In re Oil Spill by the Oil Rig "Deepwater Horizon"
2012 U.S. Dist. LEXIS 141546, 2012 WL 4610381, 902 F. Supp. 2d 808 (2012)
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Rule of Law:
Under general maritime law, purely economic losses are not recoverable in an unintentional tort action without accompanying physical injury to a proprietary interest. The Oil Pollution Act of 1990 (OPA) provides exceptions for economic loss but does not cover claims for unrealized property value diminution (stigma), losses due solely to brand disaffection, or non-pecuniary loss of recreational enjoyment.
Facts:
- On April 20, 2010, the DEEPWATER HORIZON semi-submersible drilling rig experienced a blowout, explosion, and fire while engaged in oil exploration in the Gulf of Mexico.
- The incident resulted in a massive, prolonged discharge of millions of gallons of oil into the Gulf of Mexico.
- Owners of real property near the Gulf coast alleged their property values diminished due to the stigma of the spill, even though no oil physically touched their properties ('Pure Stigma Claims').
- Entities that market BP-branded fuels, some located far from the Gulf, alleged they suffered loss of business and profits solely because of public animosity toward the BP brand following the spill ('BP Dealer Claims').
- Individuals such as recreational boaters, fishermen, and beachgoers alleged damages for the inability to use and enjoy the Gulf of Mexico for recreation ('Recreation Claims').
- Some recreation claimants also sought to recover non-refundable deposits for vacation rentals and other related expenses.
Procedural Posture:
- Numerous lawsuits arising from the Deepwater Horizon oil spill were consolidated into a multidistrict litigation (MDL) proceeding in the U.S. District Court for the Eastern District of Louisiana.
- The Plaintiffs’ Steering Committee (PSC) filed an Amended Master Complaint on behalf of non-governmental claimants asserting claims for economic loss and property damage.
- Numerous defendants filed motions to dismiss the Master Complaint.
- The District Court issued a prior order holding that the claims fall under admiralty jurisdiction, that general maritime law applies and preempts state law, and that traditional maritime limitations like the Robins Dry Dock rule remain in force for claims not governed by OPA.
- Following a preliminary settlement approval for many claims, the court directed parties to file motions addressing the viability of three categories of claims outside the settlement: 'Pure Stigma,' 'BP Dealer,' and 'Recreation Claims.'
- Defendants BP, Cameron, Halliburton, Transocean, and M-I filed motions to dismiss these specific claims for failure to state a claim upon which relief can be granted.
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Issue:
Under general maritime law and the Oil Pollution Act of 1990, are purely economic damages recoverable for claims of property stigma, brand disaffection, and loss of recreation when there is no accompanying physical injury to the claimant's proprietary interest?
Opinions:
Majority - Barbier, J.
No. Purely economic damages are not recoverable for claims of property stigma, brand disaffection, or loss of recreation where there is no physical injury to the claimant's property. Under general maritime law, the Robins Dry Dock rule bars recovery for economic losses unaccompanied by physical injury to a proprietary interest. While the Oil Pollution Act of 1990 (OPA) broadens recovery for economic losses, it does not extend to the speculative or non-physical harms asserted in these claims. Stigma claims for unrealized property value loss are not 'loss of profits or impairment of earning capacity' under OPA § 2702(b)(2)(E), nor 'injury to' property under § 2702(b)(2)(B), which requires physical injury. BP Dealer claims fail because an intangible 'brand' cannot suffer physical injury as required by Subsection (B). Recreation claims for loss of enjoyment are non-pecuniary damages not covered by OPA, and associated financial losses like lost deposits do not constitute 'injury to, or destruction of, real or personal property' owned by the claimant.
Analysis:
This order significantly clarifies the boundaries of economic loss recovery under both general maritime law and the Oil Pollution Act (OPA) in the context of a massive environmental disaster. It strongly reaffirms the vitality of the Robins Dry Dock rule, preventing a potentially limitless cascade of claims from parties who suffered only indirect economic harm. By narrowly interpreting OPA's damage provisions, the court establishes that Congress, while expanding liability beyond traditional maritime limits, did not intend to compensate for speculative, reputational, or non-pecuniary losses, thereby creating critical precedent for limiting the scope of liability in future oil spill litigation.
