The Wall Street Journal (7/1, Tracy, Hughes) reports the Senate Environment and Public Works Committee voted to remove the existing $75 million offshore oil spill liability cap. Remarkably, according to the Journal, the panel's move faces opposition and is not assured of passage by the full Senate. The Independent Petroleum Association of America argues that the absence of a cap would benefit only the largest transnational oil companies. IPAA chair Bruce Vincent, president of Swift Energy, is quoted as saying, "This is unreasonable from an economic and business standpoint and will have a devastating impact on job losses and possible increased reliance on foreign oil."

The New York Times (7/1, Broder, Robbins) notes that the committee "voted to remove the liability cap altogether, brushing aside a Republican amendment that would allow the president to set varying caps for individual accidents." The House Transportation and Infrastructure Committee "will take up its own version of a liability limits law on Thursday."

Bloomberg News (7/1, Chipman) reports, "President Barack Obama supports raising the ceiling and has faulted Republicans for blocking efforts to make BP more fully liable for damages tied to the worst US oil spill. BP Chief Executive Officer Tony Hayward has said he expects the liability limit to be increased."

It always strikes me as blatantly self-serving when companies seek to limit their obligation to pay for the damages they have caused due to their carelessness and recklessness.  They like to argue that it will adversely impact their profits.  Why should they be able to avoid accountability? Why should the innocent people and companies they harm be the ones to suffer unfairly?   As our parents said when we were children, take responsibility for your actions.  Don't make excuses.  And learn from your mistakes.

Safety and people must be put above profits.

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When a BP refinery in Texas exploded in 2005, killing 15 workers and injuring 300, the company paid out $1.6 billion in settlements to compensate those workers and their families. But the families of those killed in the April 20, 2010, explosion on board the Deepwater Horizon stand to recover far less.

It turns out that deaths on the Deepwater Horizon fall under the authority of the Death on the High Seas Act (DOHSA) of 1920, an antiquated statute that severely restricts the liability of negligent corporations operating more than 3 nautical miles offshore, as BP was on the Deepwater Horizon.

Under DOHSA, the families of the workers killed on the Deepwater Horizon stand only to recover economic damages (in this case essentially the equivalent of a worker's anticipated wages for the rest of his life), NOT any compensation for pain and suffering or for the family's loss of the victim in their lives. Future wages cannot possibly compensate for a family's permanent loss of a husband and father.

However, there is at least one precedent that offers hope to the families of those lost on the Deepwater Horizon. In the wake of the fatal TWA Flight 800 crash in 2000, Congress amended DOHSA to allow commercial airline passengers to sue for non-economic damages, retroactively allowing those families to obtain a more just recovery. On June 8, 2010, Senator Patrick Leahy (D-VT) introduced legislation, under the name "Survivors Equality Act," that seeks to do the same for the victims of the Deepwater Horizon tragedy.

"Gordon Jones, a mud engineer killed on the Deepwater rig, left behind a pregnant wife who had quit her job to stay home with their two-year-old son. But thanks to DOHSA, the most BP could owe them is the equivalent of Gordon's salary over his working life, minus what he would have paid out in taxes and personal expenses. So if Gordon made $60,000 a year for the next 30 years, BP could owe the family less than a million dollars.

The math works out even worse for workers without dependents. Jones's brother Chris testified before the Senate Judiciary Committee that one of the other Deepwater workers who was killed was single and childless. That means his family would only be entitled to recover funeral expenses under DOHSA. But because his body was never recovered after the explosion, the funeral costs will be lower. BP could end up paying his family as little as $1,000 for their loss."

The Atlantic also points out that Senator Leahy and his cosponsors, Senators Whitehouse (D-RI) and Durbin (D-IL), may be facing a tougher battle than one might expect to get his bill passed. Over the years, the most aggressive opposition to the expansion of the protections under DOHSA has come not from the airlines, not from big oil corporations, but from the cruise line lobby. 

When Senator John Kerry (D-MA) succeeded in introducing legislation that would have expanded liability for non-economic damages to all victims at sea into DOHSA in 2009, the cruise line industry spent $2.2 million lobbying (successfully) to stall the bill. Why?

According to a 2007 article in The Guardian, between just 2003 and 2007, 34 passengers and 2 crew members went missing on cruises in international waters, not including known suicides with bodies never recovered. Many of these disappearances took place under shady circumstances. An update to the protections offered to passengers by DOHSA would mean, simply put, that cruise lines could be held far more accountable for the safety of their passengers.

Sources and Additional Resources:

• "My Son's Grieving Family Deserves More from BP" from CNN.com
• "Will Deepwater Horizon Families Get Their Due?" from In These Times
• "Will the Cruise Ship Industry Do BP's Dirty Work?" from The Atlantic
• "Leahy Introduces Survivors Equality Act to Allow Families of Oil Rig Victims to Seek Justice in Court" from Senator Leahy's Webpage
• "Death on the High Seas" from The Guardian

Related previous posts on the DC Metro Area Personal Injury Law Blog:

• "Special Master Oversees BP Compensation Fund"  6/21/2010
• "BP Establishes $20 Billion Compensation Fund"  6/18/2010

President Obama met with the leaders of oil giant BP on Wednesday at the White House.  Following President Obama's strong urging,  BP announced that it agreed to establish a $20 billion compensation fund for victims of the April 20, 2010, Deepwater Horizon oil spill. By federal law, economic liabilities for oil spills are capped at a mere $75 million; BP's waiver of that limit represents a significant concession in the face of intense pressure from the Obama Administration, Democratic leaders in Congress, and the American public. Importantly, the $20 billion fund does NOT cap BP's liability--the Wall Street Journal reports that the figure serves as "neither a floor nor a ceiling" for the ultimate price tag. 

President Obama was determined not to let this environmental disaster turn into another Exxon Valdez case.  In the Valdez case, Exxon deliberately dragged the legal proceedings on for nearly 20 years, and then paid only $5 Billion in damages----Exxon's profits during this time were as high as $40 Billion per year.  Many of the fishermen and others whose livelihoods were destroyed by the Valdez spill never received any money during their lifetimes. 

The BP compensation fund will be independently administered and controlled by Kenneth Feinberg. Feinberg has experience not only as the administrator of the compensation fund for victims of the 9/11 terror attacks, but more recently as the "Wall Street Pay Czar," controlling the pay of financial executives as part of the government's bailout of the banking industry.

In addition to the $20 billion fund, BP has agreed to set up a $100 million fund specifically designated to compensate workers affected by the 6-month offshore drilling moratorium enacted by the Obama Administration in response to the disaster.  Further details about the compensation fund are expected in the coming days.