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

• Citation: 902 F.Supp.2d 808
• Decision Date: 01 October 2012
• 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 Pleading Bundle “B1”.
• Court: U.S. District Court — Eastern District of Louisiana

902 F.Supp.2d 808

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

Applies to Pleading Bundle “B1”.

MDL No. 2179.

United States District Court,

E.D. Louisiana.

Oct. 1, 2012.

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, 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, Gregory Scott Lacour, Lukinovich Law, Harahan, LA, George Edmond Crow, Law Office of George E. Crow, Katy, TX, Michael J. Lyle, Eric C. Lyttle, Weil, Gotshal & Manges LLP, Washington, DC, for Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010.

ORDER & REASONS

[As to the Motions to Dismiss the Pure Stigma, BP Dealer, and Recreation Claims]

CARL BARBIER, District Judge.

Before the Court are certain Defendants' ¹ motions to dismiss the “Pure Stigma Claims,” “BP Dealer Claims,” and “Recreation Claims.” ² Oral argument was held on September 14, 2012. Having considered counsel's arguments, the relevant record, and the applicable law, the Court finds the motions should be GRANTED as set forth below.

I. PROCEDURAL AND FACTUAL BACKGROUND

This matter arises from the April 20, 2010 blowout, explosion, and fire aboard the DEEPWATER HORIZON semi-submersible drilling rig as it was engaged in oil exploration on the Outer Continental Shelf, and the subsequent discharge of millions of gallons of oil into the Gulf of Mexico. After cases were consolidated in a multidistrict litigation (“MDL”) proceeding, the Court created various pleading bundles to manage the numerous and varied claims asserted. See Pretrial Order No. 11, Rec. Doc. 569. Relevant here is the “B1 Bundle,” which concerns non-governmental claims for economic loss and property damage.

Pursuant to the Court's instruction, the Plaintiffs' Steering Committee (“PSC”) filed a Master B1 Complaint, Rec. Doc. 879, and an Amended Master B1 Complaint, Rec. Doc. 1128 (collectively, “B1 Master Complaint”), which asserted claims under the Oil Pollution Act of 1990 (“OPA”), 33 U.S.C. § 2701, et seq., general maritime law, and state law. Many defendants moved to dismiss the B1 Master Complaint. On August 26, 2011, the Court issued an Order and Reasons granting in part an denying in part these motions (“B1 Order”). Rec. Doc. 3830, 808 F.Supp.2d 943 (E.D.La.2011). The B1 Order held, inter alia, that the DEEPWATER HORIZON was a vessel, the claims in the B1 Master Complaint fall within the Court's admiralty jurisdiction, and that general maritime law is not entirely displaced by OPA. Id. at 5–8, 18–27, 808 F.Supp.2d at 950–51, 958–63. However, to the extent maritime law supplements OPA, traditional limitations such as the Robins Dry Dock rule (discussed below) remain in effect. Id. at 26, 808 F.Supp.2d at 962. The B1 Order also held that state law was preempted by maritime law, notwithstanding OPA's state-law savings clause, 33 U.S.C. § 2718. Id. at 8–18, 808 F.Supp.2d at 951–958;see also Order & Reasons of Nov. 14, 2011, Rec. Doc. 4578 at 6–17 & n. 19, 2011 WL 5520295, at *3–8 & n. 19 (finding penalties asserted under state law are preempted by the CWA, notwithstanding OPA's savings clause).

On May 2, 2012, the Court preliminarily approved a proposed class-action settlement regarding many, but not all, claims by private parties for economic loss and property damage resulting from the oil spill. Rec. Doc. 6418. A final fairness hearing is scheduled for November 8, 2012. In the interim, the Court directed the parties to file motions addressing the viability of three types of claims outside the proposed settlement: the “Pure Stigma,” “BP Dealer,” and “Recreation Claims.” Rec. Doc. 6657. BP, Cameron, Halliburton, Transocean, and M–I moved to dismiss these claims under Fed.R.Civ.P. 12(b)(6). The PSC filed oppositions to these motions. Additionally, the plaintiffs in member case 11–956, Sellno v. BP Exploration & Production, Inc. (“Sellno Plaintiffs”), filed an opposition to the motions targeting the Pure Stigma and Recreation Claims. The plaintiffs in member case 10–4573, Tobatex, Inc. v. BP, p.l.c. (“Tobatex”), filed an opposition to the motions targeting the BP Dealer Claims.

II. LEGAL STANDARD

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a claim for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). To avoid dismissal, a complaint must plead enough facts to “ ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 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 factual allegations allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232–33 (5th Cir.2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). The court is not, however, bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

III. PURE STIGMA CLAIMS

The Court's Order directing the parties to file the instant motions described the “Pure Stigma Claims” as “claims by or on behalf of owners, lessors, and lessees of real property that they have suffered damages resulting from the taint of their property caused by the oil spill, although no oil or other contaminant physically touched the property.” Rec. Doc. 6657 (emphasis added). In light of the briefing submitted, the Court clarifies that “Pure Stigma Claims” means claims alleging a reduction in the value of real property caused by the oil spill or other contaminant even though (1) the property was not physically touched by oil and (2) the property was not sold. Furthermore, “Pure Stigma Claims” do not include claims by a person who earns a living selling property, such as a real estate agent. See infra note 6 and related text.

For illustrative purposes, the following Short–Form Joinders ³ reflect Pure Stigma Claims:

Mrs. Linda Hall (“Plaintiff”) owns a condominium at the Phoenix VIII located ... in Orange Beach, Alabama (residential). Plaintiff has experienced a diminution on the value of her property because of the oil spill. No known physical damage at this time.

Short–Form Joinder of Linda Hall, C.A. 10–8888, Rec. Docs. 245 (parentheticals appear in original).

My claim is for loss of value of my residence ... in Orange Beach, Al. No damage occurred to the property as a result of the spill. I had my property appraised in December 2005 @ $975,000. Another appraisal in December 2010 resulted in $470,000.

Short–Form Joinder of Philip Michael Reid, C.A. 10–8888, Rec. Doc. 34817.

With the exception of the Sellno Plaintiffs, the parties agree that under the Court's previous rulings the Pure Stigma Claims are not viable under general maritime law or state law. The PSC argues that the Pure Stigma Claims are recoverable under two of OPA's damages provisions, 33 U.S.C. § 2702(b)(2)(B) & (E). The Sellno Plaintiffs urge that, in addition to OPA, these claims are cognizable under general maritime law and Louisiana law.

The Court first considers the Sellno Plaintiffs' arguments regarding maritime law and Louisiana law. As mentioned above, the B1 Order held that maritime law applies to the claims in the B1 Master Complaint and state law is preempted. The B1 Order also held that OPA did not entirely displace general maritime law. However, a significant limitation under general maritime law is the Robins Dry Dock rule; i.e., maritime law bars unintentional tort claims for economic losses when they are unaccompanied by physical injury to the plaintiff's proprietary interest. Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019, 1020 (5th Cir.1985)(en banc). The Pure Stigma Claims concern property that was not physically touched by oil. Nevertheless, the Sellno Plaintiffs contend that their claims are not defeated by Robins, because they have alleged intentional tort claims.

The Sellno Plaintiffs correctly point out that the Robins Dry Dock rule, as stated in TESTBANK, is limited to unintentional torts; e.g., negligence. See TESTBANK, 752 F.2d at 1020 n. 1. However, “[i]ntentional torts generally require that the actor intend ‘the consequences of an act,’ not simply ‘the act itself.’ ” Kawaauhau v. Geiger, 523 U.S. 57, 61–62, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998) (citing Restatement (Second) of Torts § 8A, Comment a, p. 15 (1964)). Having reviewed the B1 Master Complaint and the Sellno Plaintiffs' complaint,⁴ the Court finds that neither plausibly allege facts that would take the Pure Stigma Claims outside the Robins Dry Dock rule. For example, although the Sellno Plaintiffs' repeatedly refer to Defendants' “intentional acts,” they do not allege facts that would lead to the reasonable inference that the Defendants intended either the oil spill or the purported diminution in property value. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (2009) (“A pleading that offers labels and conclusions or a formulaic recitation of the elements...