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 409gconk@law.fordham.edu212-636-7446Torts 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