Questions and Answers about an Oil Spill Claim

Image by zphone via Flickr

We've been answering questions by phone and email about what to do and how to make a claim regarding the Oil Spill:

Question: What legal options are available to individuals or businesses that are damaged by the oil spill in the Gulf of Mexico?

Answer: There are two main avenues to recover monetary damages: through traditional state-law causes of action, such as negligence; and through the federal Oil Pollution Act of 1990 (“OPA”). Generally, unless oil physically makes contact with you or property, federal law limits claims for economic damages and requires them to be filed under OPA.

Question: What kind of claims can be made pursuant to OPA?

Answer: Under OPA, claims may be filed for a broad spectrum of economic damages, including lost profits and earning capacity, oil cleanup costs, and damage to property.

Question: What do I have to do to file an OPA claim?

Answer: The filing of an OPA claim is a multi-step process. Prior to filing suit under OPA, the claimant must comply with certain procedural requirements. The claimant must first present his/her/its claim to the responsible party as designated by the federal government, BP in this situation. The responsible party then has ninety (90) days to process the claim and either settle the claim or deny it. If there no settlement by the conclusion of the 90 days, then the claimant has the option to file a lawsuit or to file a claim with the Oil Spill Liability Trust Fund.

Question
If I make a claim pursuant to OPA, does that mean that I am going to receive the full amount of the damages claimed?

Answer
The existence of the OPA does not guarantee that any person can be compensated for all economic losses. There are important risks inherent in the OPA scheme that may prevent a full recovery. Some of these include:

• The value of the claim is initially evaluated by the responsible party, which may undervalue the claim or deny it entirely. BP has promised to pay “legitimate” claims but has not yet given guidelines for what that means. If a lawsuit must be filed, there is a risk that a court would not agree with the valuation and the lawsuit could be partially or completely lost.
• It may take a very long time to resolve the claim, particularly if a lawsuit must be filed and protracted litigation begins. Some claimants are still awaiting full payment from the Exxon Valdez disaster in 1989.
• There is a risk that BP or other responsible parties will run out of money to pay claims, enter bankruptcy, or otherwise be unable to satisfy all damages. If litigation is needed, this risk increases.
• There is a cap on each responsible party’s total liability pursuant to OPA. For BP, the cap is $75 million plus clean-up costs, and there is an as-yet undetermined amount for other parties. These limits apply to the total value of all claims to be paid out by the responsible parties, meaning that, for example, BP’s $75 million might be divided up among all claimants in the Gulf of Mexico (or might be fully disbursed before claims can be filed).

Fortunately, the cap can be lifted if gross negligence or a violation of an applicable federal regulation can be shown. Also, although this has not yet been confirmed in writing, BP has indicated that it will not assert the cap as a defense to paying its full share of damages. However, these statements are not binding.

• All lawsuits must be filed within three (3) years of the incident.

Question
Is OPA the only basis for recovery of damages caused by the oil spill?

Answer
In the event that oil comes into contact with property, state-law causes of action may assist in recovering damages. These causes of action could apply in addition to damages provided under OPA. Consequently, in addition to the remedies provided under OPA, there may be other ways to recover.

This is a just an overview. Please, use common sense and talk to a lawyer if you feel like one would be able to help.

Georgia/Gulf Coast Oil Spill: Deepwater Horizon Well Failed Key Test

Image by SkyTruth via Flickr

From the WSJ and Reuters:

The chairman of a congressional subcommittee said on Wednesday it uncovered significant problems with the device that was supposed to cut the oil flow after BP's (BP.L) oil rig exploded, creating a massive unchecked spill.

Representative Bart Stupak, head of the House Subcommittee on Oversight and Investigations, said the rig's underwater blowout preventer had a leak in its hydraulic system and the device was not powerful enough to cut through joints to seal the drill pipe.

He said the panel also discovered the blowout preventer had been modified, which made it difficult to operate after the accident. Stupak also said the device's emergency backup controls may have failed because the explosion that destroyed the rig also disabled communications, preventing workers from sending signals to the underwater device

Gul Oil Spill Lawsuits/State Actions: Florida, Alabama, LA, Miss and TX get together

The top law enforcement executives for five states will meet to talk about legal options for dealing with the effects of a massive oil spill threatening their Gulf of Mexico shores.

The attorneys general from Alabama, Florida, Mississippi, Louisiana and Texas will meet Sunday in Mobile, Ala.

A statement said the meeting will discuss legal options, strategies, and preparations for the spill that erupted after a drill rig exploded April 20.

Asked if the states may file lawsuits against oil company BP PLC and other firms, a spokeswoman for Florida Attorney General Bill McCollum said he is looking at all possibilities.

Lawyers for private plaintiffs including fishermen have filed at least 26 potential class action lawsuits so far for damages from the spill.

Gulf Oil Spill Lawyer Information

From my friend Rick Kuykendall, whose home is in South Alabama:

Rick is a key founder of a litigation team of Gulf state lawyers that is one of the first to file for damages arising out of the growing oil spill disaster in the Gulf of Mexico. This suit seeks damages for fishing and other industries as well as property owners impacted by the spill and are the first of many actions to be filed by the group.

Kuykendall has extensive experience litigating environmental damage cases, and has extensive experience litigating against the oil industry. In 2009, he was co-lead counsel against Constellation Energy in an action that resulted in pollution abatement and damages to citizens whose water had been contaminated by chemicals. In major cases against Weyerhauser Paper, Shell, Exxon, Hoechst Celanese, Conoco and others, Kuykendall has demonstrated a no nonsense approach.

" We are witnessing the beginning of what may very well become the largest environmental disaster in the history of the United States. The source of the spill is still spewing upwards of 50 million gallons of oil a day into the spawning grounds of shrimp, snapper and oysters in areas of the Gulf waters. If the spill isn't contained, it will soon threaten critical gulf beaches and marshlands. The impact on individuals and small businesses still recovering from a series of hurricanes is incalculable. The oil industry, like the financial industry, asked the citizens that populate the Gulf coast to trust them with our most valuable resource and they breached that trust. They must be held accountable and I, along with the group of dedicated environmental lawyers, have the skills and resources to do just that. While we all pray for a good ending, the courthouse doors of the Gulf Coast must be opened to protect our citizens and ecosystems."Said Kuykendall.

Kuykendall’s commitment to environmental concerns is evident. He was appointed by the governor of Alabama to a select Commission on the Environment, is an Honorary Member of the Board of Directors of Mobile Bay Keepers and Co-Founder of the Pensacola River Keepers. Combining his concern for the environment with his legal expertise and resources Kuykendall has successfully brought polluters to justice.

Call him at 256-702-5005