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George W. ConkAdjunct Professor of Law & Senior Fellow, Stein Center for Law &
Ethics
Certified Civil Trial Attorney
Room 409
212-636-7446Torts Today tortstoday.blogspot.com
OtherwiseCommentari es on Law, Language & Poli tics
Blackstonetoday.blogspot.com
Fall 2013
Fordham Law School
BP Settlement
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8. Public nuisance resulting in pure
economic loss Restatement 3rd 9/3/13
An actor whose wrongful conduct harms
or obstructs public property or a public
resource is subject to liability for resulting
pure economic loss if the claimants losses
are distinct from those suffered bythe
public at large.
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Admiralty law preempts state
common law of tort Louisiana v. M/V Testbank, 752 F.2d 1019
(5th Cir. 1985)
Applying maritime law and rejecting state-law claims for nuisance by plaintiffsseeking to recover for economic lossessustained in connection with an oil spill
from a vessel on the Mississippi Riverwhich is federal water
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Oil Pollution Act 1990 33 U.S.C.. 2702
Elements of liability
(a) In general
each responsible party for a vesselor a facility from which oil isdischarged into or upon thenavigable waters or adjoiningshorelines or the exclusive economic
zone is liable for the removal costsand damages that result from suchincident.
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33 U.S.C.. 2702. Elements of liability
(A) Natural resources
Damages for injury to, destruction of, lossof, or loss of use of, natural resources...
(B) Real or personal property damage
(C) Subsistence use
(D) Revenues
Damages equal to the net loss of taxes,etc. ...by the Government of the UnitedStates, a State, or a political subdivisionthereof.
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33 U.S.C.. 2702. Elements of liability
(E) Profits and earning capacity
Damages equal to the loss of profits orimpairment of earning capacity... due tothe injury, destruction, or loss of real
property, personal property, or naturalresources...
(F) Public services
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FRCP 23 Class Actions
(a) Prerequisites.
(1) the class is so numerous that, joinderof 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
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Economic loss zone
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Proposed class action
settlements
Economic loss complaint
Medical benefits complaint
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Class definition: Natural Persons and
Entities who lost earnings, income, or
profits
Anyone living in Louisiana, Mississippi,Alabama or specified counties in Texasand Florida
Crew on vessels homeported or fishing inGulf waters
Owners of real estate
Commercial fishermen, vessel owners
Oyster leaseholders
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Exclusions
Claims for Economic Damage by Entitiesor Individuals based on employment in theBanking,Gaming, Financial, Insurance, Oil& Gas, Real Estate Development, andDefense Contractor industries, as well asEntities selling or marketing BP-brandedfuel (including jobbers and branded
dealers)
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Exclusions
Bodily Injury Claims BP Shareholder Claims
Moratorium Loss Claims
Claims relating to menhaden (or pogy)fishing, processing, selling, catching, orharvesting
Claims for punitive damages againstHalliburton and Transocean.
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Categories of recognized economic
harm claims
Individual Loss of Wages
Business Economic Loss
Multi-Facility Business Economic Loss
Start-Up Business Economic Loss
Failed Business Economic Loss
Failed Start-Up Business Economic Loss
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Property Damage
Loss of Use/Enjoyment of Real
Property
Coastal Real Property Damage
Wetlands Real Property Damage
Realized Real Property Sales Loss
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Special Categories
Vessels of Opportunity
Vessel Physical Damage
Subsistence Damage
Seafood Compensation Program
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For business losses
Compensation
framework
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Compare actual profit during post-spill
period to profits claimant might haveexpected
Step 1 Benchmark period minus 2010
loss period profits
Step 2 compensates for incremental
profits or losses relative to the benchmark
period
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Compensation & Benchmark Periods
The Compensation Period
Selected by the Claimant
- three or more consecutive monthsbetween May and December 2010
The Benchmark Period:
Pre-DWH Spill period claimant chooses asthe baseline for measuring its historicalfinancial performance.
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Compensation & Benchmark Periods
The claimant can select among the three
Benchmark Periods:
2009
2008-2009 average; or
The average of 2007-2009
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BPs lament expenses and
income do not match
Administrator has interpreted
revenue as cash received and
expenses as cash
Disbursed
Causal link of Business losses must
be shown
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5th Circuit October 2, 2013
Unjustifiable claims may be paid
The District Court must clarify how cash-basis claims are treated
Unlike `accrual accounting cash basisaccounting shows positive or negativecash flow but does does not demonstrateprofit and loss
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Causation reqts for business
economic loss claims NO causation evidence required for ZoneA businesses, Landing sites, commercialwholesale or retail dealer or primary
seafood processors
Zones B and C
V shaped pattern: 8.5 % or moredownturn compared to benchmark
Upturn of 5% or more in 2011 comapredto 2010
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Risk transfer premium RTP
Businesses added to 2010 losses
Tourism Zone A 2.5; zone B 2.0, Zone C2.0, Zone D 1.25
Charter 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 2.25
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RTP individuals
Tourism employees zones A, B, C 2.0,zone D 1.25
Charter fishing 2.5 Zones A, B, C
Zone D 1.25
Landing site 2.25 (all zones)
Non-tourism, non seafood Zone A 1.5 Zone B 1.25 Zones C, D 0.25
Individual periodic vendors 1.0
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Class action
Medical benefits
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Amchem v. Windsor (1997)
"Class members were exposed to different
asbestos- containing products, fordifferent amounts of time, in differentways, and over different periods. Some
class members suffer no physical injury orhave only asymptomatic pleural changes,while others suffer from lung cancer,
disabling asbestosis, or frommesothelioma . . . . Each has a differenthistory of cigarette smoking, a factor thatcomplicates the causation inquiry.
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Amchem v. Windsor (1997)
"The [exposure only] plaintiffs especially
share little in common, either with eachother or with the presently injured classmembers. It is unclear whether they will
contract asbestos-related disease and, ifso, what disease each will suffer. They willalso incur different medical expenses
because their monitoring and treatmentwill depend on singular circumstances andindividual medical histories."
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Medical Benefits Class
Claims for compensatory and punitivedamages and declaratory relief, broughtunder federal and maritime law fornegligence, negligence per se, gross
negligence, willful misconduct, and strictliability for personal injury and/or bodilyinjury, later-manifested injury, progression
of existing injury, damage, disease,mental or physical pain or suffering,emotional or mental harm or anguish
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DEFINITIONS
CLEAN-UP WORKERS at any time betweenApril 20, 2010, and April 16, 2012;
Resided in ZONE A for at least sixty daysbetween April 20, 2010, and September
30, 2010 (ZONE A RESIDENT), anddeveloped one or more
Resided in ZONE B for some time on each
of at least sixty days between
April 20, 2010, and December 31, 2010
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Excluded
Opt-outs from this settlement
* BP employees
* persons on Deepwater Horizon on April20, 2010
* anyone who has signed a release forsuch claims
* long-term (5 year) workers cleaning,loading, unloading or storinghydrocarbons, petrochemicals, or nuclearmaterials
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Remedies
Compensation for Specified Physical
Conditions claimed to be caused byexposure to oil and/or dispersants
Comprehensive Periodic Medical
Consultation Program providingregular medical examinations andtests to class members every three
years over a 21-year period
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Remedies
* Preservation ofclass members
rights to sue BP for compensatorydamages for physical conditions thatmanifest at a later date
* A transparent and efficient claimsadministration process.
* Establishes Gulf Region Health
Outreach Program
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Conditions
acute ocular, respiratory,
ear/nose/throat, dermal, and
neurophysical/neurological/odor-
related conditions
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Compensation
Clean-Up Workers Zone A and Zone B Residents
Enhancer for Overnight Hospitalization
and Payment of Actual Hospital Expenses, if applicable
Lump sum payments plus enhancers
$1,300 to $60,700
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