Venue in the Oil Spill Litigation
[Guest post by DRJ]
The oil may still be flowing but the legal issues are well underway, and there’s a chance the BP Oil Spill litigation could be consolidated in Houston:
“On May 13, Transocean filed a proceeding in Houston under an outmoded 1851 law known as the Limitation of Shipowner’s Liability Act to limit its legal exposure to $26.8 million, or the value of the sunken rig and whatever freight it was carrying. The limitation of liability act also allows a vessel owner to consolidate all litigation over a shipping accident to a venue of its choosing, and like a bankruptcy filing, halts all proceedings in other courts.
In maritime law, a rig is considered a vessel. Attorneys say it’s an uphill battle for vessel owners to successfully limit their liability in a such a proceeding, so the primary reason for filing may be to nudge the massive litigation that is expected over the rig explosion and oil leak to Houston.
“I think there was a considered thought process on behalf of BP and Transocean to hometown the litigation and do anything that they could do to get the litigation in Houston and out of Louisiana,” said Scott Bickford, who filed the first lawsuit the day after the explosion in federal court in New Orleans on behalf of the family of a worker who was killed. “Why is this thing in Texas other than the fact that the wrong-doers are there? This is a terrible situation.”
More than 100 cases have been filed in federal courts across the Gulf Coast over the rig explosion and oil spill, many of them in New Orleans, plus others in state court, and those proceedings are expected to be consolidated into one giant case.
Reserve plaintiff attorney Daniel Becnel has filed an application with a panel of federal judges that considers consolidation requests to hold the proceedings in New Orleans. BP, which leased the Macondo well where the Deepwater Horizon was drilling, has filed application with the panel to consolidate the proceedings in Houston. The U.S. Judicial Panel on Multi-District Litigation will meet in Boise, Idaho, on July 29 to consider arguments from both sides about where the proceedings should be held, and is expected to make a decision within a few weeks of the gathering.
But as Transocean’s proceeding moves forward in Houston to determine whether the company is eligible limit its liability, all depositions and discovery of facts will take place within the context of that suit. As work on the Transocean case proceeds in Houston, it could preempt the work of the panel of federal judges or help make the case that Houston has already become the nucleus of the litigation.
“The center of the entire litigation will move away from Louisiana to a state that has absolutely no damage. The legal implications are you get Texas justice for Louisiana,” Bickford said.”
Here’s one reason why plaintiffs’ lawyers don’t want Texas justice:
“Despite the recent oil spill in the Gulf of Mexico, 65% of Likely Voters in Texas still support offshore oil drilling, according to a new Rasmussen Reports telephone survey in the state. Twenty-one percent (21%) oppose such drilling.”
Support for offshore drilling in Texas has dropped about 12 points since the BP oil spill. Meanwhile, national support has fallen to 46%, a 16 point drop, which is another reason Houston-based Transocean might prefer venue in Texas.
— DRJ
Plus Louisiana is a corrupt trashy cesspool of Bickfords.
happyfeet (c8caab) — 5/23/2010 @ 5:41 pmWhen they got the camera down by hole all I could see spewing out of the ground were billable hours.
Lots and lots of billable hours.
MU789 (aad8cf) — 5/23/2010 @ 5:46 pmNot a legel eagle, and I have a question: wouldn’t the oil be considered their ‘cargo’?
JEA (caf4d8) — 5/23/2010 @ 6:25 pmJEA,
It depends on the applicable law. Under Texas law, oil and gas in place is real property and doesn’t become personal property until it is produced. But Texas law is different than most states, and I’m not sure what law would apply to offshore production. (It could also be covered by international agreements.) Frankly, I wonder if the oil companies want venue in Texas as much for the laws regarding ownership as the jury pool.
DRJ (d43dcd) — 5/23/2010 @ 6:43 pmCould the problem also be that any Louisiana Juror is also a potential victim?
EricPWJohnson (cedf1d) — 5/23/2010 @ 6:45 pmEric,
If it could be shown that you can’t seat an impartial jury, then that would be a basis for a change of venue. However, in general, venue for a tort claim is proper in the place where the tort occurred or as otherwise provided by law.
DRJ (d43dcd) — 5/23/2010 @ 6:52 pmDRJ
I cant see the typical tort case logic being proposed for a tort of this magnitude but who knows
EricPWJohnson (cedf1d) — 5/23/2010 @ 8:09 pmIt will probably be a consolidated case as suggested in the article.
DRJ (d43dcd) — 5/23/2010 @ 8:26 pmI am all for BP paying out the ying yang if the reports about their circumventing TransOcean and/or Halliburton’s procedures is true. However, I want rationality to predominate in this mess. The Houston judiciary is extremely well versed in petroleum law.
This incident’s lawsuits belong in Houston.
Ed from SFV (f0e1cb) — 5/23/2010 @ 8:57 pmSince the well was drilled pursuant to a Federal Lease, the oil would be the property of the Federal Govt unless it was in the possession of BP (Yeah, I know, it’s a stretch). But, not having it in possession is due to actions taken, or not taken, by BP and its subs/employees.
AD - RtR/OS! (bb1c62) — 5/23/2010 @ 9:51 pmOther than the damage by the spill, there doesn’t seem to be any nexis hooking this to LA. The accident/whatever took place in Federal waters, and the companies are all located in TX. Therefore, it would seem that TX would be the logical location for any court action, or DC in the case of action by the govt against the co’s.
There also might be some precedents from the Exxon Valdez that would apply; but that happened entirely within State waters, so perhaps not.
Just a thought…
AD - RtR/OS! (bb1c62) — 5/23/2010 @ 9:53 pmDoes BP have to pay extraction fees/taxes/royalties on oil that is spilled?
Taxation would determine ownership.
Why do you have to go to Idaho to determine jurisdiction between Louisiana and Texas?
jack (7033ff) — 5/24/2010 @ 8:16 amIts just where the Multi-District Litigation panel meets.
SPQR (26be8b) — 5/24/2010 @ 8:32 amWhen I started practicing law in Houston in 1980, it was a fairly convivial venue for tort plaintiffs. That’s no longer true. Most of the people who show up for jury duty in Houston these days are out to strike a blow for tort reform, sometimes without much regard for the particular facts before them.
Beldar (998397) — 5/24/2010 @ 8:46 am