In re Oil Spill

• Decision Date: 14 November 2011
• Docket Number: MDL No. 2179
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010 This Document Applies to: Actions by the States of Alabama and Louisiana, Part of Pleading Bundle "C" 10-4182, Alabama v. BPP.L.C., et al. 10-4183, Alabama v. Transocean, Ltd., et al. 10- 3059, Louisiana v. Triton Asset Leasing GmBH, et al. 11- 516, Louisiana v. BP Exploration. & Prod., Inc., et al.

In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010 This Document Applies to: Actions by the States of Alabama and Louisiana, Part of Pleading Bundle "C" 10-4182, Alabama v. BPP.L.C., et al. 10-4183, Alabama v. Transocean, Ltd., et al. 10- 3059, Louisiana v. Triton Asset Leasing GmBH, et al. 11- 516, Louisiana v. BP Exploration. & Prod., Inc., et al.

MDL No. 2179

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA SECTION: J(1)

Dated: November 14, 2011

JUDGE BARBIER

MAG. JUDGE SHUSHAN

ORDER AND REASONS

[As to the Motions to Dismiss the Complaints of the States of Alabama and Louisiana,

Part of Pleading Bundle "C"]

Before the Court are multiple Defendants' Motions to Dismiss¹ under Federal Rules 12(b)(1), 12(b)(6), and 12(c), respecting the First Amended Complaints of the States of Alabama andLouisiana, as well as the corresponding Oppositions,² Replies,³ Supplemental Briefs,⁴ and Post-Argument Briefs.⁵

I. BACKGROUND AND PROCEDURAL HISTORY

This Multi-district Litigation ("MDL") consists of hundreds of consolidated cases, with thousands of claimants, pending before this Court. These cases arise from the April 20, 2010 explosion, fire, and sinking of the DEEPWATER HORIZON mobile offshore drilling unit ("MODU"), and the subsequent discharge of millions of gallons of oil into the Gulf of Mexico before it was finally capped approximately three months later. The consolidated cases include claims for the deaths of eleven individuals, numerous claims for personal injury, and various claims for environmental and economic damages.

By and through their respective Attorneys General, the States of Alabama and Louisiana (sometimes referred to collectively as "the States") initiated individual actions that were consolidated with this MDL (Case Nos. 10-4182, 10-4183, 10-3059, 11-516), and subsequently filed Amended Complaints.⁶ (Rec. Docs. 1872, 2031). The States allege that the oil spill caused a variety of past, present, and future damages, including damage to natural resources and property, economiclosses (including lost revenues, such as taxes), costs associated with responding to the oil spill and performing removal actions, costs associated with providing increased or additional public services, and the long-term reputation damage or "stigma" associated with the oil spill.

Named as Defendants are BP Exploration & Production, Inc. and its related entities (collectively, "BP"), Transocean Ltd. and its related entities (collectively, "Transocean"), Halliburton Energy Services, Inc. and its related entities (collectively, "Halliburton;"), M-I, LLC ("M-I"), Cameron International Corp. ("Cameron"), Weatherford U.S., L.P. ("Weatherford"), Anadarko Petroleum Corporation Co. and Anadarko E&P Company LP (collectively, "Anadarko"), MOEX Offshore 2007 LLC and MOEX USA Corp. (collectively, "MOEX"), and Mitsui Oil Exploration Co., Ltd. ("MOECO").

Seeking compensatory and punitive damages, Alabama's Amended Complaint asserts claims under the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. § 2701, et seq., general maritime law (negligence and products liability), and Alabama law (negligence, products liability, public and private nuisance, trespass, and fraudulent concealment). Alabama also seeks civil penalties against all Defendants for violations of the Alabama Water Pollution Control Act ("AWPCA"), Ala. Code §§ 22-22-1 to -14, the Alabama Air Pollution Control Act ("AAPCA"), Ala. Code §§ 22-28-1 to -23, the Alabama Hazardous Wastes Management Act ("AHWMA"), Ala. Code §§ 22-30-1 to -24, and the Alabama Solid Waste Disposal Act ("ASWDA"), Ala. Code §§ 22-27-1 to -18.⁷ Finally,Alabama requests a declaratory judgment that BP, Transocean, Anadarko, MOEX, and MOECO are held jointly and severally liable to it for OPA removal costs.

Louisiana asserts OPA and general maritime law claims that are similar to Alabama's. Under Louisiana law, the State asserts claims of negligence, products liability, trespass, nuisance,⁸ garde,⁹ unjust enrichment, ultra hazardous activity, fraudulent concealment and negligent misrepresentation, and for violations of the Louisiana Oil Spill Prevention and Response Act ("LOSPRA"), La. R.S. 30:2451 et seq. Louisiana also seeks civil penalties for violations of the Louisiana Environmental Quality Act/Water Control Law, La. R.S. 30:2025(E), 30:2076.¹⁰ Finally, Louisiana requests a declaratory judgment that BP, Transocean, Anadarko, MOEX, and MOECO are jointly and severally liable to it under OPA for damages and removal costs, and that BP, Anadarko, MOEX, Transocean, Cameron, and Halliburton are similarly liable for damages and response costs under LOSPRA.

II. PARTIES' ARGUMENTS

Most Defendants argue that the Clean Water Act ("CWA"), 33 U.S.C. § 1251, et seq.,¹¹ and the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1331 et seq., preempt all claimsunder state law. Defendants further assert that OPA displaces general maritime law claims,¹² thus the States' only cause of action is against "Responsible Parties" as defined by OPA. Defendants conclude that because the States have not complied with OPA's "presentment" procedure, all OPA claims should be dismissed as well.

Defendant Cameron employs a different choice-of-law analysis. Cameron argues that maritime law does not apply and OCSLA adopts the law of the adjacent state, Louisiana, to the extent it is not inconsistent with federal law. Continuing, Cameron argues that to the extent Louisiana law would allow recovery against parties other than OPA Responsible Parties, it is inconsistent with federal law and preempted by OCSLA.

The States contend that general maritime law claims (including punitive damages under maritime law) are not preempted, because this case falls within the Court's admiralty jurisdiction and OPA expressly preserved maritime law. The States urge that OCSLA's provision adopting adjacent-state law does not apply, and thus the laws of all states are available. They contend that state law is applicable here, because OPA preserved state law and state law supplements (and thus is not preempted by) maritime law. The States also urge that they are not subject to OPA's presentment requirement, but, in any respect, they have sufficiently alleged presentment.

III. LEGAL STANDARD

A motion to dismiss under Rule 12(c) is subject to the same standard as a motion under Rule12(b)(6). In Re: Great Lakes Dredge & Dock Co., 624 F.3d 201, 209-210 (5th Cir. 2010). Thus,

To avoid dismissal, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, --- U.S. ---, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To be plausible, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. In deciding whether the complaint states a valid claim for relief, we accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff. [Doe v.] MySpace, 528 F.3d [413,] 418 [5th Cir. 2008]. [The Court does] not accept as true "conclusory allegations, unwarranted factual inferences, or legal conclusions." Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir.2007)); see also Iqbal, 129 S. Ct. at 1940 ("While legal conclusions can provide the complaint's framework, they must be supported by factual allegations.").

Id. at 210 (some citations omitted).

IV. DISCUSSION

With some exceptions discussed below, the issues raised by the Motions to Dismiss are identical to those previously addressed in the Court's Order and Reasons respecting the Motions to Dismiss the "B1" Master Complaint ("B1 Order"). (Rec. Doc. 3830 , - - F. Supp. 2d - -, 2011WL 3805746 (E.D. La. August 26, 2011)). Thus, the Court finds its conclusions in the B1 Order resolve many of the arguments presented here.

A. Choice of Law; Penalties under State Law

Many of the choice-of-law issues are resolved by the B1 Order. First, the conclusions that the DEEPWATER HORIZON was a vessel under maritime law and that this case falls within the Court's admiralty jurisdiction are equally applicable here. (Rec. Doc. 3830, at 4-8). The B1 Order also held that, while jurisdiction under OCSLA was present, OCSLA did not adopt the law of the adjacent state as surrogate federal law under 43 U.S.C. § 1333(a)(2)(A). (Rec. Doc. 3830 at 8-11¹³ ).That holding also applies here. Therefore, the Court rejects Cameron's argument that OCSLA adopts Louisiana law.

The B1 Order also held that claims of negligence and products liability under general maritime law were not preempted by OPA (including the availability of punitive damages), provided that the plaintiff alleged either physical injury to a proprietary interest or qualified for the commercial fisherman exception (Id. at 18-27). Thus, because the States have alleged physical injury to proprietary interests (see, e.g., Rec. Docs. 1872 ¶ 92, 2031 ¶ 109) and the other elements pertinent to negligence and products liability claims, the States have stated causes of action under general maritime law. Consequently, punitive damages may also be available to the States where their claims arise under general maritime law. (Rec. Doc. 3830 at 26-27). OPA's presentment requirement is discussed separately, below.

The B1 Order also held that state-law claims were preempted by maritime law. As the States point out below, however, civil penalties were not at issue in the B1 Order and are unique to the States. In light of this, the Court revisits the issue of whether state law is preempted.

The B1 Order focused on several factors when it concluded that maritime law preempted state law. The Court noted that the casualty at issue occurred from a MODU that was floating on the "high seas" (the waters seaward of state territorial waters¹⁴ ) and connected by its drill pipe to the to the Outer Continental Shelf ("OCS"),...