The answer lies in admiralty: justifying oil spill punitive damages recovery through admiralty law.

AuthorBush, Brittan Jackson
  1. INTRODUCTION II. DEEPWATER HORIZON, THE OIL POLLUTION ACT, AND MARITIME LAW PUNITIVE DAMAGES A. The Oil Pollution Act of 1990 B. The Deepwater Horizon Spill C. The Case Against Punitive Damages Under the Oil Pollution Act D. Maritime Law and Punitive Damages III. REINVIGORATING OIL SPILL PUNITIVE DAMAGES A. Offshore Oil Exploration and Maritime Jurisdiction B. The Supreme Court's Affirmation of Punitive Damages in Maritime Law 1. South Port: A Modern Reexamination 2. The Clean Water Act Preemption Argument 3. The Exxon and Townsend Argument IV. APPLYING THE ARGUMENTS A. General Maritime Causes of Action B. Claims Under the Oil Pollution Act V. OIL SPILL PUNITIVE DAMAGES: A NORMATIVE AND MORAL JUSTIFICATION A. Punitive Damages as a Mechanism of Retributive Justice B. Punitive Damages as a Deterrence Mechanism VI. CONCLUSION I. INTRODUCTION

    On April 20, 2010, the Deepwater Horizon oil spill struck the Gulf of Mexico and not only took the ecology and citizens of the Gulf Coast hostage, but courts along the Gulf as well. (1) The Deepwater Horizon oil spill is the largest marine pollution disaster in history and may result in the most complex and drawn out litigation in United States history. (2) While the spill's grasp on the Gulf Coast's ecology and citizens lasted only eighty-seven days, when the well was eventually sealed, (3) Deepwater Horizon's grasp on the judicial system remains until the final Deepwater Horizon case is adjudicated.

    Deepwater Horizon likely poses the most complex questions of liability ever presented to the United States judicial system. The ongoing litigation will likely involve numerous responsible parties and independent oil exploration contractors, thousands of plaintiffs, and state and local governments across the Gulf Coast. If history serves as any indicator, the Deepwater Horizon litigation could easily result in decades of litigation over the spill's liability similar to the twenty-year litigation involving the Exxon Valdez spill. (4) At the heart of the litigation lies a web of comprehensive statutes and liability regimes that muddy the already oil-soiled waters of the Deepwater Horizon controversy. Included in this web are the liability provisions of the Oil Pollution Act of 1990 (OPA), (5) the Federal Water Pollution Control Act (Clean Water Act or CWA), (6) Resource Conservation and Recovery Act of 1976 (RCRA), (7) Merchant Marine Act of 1920 (Jones Act), (8) Death on the High Seas Act (DOHSA), (9) as well as general maritime law. (10) This Article, however, turns its focus away from the specific compensatory remedies available under these statutory regimes and maritime law. Instead, this Article examines admiralty law's role in formulating an oil spill punitive damages regime for causes of action asserted under the OPA and maritime law.

    Until recently, many regarded the recovery of punitive damages in oil spill causes of action as a closed question. In the wake of the Exxon Valdez spill, Congress enacted the OPA in order to establish a comprehensive liability scheme for oil spills. (11) Congress, however, did not include any language regarding punitive damages within the OPA's provisions. The OPA's silence on punitive damages recovery required the judiciary to determine if the OPA's provisions barred punitive damages recovery for OPA claims and general maritime causes of action. While the Supreme Court has not directly addressed this question, the United States First Circuit Court of Appeals, in South Port Marine, L.L.C. v. Gulf Oil Ltd. Partnership (South Port), (12) held that punitive damages were not recoverable under the OPA and in dicta extended the exclusion of punitive damages recovery to general maritime claims as well. (13) The First Circuit's decision relied heavily on the Supreme Court's decision in Miles v. Apex Marine Corp. (14) Now, the First Circuit's decision in South Port must be reconsidered in fight of the Supreme Court's recent holdings in Exxon Shipping Co. v. Baker (Exxon) (15) and Atlantic Sounding Co. v. Townsend, (16) which criticize Miles. (17)

    This Article argues that South Port's reliance on Miles as well as congressional silence on punitive damages under the OPA leaves the question of punitive damages recovery open for future interpretation. (18) In addition, it argues that the Supreme Court's holdings in Exxon and Townsend provide arguments that justify punitive damages recovery for OPA claims and general maritime law causes of action arising from oil spills. It also provides normative justifications arguing that punitive damages are a necessary punishment and deterrence mechanism that may prevent future oil spills.

    This Article proceeds in five parts. Part II sheds greater light on the history of punitive damages recovery for oil spills. First, it provides a brief sketch of oil spill liability prior to the OPA's enactment in 1990. (19) It proceeds by applying the OPA's liability provisions specifically to the Deepwater Horizon oil spill. (20) Part II then examines the lower court decisions holding that punitive damages are not recoverable in OPA and general maritime law causes of action. (21) Part II concludes by presenting the Supreme Court's decisions in Miles, Exxon, and Townsend and ultimately questions the reliability of the lower court decisions barring punitive damages under the OPA and general maritime law. (22)

    Part III discusses the potential for maritime law to play a role in causes of action that may result in punitive damages. Part HI begins by noting that oil spills resulting from offshore oil exploration on semi-submersible movable drilling rigs, like the Deepwater Horizon, come under federal maritime jurisdiction due to the status of these rigs as vessels. (23) Part III then argues that the First Circuit's decision in South Port must be reevaluated in light of the Court's commentary on Miles in Townsend and Exxon. (24) After reopening the punitive damages debate through a refutation of South Port, Part III presents the Supreme Court's punitive damages preemption analysis of the CWA from Exxon. (25) Part III concludes that Exxon and Townsend form a complementary argument justifying punitive damages under the OPA and general maritime law causes of action. (26)

    Part IV applies the arguments from Exxon and Townsend to three types of claims that may be asserted in the wake of an oil spill. (27) It first argues that Exxon and Townsend mandate punitive damages recovery for general maritime claims outside of the OPA, including claims against non-responsible parties. (28) It next argues that Exxon and Townsend present a strong normative justification for punitive damages recovery in OPA claims that overlap with a general maritime law cause of action in which a preexisting punitive damages remedy exists.(29) It also argues that the goal of uniformity within the OPA's remedial scheme mandates that punitive damages recovery be extended to OPA claims without an overlapping general maritime law cause of action. (30) Part IV concludes by arguing that punitive damages' goals of punishment and deterrence require a punitive damages remedy for wrongful death and personal injury claims arising out of an oil spill. (31)

    Part V presents normative arguments in favor of oil spill punitive damages recovery. (32) It first argues that oil spill punitive damages recovery aligns with the punishment and retributive justice functions of punitive damages. (33) Part V also argues that oil spill punitive damages awards would function as a deterrence mechanism. (34) It ultimately advocates that punitive damages, because of their deterring effect, are necessary to prevent future marine oil spill disasters.

    Part VI concludes by urging the judiciary to allow punitive damages recovery for causes of action asserted under the OPA as well as general maritime law. (35)


    1. The Oil Pollution Act of 1990

      Prior to Congress's enactment of the OPA, liability for oil spills went through several phases. Until 1970, state law governed liability for damages and cleanup costs resulting from oil spills. (36) The rise of international transportation of petroleum and offshore oil exploration in the 1960s, however, limited the strength of state-enacted oil spill liability regimes. (37) In 1970, the federal government responded to the changes in the oil industry and established the first federal liability scheme for oil spills under the Water Quality Improvement Act of 1970. (38) In 1972, Congress incorporated the oil spill provisions from the Water Quality Improvement Act into the CWA. (39) Finally, Congress enacted the OPA, the current federal liability regime for oil spills, in response to the Exxon Valdez spill. (40) Congress's goal in enacting the OPA was to "streamline federal law to provide quick and efficient cleanup of oil spills, compensate victims of such spills, and internalize the costs of spills within the petroleum industry." (41)

      The OPA provides an extensive liability scheme for oil spills from vessels, offshore oil facilities, and land-based oil production facilities. (42) When oil is discharged into navigable waters of the United States, adjacent shorelines, or exclusive economic zones, the OPA states that each "responsible party" is liable for "removal costs" and "damages." (43) Removal costs are defined as the costs associated with removal measures that are "necessary to minimize or mitigate damage to the public health or welfare, including, but not limited to, fish, shellfish, wildlife, and public and private property, shorelines, and beaches." (44) Damages under the OPA are provided for 1) injury to, destruction of, loss of, or loss of use of natural resources, 2) injury to, or economic losses from, destruction of property, 3) loss of subsistence of natural resources, 4) net loss of taxes and other revenue from injury or loss of property, 5) loss of profits from damage to...

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