Fall 2013 Fordham Law School

BP Settlement
George W. Conk Adjunct Professor of Law & Senior Fellow, Stein Center for Law & Ethics Certified Civil Trial Attorney Room 409 gconk@law.fordham.edu 212-636-7446 Torts Today tortstoday.blogspot.com Otherwise Commentaries on Law, Language & Politics Blackstonetoday.blogspot.com

BP settlement

 8. Public nuisance resulting in pure economic loss Restatement 3rd 9/3/13

An actor whose wrongful conduct harms or obstructs public property or a public resource is subject to liability for resulting pure economic loss if the claimants losses are distinct from those suffered bythe public at large.
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Admiralty law preempts state common law of tort

Louisiana v. M/V Testbank, 752 F.2d 1019 (5th Cir. 1985)

Applying maritime law and rejecting statelaw claims for nuisance by plaintiffs seeking to recover for economic losses sustained in connection with an oil spill from a vessel on the Mississippi River which is federal water
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Oil Pollution Act 1990 33 U.S.C.. 2702 Elements 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.
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33 U.S.C.. 2702. Elements of liability (A) Natural resources Damages for injury to, destruction of, loss of, or loss of use of, natural resources... (B) Real or personal property damage (C) Subsistence use (D) Revenues Damages equal to the net loss of taxes, etc. ...by the Government of the United States, a State, or a political subdivision thereof.
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33 U.S.C.. 2702. Elements of liability (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... (F) Public services

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FRCP 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.
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Economic loss zone

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Proposed class action settlements

Economic loss complaint Medical benefits complaint

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Class definition: Natural Persons and Entities who lost earnings, income, or profits Anyone living in Louisiana, Mississippi, Alabama or specified counties in Texas and Florida Crew on vessels homeported or fishing in Gulf waters Owners of real estate Commercial fishermen, vessel owners Oyster leaseholders
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Exclusions

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)

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Exclusions

Bodily Injury Claims BP Shareholder Claims Moratorium Loss Claims Claims relating to menhaden (or pogy) fishing, processing, selling, catching, or harvesting Claims for punitive damages against Halliburton and Transocean.
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Categories of recognized economic harm claims

Individual Loss of Wages Business Economic Loss Multi-Facility Business Economic Loss Start-Up Business Economic Loss Failed Business Economic Loss Failed Start-Up Business Economic Loss
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Property Damage

Loss of Use/Enjoyment of Real Property Coastal Real Property Damage Wetlands Real Property Damage Realized Real Property Sales Loss

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Special Categories

Vessels of Opportunity Vessel Physical Damage Subsistence Damage Seafood Compensation Program

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Compensation framework
For business losses

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Compare actual profit during post-spill period to profits claimant might have expected

Step 1 Benchmark period minus 2010 loss period profits

Step 2 compensates for incremental profits or losses relative to the benchmark period
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Compensation & Benchmark Periods

The 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.

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Compensation & Benchmark Periods

The claimant can select among the three Benchmark Periods: 2009 2008-2009 average; or

The average of 2007-2009

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BPs lament expenses and income do not match

Administrator has interpreted revenue as cash received and expenses as cash

Disbursed Causal link of Business losses must be shown

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5th Circuit October 2, 2013

Unjustifiable claims may be paid The District Court must clarify how cashbasis claims are treated Unlike `accrual accounting cash basis accounting shows positive or negative cash flow but does does not demonstrate profit and loss

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Causation reqts for business economic loss claims

NO causation evidence required for Zone A businesses, Landing sites, commercial wholesale or retail dealer or primary seafood processors Zones B and C V shaped pattern: 8.5 % or more downturn compared to benchmark Upturn of 5% or more in 2011 comapred to 2010
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Risk transfer premium RTP Businesses added to 2010 losses

Tourism Zone A 2.5; zone B 2.0, Zone C 2.0, Zone D 1.25 Charter 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 2.25

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RTP individuals

Tourism employees zones A, B, C 2.0, zone D 1.25 Charter fishing 2.5 Zones A, B, C Zone D 1.25 Landing site 2.25 (all zones) Non-tourism, non seafood Zone A 1.5 Zone B 1.25 Zones C, D 0.25 Individual periodic vendors 1.0
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Medical benefits
Class action

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Amchem 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.
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Amchem 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."
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Medical Benefits Class

Claims 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
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DEFINITIONS

CLEAN-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 between April 20, 2010, and December 31, 2010
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Excluded

Opt-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 materials
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Remedies

Compensation for Specified Physical Conditions claimed to be caused by exposure to oil and/or dispersants Comprehensive Periodic Medical Consultation Program providing regular medical examinations and tests to class members every three years over a 21-year period

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Remedies

* 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 Program

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Conditions
acute ocular, respiratory, ear/nose/throat, dermal, and neurophysical/neurological/odorrelated conditions

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Compensation

Clean-Up Workers Zone A and Zone B Residents Enhancer for Overnight Hospitalization and Payment of Actual Hospital Expenses, if applicable Lump sum payments plus enhancers $1,300 to $60,700

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