Torts Fall 2009 Fordham Law School Chapter I - Introduction to
Tort Liability
George W. ConkAdjunct Professor of Law & Senior Fellow,
Stein Center for Law & EthicsCertified Civil Trial AttorneyRoom
[email protected] Today
tortstoday.blogspot.comOtherwise Commentaries on Law, Language
& PoliticsBlackstonetoday.blogspot.com
Fall 2014 Fordham Law School
BP SettlementBP settlement11Scope of liability under the OPA and
Maritime Law Preemption of State Law ClaimsIn Re Deepwater
HorizonB1 OrderEDLA August 26, 20112011 WL 3805746Judge Carl J.
BarbierMDL No. 2179BP Proving Damages part 122A causal link?The
Gulf Coast Claims Facility evaluated all claims submitted to
determine whether a loss was caused by the Oil Spill. Kenneth
Feinberg i/m/o BP Esploration v. Lake Eugenie Land, etc. October
2014See Gulf Coast Claims Facility Final Rules Governing Payment
Options, Eligibility and Substantiation Criteria, and Final Payment
Methodology (Feb. 18, 2011)BP settlement3The Gulf Coast Claims
Facility evaluated all claims submitted to determine whether a loss
was caused by the Oil Spill. See Gulf Coast Claims Facility Final
Rules Governing Payment Options, Eligibility and Substantiation
Criteria, and Final Payment Methodology, at 2 (Feb. 18, 2011),
available at
http://www.eng2viet.files.wordpress.com/2011/02/gccffinal-
rules.pdf (The ability of the claimant to link the alleged damage
to the Oil Spillas opposed to other factors such as a general
downturn in the Gulf region economy or other financial uncertainty
unrelated to the Oil Spillis required.). For each claim, evidence
of an identifiable link between an actual loss and the Oil Spill
was required. Ibid. During the next 16 monthswell before the first
trial involving the explosion beganMr. Feinberg, acting as
Administrator of the Gulf Coast Claims Facility, received and
processed over one million individual claims and distributed some
$6.2 billion to over 220,000 individuals and businesses. See BDO
Consulting, BDOs Report, at 59 (2012). 3Oil Pollution Act 1990 33
U.S.C.. 2702Elements of liability(a) In general each responsible
party for a vessel or a facility from which oil is discharged into
or upon the navigable waters or adjoining shorelines or the
exclusive economic zone is liable for the removal costs and damages
that result from such incident.BP settlement433 U.S.C..
2702Elements of liability(a) In generalNotwithstanding 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.
433 U.S.C.. 2702. Elements of liability(A) Natural
resourcesDamages for injury to, destruction of, loss of, or loss of
use of, natural resources...(B) Real or personal property damage
resulting from destruction of, real or personal property(C)
Subsistence useBP settlement533 U.S.C.. 2702. Elements of
liability(D) RevenuesDamages equal to the net loss of taxes, etc.
...by the Government of the United States, a State, or a political
subdivision thereof.BP settlement633 U.S.C.. 2702. Elements of
liability(E) Profits and earning capacityDamages 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...(F) Public servicesBP settlement7FRCP 23 Class
Actions(a) Prerequisites.(1) the class is so numerous that, joinder
of all members is impracticable(2) there are questions of law or
fact common to the class,(3) the claims or defenses of the
representative parties are typical of the claims or defenses of the
class; and(4) the representative parties will fairly and adequately
protect the interests of the class.
BP settlement88Two class action settlements 910 F.Supp.2d 891
(E.D.La.2012)Economic loss classMedical benefits classAffirmed: 739
F.3d 790 (5th Cir. 2014)BP settlement99Exclusions Claims for
Economic Damage by Entities or Individuals based on employment in
the Banking,Gaming, Financial, Insurance, Oil & Gas, Real
Estate Development, and Defense Contractor industries, as well as
Entities selling or marketing BP-branded fuel (including jobbers
and branded dealers)BP settlement1010ExclusionsBodily Injury
ClaimsBP Shareholder ClaimsMoratorium Loss ClaimsClaims relating to
menhaden (or pogy) fishing, processing, selling, catching, or
harvesting Claims for punitive damages against Halliburton and
Transocean.BP settlement1111Economic loss zone
BP settlement1212Class definition Business Economic
LossesBusinesses in the Gulf Coast Areas who owned, operated or
leased premises andsold products or bought seafoodService
businesses in the AreasOwned or leased real estateSeafood Crew,
Commercial Fisherman, Oyster Leaseholders, and Vessel OwnersBP
settlement13BP expertThe DWH Oil Spill had some direct implications
for tourism and seafoodindustries with consequential effects on
some businesses in related industries. Thetourism and seafood
industries are concentrated in the immediate coastal area.
Asdistance from the coastal area increases, the composition of
economic activity shifts, with tourism and seafood becoming less
important drivers of economic activity. The Economic Damage Claim
Frameworks explicitly incorporate theseeconomic realities in the
methodologies for compensating Class Members. . . .. . .Businesses
and individuals may suffer losses for a wide variety of
reasons.Thus, it is necessary and economically appropriate to
evaluate the likelihood thata Claimants losses were due to the DWH
Spill or to other unrelated factors. Thestandardized approaches
established in the Settlement Agreement for determining the
likelihood that a Claimants losses were caused by the DWH Spill,
includinggranting a presumption that certain Claimants losses are
spill-related, are clearlydefined, reasonable and based on sound
economic principles.
13Tourism businessesTourism means businesses which provide
services such as attracting, transporting, accommodating or
catering to the needs or wants of persons traveling to, or staying
in, places outside their homecommunity.BP settlement1414Class
definition: Natural Persons and Entities who lost earnings, income,
or profitsAnyone living in Louisiana, Mississippi, Alabama or
specified counties in Texas and FloridaCrew on vessels homeported
or fishing in Gulf watersOwners of real estateCommercial fishermen,
vessel ownersOyster leaseholdersBP settlement1515Categories of
recognized economic harm claimsIndividual Loss of WagesBusiness
Economic LossMulti-Facility Business Economic LossStart-Up Business
Economic LossFailed Business Economic LossFailed Start-Up Business
Economic LossBP settlement1616Property DamageLoss of Use/Enjoyment
of Real PropertyCoastal Real Property DamageWetlands Real Property
DamageRealized Real Property Sales LossBP settlement1717Special
CategoriesVessels of OpportunityVessel Physical DamageSubsistence
DamageSeafood Compensation ProgramBP settlement1818Causation reqts
Business Economic Losses - Ex. 4BNo causation requirement
for:Businesses in zone A:Landing sites, commercial, wholesale,
retail, or primary seafood processorsSeafood distributors and
retailersTourismCharter fishermen
BP settlement19Fn 1 excpetion start-ups, failed businesses,
entities not withing the class definition19Causation reqts for
business economic loss claimsZones B and CV shaped pattern: 8.5 %
or more downturn compared to benchmarkUpturn of 5% or more in 2011
compared to 2010
BP settlement2020Risk transfer premium RTP Businesses multiplier
added to 2010 lossesTourism Zone A 2.5; zone B 2.0, Zone C 2.0,
Zone D 1.25Charter fishing 2.5 in Zones A,B, or C Zone D-1.25
Primary seafood processors of shrimp/crab/oyster 3.0 (any
zone)Other seafood 2.25BP settlement2121RTP individualsTourism
employees zones A, B, C 2.0, zone D 1.25Charter fishing 2.5 Zones
A, B, CZone D 1.25Landing site 2.25 (all zones)Non-tourism, non
seafoodZone A 1.5 Zone B 1.25 Zones C, D 0.25Individual periodic
vendors 1.0
BP settlement2222For business lossesCompensation frameworkBP
settlement2323Gulf shrimp landings 2008-2009 compared to 2010
Business Torts BP Gulf Oil Spill Spring 20122424
Compare actual profit during post-spill period to profits
claimant might have expectedStep 1 Benchmark period minus 2010 loss
period profitsStep 2 compensates for incremental profits or losses
relative to the benchmark periodBP settlement2525Compensation &
Benchmark PeriodsThe Compensation Period Selected by the Claimant-
three or more consecutive months between May and December 2010 The
Benchmark Period: Pre-DWH Spill period claimant chooses as the
baseline for measuring its historical financial performance.
BP settlement26Compensation & Benchmark PeriodsThe claimant
can select among the three Benchmark Periods:
2009
2008-2009 average; or
The average of 2007-2009BP settlement2727BPs lament expenses and
income do not matchAdministrator has interpreted revenue as cash
received and expenses as cashDisbursedCausal link of Business
losses must be shownBP settlement285th Circuit October 2,
2013Unjustifiable claims may be paidThe District Court must clarify
how cash-basis claims are treatedUnlike `accrual accounting cash
basis accounting shows positive or negative cash flow but does does
not demonstrate profit and lossBP settlement29Judicial estoppel?
BPs expert supporting approval of the classThe DWH Oil Spill had
some direct implications for tourism and seafoodindustries with
consequential effects on some businesses in related industries.
Thetourism and seafood industries are concentrated in the immediate
coastal area. BP settlement30Causation is presumed for certain
categories of losses. A BP expert, supporting the class settlement
explained:
The DWH Oil Spill had some direct implications for tourism and
seafoodindustries with consequential effects on some businesses in
related industries. The tourism and seafood industries are
concentrated in the immediate coastal area. Asdistance from the
coastal area increases, the composition of economic activity
shifts, with tourism and seafood becoming less important drivers of
economic activity. The Economic Damage Claim Frameworks explicitly
incorporate theseeconomic realities in the methodologies for
compensating Class Members. . . .. . .Businesses and individuals
may suffer losses for a wide variety of reasons.Thus, it is
necessary and economically appropriate to evaluate the likelihood
thata Claimants losses were due to the DWH Spill or to other
unrelated factors. Thestandardized approaches established in the
Settlement Agreement for determiningthe likelihood that a Claimants
losses were caused by the DWH Spill, includinggranting a
presumption that certain Claimants losses are spill-related, are
clearlydefined, reasonable and based on sound economic
principles.30Judicial estoppel? BPs expert supporting approval of
the classAs distance from the coastal area increases, the
composition of economic activity shifts, with tourism and seafood
becoming less important drivers of economic activity. The Economic
Damage Claim Frameworks explicitly incorporate these economic
realities in the methodologies for compensating Class Members. . .
.BP settlement31Judicial estoppel? BPs expert supporting approval
of the classThe standardized approaches established in the
Settlement Agreement for determining the likelihood that a
Claimants losses were caused by the DWH Spill, including granting a
presumption that certain Claimants losses are spill-related, are
clearly defined, reasonable and based on sound economic
principles.BP settlement32Policy Statement re Ex. 4BThe Claims
Administrator will thus compensate eligible Business Economic Loss
and Individual Economic Loss claimants for all losses payable under
the terms of the Economic Loss frameworks in the Settlement
Agreement, without regard to whether such losses resulted or may
have resulted from a cause other than the Deepwater Horizon oil
spill provided such claimants have satisfied the specific causation
requirements set out in the Settlement Agreement.
In re Deepwater Horizon, 744 F.3d 370 (5th Cir. 2014)
BP settlement33Judge Edith Clement,dissentingThe judicial power
of federal courts extends only to cases and controversies. There
are but three irreducible constitutional requirements: an injury in
fact, a causal connection between the injury and the conduct
complained of, and that the injury is likely to be redressed by a
favorable decision.BEL panel March 3, 2014 BP settlement34EDITH
BROWN CLEMENT, Circuit Judge, dissenting.Lujan v. Defenders of
Wildlife, 504 U.S. 555, 56061, 112 S.Ct. 2130, 119 L.Ed.2d 351
(1992)
34Class definition Section 1. . . If a person or entity is
included within the geographical descriptions in Section1.1 or 1.2,
and their claims meet the descriptions of one or more of theDamage
Categories described in Section 1.3, that person or entity is a
member of the Economic and Property Damages Settlement Class,
unless the person or entity is excluded under Section 2BP
settlement35Class definition Section 1Damage Categories, which are
fullydescribed in the attached Exhibits
1A-15:SeafoodTourismWetlandsCoastal propertyReal property
salesSubsistence, failed, and start-ups
BP settlement36Class actionMedical benefitsBP
settlement3737Amchem v. Windsor (1997)"Class members were exposed
to different asbestos- containing products, for different amounts
of time, in different ways, and over different periods. Some class
members suffer no physical injury or have only asymptomatic pleural
changes, while others suffer from lung cancer, disabling
asbestosis, or from mesothelioma . . . . Each has a different
history of cigarette smoking, a factor that complicates the
causation inquiry.BP settlement38117 S. Ct. 223138Amchem v. Windsor
(1997)"The [exposure only] plaintiffs especially share little in
common, either with each other or with the presently injured class
members. It is unclear whether they will contract asbestos-related
disease and, if so, what disease each will suffer. They will also
incur different medical expenses because their monitoring and
treatment will depend on singular circumstances and individual
medical histories."BP settlement39117 S. Ct. 223139Medical Benefits
ClassClaims for compensatory and punitive damages and declaratory
relief, brought under federal and maritime law for negligence,
negligence per se, gross negligence, willful misconduct, and strict
liability for personal injury and/or bodily injury,
later-manifested injury, progression of existing injury, damage,
disease, mental or physical pain or suffering, emotional or mental
harm or anguish
BP settlement4040DEFINITIONSCLEAN-UP WORKERS at any time between
April 20, 2010, and April 16, 2012;Resided in ZONE A for at least
sixty days between April 20, 2010, and September 30, 2010 (ZONE A
RESIDENT), and developed one or more Resided in ZONE B for some
time on each of at least sixty days betweenApril 20, 2010, and
December 31, 2010
BP settlement4141ExcludedOpt-outs from this settlement* BP
employees* persons on Deepwater Horizon on April 20, 2010* anyone
who has signed a release for such claims* long-term (5 year)
workers cleaning, loading, unloading or storing hydrocarbons,
petrochemicals, or nuclear materialsBP
settlement4242RemediesCompensation for Specified Physical
Conditions claimed to be caused by exposure to oil and/or
dispersantsComprehensive Periodic Medical Consultation Program
providing regular medical examinations and tests to class members
every three years over a 21-year periodBP settlement4343Remedies*
Preservation of class members rights to sue BP for compensatory
damages for physical conditions that manifest at a later date* A
transparent and efficient claims administration process.*
Establishes Gulf Region Health Outreach ProgramBP
settlement4444Conditionsacute ocular, respiratory, ear/nose/throat,
dermal, and neurophysical/neurological/odor-related conditions
BP settlement4545CompensationClean-Up Workers Zone A and Zone B
ResidentsEnhancer for Overnight Hospitalization and Payment of
Actual Hospital Expenses, if applicableLump sum payments plus
enhancers$1,300 to $60,700
BP settlement4646