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Has the MDL 2179 Court Overreached Its Authority?

Has the MDL 2179 Court Overreached Its Authority?

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Supreme Court Decision Poses an Interesting Dilemma for the BP Oil Spill Trial Court

Tampa, FL (April 11, 2012) – The Supreme Court has held that a district court conducting pretrial proceedings pursuant to 28 U.S.C. §1407(a) has no authority to invoke 28 U.S.C. §1404(a) to assign a transferred case to itself for trial. Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).

On April 8, 2012, Selmer M. Salvesen, a clam farmer in Florida, filed a Motion to Vacate Order and Reasons [As to Motions to Dismiss the B1 Master Complaint] (Rec. Doc. 3830 dated August 26, 2011) with the MDL 2179 court. Mr. Salvesen’s Motion to Vacate poses an interesting dilemma for the BP Oil Spill trial court: (a) Does the court grant the motion to vacate the B1 order thereby derailing the MDL 2179 runaway train? or (b) Does the court ignore the Supreme Court decision in Lexecon in the name of judicial discretion, judicial efficiency, judicial economy and political expediency?

The Lexecon Rule

Justice Souter, in delivering the opinion of the Court in Lexecon, explained 28 U. S. C. §1407(a) authorizes the Judicial Panel on Multidistrict Litigation (the “Panel”) to transfer civil actions with common issues of fact “to any district for coordinated or consolidated pretrial proceedings,” but imposes a duty on the Panel to remand any such action to the original district “at or before the conclusion of such pretrial proceedings.” “Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated.” 28 U.S.C. §1407(a).

Justice Souter pointed out that the Panel’s instruction comes in terms of the mandatory “shall,” which normally creates an obligation impervious to judicial discretion. Anderson v. Yungkau, 329 U. S. 482, 485 (1947).

Moreover, the Supreme Court found that neither the statute’s language nor legislative history can unsettle §1407’s straightforward language imposing the Panel’s responsibility to remand, which bars recognizing any self-assignment power in a transferee court and consequently entails the invalidity of the Panel’s Rule 14(b).

The legislative history tends to confirm that self-assignment is beyond the scope of the transferee court’s authority. Justice Souter noted that the same House Report that spoke of the continued vitality of §1404 in §1407 cases also said this:

The proposed statute affects only the pretrial stages in multidistrict litigation. It would not affect the place of trial in any case or exclude the possibility of transfer under other Federal statutes…..The subsection requires that transferred cases be remanded to the originating district at the close of coordinated pretrial proceedings. The bill does not, therefore, include the trial of cases in the consolidated proceedings.” H. R. Rep. No.1130, 90th Cong., 2d Sess., p. 4 (1968) (Emphasis added)

The comments of the bill’s sponsors further suggest that application of 28 U.S.C. §1407 would not affect the place of trial. See, e.g., Multidistrict Litigation: Hearings on S. 3815 and S. 159 before the Subcommittee on Improvements in Judicial Machinery of the Senate Comm. On the Judiciary, 90th Cong., 1st Sess. Pt. 2, p. 110 (1967) (Sen. Tydings) (“[W]hen the deposition and discovery is completed, then the original litigation is remanded to the transferor district for trial”). Both the House and the Senate Reports stated that Congress would have to amend the statute if it determined that multidistrict litigation cases should be consolidated for trial. S. Rep. No. 454, 90th Cong., 1st Sess., p. 5 (1967). (Emphasis added)

MDL 2179

In order to efficiently manage MDL 2179, the court consolidated and organized the various types of claims into several “pleading bundles.” The “B1” pleading bundle includes all claims for private or “non-governmental” economic loss and property damages.  There are between 100,000 – 130,000 individual claims encompassed within the “B1” pleading bundle.

Rather than allege claims under the Oil Pollution Act of 1990 (“OPA”) (which governs the MDL 2179 cases alleging economic loss due to the BP oil spill) and the Outer Continental Shelf Lands Act (“OCSLA”) (which governs the MDL 2179 personal injury and wrongful death actions and borrows the law of the adjacent state as surrogate federal law), the PSC made the unfathomable decision to allege claims under a hodgepodge of statutes.

In the B1 First Amended Master Complaint, the PSC states, “The claims presented herein are admiralty or maritime claims within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure. Plaintiffs hereby designate this case as an admiralty or maritime case, and request a non-jury trial, pursuant to Rule 9(h).”

Under general maritime law, the PSC alleges claims for negligence, gross negligence and willful misconduct, and strict liability for manufacturing and/or design defect. Under various state laws, the PSC alleges claims for nuisance, trespass, and fraudulent concealment. Under the Florida Pollutant Discharge Prevention and Control Act, Fla. Stat. § 376.011, et seq., PSC alleges a claim for strict liability. The PSC also seeks: (a) punitive damages under all claims; and (b) a declaration by the Court that the conduct of BP and its agents and representatives, including the Gulf Coast Claims Facility (“GCCF”), in obtaining releases and/or assignments of claims against other parties, persons, or entities is not an obligation of BP under OPA.

The PSC appears to be more interested in ensuring significant economy and efficiency in the judicial administration of the MDL 2179 court rather than in obtaining justice for the MDL 2179 plaintiffs. As noted above, in its B1 First Amended Master Complaint, the PSC alleges claims under general maritime law, not under OPA and OCSLA, thereby assisting the court in expeditiously being able to:

(a) Find, “The Deepwater Horizon was at all material times a vessel in navigation.”

(b) Find, “Admiralty jurisdiction is present because the alleged tort occurred upon navigable waters of the Gulf of Mexico, disrupted maritime commerce, and the operations of the vessel bore a substantial relationship to traditional maritime activity. With admiralty jurisdiction comes the application of substantive maritime law.”

(c) Find, “State law, both statutory and common, is preempted by maritime law, notwithstanding OPA’s savings provisions. All claims brought under state law are dismissed.”

(d) Find, “General maritime law claims that do not allege physical damage to a proprietary interest are dismissed under the Robins Dry Dock rule, unless the claim falls into the commercial fishermen exception.”

(e) Find, “…. That nothing prohibits Defendants from settling claims for economic loss. While OPA 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.”

In re Oil Spill by the Rig Deepwater Horizon in the Gulf of Mexico, on April 20, 2010, – F. Supp. 2d -, 2011 WL 3805746 (Aug. 26, 2011 E.D. La.).

Since the PSC requests a non-jury trial pursuant to Rule 9(h) and alleges claims under general maritime law, rather than OPA and OCSLA, the MDL 2179 court has formulated a trial plan that dispenses with trial by jury and instead conducts a bench trial applying general maritime law.

The Heyburn Rule

The Honorable John G. Heyburn II, Chair of the Judicial Panel on Multidistrict Litigation, addressed the Lexecon decision in his article, “A View From the Panel: Part of the Solution,” 82 Tulane L. Rev. 2225 (2008).  The following is an excerpt from Judge Heyburn’s article.

Judge Heyburn points out that five appropriate strategies are available by which the Lexecon conundrum may be avoided:

(a) Provided the plaintiff is amenable and venue lies in the transferee district, the action could be refiled there.

(b) The parties could also agree to waive objections to venue.

(c) Alternatively, the transferee court could try a “Bellwether” case that was originally filed in the transferee district, the result of which may promote settlement of the transferred actions in the MDL.

(d) Another option, suggested in the Lexecon opinion itself, is for the transferor court to transfer the action back to the transferee court under § 1404(a).

(e) Still another option would be for the transferee judge to follow the action to the transferor court after obtaining an intracircuit or intercircuit assignment.

The MDL 2179 court has failed to avail itself of any of these “appropriate” strategies.

A “Bellwether” trial is sui generis; a “walks like a duck, quacks like a duck, it must be a duck” analysis cannot be used. Judge Barbier cannot try the cases transferred for “pretrial proceedings.” Judge Barbier certainly cannot try all of the plaintiffs’ claims in the aggregate in this proceeding. Nor can the Lexecon decision be circumvented by the device of permitting claimants to file “short-form joinders” injecting themselves into the limitation action. Accordingly, Judge Barbier, at the request of the PSC, formulated a non-jury trial plan which does not seek to adjudicate all the plaintiffs’ claims in the aggregate. Instead, it plans a non-jury trial of “issues” related to “allocation of fault” in the abstract. This novel proposal is still defective, as a trial of “issues” would try parts of actions that under Lexecon the MDL judge must not try and would amount to a class action in a limitations proceeding contrary to Rule 23. Moreover, the Fifth Circuit has held that class actions are not permitted in limitation proceedings. Lloyds Leasing Ltd. v. Bates, 902 F.2d 368 (5th Cir. 1990). Indeed, such a trial resembles an unsanctioned class action in almost everything but name. It does not remotely resemble a “Bellwether” trial.

Although Judge Barbier and the PSC refer to the MDL 2179 court’s “broad discretionary authority,” a “special-procedure” should not be crafted where a mandatory procedure already exists. It is important to remember that the very MDL procedures Judge Barbier and the PSC wish to circumvent were specifically enacted to reduce costs and promote judicial economy. Allowing the MDL 2179 trial plan would be inconsistent with the clear statutory mandate of the multidistrict litigation enabling statute, 28 U.S.C. § 1407(a), and the Supreme Court’s holding in Lexecon. While the need to promote efficiency in litigation is real, it cannot be accomplished by overriding the applicable provisions set forth by Congress. In re: FEMA Trailer Formaldehyde Products Liability Litigation, 2009 WL 2390668 (United States District Court, E.D. Louisiana).

Judge Heyburn describes the Lexecon decision as a “conundrum” which may be avoided by “resourceful” transferee judges. Plaintiff Salvesen respectfully disagrees. The Lexecon decision is not a conundrum. It is not an obstacle which judicial discretion may circumvent in the name of judicial efficiency, judicial economy or political expediency. It is the law.

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Will Victims of the BP Oil Gusher Also Be Victims of Class Action Lawsuits and the BP Oil Spill Victim Compensation Fund?

Will Victims of the BP Oil Gusher Also Be Victims of Class Action Lawsuits
and the BP Oil Spill Victim Compensation Fund?

By Brian J. Donovan

July 16, 2010

INTRODUCTION

The question is whether victims of the BP oil gusher will have to pay thrice: (a) once for the gusher, the environmental and economic damages of which will devastate their way of life and leave many in financial ruin; (b) again for daring to demand justice, which will consume their time, energy and hopes for years to come if they are held hostage by class action lawsuits; and (c) a third time by being mislead and undercompensated by the “BP Oil Spill Victim Compensation Fund (BPOSVCF).”

THE BP OIL GUSHER

The damages suffered by victims of the BP oil gusher will be enormous and on-going. The livelihoods of all persons whose businesses rely on the natural resources of the Gulf Coast are at risk. Commercial fishermen, oyster harvesters, shrimpers, and  businesses involved, directly or indirectly, in processing and packaging for the seafood industry will experience the end of a way of life that, in many cases, has been passed down from one generation to the next.

Pursuant to the Oil Pollution Act of 1990 (OPA), for an offshore facility the total of the liability of a responsible party and any removal costs incurred by, or on behalf of, the responsible party, with respect to each incident shall not exceed the total of all removal costs plus $75,000,000.

However, this limit on liability “does not apply if the incident was proximately caused by gross negligence, willful misconduct of, or the violation of an applicable federal safety, construction, or operating regulation by, the responsible party, an agent or employee of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party.”

OPA broadened the scope of damages (i.e., costs) for which an oil spiller would be liable. Under OPA, a responsible party is liable for all cleanup costs incurred, not only by a government entity, but also by a private party. In addition to cleanup costs, OPA significantly increased the range of liable damages to include the following:

• injury to natural resources,
• loss of personal property (and resultant economic losses),
• loss of subsistence use of natural resources,
• lost revenues resulting from destruction of property or natural resource injury,
• lost profits resulting from property loss or natural resource injury, and
• costs of providing extra public services during or after spill response.

Given BP’s documented violation of federal safety regulations aboard the Deepwater Horizon, e.g., using an improper cementing technique to seal the well, failing to adequately test and maintain blowout prevention equipment and drilling deeper than BP’s federal permit allowed, there will be no limitation on BP’s liability. (Oil Pollution Act of 1990, 33 U.S.C. 2704).

Furthermore, BP may be liable to the United States and to Louisiana for damages resulting from lost royalties. Pursuant to Section 2702 of OPA, “Notwithstanding any other provision or rule of law, and subject to the provisions of this Act, each responsible party for a vessel or a 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) of this section that result from such incident…”, including revenue losses such as “taxes, royalties, rents, fees, or net profit shares due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by the Government of the United States, a State, or a political subdivision thereof.” (Oil Pollution Act of 1990, 33 U.S.C. 2702(b)(2)(D)).

BP also faces uncapped liability under a little-known Clean Water Act (CWA) civil damages provision.

Pursuant to Section 1321 of the CWA, “Any person who is the owner, operator, or person in charge of any vessel, onshore facility, or offshore facility from which oil or a hazardous substance is discharged in violation of paragraph (3), shall be subject to a civil penalty in an amount up to $25,000 per day of violation or an amount up to $1,000 per barrel of oil or unit of reportable quantity of hazardous substances discharged. In any case in which a violation of paragraph (3) was the result of gross negligence or willful misconduct of a person described in subparagraph (A), the person shall be subject to a civil penalty of not less than $100,000, and not more than $3,000 per barrel of oil or unit of reportable quantity of hazardous substance discharged.” (Clean Water Act, 33 U.S.C. 1321).

Under the CWA, the basic fine is $1,100 per barrel spilled. But the penalty can rise to $4,300 a barrel if a federal court rules the spill resulted from gross negligence. As noted above, the fines were originally set at $1,000 to $3,000 but that was raised in 2004 to keep up with inflation. Accordingly, the number of barrels of oil being released from the well is going to be critical.

If the government pursues civil fines based on the volume of oil spilled, it would take into consideration whether BP has made its best effort to mitigate the spill, its prior history of offenses, if any, and whether BP can bear the cost of fines, among other factors. BP received the third-largest criminal penalty, of $50 million, for an environmental offense in U.S. history for a Texas City refinery fire in 2005. BP subsidiaries remain under federal probation for prior offenses in Texas and Alaska.

As of July 16, 2010, regardless of whether you prefer to say “spill” or “gusher,” these are the numbers to consider:

Total Amount of Oil Released to Date: 4,675,000 barrels
Amount of Oil Recovered by BP to Date (via Containment Cap): 826,800 barrels
Oily Water Recovered (via Skimming): 792,857 barrels of oily water = 79,286 barrels of oil
Oil Consumed by Controlled Burns: 261,191 barrels
Total Amount of Unrecovered Oil in the Gulf of Mexico to Date: 3,507,743 barrels

In this case, “Barrels Spilled” means “Oil Consumed by Controlled Burns” + “Total Amount of Unrecovered Oil in the Gulf of Mexico” = 261,191 + 3,507,743 = 3,768,934 barrels of oil spilled.

Under the CWA alone, gross negligence penalties based upon 3,768,934 barrels of oil spilled would equal $16,206,416,200. This equates to a penalty of approximately $191 million per day. BP’s net profits in the first quarter of 2010 were approximately $6.7 million per day.

It is obvious why BP, despite having the ability to obtain a very accurate flow rate, does not want a more accurate oil spill measurement. It is also very obvious why BP does not want to collect a great deal of the oil spill. Since April 22, 2010, BP admits that its skimming operations have been able to recover only 792,857 barrels of oily water. This equates to collecting a total of only 79,286 barrels of oil from the Gulf of Mexico since April 22, 2010.

The federal government has abdicated its responsibility. Pursuant to OPA Section 4201, and given that the BP oil spill is a “discharge posing substantial threat to public health or welfare,” President Obama should have federalized the collection of the oil that is in the sea and the restoration of the coastal areas impacted by the oil. Both of these activities could be done without having to federalize the operational priority of stopping the flow of oil from the well.

The Obama administration has no intention of holding BP accountable under either OPA 90 or CWA. Under the CWA, BP faces fines of up to $4,300 for each barrel spilled. Furthermore, pursuant to Section 2702 of OPA 90, BP would be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well.

If the federal government intended to collect $4,300 and a royalty of 18.75% for each barrel spilled, it would:

(a) try to have at least a very rough estimate of the number of barrels gushing from the BP well. This estimate does not exist. From April 28th to May 27th, the official estimated flow rate was 5,000 bbl/day. This intentionally underestimated amount of oil being released from the BP well was from NOAA, not BP. NOAA fully supported, and continues to fully support, BP’s strategy to underestimate the amount of oil being released from the well. “I think the estimate at the time was, and remains, a reasonable estimate,” said Dr. Lubchenco, the NOAA administrator. “Having greater precision about the flow rate would not really help in any way. We would be doing the same things.”

(b) collect every barrel of oil that is released into the Gulf of Mexico before it reaches the marshes of Louisiana and the beaches of Alabama, Mississippi and Florida. This would require stopping the use of dispersants to allow the oil to reach the surface and using tankers to collect the oil. To date, the federal government has allowed BP to use more than 1,840,000 gallons of oil dispersant.

An accurate measurement of the flow of oil and collection of the oil spilled into the Gulf of Mexico could change the way people remember this gusher and their opinion of BP.  Once the leak is plugged and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 1,000 or 100,000 bbl/day of oil?

CLASS ACTION LAWSUITS

Teams of lawyers from across the country have descended on the Gulf Coast to file potential class-action lawsuits to recover damages suffered by the lead plaintiff(s) and absent class members as a result of the BP oil gusher.

A class action is a procedural device that permits one or more plaintiffs to file and prosecute a lawsuit on behalf of a larger group. The larger group consists of the class members who have suffered the same wrong at the hands of the defendant but who are too numerous for the court to adequately manage the lawsuit if each class member were required to be joined as named plaintiffs.

In order to proceed as a class action, the case must be “certified” as a class action: that is, a court must determine that the class action criteria set forth in Rule 23 of the Federal Rules of Civil Procedure have been met. A class certified under Rule 23(b)(3) is distinct from a class certified under Rule 23(b)(1) or (2) in one important way. If a Rule 23(b)(3) class is certified, “notice” of the class action must be sent to class members and an opportunity to “opt-out” of the class must be provided. In contrast, a class certified under Rule 23(b)(1) or (2) is “mandatory,” notice is not required, and no class member may opt-out. Despite requirements regarding the notice that must be given to absent class members, there is always the possibility that many class members will not receive notice of the litigation or that such notice will be insufficient to fully inform them of their rights, thereby depriving them of any meaningful opportunity to opt-out.

If a class is certified and the class representatives are unsuccessful, the absent class members‘ claims will be “legally obliterated” by the result of the litigation, even though they did not actively participate in the suit.

The Supreme Court has observed that, while the text of Rule 23 does not preclude certification in cases with significant damages, the drafters “had dominantly in mind” the use of the class action to aggregate relatively small individual recoveries into a case that would be worthwhile for an attorney to litigate.

Given that the damages suffered by the vast majority of individual potential plaintiffs as a result of the BP oil gusher are potentially so great, it should be economically feasible for many individual plaintiffs to file individual lawsuits. Here, class treatment would not be necessary to permit effective litigation of the claim. An individual lawsuit would: (a) ensure the plaintiff that the plaintiff’s attorney has his or her best interests in mind; (b) protect the plaintiff’s due process rights; (c) ensure that the plaintiff is not a victim of a class action case in which individual class members receive little or no compensation and only plaintiffs‘ counsel stand to benefit from class certification; (d) give the plaintiff control over the prosecution of the case; (e) allow the plaintiff to present evidence of exposure, injury, and damages relating to his or her particular claim; and (f) allow the plaintiff to make the decision on whether or when to settle.

BP Plc, the responsible party, is a powerful and well-funded defendant, does not lack imagination or incentive to pose innumerable legal barriers, and will aggressively assert its legal rights and otherwise use the law, the courts and the judicial system to serve its interests. BP can afford to stall, and actually benefits from delay, but its victims cannot afford to wait for years to be fully compensated for their losses.

Victims of the BP oil gusher who have suffered significant losses should dare to demand justice by immediately seeking competent legal counsel, filing individual lawsuits, and actively participating in the litigation of their claims.

BP OIL SPILL VICTIM COMPENSATION FUND

On June 16, 2010 President Obama announced that BP has agreed to set aside $20 billion to pay economic damage claims to people and businesses that have been affected by the BP oil gusher. President Obama stated, “This $20 billion will provide substantial assurance that the claims people and businesses have will be honored. It’s also important to emphasize this is not a cap.  The people of the Gulf have my commitment that BP will meet its obligations to them. BP has publicly pledged to make good on the claims that it owes to the people in the Gulf, and so the agreement we reached sets up a financial and legal framework to do it.

Another important element is that this $20 billion fund will not be controlled by either BP or by the government. It will be put in a escrow account, administered by an impartial, independent third party. So if you or your business has suffered an economic loss as a result of this spill, you’ll be eligible to file a claim for part of this $20 billion. This fund does not supersede either individuals’ rights or states’ rights to present claims in court. BP will also continue to be liable for the environmental disaster it has caused, and we’re going to continue to work to make sure that they address it.”

The Obama administration indicated any money paid to claimants will be counted against future settlements, to prevent double-dipping.

BP and the Obama administration agreed to appoint Kenneth Feinberg, a Washington lawyer and Democratic Party supporter who administered the claims process for victims of 9/11, to run the independent claims process commonly referred to as the BP Oil Spill Victim Compensation Fund.  Feinberg declined to comment on how much BP is paying him to run the fund.

BP’s offer to settle quickly might be a savvy move if Feinberg can obtain ironclad releases from the shrimpers, hotel owners and thousands of other people who claim they’ve lost money because of the gusher. BP could save hundreds of millions of dollars in legal fees by preemptively funding the settlement. Feinberg said that at his request, lawyers for BP will be involved in drafting releases that exempt BP – but not other potential defendants – from any future liability for the spill. “This makes sense, since the release is designed to provide BP protection from lawsuits, and BP is paying $20 billion to satisfy claims,” Feinberg said in an e-mail message.

In theory, Feinberg and BP’s lawyers can craft an ironclad release, like the ones used to settle car-accident lawsuits every day. However, that could be a difficult proposition. “In practice, with this incident not only is there an ongoing catastrophe today, but its full effects won’t be felt for years,” said Burton LeBlanc, an attorney in the Baton Rouge, La., office of Baron & Budd, a Dallas firm that is prominent in asbestos and toxic-tort litigation. “The damages for some constituencies can’t be calculated yet.” Baron & Budd has even issued a news release reminding potential plaintiffs that the benzene in spilled oil can cause leukemia and lymphoma and pose “a serious health impact that can last for half a century.”

The BP fund is an attempt to buy peace by overwhelming potential plaintiffs with “easy” money. Companies have tried that before, with mixed success. Asbestos manufacturers failed miserably when they negotiated a global settlement with plaintiff lawyers in the early 1990s under which they’d pay out $300 million to injured workers in exchange for having cases of workers who were exposed, but not sick, valued at zero. The Supreme Court rejected the settlement in 1997 because it bound future claimants to terms they had no part in negotiating. The companies were out the $300 million and still faced thousands of asbestos lawsuits.

Feinberg’s Roadshow
On July 15, 2010, Feinberg, flying on a private jet paid for by BP, toured Louisiana and tried to assure affected residents they would be fairly compensated. He announced that he expects to set up shop for the independent BPOSVCF within the next two to three weeks. The BPOSVCF will operate for three years.

Feinberg explained the compensation plan includes two components: a no-obligation six month emergency payment for lost income and a final lump-sum payment with acceptance of release for BP. All victims can apply for the six month payment, up until ninety days after the well is capped. However, if claimants choose to accept the second and final BPOSVCF offer, they waive any right to bring further court proceedings against BP.

If victims do not consider the final offer sufficient, they may turn it down and pursue higher payments through the courts. However, Feinberg views the lack of court proceedings associated with his facility as a win-win for both sides. “Everyone should come in,” and the matter will be over with, in a matter of weeks or months, rather than years.

“When the oil has stopped, and we all know where it is heading, then I really urge you to come forward with a lump-sum request for payment,” Mr. Feinberg said on July 15th at a town-hall meeting attended by hundreds in Houma, La. Fielding repeated queries about how long-term damage from the spill will be measured, he said that his team would make its best estimates in calculating its final reimbursement offers.

Feinberg plans to apply tort-law principles in weighing claims, meaning plaintiffs will have to show that their losses wouldn’t have occurred “but for” the oil spill. “I am determined to come up with a system more generous and more beneficial than if you file a lawsuit,” Feinberg said.

Opposition to the BPOSVCF
On July 13, 2010, Alabama Attorney General Troy King wrote a letter to President Obama, urging the president to scrap Feinberg’s proposals for administering the BPOSVCF. “The document appears collusive at best and contrary to the public interest at worst,” King wrote to Obama. King said he was shocked that the Gulf states hadn’t been asked for input before Feinberg and BP reached the ninth draft of the plan. He called it “an illegal attempt” to limit BP’s liability under federal law. He also said that it aimed to keep people who have suffered damage out of state courts by making them sign a release waiving lawsuits or additional claims against BP.

“The federal government, especially the executive branch, has no business usurping state court jurisdiction and meddling in the state law liability arising from the oil spill,” King wrote.

Given that losses could continue for months or years after the gusher is stopped, King is justifiably concerned that the BPOSVCF would terminate interim claims ninety days after the well is capped and allow just one final claim thereafter.

On July 14, 2010, attorneys general from the five Gulf states met with U.S. Attorney General Eric Holder in Mobile, Alabama. Attorney General  Jim Hood of Mississippi and Attorney General Troy King of Alabama said the meeting was dominated by talk of a proposal Feinberg sent to the Gulf states that would have ended claims payments ninety days after the well is capped and required people to sign a release of liability before collecting their last payment from the BPOSVCF.

Hood said Holder recognized the flaws in the current BPOSVCF plan. “This is going to go on for three, five, ten years after the spill is stopped,” Hood said. Mr. Feinberg “can’t treat it like 9/11,” which, Hood said, for all of its horror, took place on a single day.

King said Holder would put together a panel of attorneys and officials, with heavy representation from the Gulf Coast, to draft a new proposal to submit to Feinberg. “The focus should be on protecting the Gulf states and making sure everyone is made whole,” said King.

Issues BP Victims Must Consider
Many businesses are concerned it will be difficult, if not impossible, to forecast the long-term recovery of the crab and shrimp populations, or how quickly U.S. consumers will re-embrace Gulf seafood, among other things.

Gary Bauer, president of Pontchartrain Blue Crab Inc., a seafood wholesaler and processor on Salt Bayou east of New Orleans, said his sales of blue crab and shrimp have dropped to 20% of their normal $8 million-a-year pace. In addition, foreign seafood suppliers are moving in on his network of grocers, restaurants and other buyers, further denting his long-term prospects. “Are we going to have a crab season next year, and are there going to be fishermen who will fish next year?” Mr. Bauer said. “How does BP reimburse for that? I spent 10 years of my life building a brand, and they destroyed it.”

Wayne Hess, manager of American Seafood Inc., a processor and wholesaler in New Orleans, said his sales were down roughly 30% from their annual average of $5 million to $7 million. “How am I supposed to project my losses not knowing how all of the different species we carry will be affected in the next year to five years?” he said. “The female crabs that are mating right now don’t drop their eggs until October or December. Those larvae may not make it.”

How can those in the tourism and fishing industries possibly know the extent of the damage to their business without knowing what next year’s season will be like? How can a person predict the long-term health effects of his or her exposure to the oil? As noted above, the benzene in spilled oil can cause leukemia and lymphoma and pose “a serious health impact that can last for half a century.”

So far, economic damage estimates vary widely. Greater New Orleans Inc., the economic-development agency for the 10-parish area, published preliminary estimates that the region’s fishing industry stands to suffer annual losses ranging from $900 million to $3.3 billion.

According to estimates from bond rating agency Moody’s, BP has total proven reserves of approximately 18 billion barrels of oil in the ground. BP has the ability and responsibility to fully compensate each and every BP oil gusher victim.

Conflict of Interest
“I’m working for you,” Feinberg repeatedly stated to the crowds of victims in Louisiana, and he called for local collaboration.

Feinberg is being compensated by BP, travels on a private jet paid for by BP, and has requested that lawyers for BP, not attorneys general from the Gulf states, be involved in drafting releases that exempt BP – but not other potential defendants – from any future liability for the spill.

An important rule of interpretation in administrative law is the “duck rule” – if it walks like a duck and quacks like a duck, it’s probably a duck. Abraham Lincoln reportedly explained a stronger version of this rule in his answer to the question, “If you call a dog’s tail a leg, how many legs does a dog have? Four. Just because you call the tail a leg doesn’t make it one.” Feinberg is a BP duck. Just because he says he is working for you doesn’t mean he is.

Councilman Thomas Capella from Jefferson Parish, Louisiana asked Feinberg if claimants should hire an attorney. Feinberg said that’s not necessary because his office will have attorneys on staff to provide free services to individuals and businesses. The fact that Feinberg’s attorneys intend to represent both BP and BP’s victims is an egregious conflict of interest.

“I am determined to come up with a system more generous and more beneficial than if you file a lawsuit,” Feinberg said. The question is whether the system will be more generous and more beneficial for BP or BP’s victims.

Animated and lively, with a little Bostonian humor, it has been reported Feinberg held the attention of the overflowing crowds during his recent roadshow in Louisiana. A reporter stated, “He jabs the air, punches up words to drive home a point and gets laughs with self-deprecating references to his Boston accent.” Rather than saying “cheese” when he posed for a photo with four police officers, he said, “Everybody file a claim?”

The following joke may be more appropriate for Feinberg’s BPOSVCF plan:

Question: What is the name of the bayou that is most representative of the federal government’s response to the victims of the BP oil gusher?
Answer: Bayou Self

CONCLUSION

Under the CWA alone, gross negligence penalties based upon 3,768,934 barrels of oil spilled would equal $16,206,416,200. Unfortunately, the federal government has no intention of holding BP accountable under either OPA 90 or CWA. Pursuant to OPA Section 4201, and given that the BP oil spill is a “discharge posing substantial threat to public health or welfare,” President Obama should have federalized the collection of the oil that is in the sea and the restoration of the coastal areas impacted by the oil. Both of these activities could be done without having to federalize the operational priority of stopping the flow of oil from the well. To date, the federal government has allowed BP to use more than 1,840,000 gallons of oil dispersant. Once the well is capped and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 1,000 or 100,000 bbl/day of oil?

Each individual potential plaintiff who has suffered damages as a result of the BP oil gusher should immediately seek competent legal counsel to directly represent his or her interests. If the amount of damages suffered by the individual potential plaintiff is small, it may not be economically feasible for the plaintiff to file an individual lawsuit. Accordingly, a class action lawsuit may be in the best interests of this plaintiff. However, given that the damages suffered by the vast majority of individual potential plaintiffs as a result of the BP oil gusher are potentially so great and will be on-going, class treatment would not be necessary to permit effective litigation of the claim. Here, when the amount of damages suffered by the individual is so great, the filing of an individual lawsuit should be economically feasible and may be in the best interests of the plaintiff. This decision should be made by the potential plaintiff only after a thorough consultation with his or her legal counsel.

The BPOSVCF is not administered by an impartial, independent third party. However, claimants will only waive their right to sue if they accept a final lump-sum payment. They can still sue if they only accept an initial emergency payment. Therefore, acceptance of a no-obligation six month emergency payment for lost income may be in the best interests of victims of the BP oil gusher. The decision to accept a final lump-sum payment, and thereby waive any right to bring further court proceedings against BP, should be made by the BP oil gusher victim only after a thorough consultation with his or her legal counsel.

APPENDICES

References
Adams, Mike, “First Amendment suspended in the Gulf of Mexico as spill cover-up goes Orwellian,” NaturalNews (July 3, 2010), available at: http://www.naturalnews.com/029130_Gulf_of_Mexico_censorship.html

Bhattacharyya, S., P.L. Klerks, and J.A. Nyman. 2003. Toxicity to freshwater organisms from oils and oil spill chemical treatments in laboratory microcosms. Environmental Pollution 122:205-215.

BP is Not the Only Responsible Party, available at: http://renergie.wordpress.com/2010/05/25/bp-is-not-the-only-responsible-party/

Chokkavelu, Anand, “The BP Stat That Will Shock You,” Motley Fool (July 9, 2010), available at: http://www.msnbc.msn.com/id/38165954/ns/business-motley_fool/

Clean Water Act

EPA: http://www.epa.gov/oem/content/lawsregs/opaover.htm

Fisher, Daniel and Hawkins, Asher, “BP’s Legal Blowout,” Forbes.com (July 14, 2010)

Greenwald, Glenn, “The BP/Government police state,” Salon (July 5, 2010), available at:
http://www.salon.com/news/opinion/glenn_greenwald/2010/07/05/bp/index.html

Hals, Tom, “Analysis: BP investors face tough road in court fights,” Reuters (July 16, 2010)

Hudson, Kris and Baskin, Brian, “Fears Mount That Fund Won’t Cover All Damages,” The Wall Street Journal (July 15, 2010)

Kindy, Kimberly, “Recovery effort falls vastly short of BP’s promises,” Washington Post
(July 6, 2010), available at:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/05/AR2010070502937.html

Lustgarten, Abrahm, “Chemicals Meant To Break Up BP Oil Spill Present New Environmental Concerns,” ProPublica (April 30, 2010), available at: http://www.propublica.org/article/bp-gulf-oil-spill-dispersants-0430

MMS: http://www.mms.gov/

Murtaugh, Dan, “Attorney General Eric Holder says he’ll try to address oil spill claims concerns,” Press-Register (July 15, 2010)

National Contingency Plan

NOAA: http://www.noaa.gov/

Oil Pollution Act of 1990

Peters, Jeremy W., “Efforts to Limit the Flow of Spill News,” The New York Times (June 9, 2010)

Philips, Matthew, “BP’s Photo Blockade of the Gulf Oil Spill,” Newsweek (May 26, 2010), available at: http://www.newsweek.com/2010/05/26/the-missing-oil-spill-photos.html

Schoof, Renee and Bolstad, Erika, “BP well may be spewing 100,000 barrels a day, scientist says,” McClatchy Newspapers (June 7, 2010), available at: http://www.mcclatchydc.com/2010/06/07/95467/bp-well-may-be-spewing.html

Schoof, Renee, “Scientists propose big experiment to study Gulf oil spill,” McClatchy Newspapers (July 11, 20100, available at:
http://www.miamiherald.com/2010/07/11/1725271/scientists-propose-big-experiment.html

Schwartz, John, “More Delicate Diplomacy for the Overseer of the Compensation Fund,” The New York Times (July 16, 2010)

USA Today: http://content.usatoday.com/communities/greenhouse/post/2010/05/how-responsible-is-us-government-for-gulf-oil-spill/

USCG: http://www.uscg.mil/

Walsh, Bryan, “The Oil Spill and the Perils of Losing Trust,” Time (July 7, 2010), available at:
http://ecocentric.blogs.time.com/2010/07/07/the-oil-spill-and-the-perils-of-losing-trust/
About the Author
Brian J. Donovan is an attorney and marine engineer with thirty-five years of international business experience.

Mr. Donovan, a member of The Florida Bar, The U.S. District Court, Middle District of Florida and The United States Court of Appeals for the Eleventh Circuit, holds a J.D. from Syracuse University College of Law (where he was recipient of the “Global Law & Practice Award” as the outstanding graduate in the areas of International Law and International Business Law) and a B.S., with honors, in Marine/Mechanical and Nuclear Engineering from the United States Merchant Marine Academy.

Mr. Donovan, with deep family roots in southern Louisiana, has first-hand knowledge of the catastrophic devastation of the Louisiana Gulf Coast caused by hurricanes Katrina and Rita. He fully appreciates that the damage caused by Katrina and Rita may pale in comparison to the massive and potentially unprecedented environmental and economic impact of the BP oil gusher of April, 2010.

Why BP Does Not Want an Accurate Measurement of the Gulf Oil Spill

Posted in BP, Clean Water Act, dispersants, measurement, oil spill, OPA 90, responsible party by renergie on June 14, 2010

Why BP Does Not Want an Accurate Measurement of the Gulf Oil Spill

By Brian J. Donovan

June 13, 2010

INTRODUCTION

The amount of oil that will ultimately be released into the waters of the Gulf of Mexico as a result of  the Deepwater Horizon blowout of April 20, 2010 may never be known.

On April 24, BP reported that approximately 1,000 barrels of oil per day (bbl/day) were being released into the Gulf.

On April 28, it was estimated that approximately 5,000 bbl/day were being released into the Gulf of Mexico. Repeated endlessly in news reports, this figure became conventional wisdom. However, the 5,000 bbl/day estimate was hastily produced in Seattle by a NOAA unit that responds to oil spills. It was calculated with a protocol known as the Bonn convention which calls for measuring the extent of an oil spill, using its color to judge the thickness of oil atop the water, and then multiplying. Alun Lewis, a British oil-spill consultant who is an authority on the Bonn convention, said the method was specifically not recommended for analyzing large spills like the one in the Gulf of Mexico, since the thickness was too difficult to judge in such a case.

On May 27, USGS Director Dr. Marcia McNutt, Chair of the National Incident Command’s Flow Rate Technical Group (FRTG), announced that the amount of oil flowing from BP’s leaking oil well was estimated to be 12,000 to 19,000 bbl/day.

On June 3, BP sawed off the riser pipe that had been kinked near the seafloor, constricting the flow of oil from the leak. The clean cut allowed the company to secure a containment cap to the pipe, capturing some of the escaping oil and funneling it to ships at the surface.

On June 10, is was guesstimated that the well was gushing 20,000 to 40,000 bbl/day. This latest figure is for the size of the leak prior to June 3, when BP sawed off a bent riser pipe, potentially increasing the amount of crude escaping by as much as 20 percent. According to Marcia McNutt, director of the U.S. Geological Survey, a projection for the current rate of oil flow has not been developed. Preliminary figures from a team of Woods Hole Oceanographic Institution scientists suggest the well could be leaking as much as 50,000 barrels a day, McNutt said.

According to Dr. McNutt, the “most credible estimate” for the size of the leak before the riser pipe was cut is 20,000 to 40,000 bbl/day. Based on the midpoint (30,000 bbl/day) of the latest approximation, from April 22 when the Deepwater Horizon rig sank until June 3 the well gushed 1.26 million barrels of oil, or 52.9 million gallons. The midpoint guesstimate of 30,000 bbl/day is six times more than the figure that BP and the federal government used from April 28 to May 27.

BP alleges that it is capturing about half of the new estimated flow rate from the Deepwater Horizon well, almost a mile down on the seabed of the Gulf of the Mexico, and siphoning it to ships on the surface.  BP reportedly collected 15,520 barrels of crude at the surface between noon on June 9 and noon on June 10, the last 24-hour period for which data is available. According to the midpoint of the latest estimates from the group of scientists, this means at least  15,500 bbl/day of crude oil are currently being released into the waters of the Gulf of Mexico.

BP does not want an accurate measurement of the Gulf oil spill for two reasons:
(a) the Oil Pollution Act of 1990; and (b) the Clean Water Act.

THE OIL POLLUTION ACT OF 1990

Pursuant to the Oil Pollution Act of 1990 (OPA), for an offshore facility the total of the liability of a responsible party and any removal costs incurred by, or on behalf of, the responsible party, with respect to each incident shall not exceed the total of all removal costs plus $75,000,000.

However, this limit on liability “does not apply if the incident was proximately caused by gross negligence, willful misconduct of, or the violation of an applicable Federal safety, construction, or operating regulation by, the responsible party, an agent or employee of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party.”

OPA broadened the scope of damages (i.e., costs) for which an oil spiller would be liable. Under OPA, a responsible party is liable for all cleanup costs incurred, not only by a government entity, but also by a private party. In addition to cleanup costs, OPA significantly increased the range of liable damages to include the following:

• injury to natural resources,
• loss of personal property (and resultant economic losses),
• loss of subsistence use of natural resources,
• lost revenues resulting from destruction of property or natural resource injury,
• lost profits resulting from property loss or natural resource injury, and
• costs of providing extra public services during or after spill response.

Given BP’s documented violation of federal safety regulations aboard the Deepwater Horizon, e.g., using an improper cementing technique to seal the well, failing to adequately test and maintain blowout prevention equipment and drilling deeper than BP’s federal permit allowed, there will be no limitation on BP’s liability. (Oil Pollution Act of 1990, 33 U.S.C. 2704).

BP may be liable to the United States and to Louisiana for damages resulting from lost royalties. Pursuant to Section 2702 of OPA 90, “Notwithstanding any other provision or rule of law, and subject to the provisions of this Act, each responsible party for a vessel or a 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) of this section that result from such incident…”, including revenue losses such as “taxes, royalties, rents, fees, or net profit shares due to the injury, destruction, or loss of real property, personal property, or natural resources, which shall be recoverable by the Government of the United States, a State, or a political subdivision thereof.” (Oil Pollution Act of 1990, 33 U.S.C. 2702(b)(2)(D)).

THE CLEAN WATER ACT

BP also faces uncapped liability under a little-known Clean Water Act (CWA) civil damages provision.

Pursuant to Section 1321 of the CWA, “Any person who is the owner, operator, or person in charge of any vessel, onshore facility, or offshore facility from which oil or a hazardous substance is discharged in violation of paragraph (3), shall be subject to a civil penalty in an amount up to $25,000 per day of violation or an amount up to $1,000 per barrel of oil or unit of reportable quantity of hazardous substances discharged. In any case in which a violation of paragraph (3) was the result of gross negligence or willful misconduct of a person described in subparagraph (A), the person shall be subject to a civil penalty of not less than $100,000, and not more than $3,000 per barrel of oil or unit of reportable quantity of hazardous substance discharged.” (Clean Water Act, 33 U.S.C. 1321).

Under the CWA, the basic fine is $1,100 per barrel spilled. But the penalty can rise to $4,300 a barrel if a federal court rules the spill resulted from gross negligence. As noted above, the fines were originally set at $1,000 to $3,000 but that was raised in 2004 to keep up with inflation. Accordingly, the number of barrels of oil being released from the well is going to be critical.

If the government pursues civil fines based on the volume of oil spilled, it would take into consideration whether BP has made its best effort to mitigate the spill, its prior history of offenses, if any, and whether BP can bear the cost of fines, among other factors. Interestedly, BP received the third-largest criminal penalty, of $50 million, for an environmental offense in U.S. history for a Texas City refinery fire in 2005. BP subsidiaries remain under federal probation for prior offenses in Texas and Alaska.

Under the CWA alone, gross negligence penalties based upon a discharge rate of 30,000 barrels per day would total $129 million per day. BP’s net profits in the first quarter of 2010 were approximately $6.7 million per day.

It is obvious why BP, despite having the ability to obtain a very accurate flow rate through ultrasound, does not want a more accurate measurement. It is also very obvious why BP does not want to collect a great deal of the oil spill. Since April 22, 2010, BP admits that it has been able to recover only approximately 475,000 barrels of “oily liquid.” This equates to collecting a total of only 47,000 to 71,000 barrels of oil.

BP’S STRATEGY IS TO SYSTEMATICALLY UNDERESTIMATE THE RATE OF THE OIL THAT’S BEING SPILLED INTO THE GULF OF MEXICO

BP’s strategy, to systematically underestimate the rate of the oil that’s being spilled into the Gulf of Mexico, involves: (a) prohibiting independent measurement of the rate of oil flow from the well by unbiased third party scientists and engineers by denying direct access to the Deepwater Horizon well; and (b) applying an unprecedented amount of dispersant to the oil spill both on the surface and underwater.

Denying Direct Access to the Deepwater Horizon Well
Dr. Ian R. MacDonald, an oceanographer at Florida State University who is an expert in the analysis of oil slicks, said he had made his own rough calculations using satellite imagery. They suggested that the leak could “easily be four or five times” the government estimate, he said. Steven Wereley, an associate professor of mechanical engineering at Purdue University, analyzed videotape of the seafloor gusher using a technique called particle image velocimetry.  A computer program simply tracks particles and calculates how fast they are moving. Wereley put the BP video of the gusher into his computer. He made a few simple calculations and came up with an astonishing value for the rate of the oil spill: 70,000 bbl/day.

Dr. MacDonald believes NOAA  has been slow to mount the research effort needed to analyze the leak and assess its effects. Sylvia Earle, a former chief scientist at NOAA and perhaps the country’s best-known oceanographer, said that she, too, was concerned by the pace of NOAA’s scientific response.

Prior to May 27, BP and the federal government had made no attempt to update its estimate of 5,000 bbl/day since releasing it on April 28th. “I think the estimate at the time was, and remains, a reasonable estimate,” said Dr. Lubchenco, the NOAA administrator. “Having greater precision about the flow rate would not really help in any way. We would be doing the same things.”

Scientists have come down hard on BP for refusing to take advantage of methods available to measure the oil. On May 13, The New York Times reported that BP was planning to fly scientists from the Woods Hole Oceanographic Institute to Louisiana to conduct volume measurements. The oceanographers were poised to use underwater ultrasound equipment to measure the flow of oil and gas from the ocean floor when BP canceled the trip.

On June 8, in responding to a question regarding the rate of the flow of oil from the BP well, Admiral Thad Allen told ABC News, “Everything we know and everything we see is through either the remote sensors or remote-operated vehicles that are like looking through a particular keyhole at a particular time.” Access to that keyhole is still completely controlled by BP.

An accurate measurement of the flow of oil could change the way people remember this spill and their opinion of BP.  Once the leak is plugged and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 5,000 or 80,000 bbl/day of oil? By allowing BP to obscure the spill’s true magnitude, the federal government appears to support BP’s strategy.

Dispersants: An Out-of-Sight, Out-of-Mind Strategy
To date, more than 1,000,000 (one million) gallons of dispersant have been poured into the Gulf of Mexico by BP since the April 22 sinking of the Deepwater Horizon rig, an unprecedented application and for a duration and at depths also without precedent. BP has an additional 805,000 gallons of dispersant on order.

Dispersants break oil into droplets that decompose more quickly. But scientists worry that extensive use of the chemicals in the BP spill is increasing marine life’s exposure to the toxins in oil. Environmentalists consider their use effective for ridding surface waters of oil but say when the toxins are broken down and become embedded on the sea bed they pose a significant threat to marine life. Experiments by John Nyman of Louisiana State University indicate that the combination of Louisiana crude and the dispersant used on the current spill is more toxic to marsh-dwelling invertebrates than oil alone would be.

BP is using the dispersant “Corexit 9500.” While Corexit 9500 is on the EPA’s approved list, BP is using this dispersant in unprecedented volumes and has been using it underwater at the source of the leak, a procedure that has never been tried before. The EPA has acknowledged that “much is unknown about the underwater use of dispersants.” Moreover, of all the chemicals approved by the EPA for use on oil spills, Corexit 9500 is among the most toxic to certain organisms. It also is among the least effective in breaking up the kind of oil that is prevalent in the area around the spill site, EPA tests concluded. Corexit might also be contributing to the formation of large undersea “oil plumes” thousands of feet below the surface. The undersea plumes may go a long way toward explaining the discrepancy between the flow estimates, suggesting that much of the oil emerging from the well could be lingering far below the sea surface.

Sylvia Earle, the National Geographic’s explorer-in-residence and former chief scientist at NOAA, stated that “the instructions for humans using Corexit warn that it is an eye and skin irritant, is harmful by inhalation, in contact with skin and if swallowed, and may cause injury to red blood cells, kidney or the liver.” “People are warned not to take Corexit internally,” she said, “but the fish, turtles, copepods and jellies have no choice.”

Earle further states, “We don’t know what the effect of dispersants applied a mile underwater is; there’s been no laboratory testing of that at all, or the effect of what it does when it combines with oil a mile underwater.” One problem with breaking down the oil is that it makes it easier for the many tiny underwater organisms to ingest this toxic soup. “The effort should be in recovering the oil, not making it more difficult to recover by dispersing it,” says Earle. The chemical assault appeared geared, she says, “to improving the appearance of the problem rather than solving the problem.”

Carl Safina, president and co-founder of Blue Ocean Institute, a New York-based conservation organization, believes BP’s dispersant strategy has more to do with PR than good science. “It takes something that we can see that we could at least partly deal with and dissolves it so we can’t see it and can’t deal with it,” he said. It’s not at all clear to me why we are dispersing the oil at all,” Safina said. “It’s an out-of-sight, out-of-mind strategy. It’s just to get it away from the cameras on the shoreline.

Sinking Agents
The National Oil and Hazardous Substances Pollution Contingency Plan, more commonly called the National Contingency Plan or NCP, is the federal government’s blueprint for responding to both oil spills and hazardous substance releases. The National Contingency Plan is the result of our country’s efforts to develop a national response capability and promote overall coordination among the hierarchy of responders and contingency plans.

Pursuant to NCP Section 300.310, “As appropriate, actions shall be taken to recover the oil or mitigate its effects. Of the numerous chemical or physical methods that may be used, the chosen methods shall be the most consistent with protecting public health and welfare and the environment. Sinking agents shall not be used.”

Sinking agents means those additives applied to oil discharges to sink floating pollutants below the water surface.

The question is whether BP’s dispersants are “sinking agents” when they are applied a mile underwater at the source of the well leak.

CONCLUSION

BP is knowingly and systematically underestimating the size of the spill to limit the financial impact on the company. Under the CWA, the company faces fines of up to $4,300 for each barrel spilled. Furthermore, pursuant to Section 2702 of OPA 90, BP may be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well.

APPENDICES

References
Bhattacharyya, S., P.L. Klerks, and J.A. Nyman. 2003. Toxicity to freshwater organisms from oils and oil spill chemical treatments in laboratory microcosms. Environmental Pollution 122:205-215.

BP is Not the Only Responsible Party, available at: http://renergie.wordpress.com/2010/05/25/bp-is-not-the-only-responsible-party/

Clean Water Act

EPA: http://www.epa.gov/oem/content/lawsregs/opaover.htm

MMS: http://www.mms.gov/

National Contingency Plan

NOAA: http://www.noaa.gov/

Oil Pollution Act of 1990

USA Today: http://content.usatoday.com/communities/greenhouse/post/2010/05/how-responsible-is-us-government-for-gulf-oil-spill/

USCG: http://www.uscg.mil/
 

 

 

About the Author
Brian J. Donovan is an attorney and marine engineer with thirty-five years of international business experience.

Mr. Donovan, a member of The Florida Bar, The U.S. District Court, Middle District of Florida and The United States Court of Appeals for the Eleventh Circuit, holds a J.D. from Syracuse University College of Law (where he was recipient of the “Global Law & Practice Award” as the outstanding graduate in the areas of International Law and International Business Law) and a B.S., with honors, in Marine/Mechanical and Nuclear Engineering from the United States Merchant Marine Academy.

Mr. Donovan, with deep family roots in southern Louisiana, has first-hand knowledge of the catastrophic devastation of the Louisiana Gulf Coast caused by hurricanes Katrina and Rita. He fully appreciates that the damage caused by Katrina and Rita may pale in comparison to the massive and potentially unprecedented environmental and economic impact of the BP oil spill of April, 2010.

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