Damages: the BP Gulf Oil Spill and the Deepwater Horizon Disaster video lecture 12/6/20 1:01
Deepwater Horizon Settlements - official website
The economic losses suffered in the Gulf Coast region as a result of the massive oil spill in April 2010 were not recoverable under prevailing precedent in both maritime and tort law. They both provided that "pure economic loss was not compensable". ONLY if one suffered property damage or physical injury could he/she recover money.
Plaintiffs had argued with some success for expansive concepts of proximate cause such as may be recalled from first year torts and the Kinsman cases. There recovery for economic losses due to inability to meet contractual delivery dates were held to be too remote to permit recovery as a foreseeable consequence of the failure to secure vessels in the swift currents of the icy Niagara River which caused the collision with and collapse of a bridge over the river.
Courts had repeatedly found a way to compensate economic losses that were the obvious result of negligence in environmental cases arising from barges that spilled into rivers, oil wells in the ocean off the California coast, and the oil spilled by an Exxon supertanker off the shore in Alaska. One bold judge - John Minor Wisdom - had argued in the Testabank case that property damage was not a prerequisite. So long as one was rendered unable to "make use of" the damaged natural resource the loss should be compensable. But he was a lone dissenter on the Fifth Circuit Court of Appeals.
Although to reason by example is often merely to restate the problem, the following illustration may be an aid in explaining our result. To anyone familiar with N. Y. traffic there can be no doubt that a foreseeable result of an accident in the Brooklyn Battery Tunnel during rush hour is that thousands of people will be delayed. A driver who negligently caused such an accident would certainly be held accountable to those physically injured in the crash. But we doubt that damages would be recoverable against the negligent driver in favor of truckers or contract carriers who suffered provable losses because of the delay or to the wage earner who was forced to "clock in" an hour late. And yet it was surely foreseeable that among the many who would be delayed would be truckers and wage earners.
In the final analysis, the circumlocution whether posed in terms of "foreseeability," "duty," "proximate cause," "remoteness," etc. seems unavoidable. As we have previously noted, 338 F.2d at 725, we return to Judge Andrews' frequently quoted statement in Palsgraf v. Long Island R.R., 248 N.Y. 339, 354-355 (dissenting opinion): "It is all a question of expediency * * * of fair judgment, always keeping in mind the fact that we endeavor to make a rule in each case that will be practical and in keeping with the general understanding of mankind." Petitions of Kinsman Transit Co., 388 F.2d 821, 825 (2d Cir. N.Y. 1968)
Fortunately for people on the Gulf Coast the Oil Pollution Act of 1991 promised a broader scope of liability - as long as one suffered a loss that was "due to" or "results from" damage to natural resources a recovery was allowed. Neither property damage nor personal injury needed to be shown, federal judge Carl Barbier held.
The OPA contained a limitation for $75 million for oil spill compensation. But the statute excepted damage resulting from gross negligence. BP did not raise that as a statutory defense. And Judge Barbier ultimately ruled that BP had been grossly negligent - thus allowing escape from the damages cap.
For those most directly affected - fishermen and others in the immediate shoreline area a simple mode of proof of damages was devised:
How to calculate your lost income or profits under the Deepwater Horizon Settlement, using a fisherman as an exemplar
A) What was my share of the catch for either the same period in
* 2009
OR
* 2008-2009 average
OR
* Average of 2007 - 2009
B) What was my catch of shrimp for any three months in the period April 20 - December 2010
C) A minus B = Loss
D) Depending on Zone or category multiply C x [1.25x....3.0x) RTP
E) Add C+ D = total compensation
[A] ($30,000), plus RTP ($90,000) = $120,000
- GWC
NOAA: Deepwater Horizon oil spill settlements: Where the money went
U.S. and States Announce Historic Settlement - Department of Justice
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