Georgia Lawyer and Oil Spill Claims:Deepwater Study

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Just issued this week. Some important statements, some obvious:

One that  should come as no surprise: “This disaster was preventable had existing progressive guidelines and practices been followed. This catastrophic failure appears to have resulted from multiple violations of the laws of public resource development, and its proper regulatory oversight.”

The first DHSG progress report identified seven elements responsible for this disaster:

• Improper cement design (segmented discontinuous cement sheath).

• Flawed Quality Assurance and Quality Control (QA / QC) – no cement bond logs in critical sections of the well, ineffective oversight of operations.
• Bad decision making – removing the pressure barrier – displacing the drilling mud with sea water 8,000 feet below the drill deck.
• Loss of situational awareness – early warning signs not properly detected, analyzed or corrected (repeated major gas kicks, lost drilling tools, including evidence of damaged parts of the Blowout Preventer) during drilling and/or cementing, lost circulation, changes in mud volume and drill string weight).
• Improper operating procedures – premature off-loading of the drilling mud (weight material not available at critical time).
• Flawed design and maintenance of the final lines of defense – including the Blowout Preventers (BOPs) blind shear rams, hydraulic lines, and triggering equipment – and the Emergency Shutdown and Disconnect (ESD) systems.

And more:

In the case of the Deepwater Horizon’s BOPs, the first few days following the incident are very revealing and symptomatic of BP’s failed Safety Management System (SMS). The initial response by engineers was focused on trying to fully engage the rig’s single functional blind shear ram using Remote Operated Vehicles (ROVs). However, it did not work and, in fact, the BP engineers reportedly did not even have accurate information about how the BOPs had been previously modified and wasted precious time trying to activate the BOPs.

 http://ccrm.berkeley.edu/deepwaterstudygroup.html

Georgians who owns a Condo or Home on the Gulf and the Oil Spill: An -Insurance Covered event?

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The man made calamity that is the BP oil spill will cause extensive property damage and business interruption losses to businesses all along the Gulf Coast vacation homes and condominiums in Florida, and many types of  businesses around the Gulf.

There are also businesses away from the coastline,that might suffer business income losses. Where we go (Seagrove Beach), there is a direct financial hit being felt in towns like Defuniak Springs, Florida, as well as towns filled with hardworking folks -Florala, Flomaton, Chipley.  Gas stations like the Tom Thumb on 30-A in Seagrove seems bustling - are other service stations doing the same?

I spoke with an inn owner east of Destin who had massive losses for June, and July looked even worse.



While home and condo owners and other businesses are looking first at responsible parties to cover their losses, lawsuits against BP, Transocean and others could stretch out over a decade - or more.

So, now what? Folks should start thinking now about their own insurance coverage.

Affected business owners may want to look at their insurance policies, checking to see if  business interruption coverage is included. In our experience most business property policies have "BI".

BI coverage is designed to protect businesses from losses stemming from unavoidable interruptions in their daily operations. BI coverage may apply in a variety of circumstances, such as a forced shutdown, a downturn in business due to the damage from the oil spill, or a substantial impairment in access to products, services, or a premise.

The Business Owner's Policy (BOP) is an "off the shelf," cookie cutter policy written by the Insurance Services Office (ISO) with standard language. Most small businesses purchase BOPs.

The most important section of an insurance policy is the "Declarations" page, which defines, very specifically: Who is insured? What property is covered? In what amount is the coverage? What are the deductibles and co-pays? Are there any special exclusions or endorsements to the policy? This helps an owner figure out if he or she has the basis for a claim and provides a road map to the policy coverages. 

The "off the shelf" language usually looks like this: "We will pay for the actual loss of ‘Business Income’ you sustain due to the necessary suspension of ‘operations’ during the ‘period of restoration’… The suspension must be caused by direct physical loss or damage to property at the ‘described premises’…." In order to understand the coverage that a policy offers, you have to understand the terms used in defining the coverage.

Business Income: Business income is specifically defined in the policy as net income that would have been earned AND continuing normal operating expenses that would have been incurred. Payroll may be treated separately depending upon the policy coverage.

There may be other coverage, such as Civil Authority coverage:

• Interruption by Civil Authority.  Losses caused by orders of city or governmental authority which prohibits access to your premises due to direct physical loss to the property are covered under some policies. There may be a time limitation of the period of indemnity of one, two or three weeks.

  There are other types of coverage which may apply to some policy holders.

• Extra Expenses. Extra expenses are those cost that a business operator incurs as a result of a covered period to avoid or minimize his or her business income loss. These extra expenses are covered to the extent that they reduce the amount of the loss of the insured. 
• Extended Period: Some policies provide for an extended coverage period to allow a business to return to normal operations. This period is usually limited, and is in addition to the period of restoration.

What makes sense to do right now: The list may be long, but looking at it makes sense.

• Locate all of your insurance policies
  
• Read each one -- Liability, D&O or first-party property insurance. Then, read them again
  
• As you read keep in mind that that property damage, business income, contingent business income and extra expense coverage may be available under your policy - but you need to read it for yourself.
  
• In some jurisdiction, an argument may be made that coverage may be available even without direct physical loss or damage
  
• If you think there is coverage, it's time to consider if the next step is giving notice to all levels of coverage
  
• Consider whether insurance coverage may be available under other insurance policies.

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   Now's the time to looks over what you have - what you paid for - to see if your risk is covered. If you need help, call us.

Georgia and Oil Spill Claims, June 24, 2010

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As folks begin to try to grasp the quagmire of a claim involving the gulf oil spill man made calamity, some quick information from various publications about making a claim:

 
Mitigation


When making a claim under the Oil Pollution Act, there is no required format for OSLTF claims. You must, however, support your claim with evidence, information, and documentation.


The Coast Guard considers that each claimant has a responsibility to make reasonable efforts to mitigate—that is, to avoid or minimize—the losses from an oil spill incident. Additional expenses related to avoiding or minimizing losses by a claimant can be included in the claim as additional expenses. The claimed amount of a direct loss will be adjusted for extra expenses and/or income related to avoidance/minimization efforts.

Know that you can make a claim for Property Damage. This means damages for injury to, or economic losses resulting from destruction of property.

You Must Provide Information Showing:

Your ownership or leasehold interest in the property

That property was injured or destroyed

Value of property both before and after injury

Cost of repair or replacement of the property

If you lost money, show:

The property was not usable because of the oil spill

The value of your property before and after the spill

Don't expect this list to change much when the $20 B fund is set up by August.

FL Court: Commercial Fishermen Have Causes of Actions Based on Pollutants' Release

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A recent Florida Supreme Court decision is especially timely given the man made catastrophe in the Gulf. The Court answered two certified questions:



    DOES FLORIDA RECOGNIZE A COMMON LAW THEORY UNDER WHICH COMMERCIAL FISHERMEN CAN RECOVER FOR ECONOMIC LOSSES PROXIMATELY CAUSED BY THE NEGLIGENT RELEASE OF POLLUTANTS DESPITE THE FACT THAT THE FISHERMEN DO NOT OWN ANY PROPERTY DAMAGED BY THE POLLUTION?

    DOES THE PRIVATE CAUSE OF ACTION RECOGNIZED IN SECTION 376.313, FLORIDA STATUTES (2004), PERMIT COMMERCIAL FISHERMEN TO RECOVER DAMAGES FOR THEIR LOSS OF INCOME DESPITE THE FACT THAT THE FISHERMEN DO NOT OWN ANY PROPERTY DAMAGED BY THE POLLUTION?    

As to the first question, here's what the Court held:

"The Legislature has enacted a far-reaching statutory scheme aimed at remedying, preventing, and removing the discharge of pollutants from Florida‟s waters and lands. To effectuate these purposes, the Legislature has provided for private causes of action to any person who can demonstrate damages as defined under the statute. There is nothing in these statutory provisions that would prevent commercial fishermen from bringing an action pursuant to chapter 376."

The Court wrote as to the second question:

'We have plaintiffs who have brought traditional negligence and strict liability claims against a defendant who has polluted Tampa Bay and allegedly caused them injury. Thus, the economic loss rule does not prevent the plaintiffs from bringing this cause.'

The Court went on:

We conclude, as did many of the courts in the cases discussed above, that the defendant owed a duty of care to the commercial fishermen, and that the commercial fishermen have a cause of action sounding in negligence.

In the present case, the duty owed by Mosaic arose out of the nature of Mosaic‟s business and the special interest of the commercial fisherman in the use of the public waters. First, Mosaic‟s activities created an appreciable zone of risk within which Mosaic was obligated to protect those who were exposed to harm.

Mosaic's business involved the storage of pollutants and hazardous contaminants. It was forseeable that, were these materials released into the public waters, they would cause damage to marine and plant life as well as to human activity.

Here, the discharge of the pollutants constituted a tortious invasion that interfered with the special interest of the commercial fishermen to use those public waters to earn their livelihood. We find this breach of duty has given rise to a cause of action sounding in negligence. We note, however, that in order to be entitled to compensation for any loss of profits, the commercial fishermen must prove all of the elements of their causes of action, including damages.

Find the opinion here. http://www.floridasupremecourt.org/decisions/2010/sc08-1920.pdf 

Questions and Answers about an Oil Spill Claim

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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.

Oil Spill/Georgia: Submitting a Claim under the Oil Pollution Act

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Federal law allows people to make a claim now under the Oil Pollution Act. What are the particulars?

What Claims May Be Submitted?

Claims can be submitted for a number of problems associated with either the oil spill or even the substantial threat of discharge of oil. Possible claims include

* Removal Costs
* Real or Personal Property Damage
* Loss Profits and Earning Capacity
* Loss of Government Revenue
* Costs of Increased Public Services
* Natural Resource Damage


These are just some of the ways individuals may be able to be compensated for this disaster as a variety of other reasons do exist.

Who Can Make a Claim for Damage from the Oil Spill?
A claimant could be

* An individual
* A corporation, partnership, or association
* States, municipalities, and political subdivisions of States.



Do You Qualify to Submit an Oil Spill Claim?

To qualify to submit an Oil Spill claim, these factors are to be met

* The incident/events surrounding the spill must have occurred on or after August 18, 1990. EVEN THE THREAT OF THE SPILL GIVES YOU A RIGHT TO FILE A CLAIM.
* The incident involved discharge, or substantial threat of discharge, or oil.
* The discharge or substantial threat of a discharge was into or upon the navigable water or the U.S. and its shorelines



What is the Claim Format for an Oil Spill Claim under OPA?

There is no required format for an Oil Spill Claim under the Oil Protection Act. However, you must support your claim with evidence, information, and documentation. Claims must be made in writing, and must follow include the following information:

* Type and amount of damages for each type of claim
* Total amount claimed
* Your full name, street and mailing address, and telephone numbers for your home and business
* Time, date and geographic location of the oil spill, identification of the navigable water impacted; and an explanation of how the oil impacted the water
* Identify the vessel, facility, or person causing or suspected of causing the spill, if possible, and include an explanation of why you suspect the vessel, facility, or person to have cause the spill.
* A general description of the impact of the spill, including the removal costs or damages claimed by category
* Explanation of how the damage happened, the location, and the date and time (this may/may not be the same as the location, date, or time of the spill)
* Descriptions of actions taken to minimize or avoid damages
* Costs of assessing the damage
* Name, street and mailing address, and telephone numbers of any witnesses and a brief description of what the witness knows
* Copies of any written communications and content of any verbal communications with the RP, including any claims submitted to the RP
* Information on any attempts to submit claims to the person or company responsible for the oil pollution
* Any compensation you have received for removal costs or damages from the spill
* Statement that no action has been taken in court or, if action has been taken, the status of the pending court case
* Certification statement of the accuracy of the claim to the best of your knowledge and belief
* Your signature and, if applicable, your legal representative's signature.

Talk to us if you are considering making a claim.

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

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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

Gulf oil Spill Events, May 9, 2010

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Not good this weekend:

In Louisiana, truckloads of sand were being delivered and put in sandbags to be dropped by National Guard helicopters along Fourchon Beach, which is southwest of New Orleans. It's one of the few beaches along the Louisiana coast, with about two miles of public sand and another seven miles that is privately owned.

Officials declared a state of emergency and closed the beach until further notice.

Oil estimate now greater: It has been pouring into the Gulf from a blown-out undersea well at about 210,000 gallons per day.

Booms have been put out to protect estuaries, marshlands and coastlines, from west of the Mississippi River to points as far east as Panama City, Fla.

Source.

Alabama: Oil Spill - BP Officials meet residents of Bayou La Batre

It was a packed house at the community center in Bayou La Batre. With no air conditioning it was also a sweaty, hothouse. Officials from BP, the Coast Guard and others tried to update an uncomfortable crowd on the oil spill. At times the meeting was tense. One man grabbed the microphone and called it BP propaganda. A BP spokesman updated the room on what they're doing to contain the spill and offered numbers for people to file claims with the company. Bayou La Batre Mayor Stan Wright urged fishermen not to sign anything with the company if they do get a settlement.

People left the meeting with some contact sheets, but many wanted more.

“You know I just think there's so many questions they don't have answers for all of them yet, they seem to be doing the best they can with what they have to work with,” says charter and commercial fisherman Skipper Thiery. Most people wanted some idea of how the oil spill was going to affect them and their way of life--something we won't really know until the oil gets here.

From another source:

On Saturday afternoon May 1, as the oil spill continued to work its way onto the northern Gulf Coast, BP held what it had said would be a public information meeting in the south Alabama fishing town of Bayou La Batre. Those in attendance included town leaders, fishermen, local business owners and townspeople, all of whom are certain to be economically damaged by the oil slick now bearing down on the coastline. However, BP converted the public meeting into a public relations and litigation ploy. BP told the fishermen, business owners and local officials present that it will be unnecessary for them to hire their own legal counsel, that if they call a BP 1-800 telephone number and claim total damages for themselves and their businesses of less than $5,000 dollars, then BP would pay a claim of less than $5,000 but the damaged individuals and businesses in Bayou La Batre will be required to sign BP paperwork. If the claim against BP is more than $5,000, BP told the audience they would be required to deal directly with BP's legal department.



Local town leaders took the microphone from the BP representative, and told the townspeople present not to sign BP’s paperwork.


It is astonishing that BP, with its hordes of high-priced lawyers, would tell innocent victims not to obtain legal help for themselves, and that BP would try to lure these victims into dealing directly with BP's legal department.

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 and the Law: Fishermen wait for spill effects

From: http://neworleanscitybusiness.com/blog/2010/04/29/fishermen-lawyers-wait-for-oil-spill-effects/

Shrimp fishermen in south Louisiana have traded in their fishing gear for garbage bags and anything else they can use to collect as much of the crude oil now leaking at about 200,000 gallons per day from a collapsed BP rig and posing an increasing threat to their livelihood.

“We’re trying to save our industry at this point,” said Kim Chauvin, fourth generation co-owner of Mariah Jade Shrimp Co. south of Houma.

While environmentalists and ecologists struggle to predict the coastal impact of the slick, which has already come aground on the Mississippi Delta, Chauvin is optimistic that the central and western parts of the state will not be affected.

“There’s no need for alarm in the central and western parts of the state,” she said.


In New Orleans, a team of lawyers from throughout the Gulf Coast has been assembled to prosecute claims for affected commercial fisherman. With the oil just now reaching land, the attorneys said that there is still no way of knowing what kind of monetary impact the oil leak could have on fisherman. But in any case, they’re taking “pre-emptive action.”



On Wednesday, the state Department of Wildlife and Fisheries opened up an area to shrimp harvesting a couple weeks early in anticipation of damage from the oil slick.

“In consideration of the potential threat to these resources… this special season should provide fisherman with added economic opportunity through harvest and sale of over-wintering white shrimp,” the release says.

The LDWF has been trying to figure put what kind of economic impact the oil leak could have on the state’s seafood industry. It has begun gathering the dockside value of commercial seafood landings with a focus on the the Mississippi Delta area and parts east.

“We identified an area likely to suffer because of the spill,” said Jack Isaacs, an economist with the LDWF.

From 2007 to 2009, the average annual value of shrimp caught in the Lake Pontchartrain Basin was $9.24 million or 7.1 percent of the state’s total commercial seafood landings. In the Mississippi Delta, there was nearly $7.41 million worth of shrimp caught yearly, or 5.68 percent of the state’s total.

There is a total yearly dockside commercial value of seafood at $44.8 million in the Lake Pontchartrain Basin and $8.7 million in the Mississippi Delta, and the values do not include any additional value added by wholesalers, processors, packers, distributors, retailers or restaurants, Isaacs said.

Perhaps more worrisome for the seafood industry is the vulnerability of oysters. State research shows that 78 percent of oysters harvested from public reefs in Louisiana are in the Lake Pontchartrain Basin, representing $11.7 million in value. Another 45 percent of oyster coming from private leases in the state are in that same basin, totaling $12.7 million in value.

“The good thing for shrimp and fish is that they can swim away as the slick of oil approaches them,” said Cliff Hall, co-owner of seafood distributor New Orleans Fish House. “Oysters, unfortunately, will not be so lucky, as they are connected to the reefs and cannot move.”

Like Chauvin, Hall is anxiously hoping that winds keep the slick to the east of the Mississippi River delta.

“While it’s not good for the east side of the river, the positive part of this is it’s not affecting west side of river,” Hall said. “We’ll continue to draw from those resources for our restaurants.”•

Alabama/Georgia/Florida Oil Spill Damage Information

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I grew up in Florida, and consider the Gulf Coast South my home - from the Bayous of LA, to favorite places like Fairhope, to Seagrove Beach - all in the path of a man made disaster that may be worse than any hurricane.

How to help:

For folks in Mississippi: Please call 1.866.448.5816. If you want to register your desire to help and receive updates, visit Volunteer Mississippi.

www.mcvs.org/

If you're in Louisiana: To report oiled or injured wildlife, please call 1-866-557-1401.For spill claims: 1-800-440-0858.

For Community and Volunteer Information, please call 1-866-448-5816

Also worth a look is: www.emergency.louisiana.gov.

For Alabama citizens: The Alabama Coastal Foundation at 251-990-6002; the Mobile Bay National Estuary Program at 251-431-6409; or Mobile Baykeeper at 251-433-4229.

For the Coast of Florida: Go to www.volunteerfloridadisaster.org/

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