The BP oil spill in the Gulf of Mexico has given rise to some of the largest, most complex litigation in U.S. history. There have already been more than 300 lawsuits filed in federal courts, including over 250 filed as proposed class action lawsuits. If the class action lawsuits are certified by a judge as actual class actions, they could include millions of Gulf Coast residents, businesses, and property owners. Defendants in the cases include British Petroleum, Transocean and Halliburton. A ruling is expected in August.

July 29, 2010 – First Hearing Held in all Federal Oil Spill Lawsuits

The Judicial Panel on Multidistrict Litigation (JPML) held a hearing in Boise, Idaho, on July 29, 2010, to determine whether the cases should all be consolidated and, if so, which court should handle the cases. It is almost a foregone conclusion that the cases will be consolidated. The big issue is where the cases will be sent. The defendants have argued the cases should be sent to Houston, Texas. They were joined in their request by Houston attorney Mark Lanier, who represents some of the plaintiffs. Other oil spill attorneys argued the cases should be sent to New Orleans, Mississippi, or Mobile, Alabama. The Justice Department argued that the cases should be sent to New Orleans.

Some interesting statements were made by oil spill attorneys at the hearing today, so we thought this would be a good time to quote some of the statements by oil spill lawyers handling the BP lawsuits for Gulf Coast residents, businesses and property owners.

Oil Spill Attorneys – What Some Are Saying

July 29, 2010 – Boise, Idaho – Statements Made to Judicial Panel on Multidistrict Litigation (JPML)(from Reuters, The New York Times, and the Wall Street Journal).

New Orleans oil spill attorney Russ Herman:

“Our culture rises as a gumbo of Cajuns, Creole, French, German and Spanish,” he said. “All of that is threatened now. This disaster threatens our hope and faith. That’s why New Orleans is the best avenue of justice.”

“We rise out of our myth, our metaphor, our mystery, our seafood and our music, which now is threatened, and the threat of our culture threatens our hope and our faith. You have an opportunity to focus the world on this country, on this disaster, so it won’t happen again. Assist us in our resliiency.”

New Orleans oil spill attorney Allan Kenner: “”If after the Sept. 11 attacks this panel had sent all those cases to Houston or brought in a judge [from elsewhere] to sit in New York, the public would be outraged.”

BP attorney Andrew J. Langan, representing BP, reiterated that his client wants the cases sent to the Southern District of Texas for pretrial proceedings, asserting that “the key witnesses and key documents are by far located in Houston.” Langan told the Panel that, if the cases are sent to New Orleans, BP will argue that Judge Carl Barbier should recuse himself from the cases. Judge Barbier sold his oil stocks shortly after the spill and has refused to recuse himself.

“You are the Superman of the Justice League!” Russ Herman said to W. Mark Lanier, a plaintiffs lawyer who wants the cases heard in Houston, his home. (In an interview, Mr. Lanier noted that he had won many cases against oil giants in Houston, and said, “Houston jurors hate big oil, and think they’re all dirty.”)

Other statements by oil spill attorneys about the BP lawsuits and the JPML hearing (July 29, 2010)(from the Los Angeles Times and The Gazette):

Charlie Tebbutt, an Oregon attorney representing the Center for Biological Diversity in its suit alleging violations of the Clean Water Act, said he is pursuing the maximum penalties against BP and Transocean of $4,300 per barrel of oil spilled into the Gulf waters. He estimates the bill could be $20 billion, “if we can prove gross negligence or willful misconduct, which we expect should be relatively easy to prove in this case.”

“The stakes here are tremendous,” said Georgene Vairo, a Loyola Law School professor of civil procedure and expert in complex litigation. “For a single-event type of incident this is the biggest we’ve ever seen, just in the range of claims, the government and private party actions, the cost of claims, the insurance aspects. It’s just the whole nine yards. It’s huge.” “The facts here are going to be relevant to every single claim. What did they do when they built that pipeline and well? Who did what in terms of maintaining the well over time? Did they do the required inspections?” Vairo said. Once those questions are answered in one case, they can be applied to the rest, she said.

Oil spill attorney Allan Kenner: “We are witnessing nothing short of a collapse of an ecosystem that took tens of thousands of years to create.”

Check back for more quotes from oil spill attorneys in the coming days.

Oil Spill Attorneys Dispute $75 Million Cap on Oil Spill Lawsuits

5-4-2010 – The New York Times yesterday reported that a federal law (the Oil Pollution Act of 1990, or “OPA”) established a $1.6 billion reserve to pay for damages from oil spills, and that “Up to $1 billion of the $1.6 billion reserve could be used to compensate for losses….” But what really started people talking was the blockbuster contained in the Times article’s next sentence: “Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government. (emphasis added).

By dinnertime, thousands of articles had been posted on news sites and blogs discussing the possibility that BP would get away with paying only $75 million in damages, and Democratic Senators Bill Nelson of Florida and Robert Menendez and Frank Lautenberg of New Jersey had introduced legislation to raise that cap to $10 billion. The name of the new bill? The Big Oil Bailout Prevention Act.

But what of the Times’s assertion that BP faces “no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government?” It turns out that it’s not nearly as black-and-white as the Times article implies. We can thank Politico for adding some perspective.

Politico quotes Office of Management and Budget spokesman Ken Baer, who said, “If BP is found to be grossly negligent or to have engaged in willful misconduct or conduct in violation of federal regulations, then there is no cap under the Oil Pollution Act for damages. In addition, BP could be liable for damages under additional applicable federal and state laws. You can be sure that BP will be held accountable to the full extent of the law.” Politico also found someone with expertise in the matter, Houston lawyer Hutson Smelley Smelley actually wrote a law review article about the federal law.  According to Smelley, “The legislation allows the states to impose additional penalties and to continue to enforce their own laws.”

Also weighing in on the issue was David Pettit, Director of the Southern California Air Program. Pettit wrote, “The OPA expressly does not preempt claims under state law or common law.  A potential problem for plaintiffs in those non-federal claims is that they may need to prove negligence, but the flip side is that there is, in general, no cap on damages.”

It appears from this corner that the Times may have jumped the gun when it created the impression that BP’s liability to Gulf Coast residents will be limited to $75 million. The Associated Press quotes an Oppenheimer & Co. analyst who estimates that BP may be required to pay $5 billion to $15 billion for the cleanup, damage claims and lawsuits. AP notes that BP has already lost $32 billion in stock market valuation due to concerns over its oil spill liabilities. AP also quotes a New Orleans lawyer who represents oil and gas companies: ”The worst-case scenario is enormous. There are already a number of wrongful-death and personal injury cases out there. There will be no doubt more.”

About 30 class action lawsuits have already been filed by oil spill attorneys representing Gulf Coast residents. (See Oil Spill Lawsuits Flood Courthouses in the Central Florida Law Journal). BP earned profits of $14 billion in 2009, and over $6 billion in the first quarter of 2010. These oil spill attorneys do not believe BP’s damages will be capped at $75 million. BP can afford, and should be required, to pay all damages caused by its massive oil spill.

If you are interested, you can read relevant sections of the Oil Pollution Act of 1990 here. Below are some of the provisions of the Act:

(o) Obligation for damages unaffected; local authority not preempted; existing Federal authority not modified or affected

(1) Nothing in this section shall affect or modify in any way the obligations of any owner or operator of any vessel, or of any owner or operator of any onshore facility or offshore facility to any person or agency under any provision of law for damages to any publicly owned or privately owned property resulting from a discharge of any oil or hazardous substance or from the removal of any such oil or hazardous  substance.

(2) Nothing in this section shall be construed as preempting any State or political subdivision thereof from imposing any requirement or liability with respect to the discharge of oil or hazardous substance into any waters within such State, or with respect to any removal activities related to such discharge.

(3) Nothing in this section shall be construed as affecting or modifying any other existing authority of any Federal department, agency, or instrumentality, relative to onshore or offshore facilities under this chapter or any other provision of law, or to affect any State or local law not in conflict with this section.