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

• Decision Date: 06 September 2013
• Docket Number: MDL No. 2179.
• Citation: 970 F.Supp.2d 524
• Parties: In re OIL SPILL BY the OIL RIG “DEEPWATER HORIZON” IN the GULF OF MEXICO, on April 20, 2010. Applies to Nos. 10–4239, 10–4240, 10–4241.
• Court: U.S. District Court — Eastern District of Louisiana

970 F.Supp.2d 524

In re OIL SPILL BY the OIL RIG “DEEPWATER HORIZON” IN the GULF OF MEXICO, on April 20, 2010. Applies to Nos. 10–4239, 10–4240, 10–4241.

MDL No. 2179.

United States District Court, E.D. Louisiana.

Sept. 6, 2013.

Alan Mark Weigel, Blank Rome LLP, Sylvia E. Simson, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, Francis Xavier Neuner, Jr., Ben Louis Mayeaux, Jed M. Mestayer, Neunerpate, Lafayette, LA, Leo Raymond McAloon, III, Michael D. Cangelosi, Gieger, Laborde & Laperouse, LLC, Kevin Richard Tully, Howard Carter Marshall, Christovich & Kearney, LLP, Patrick Edward O'Keefe, Philip S. Brooks, Jr., Montgomery Barnett, Harold J. Flanagan, Andy Joseph Dupre, Sean Patrick Brady, Stephen M. Pesce, Flanagan Partners, LLP, John Emerson Galloway, Cherrell R. Simms, Galloway, Johnson, Tompkins, Burr & Smith, New Orleans, LA, George Edmond Crow, Law Office of George E. Crow, Katy, TX, Michael J. Lyle, Eric C. Lyttle, Quinn Emanuel Urquhart & Sullivan, LLP, Washington, DC, for Defendants.

ORDER & REASONS

[As to the Cross Motions for Summary Judgment regarding the claims by the Mexican States]

CARL BARBIER, District Judge.

Before the Court are cross motions for summary judgment by the Mexican States of Veracruz, Tamaulipas, and Quintana Roo (collectively, “the Mexican States”) and BP, Transocean, Halliburton, and Cameron (collectively, “Defendants”).¹ Generally stated, these motions raise the issue of whether the Mexican States held a “proprietary interest” in certain property allegedly damaged by discharged oil, such that their tort claims may proceed under general maritime law. For the reasons set forth below, the Court finds the Mexican States do not meet this threshold. Accordingly, the Court will grant the Defendants' motions and deny the Mexican States' motion.

I. FACTUAL AND PROCEDURAL 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, that it had drilled on the outer continental shelf approximately fifty miles south of the Louisiana coast. After burning for two days, the HORIZON sank, fracturing the marine riser that had connected it to the Macondo Well. Consequently, millions of gallons of oil discharged into the Gulf of Mexico before the well could be successfully capped on July 15, 2010.

Cases arising from these events eventually were consolidated before this Court pursuant to 28 U.S.C. § 1407 as Multidistrict Litigation 2179 (“MDL 2179”). In September of 2010, the Mexican States each filed substantially similar complaints in the Western District of Texas against BP (the well owner and operator and block lessee), Transocean (owner of the DEEPWATER HORIZON), Halliburton (cement contractor), Anadarko (co-owner and co-lessee with BP), and Cameron (manufacturer of the HORIZON's blowout preventer) for damages they allegedly incurred or would incur as a result of the oil spill. These damages included the costs of monitoring and preparing to respond to the oil spill; contamination and injury to the waters, estuaries, seabed, animals, plants, beaches, shorelines, etc., of the Mexican States; lost taxes, fees, etc., due to reduced fishing activity and fishing-related industries; lost taxes, etc., due to diminished tourism; and the net costs of providing increased public services. ( See Veracruz Am. Compl. ¶ 55). The Mexican States' cases were transferred to this Court and consolidated with MDL 2179. ( See State of Veracruz v. BP, PLC, et al., No. 10–4239; State of Tamaulipas, v. BP, PLC, et al., No. 10–4240; State of Quintana Roo v. BP, PLC, et al., No. 10–4241).

In 2011, the Defendants moved to dismiss the Mexican States' complaints under Federal Rule of Civil Procedure 12(b)(6). On December 9, 2011, the Court partially granted these motions and dismissed the Mexican States' claims under the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., as well as their claims of nuisance and negligence per se. (Order p. 12, Rec. Doc. 4848, 835 F.Supp.2d 175, 182 (E.D.La.2011)).² The Mexican States' claims of negligence and gross negligence were preserved, but only to the extent oil caused a physical injury to the Mexican States' proprietary interests. Id. The “physical injury to a proprietary interest” requirement stems from the Supreme Court's decision in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), as interpreted by the Fifth Circuit Court of Appeals in Louisiana ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th Cir.1985) (en banc).

The Court subsequently established a schedule for the parties to conduct limited discovery and file motions on the issue of whether the Mexican States hold the requisite proprietary interest in the property allegedly damaged by oil. (Rec. Doc. 7367). Those motions have been fully briefed, argued, and submitted for decision. Defendants urge that, assuming oil in fact damaged Mexican waters, shores, wildlife, and other natural resources,³ the Mexican States do not possess a proprietary interest in these things and their claims should be dismissed. The Mexican States argue that Robins Dry Dock does not apply to their claims, and, alternatively, that they hold the requisite proprietary interests.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing former Fed.R.Civ.P. 56(c), now Fed.R.Civ.P. 56(a)); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrains from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir.2008). All reasonable inferences are drawn in favor of the nonmoving party, but a party cannot defeat summary judgment with conclusory allegations or unsubstantiated assertions. Little, 37 F.3d at 1075. A court ultimately must be satisfied that “a reasonable jury could not return a verdict for the nonmoving party.” Delta, 530 F.3d at 399.

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’ ” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263–64 (5th Cir.1991) (citation omitted). The nonmoving party can then defeat the motion by either countering with sufficient evidence of its own, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id. at 325, 106 S.Ct. 2548;Little, 37 F.3d at 1075.

III. DISCUSSION

A. Preliminary Motions

At the outset, several motions incidental to the instant cross motions for summary judgment must be resolved. The Court GRANTS the Defendants' Motion to Strike Certain of the Mexican States' Summary Judgment Exhibits (Rec. Doc. 8424) for essentially the reasons provided by the Defendants. The Court notes, however, that it reviewed all of the exhibits (provided they were in English, many of which were not) and concludes that none would have changed the Court's resolution of the cross motions for summary judgment.

The Court also GRANTS both Cameron's Motion for Leave to File Summary Judgment Sur–Reply (Rec. Doc. 8514) and the Mexican States' Motion for Leave to File Amended Response to same (Rec. Doc. 8702).

B. The Mexican States' Claims Are Subject to Robins Dry Dock

The Fifth Circuit's en banc decision in Louisiana ex rel. Guste v. M/V Testbank “reviewed and reaffirmed the ‘prevailing’ maritime rule that ‘denie[s] a plaintiff recovery for economic loss if that loss resulted from physical damage to property in which he had no proprietary interest.’ ” In re Bertucci Contracting Co., 712 F.3d 245, 246 (5th Cir.2013) (quoting Testbank, 752 F.2d at 1022). Stated another way, the rule of Robins Dry Dock bars “recovery of purely economic claims absent physical injury to a proprietary interest in a maritime negligence suit.” Id. at 247 (quotations and citations omitted). The physical injury requirement imposes a “pragmatic limitation on the doctrine of foreseeability” that enables it to function as a rule of law. Testbank, 752 F.2d at 1021. Its purpose is “to limit the consequences of negligence and exclude indirect economic repercussions, which can be widespread and open-ended.” Catalyst Old River Hydroelectric Ltd. P'ship v. Ingram Barge Co., 639 F.3d 207, 210 (5th Cir.2011); see also Amoco Transport Co. v. S/S Mason Lykes, 768 F.2d 659, 668–69 (5th Cir.1985) (“The spectre of runaway recovery lies at the heart of the Robins Dry Dock rubric.”).

The Mexican States initially argue that the Robins Dry Dock rule does not apply because BP pleaded guilty to various criminal violations related to the DEEPWATER HORIZON incident. The Mexican States are correct that Testbank 's...