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Oil Spill Damages — Count Your Losses Carefully


If you’ve followed the news lately, you’ve probably noticed that a number of suits have been filed in states along the Gulf, as those devastated by the British Petroleum (BP) oil spill attempt to recover for losses to their property and livelihood. Attorneys have filed suit in Birmingham, Galveston, and New Orleans, on behalf of fishermen in the regions. While most of these suits are aimed at the worthy goal of restoring some semblance of normalcy back to the lives of the people of the Gulf region, the litigation itself may be somewhat premature.

Under the Oil Pollution Act of 1990 (OPA), which will govern BP in determining their liability, “all claims for removal costs or damages shall be presented first to the responsible party.” See 28 U.S.C. §2713. President Obama has already designated BP as a responsible party under OPA. The next step should be to file claims with BP, not to file suit against them. Once BP has notice of the claim, they have 90 days to pay for the damages before the claimant can bring litigation. In the cases brought thus far, claims have not been filed with BP because it has not even been 90 days since the April 20 Deepwater Horizon explosion. Those injured may also opt into the Oil Spill Liability Trust Fund, which may be focused mainly on removing the oil.[1]

The conclusion is that presenting a claim to a responsible party prior to filing suit is a mandatory condition precedent, and judges have dismissed OPA cases that have failed to do this. In a 1995 case, Boca Ciega Hotel Inc. v. Bouchard Transp. Co. Inc., the 11th Circuit Court of Appeals dismissed an OPA claim that was not properly made to the defendant prior to trial. Any case brought prior to this type of action should thus eventually prove unfruitful.

BP has provided individuals with a claims process through which they plan to reimburse some individuals for part of the losses they have incurred. This, however, may not be an adequate remedy for those who have suffered significant financial harm. The losses suffered by many will not be fully known or calculable for some time.

Individuals and businesses should be wary of settling claims for future injury with BP when the totality of the oil spill is not yet known. There should be little doubt that in settling these claims, BP is acting in their own best interests. Those who have suffered property or business loss from the oil spill should do the same and know the potential effects of reaching a settlement with BP, which may not take into account all damages.

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