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

• Citation: 808 F.Supp.2d 943,2011 A.M.C. 2220
• Decision Date: 26 August 2011
• Docket Number: MDL No. 2179.
• Parties: In re OIL SPILL BY THE OIL RIG “DEEPWATER HORIZON” IN THE GULF OF MEXICO, on April 20, 2010.Applies to: B1 Master Complaint.
• Court: U.S. District Court — Eastern District of Louisiana

2011 A.M.C. 2220

808 F.Supp.2d 943

In re OIL SPILL BY THE OIL RIG “DEEPWATER HORIZON” IN THE GULF OF MEXICO, on April 20, 2010.Applies to: B1 Master Complaint.

MDL No. 2179.

United States District Court, E.D. Louisiana.

Aug. 26, 2011.

Alan Mark Weigel, Blank Rome LLP, Jeremy T. Grabill, Sylvia E. Simson, Theodore E. Tsekerides, Weil, Gotshal & Manges LLP, New York, NY, Francis Xavier Neuner, Jr., Ben Louis Mayeaux, Jed M. Mestayer, Laborde & Neuner, Lafayette, LA, Leo Raymond McAloon, III, Michael D. Cangelosi, Gieger, Laborde & Laperouse, LLC, Kevin Richard Tully, Gregory Scott Lacour, 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, Gregory Scott Lacour, Howard Carter Marshall, Kevin Richard Tully, Christovich & Kearney, 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, Weil, Gotshal & Manges LLP, Washington, DC, Paul R. Taylor, Jofrey M. McWilliam, Byrnes Keller Cromwell, LLP, Seattle, WA, for Defendants.

ORDER AND REASONS

[As to Motions to Dismiss the B1 Master Complaint]

BARBIER, District Judge.

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”), which resulted in the release 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 death of eleven individuals, numerous claims for personal injury, and various claims for environmental and economic damages.

In order to efficiently manage this complex MDL, the Court consolidated and organized the various types of claims into several “pleading bundles.” The “B1” pleading bundle includes all claims for private or “non-governmental economic loss and property damages.” There are in excess of 100,000 individual claims encompassed within the B1 bundle.

In accordance with Pretrial Order No. 11 (Case Management Order No. 1), the Plaintiffs' Steering Committee (“PSC”) filed a B1 Master Complaint (Rec. Doc. 879) and a First Amended Master Complaint (Rec. Doc. 1128) (collectively “B1 Master Complaint”). Before the Court are various Defendants' Motions to Dismiss the B1 Master Complaint (Rec. Docs. 1440, 1390, 1429, 1597, 1395, 1433, 1414, and 2107) and their Replies (Rec. Docs. 2312, 2188, 2298, 2216, 2191, 2212, 2217, and 2208), as well as Plaintiffs' Oppositions (Rec. Docs. 1803, 1804, 1808, 1821, and 2131).

I. PROCEDURAL HISTORY

In the B1 Master Complaint, the PSC identifies a number of categories of claimants seeking various types of economic damages, including Commercial Fishermen Plaintiffs, Processing and Distributing Plaintiffs, Recreational Business Plaintiffs, Commercial Business Plaintiffs, Recreation Plaintiffs, Plant and Dock Worker Plaintiffs, Vessel of Opportunity (“VoO”) Plaintiffs, Real Property Plaintiffs, Real Property/Tourism Plaintiffs, Banking/Retail Business Plaintiffs, Subsistence Plaintiffs, Moratorium Plaintiffs, and Dealer Claimants.

Plaintiffs named the following as Defendants in their B1 Master Complaint: BP Exploration & Production Inc., BP America Production Company and BP p.l.c. (collectively “BP”); Transocean Ltd., Transocean Offshore, Transocean Deepwater, Transocean Holdings (collectively “Transocean”); Halliburton; M–I; Cameron; Weatherford; Anadarko, Anadarko E & P (collectively “Anadarko”); MOEX Offshore, MOEX USA (collectively “MOEX”); and MOECO. All of the Defendants, with the exception of MOECO, have filed Motions to Dismiss. Additionally, Dril–Quip, which was not named as a Defendant in the Master Complaint, has filed a Motion to Dismiss (Rec. Doc. 2107) because of the procedural effect of the Rule 14(c) tender in Transocean's Third–Party Complaint.

Plaintiffs allege claims under general maritime law, the Oil Pollution Act of 1990 (“OPA”), 33 U.S.C. § 2701 et seq., and various state laws. Under general maritime law, Plaintiffs allege claims for negligence, gross negligence, and strict liability for manufacturing and/or design defect. Under various state laws, Plaintiffs allege claims for nuisance, trespass, and fraudulent concealment, and they also allege a claim for strict liability under the Florida Pollutant Discharge Prevention and Control Act, Fla. Stat. § 376.011 et seq. Additionally, Plaintiffs seek punitive damages under all claims and request declaratory relief regarding any settlement provisions that purport to affect the calculation of punitive damages.

II. LEGAL STANDARD ON MOTIONS TO DISMISS

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough facts “ ‘to state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 1949. A court “must ... accept all factual allegations in the complaint as true” and “must draw all reasonable inferences in the plaintiff's favor.” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir.2009). The Court is not, however, bound to accept as true legal conclusions couched as factual allegations. Iqbal, 129 S.Ct. at 1949–50.

III. PARTIES' ARGUMENTS AND DISCUSSION

The subject Motions to Dismiss go to the heart of Plaintiffs' claims in this case. Various Defendants advance somewhat different arguments as to why some or all of the B1 bundle claims should be dismissed. At bottom, however, all Defendants seek dismissal of all non-OPA claims for purely economic damages resulting from the oil spill.¹ Essentially, Defendants move to dismiss all claims brought pursuant to either general maritime law or state law. All parties advance a number of arguments regarding the law that should apply to the Plaintiffs' claims for economic loss. The Defendants' Motions raise a number of issues involving choice of law, and especially the interplay among admiralty, the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. § 1301 et seq., OPA, and various state laws.

A. Vessel status

Although it was unclear prior to oral argument, it is now apparent that only Defendant Cameron suggests that the DEEPWATER HORIZON MODU was not a vessel in navigation at the time of the casualty on April 20, 2010. Plaintiffs and all other Defendants agree that the DEEPWATER HORIZON MODU was at all material times a “vessel” as that term is defined and understood in general maritime law. Cameron argues that although the DEEPWATER HORIZON may have been a vessel during the times it was moved from one drilling location to another, at the time of the casualty it was stationary and physically attached to the seabed by means of 5,000 feet of drill pipe. Cameron relies on a line of cases beginning with Rodrigue v. Aetna Casualty Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969), for the proposition that a drilling platform permanently or temporarily attached to the seabed of the Outer Continental Shelf is considered an “fixed structure” and not a vessel. Accordingly, argues Cameron, admiralty jurisdiction is absent and general maritime law does not apply. Cameron contends that no state law, other than that of Louisiana law used as surrogate federal law under OCSLA, governs Plaintiffs' claims.

The Court is not persuaded by Cameron's arguments. Under clearly established law, the DEEPWATER HORIZON was a vessel, not a fixed platform. Cameron's arguments run counter to longstanding case law which establishes conclusively that the Deepwater Horizon, a mobile offshore drilling unit, was a vessel.

In the seminal case of Offshore Co. v. Robison, the Fifth Circuit held that a “special purpose vessel, a floating drilling platform” could be considered a vessel. 266 F.2d 769, 779 (5th Cir.1959). Specifically, the defendants in that case, who claimed that the floating platform should not be considered a vessel, argued that “[t]he evidence shows that Offshore 55 was a platform designed and used solely for the purpose of drilling oil wells in offshore waters—in this instance, the Gulf of Mexico. That the platform was not self-propelled and when moved from one well to another, two large tugs were used. Further, when an oil well was being drilled the platform was secured to the bed of the Gulf in an immobilized position with the platform itself raised forty to fifty feet above the water level....” Id. at 773 n. 3. Nonetheless, the Fifth Circuit held that such a “floating drilling platform” can be a vessel, though secured to the seabed while drilling a well.

Cameron's argument is also foreclosed by more recent Fifth Circuit precedent in Demette v. Falcon Drilling Co., Inc., 280 F.3d 492, 498 n. 18 (5th Cir.2002) (“This circuit has repeatedly held that special-purpose movable drilling rigs, including jack-up rigs, are vessels within the meaning of admiralty law.”), overruled in part, on other grounds by, Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778, 788 & n. 8 (5th Cir.2009) (en banc). In fact, in Demette, the Fifth Circuit expressly rejected the very same argument that Cameron makes in this case. Id. More recently, the Supreme Court held “a ‘vessel’ is any watercraft practically capable of maritime transportation.” Stewart v. Dutra Constr. Co., 543 U.S. 481, 497, 125 S.Ct. 1118, 160 L.Ed.2d 932 (2005). Noting that “a watercraft need not be in motion to qualify as a vessel ...,” the Supreme Court...