In re Oil Spill By the Oil Rig “Deepwater Horizon” in the Gulf Mexico

• Decision Date: 30 March 2015
• Docket Number: No. MDL 2179.,MDL 2179.
• Citation: 98 F.Supp.3d 872
• Parties: In re OIL SPILL BY THE OIL RIG “DEEPWATER HORIZON” IN THE GULF OF MEXICO, ON APRIL 20, 2010
• Court: U.S. District Court — Eastern District of Louisiana

98 F.Supp.3d 872

In re OIL SPILL BY THE OIL RIG “DEEPWATER HORIZON” IN THE GULF OF MEXICO, ON APRIL 20, 2010

No. MDL 2179.

United States District Court, E.D. Louisiana.

Signed March 30, 2015.

Corey Maze, Special Deputy Attorney General, for nos. 10-4183, 13-2647, 13-2645, 13-2813, 10-4182, 13-2646.

ORDER & REASONS

[As to BP's Motion to Strike the State of Alabama's Jury Demand]

CARL J. BARBIER, District Judge.

BP moved to strike the State of Alabama's (“the State” or “Alabama”) jury demand from the trial on Alabama's compensatory damages. (Rec. Doc. 12345).¹ The motion was briefed and submitted without oral argument.² For reasons explained below, the Court concludes that the State is entitled to a jury trial on its present claims under the Oil Pollution Act of 1990 (“OPA” or “the Act”), 33 U.S.C. § 2701 et seq.³ Accordingly, the Court denies BP's motion.

BACKGROUND

On April 20, 2010, a blowout, explosion, and fire occurred aboard the mobile offshore drilling unit DEEPWATER HORIZON as it was preparing to temporarily abandon a well, known as Macondo, it had recently drilled on the Outer Continental Shelf. Approximately 3.19 million barrels of oil discharged into the Gulf of Mexico before the well was successfully capped on July 15, 2010. In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, 77 F.Supp.3d 500, 524–25, 2015 WL 225421, at *22 (E.D.La. Jan. 15, 2015) (Rec. Doc. 14021 ¶¶ 273, 277). Litigation ensued.

On May 13, 2010, Transocean, owner of the DEEPWATER HORIZON, instituted a limitation action under the Shipowner's Limitation of Liability Act, 46 U.S.C. 30501 et seq., in the Southern District of Texas (the “Limitation Action”). The Limitation Action was later transferred to this Court pursuant to Rule F(9) of the Supplemental Rules for Admiralty and Maritime Claims (C.A. No. 10–2771, Rec. Doc. 207). On August 10, the Judicial Panel on Multidistrict Litigation centralized cases arising from HORIZON/Macondo disaster and transferred them to this Court pursuant to 28 U.S.C. § 1407, creating Multidistrict Litigation 2179 (“MDL 2179”). In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, 731 F.Supp.2d 1352 (J.P.M.L.2010) (Rec. Doc. 1). Transfers via 28 U.S.C. 1407 are for “pretrial proceedings” and, as a general matter, may not be tried by the transferee court. This is in contrast to the Limitation Action, which is before the Court for all purposes, including trial.

On August 12, 2010, the State of Alabama filed two complaints in the Middle District of Alabama relating to its alleged losses due to the 2010 Gulf oil spill.⁴ Both actions were transferred to this Court under 28 U.S.C. § 1407 as “tag along” cases to MDL 2179. (C.A. Nos. 10–4182, 104183). On March 7, 2011, the Fifth Circuit issued its opinion in an unrelated matter, Luera v. M/V Alberta, 635 F.3d 181 (5th Cir.2011), discussed below. On April 5, 2011—four weeks after Luera was decided—the State amended both complaints in a single pleading (“the Amended Complaint”). (Rec. Doc. 1872). The Amended Complaint asserted three categories of claims: general maritime law claims, OPA claims, and claims under Alabama state law. Specific jurisdictional grounds were invoked for each category: General maritime law claims were pled under admiralty jurisdiction⁵ and designated as 9(h) claims,⁶ OPA claims were pled under that Act's jurisdictional provision⁷ and the federal question statute;⁸ and state law claims were pled under supplemental jurisdiction.⁹ (Am. Compl. ¶¶ 33, 34, 35). The Amended Complaint requested a jury “for any and all claims pleaded herein in which a jury trial is available by law.” (Am. Compl. ¶ 369).

Two weeks after filing the Amended Complaint, the State filed a claim in Transocean's Limitation Action (“Limitation Claim” or “Claim in Limitation”). (C.A. No. 10–2771, Rec. Doc. 323). Alabama's Claim in Limitation sought relief for the same types of injuries asserted in its Amended Complaint, but it did not plead any claims under OPA and specifically averred that Transocean's “Complaint [in Limitation] does not apply to the State's claims arising under [OPA].” (Limitation Claim, p. 4). The Limitation Claim instead pled negligence, public nuisance, and trespass under general maritime law and/or state law.

A major part of the Court's management of MDL 2179 revolved around trying the Limitation Action to the bench, as it was a proceeding in admiralty and before the Court for all purposes, consisted of thousands of individual claims, and concerned many issues common to all parties in MDL 2179. On that topic, Alabama's Limitation Claim stated:

By filing this Answer and Claim in Limitation, the State intends to be—and upon information and belief, will be—a participant in the MDL Court's February 27, 2012¹⁰ limitation trial under Rule 9(h) of the Federal Rules of Civil Procedure. By participating in the aforementioned trial, the State does not waive its right to, and its request for, a trial by jury on the claims raised in it[s] First Amended Complaint in MDL 2179.

(Limitation Claim ¶ 109). The Amended Complaint similarly stated:

The State recognizes that, as part of its duty to efficiently manage the thousands of claims arising from the Deepwater Horizon explosion and resulting Spill, the MDL Court has set a trial for February 27, 2012 to decide common issues of limitation and liability. The State further recognizes that it will become a party to that trial once it files an answer and claim in the in the Transocean Limitation Action (Civil Action No. 10–2771). The State intends to participate in the aforementioned limitation and liability trial, which upon information and belief will be conducted without a jury.

Neither the State's pleading of general maritime claims, nor its participation in the bench trial(s) on limitation and liability issues common to the MDL amounts to a waiver of the State's right to a jury trial. The State cannot be forced into a Hobson's Choice. Once the MDL Court determines the common factual and legal issues regarding limitation and liability, the State reserves its right to seek a remand of all remaining issues and claims that uniquely apply to the State of Alabama—including, but not limited to, the quantification of the State's damages—to the originating transferor district, the Middle District of Alabama, for a trial by jury.

(Amended Compl. ¶¶ 370–71).¹¹

In November 2011, the Court dismissed Alabama's state-law claims, leaving its claims under general maritime law and OPA. (Rec. Doc. 4578). In the spring of 2013, the Court held the “Phase One” trial on the Limitation Action.¹² This was a bench trial that concerned, inter alia, determining fault among BP, Transocean, Halliburton, et al. for the blowout, explosion, and oil spill. The Phase One trial did not address issues particular to any one claimant. The State actively participated in the Phase One trial. The Court rendered its findings and conclusions in September 2014. In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, 21 F.Supp.3d 657 (E.D.La.2014) (Rec. Doc. 13381–1). In addition to determining fault and liability issues for the disaster, the Court determined, inter alia, that three of the five Transocean entities¹³ were not entitled to limit liability under the Limitation of Liability Act. Id. at 753–54. The Court also concluded that claims under OPA may not be limited under the Limitation of Liability Act. Id. at 753.

Meanwhile, the Court had issued a scheduling order to prepare some of the State's claims for trial (“Alabama Compensatory Trial”). (Rec. Doc. 13149). That proceeding will concern Alabama's claims under OPA against BP for removal costs and damages, with the exception of “natural resource damages.” See 33 U.S.C. § 2702(b) (listing the types of removal costs and damages recoverable under OPA). Specifically, the State seeks recovery for lost tax revenues, lost revenues to state departments, financial impact to state public services, state response and recovery costs, and physical property damage to state lands (not natural resource damage) and resulting increased public service costs. (Alabama Opp'n 6, Rec. Doc. 12466). Alabama demands a jury in the Alabama Compensatory Trial. BP filed a motion to strike this demand. (Rec. Doc. 12345).

DISCUSSION

A. Rule 9(h) Elections

Before turning to the issues central to BP's motion, the Court addresses the State's jurisdictional elections in its Amended Complaint.

When a claim is within admiralty jurisdiction and also within some other federal subject matter jurisdiction, the plaintiff may designate whether the claim is in admiralty or not. See Fed.R.Civ.P. 9(h). A caveat here is that a claim cognizable only in admiralty “is an admiralty or maritime claims for those purposes, whether or not so designated.” Id. One important consequence of the Rule 9(h) election is whether there is a right to a jury trial, as admiralty cases are traditionally tried to the bench. Luera v. M/V Alberta, 635 F.3d 181, 188 (5th Cir.2011).

In Luera, the Fifth Circuit held that an injured longshore worker who pled in rem claims under admiralty jurisdiction and in personam claims under diversity jurisdiction, and timely demanded a jury, was entitled to a jury trial on the in personam claims. Id. at 195–96. Furthermore, the in rem claims also could be tried to jury, because the claims were “ ‘based on one event, causing one set of injuries, to one victim.’ ” Id. The court found it significant that the plaintiff, although required to plead admiralty jurisdiction over the in rem claim (because such claims are exclusively under federal admiralty jurisdiction), made it clear that she did not wish to proceed in admiralty on the in personam claims and only asserted diversity as the basis for subject matter jurisdiction. Id. at 190, 195.

A few weeks after Luera was decided, the State filed its Amended Complaint, wherein it mimicked the specific and...