The legal fallout from major offshore events such as the DEEPWATER HORIZON spill, PIPER ALPHA, and the grounding of the EXXON VALDEZ has resulted in extreme stress testing of liabilities allocation in upstream oil and gas project contracts. The risks inherent in the offshore oil and gas industry are very large. This Article examines how liability is shared during offshore construction projects, the standard insurance policy that is commonly used in respect of such risks, and a number of topical issues that parties engaged in such activity might bear in mind when they are negotiating contracts and insurance arrangements to protect their position.
To most people, nothing is more fascinating and newsworthy than a maritime disaster. A burning factory in Kentucky or a pipeline oil spill in Utah does not generate the same sense of drama and excitement as an equivalent amount of spilled oil from a burning ship or oil platform in Louisiana, Texas, or anywhere else. This Article partners a panel presentation at the 2011 Tulane Admiralty Law Institute. In this presentation, for illustrative purposes, the authors played back a United States Coast Guard Vessel Traffic Service (VTS) Automatic Identification System (AIS) Electronic Chart Display (ECDIS) for the M/T BOW FORTUNE--M/T STOLT ZULU collision at 81 Mile Point on the Mississippi River above New Orleans at about 0440 hours on May 19, 2006.
Following the Deepwater Horizon incident, there was a great deal of criticism of the Limitation of Shipowners Liability Actand claims that the owner of the Deepwater Horizon was using a legal loophole to shortchange those injured and the survivors of those killed on the rig. For instance, Senator John Rockefeller IV, Chairman of the Senate Committee on Commerce, Science, and Transportation, said.. . .
On April 20, 2010, the mobile offshore drilling unit (MODU) Deepwater Horizon exploded and caught fire in the Gulf of Mexico. Eleven (11) workers were killed and seventeen (17) were injured. Three days later the rig sank, and millions of gallons of oil escaped into the Gulf of Mexico until the well was finally capped on July 15, 2010. Numerous lawsuits followed seeking compensation for the personal injuries and deaths as well as for property, business, and natural resource damages caused by the explosions, fire, and spill. These cases have been consolidated in the United States District Court for the Eastern District of Louisiana by order of the United States Judicial Panel on Multidistrict Litigation.
This disaster and the resulting litigation has brought national attention to the complex substantive and procedural issues that arise from such maritime accidents. It has also showcased the disparities in the remedies among classes of personal injury and wrongful death plaintiffs. While the litigation also involves claims for property damage, business loss, and damage to natural resources, this Article will analyze the issues strictly as they relate to the claims for personal injury and death. It will provide a broad overview of the rights and remedies of the injury and death plaintiffs and highlight the differences between the different plaintiff groups.
In the aftermath of the Deepwater Horizon oil spill of 2010, President Obama urged Congress to amend the natural resource damage provisions of the Oil Pollution Act of 1990 to replace the rebuttable presumption of validity the law presently accords to damage assessments by the designated natural resource trustees that were conducted in accordance with regulations promulgated by the National Oceanic and Atmospheric Administration with the standard of judicial review prescribed by the Administrative Procedures Act (APA). Although the House of Representatives passed such an amendment in 2010, the Senate failed to act on the amendment before the 111th congressional term ended. Nevertheless, White House and congressional support in the wake of the 2010 spill suggests that the proposal is likely to resurface in the near future. Accordingly, this Article examines the meaning and effect of the proposed substitution of APA review for the existing rebuttable presumption, potential difficulties in implementing the new standard, and whether the amendment might unconstitutionally deprive spillers of the right to a jury trial.
The explosion of the BP-leased Deepwater Horizon and subsequent oil spill stand as an indictment not just of our national energy priorities and environmental law enforcement; they equally represent a failure of Anglo-American corporate law and what passes for corporate social responsibility in business today. Using BP and the disaster as a compelling case study, this Article examines green marketing and corporate governance and identifies elements of each that encourage firms to engage only superficially in corporate social responsibility yet trumpet those efforts to eager consumers and investors. This Article then proposes reforms and protections designed to increase corporate social responsibility, root out greenwashing, and recognize liability for corporate social responsibility frauds on consumers and investors. One of these protections derives from the newly enacted Dodd-Frank Act, whose Bureau of Consumer Financial Protection could play a leading role in policing fraudulent claims of corporate social responsibility.
What is the current scheme in the United States for dealing with oil pollution? This Article examines the question from several perspectives. These include the basic liability regime, including removal costs and damages. OPA has gone further than any other statute in providing for both public and private remedies. The discussion will cover the basis for liability, parties responsible for paying removal costs and damages, defenses to liability, damages recoverable by governmental entities and private parties, limitation of liability, including loss of the right to limit, insurance, and other forms of financial responsibility. This Article will briefly address the claims procedure, including claims made against the Oil Spill Liability Trust Fund. This Article will then discuss possible criminal prosecutions followed by administrative and civil penalties. Finally, this Article will look at choice-of-law issues with particular attention devoted to the role of state laws.