants, in every case, to “mitigate” damages. This means that if a claimant can obtain other employment or receive money from other sources, the claimant is required to do so or risk having his compensation reduced by that amount. As an example, if you fish commercially or guide trips out of Venice and there is work available out of Grand Isle, you must take that work if it is possible. Another example would be for marina lodging; if a hotel/marina can operate and make money by catering to oil spill clean up crews, they must do so and their damages will be reduced accordingly. However, good honest work never seems to be a problem for the people of the great State of Louisiana!
IN THE END …
It is a dark time for outdoorsmen and people who make a living by virtue of our rich natural resources; however, it’s good to know there are ways to make BP and its related and subsidiary companies foot the bill for all that we have lost.
Jason R. Kenney is a local maritime law attorney with the law firm of Staines & Eppling, APLC; www.staines-eppling.com. He can be reached at his office at (504) 838-0019.
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