Parens patriae litigation to redress societal damages from the BP oil spill: the latest stage in the evolution of crimtorts.

• Author: Rustad, Michael L.

ABSTRACT *

The BP oil spill has led to some of the most complex legal dilemmas in Anglo-American history. This Article explores four mechanisms that claimants are using to seek compensation for damages caused by this unprecedented environmental disaster: (1) One-on-One Torts; (2) Class Actions; (3) the Gulf Coast Claims Facility; and (4) Environmental Patens Patriae Actions. We argue that the government-initiated parens patriae actions are necessary to supplement, but not to supplant, the other three mechanisms in order to vindicate the larger societal injury. The patens patriae litigation may enable the Gulf States to recoup larger societal losses to their habitat, ecosystems, tax revenues, and tourism. This mechanism can potentially resolve the problem of aggregating valid claims by plaintiffs who cannot be certified as classes or who do not qualify under the Gulf Coast Claims Tribunal Guidelines. We classify environmental patens patriae as public crimtorts because government attorneys deploy private tort law to redress societal injuries. By contrast, in private crimtorts, trial lawyers receive punitive damages as a bounty for uncovering and prosecuting dangerous conditions and practices. Both public and private crimtorts require intermediate procedural protections to ensure that corporate defendants are treated fairly. Courts or legislatures will need to determine which intermediate protections best balance defendants' rights versus society's interests.

1. INTRODUCTION: THE BP OIL CATASTROPHE II. PART I: CIVIL JUSTICE ALTERNATIVES FOR COMPENSATING THE BP OIL SPILL VICTIMS A. "One-on-One" Torts 1. The Case for Individualized Environmental Justice 2. Difficulties in Proving Causation in Environmental Torts 3. David v. Goliath Imbalance in Legal Resources a. The BP Corporate Family b. The Transocean Corporate Family c. The Halliburton Corporate Family d. The Andarko Corporate Family e. The Moex Offshore Corporate Family f. Cameron International Corporation g. Miscellaneous Additional Defendants 4. One-on-One Environmental Torts Will Overwhelm the Civil Justice System B. The Gulf Coast Claims Facility (GCCF) 1. The Formation of the Gulf Coast Claims Facility 2. Advantages of the Gulf Coast Claims Facility 3. Concerns About the Gulf Coast Claims Facility a. Kenneth Feinberg: The $20 Billion Dollar Man b. The GCCF's Legitimacy and Transparency Limitations c. Controversial GCCF Proximate Cause Delimiters d. Exclusion of Noneconomic Damages as Tort Reform in Disguise e. The Abolition of the Collateral Source Rule f. The GCCF Does Not Compensate Societal Damages C. Class Actions Against Oil Industry Defendants 1. Advantages of Class Actions III. PART II: THE RESURRECTION OF PARENS PATRIAE FOR COLLECTIVE INJURIES A. The Gulf States' Parens Patriae Environmental Actions B. History of Parens Patriae 1. The Equitable Roots of Parens Patriae 2. Parens Patriae Exported to America 3. Injunctive Relief in Early Parens Patriae Environmental Cases C. The Modern Expansion of Parens Patriae D. The Metamorphosis of Public Nuisance 1. Public Nuisance in Tobacco Parens Patriae Actions 2. Public Nuisance in Environmental Parens Patriae Actions a. Show Me the Money: Parens Patriae Actions b. The Rise of Public Crimtorts 3. Alabama's Pioneering Environmental Parens Patriae Action 4. Louisiana's Declaratory Judgment Action 5. Mexican States' Lawsuits 6. Panama City's Environmental Parens Patriae Lawsuit 7. Justice Department Oil Spill Lawsuit IV. PART III: PUBLIC CRIMTORTS TO REDRESS ENVIRONMENTAL MASS DISASTERS A. Crimtorts to Vindicate Societal Damages B. Public Crimtorts as Parens Patriae Actions C. Public Crimtorts Versus Alternative Pathways.. 1. Punitive Damages as the Paradigmatic Crimtort Remedy 2. Crimtorts' Procedural Justice Framework 3. Unresolved Policy Issues in Environmental Crimtorts a. Separation of Powers b. Market-Based Solution to Cost-Shifting 4. Parens Patriae Action as a "Fourth Branch of Government?" 5. Limiting the Overkill Problem V. CONCLUSION: ENVIRONMENTAL CRIMTORTS AS A SUPPLEMENT TO PRIVATE LITIGATION I. INTRODUCTION: THE BP OIL CATASTROPHE

   On April 20, 2010, an explosion and fire on the Mobile Offshore Drilling Unit Deepwater Horizon ("Deepwater Horizon") oil rig killed eleven workers. (3) Deepwater Horizon's drilling platform sank into the Gulf of Mexico two days later, "bending and breaking a riser pipe carrying oil to the ocean surface from approximately 5,000 feet below the sea floor." (4) The resulting release of five million barrels of oil (5) created the largest marine environmental catastrophe in U.S. history. (6) For an eighty-seven-day period, the broken pipe released approximately 35,000 to 60,000 barrels of crude oil daily into the waters of the Gulf of Mexico (7) before it was capped off and finally declared "effectively dead" on September 19, 2010. (8) The ensuing 200-mile wide and 300-mile long oil slick polluted "the precious wetlands, bays, and estuaries of Louisiana's Coastal Zone with heavy oil and sludge, and has reportedly contaminated beaches in Mississippi, Alabama, and Florida." (9) The oil spill "closed a third of the Gulf's critical fishing grounds," creating an economic disaster because "[f]or the Gulf States, $10.5 billion of gross domestic product is tied to the fishing industry." (10) The cascading effects of this widespread environmental devastation (11) have created unprecedented legal dilemmas that require rethinking of the traditional division between private and public law. The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling in its January 11, 2011 Report to the President, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling, called for new legal reforms to hold oil companies more accountable for environmental damage. (12) Laws and regulations, the Commission unanimously concluded, "lag behind the real risks associated with deepwater drilling into large, high-pressure reservoirs of oil and gas located far offshore and thousands of feet below the ocean's surface." (13) The United States Justice Department filed suit against BP Products North America in a federal district court in Texas in March 2009 for violating the Clean Air Act. (14) The Justice Department sought an injunction and monetary penalties, charging BP Products with failing to report hazards required under Risk Management Program regulations in its Texas City refinery. (15) British Petroleum's (BP) history of failure to safeguard the Gulf region's environment drew harsh criticism, (16) as did the company's failure to protect the safety of its workers over the past fifteen years. (17)

   This Article recommends that the Gulf States use their parens patriae powers to file environmental tort lawsuits to recover for societal damages to their natural resources and people. (18) Our focus is on identifiable societal losses to governments and municipalities caused by BP and other oil industry defendants. Our argument unfolds in three parts. Part I examines three leading civil justice system alternatives for compensating the victims of the BP oil spill: (1) one-on-one torts; (2) private dispute resolution in the form of the Gulf Coast Claims Facility, which is funded by BP; and (3) private class actions certified for diverse victim categories. Our litigation roadmap will illustrate the challenges confronting each of these approaches due to both the diverse categories of potential plaintiffs and the heterogeneous corporate families named as defendants.

   We propose public crimtorts in the form of parens patriae environmental litigation to supplement, but not to supplant, the other three approaches by addressing the societal damages incurred by the Gulf States independently from the injuries suffered by the private litigants. The claimants seeking the three remedies discussed in Part I face barriers arising out of the sheer magnitude of the spill, the complexity of establishing multiple causation, potential conflicts of interest, judicial reluctance to collectivize claims, and the difficulties of identifying responsible parties. To the extent that these policy alternatives fail, the states could bridge the enforcement gap by establishing alternative compensation schemes funded by parens patriae actions.

   Part II traces the path of parens patriae litigation from its origins in Medieval England to its application in contemporary public health and environmental tort actions. We acknowledge some of the criticisms made about public health and environmental parens patriae, but conclude that this collective solution provides a key complement to the proposed alternatives of a private claims facility, class actions, or individual lawsuits in redressing the societal harms caused by the BP oil spill.

   Part III explores the crimtort implications of governmental actors deploying private tort remedies such as punitive damages in environmental disaster cases. First, we classify parens patriae actions as public environmental crimtorts that blend the deterrence function of criminal law with the compensatory function of the law of torts. Second, we demonstrate that parens patriae environmental tort action is the sole remedy that vindicates the states' sovereign or quasi-sovereign interest in protecting its natural environment, habitat, public health, or financial well-being. Third, we argue that public environmental crimtorts provide a collective solution for societal injuries without devolving into an illegitimate fourth branch of government. Thus, we conclude that environmental parens patriae crimtort actions potentially fill the enforcement gap left by the inadequacies of legislation, regulation, criminal law, and litigation by private parties.

2. PART I: CIVIL JUSTICE ALTERNATIVES FOR COMPENSATING THE BP OIL SPILL VICTIMS

   1. "One-on-One" Torts

      1. The Case for Individualized Environmental Justice

         Courts are reluctant to certify punitive damages class actions to aggregate...