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Mark A. Hofmann

BP spill triggers effort to broaden liabilities

House passes bill to allow higher offshore damages

July 11, 2010 - 6:00am

A widow of one of 11 workers killed aboard the Deepwater Horizon wears a ribbon to honor her late husband.

A widow of one of 11 workers killed aboard the Deepwater Horizon wears a ribbon to honor her late husband.


WASHINGTON—Tort reform advocates fear a House bill that would expand maritime liability could be part of larger effort to roll back liability limits.

The House approved the Securing Protections for the Injured from Limitations on Liability Act—or SPILL Act—only hours before lawmakers left for their Fourth of July recess.

The bill, filed in response to the April 20 explosion of BP P.L.C's Deepwater Horizon drilling platform and the massive Gulf Coast oil spill that resulted, would amend the Death on the High Seas Act to allow recovery of noneconomic damages for maritime death victims' families, starting with the 11 workers who died in the accident. The SPILL Act, H.R. 5503, also would amend the Jones Act to provide noneconomic damages for loss of care, comfort and companionship to surviving family members by seamen's employers.

In addition, the bill would repeal the 1851 Limitation of Liability Act, which holds that if an accident occurs that is beyond the knowledge of a ship's owners, the owners' liability is limited to the value of the ship at the time it sinks.

A provision that would have amended the Class Action Fairness Act to give state attorneys general greater leeway in filing class actions in state courts that otherwise would have been filed in federal courts was dropped before the vote.

The Senate has yet to act on the matter.

The Washington-based American Assn. for Justice, which represents plaintiffs attorneys, pushed the measure and quickly praised the House's action.

“The House's quick passage of this bill shows how current maritime laws desperately need to be updated if the negligent corporations responsible for the tragedy are to be held accountable,” AAJ President Anthony Tarricone said in a statement. “The families of workers who died aboard the Deepwater Horizon, as well as those affected by other maritime disasters, are now one large step closer to receiving justice.”

Tort reform supporters, however, are concerned that attempts to expand liability in maritime cases could expand to other liabilities.

“We are very much concerned about this being a stalking horse for a number of anti-tort reform” moves, said Matt Webb, senior vp-legal reform policy at the U.S. Chamber Institute for Legal Reform in Washington. He noted that the original SPILL Act contained a “very broad” exception to the Class Action Fairness Act.

“We're very much concerned about the other side using the adage of not letting any crisis go unused and trying to use this as a catalyst to get any number of lawsuit-expanding provisions passed,” Mr. Webb said. Changes to the Death on the High Seas Act and the Jones Act have the potential of “having significant impact on asbestos-related litigation in the maritime world.”

The success of proponents of expanded liability “was limited to admiralty and Jones Act cases,” said Victor Schwartz, general counsel for the American Tort Reform Assn. in Washington. “But the vote could be taken as a disapproval of any legislative limits on liability,” he said.

“The expansion of wrongful death to include loss of companionship at the very time that liability limits are lifted totally from cases against the industries involved could be a death knell by lawsuits for smaller companies that may have been involved,” Mr. Schwartz said.

“It is anathema to the rule of law to change the rules of the game retroactively after a specific incident,” said James Copland, director of the Center for Legal Policy at the New York-based Manhattan Institute. “You don't want to do that with civil law,” he said. Imposing laws retroactively strips businesses of confidence in the legal system, he said.

Mr. Copland said he believes that the looming midterm congressional elections are motivating proponents of expanding liability in civil cases.

“Unambiguously, I would agree that the trial bar is trying vigorously to get some of its preferred agenda items through the Congress as soon as it can, because I think it fears the window of opportunity may be closing after November with a new Congress,” he said.

 



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