OCSLA and OPA, Not General Maritime Law, Govern MDL 2179
Tampa, FL (January 3, 2012) - On October 18, 2011, Cameron International Corporation ("Cameron") filed a Petition for Writ of Mandamus in the United States Court of Appeals for the Fifth Circuit.
Cameron believes there are two controversial facets of the trial plan proposed by Judge Carl Barbier for trial in the Gulf oil spill litigation:
1. Bench Trial vs. Trial by Jury
Judge Barbier proposes to dispense with trial by jury and instead to conduct a bench trial applying general maritime law. But the claims against Cameron are all governed by the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1331 et seq., which borrows the law of the adjacent state as surrogate federal law. Cameron is entitled under the Seventh Amendment to have those statutory tort claims for money damages tried before a jury.
2. "Allocation of Fault Issues" Without Reference to the Claim of Any Individual Plaintiff and in a Manner Contrary to the Federal Rules and the Oil Pollution Act of 1990 ("OPA")
This bench trial will adjudicate "allocation of fault issues" without determining whether there is underlying liability to any individual plaintiff and, indeed, will proceed without the participation of any identified private plaintiff. That proposal is incompatible with the federal rules, the Fifth Circuit Court's precedent, and the comprehensive scheme mandated by Congress in OPA, 33 U.S.C. § 2701 et seq.
Cameron argues that the first false premise is that general maritime law, not OCSLA, governs the whole case. For some, the oil spill might be associated with images of the Deepwater Horizon on the surface of the ocean, rather than an oil well 5000 feet below the surface. But unlike other high-profile cases involving vessels (such as the Exxon Valdez), this litigation is not about an oil spill from a vessel; it is about a blowout and spill from an oil well erected on the seabed.
OCSLA extends federal sovereignty "to the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing or producing resources therefrom, .. .to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a state." 43 U.S.C. § 1333(a)(1).
Recognition of OCSLA jurisdiction is decisive for the choice-of-law inquiry, because OCSLA acts "to define a body of law applicable" to activities on the outer continental shelf. Rodrigue v. Aetna Cas. & Surety Co., 395 U.S. 352, 356 (1969). To do so, it mandates "adoption of state law as surrogate federal law." OCSLA establishes the preemptive reach of federal law, 43 U.S.C. § 1333(a)(1), then fills any gaps in federal law by borrowing the law "of each adjacent State." 43 U.S.C. § 1333(a)(2)(A).
The PLT Test
In Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043 (5th Cir. 1990), the Fifth Circuit set forth a three-part choice-of-law test for OCSLA:
(1) The controversy must arise on a situs covered by OCSLA (i.e. the subsoil, seabed, or artificial structures permanently or temporarily attached thereto).
(2) Federal maritime law must not apply of its own force.
(3) The state law must not be inconsistent with Federal law.
As in PLT, all of these conditions are met in the MDL 2179 case.
1. The situs test is satisfied.
This controversy arose on an OCSLA situs. The Fifth Circuit recently noted that the situs requirement is satisfied if the events took place on "a fixed platform or other structure attached to the seabed." Grand Isle Shipyard, Inc. v. Seacor Marine, L.L.C., 589 F.3d 778, 784 (5th Cir. 2009) (en banc) (emphasis added). Thus, the district court correctly acknowledged that "the PLT test incorporates into § 1333(a)(2)(A) the locations referenced in § 1333(a)(1), specifically 'temporarily attached' structures."
2. Maritime law does not apply of its own force.
Maritime law does not "apply of its own force." PLT, 895 F.2d at 1047. Two separate lines of reasoning compel this conclusion.
In the first place, the Supreme Court has held consistently that drilling activities in water are not subject to maritime law. Over 100 years ago, the Court "specifically held that drilling platforms are not within admiralty jurisdiction." Rodrigue v. Aetna Cas. & Surety Co., 395 U.S. 352, 360 (1969) (citing Phoenix Constr. Co. v. The Steamer Poughkeepsie, 212 U.S. 558 (1908)).
This long-standing principle forecloses any competition between OCSLA and general maritime law. As the Court held in Rodrigue, when enacting OCSLA "Congress assumed that the admiralty law would not apply unless Congress made it apply, and then Congress decided not to make it apply." The Court rested this conclusion on its "careful scrutiny" of OCSLA's legislative history, which revealed that Congress had considered at length what body of law should govern the facilities identified in the statute; Congress understood that those exploration and production facilities "were not themselves to be considered within maritime jurisdiction" and therefore had "deliberately eschewed the application of admiralty principles." Instead, Congress selected the law of the adjacent state.
Twice since Rodrigue, the Court has reiterated "the operative assumption underlying the statute: that admiralty jurisdiction generally should not be extended to accidents in areas covered by OCSLA." Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 218 (1985); see Chevron Oil Co. v. Huson, 404 U.S. 97, 101 (1971) ("comprehensive admiralty law remedies [do not] apply under § 1333(a)(1)"). Thus, general maritime law does not apply "of its own force" to the federal enclave defined by OCSLA. If OCSLA applies, then general maritime law does not.
In any event, maritime law does not apply "of its own force" to this case for a second reason: Mineral production activities on the outer continental shelf are not "traditional maritime activities," and as such are not subject to maritime law. At one time, this Court had suggested that offshore drilling is maritime commerce, but the Supreme Court decisively held otherwise in Herb's Welding, v. Gray, 470 U.S. 414 (1985). In that case, the Court reiterated that "drilling platforms [are] not even suggestive of traditional maritime affairs" and stated explicitly that "exploration and development of the Continental Shelf are not themselves maritime commerce.
In PLT, therefore, this Court recognized that maritime law applies only if "the subject matter of the controversy bears significant relationship to traditional maritime activities."
By the standard of PLT, general maritime law is inapplicable to the claims related to Cameron's BOP, which is the subject of oil and gas exploration and production when attached to an exploration well.
This conclusion is best illustrated by Texaco Exploration & Production, Inc. v. AmClyde Engineered Production Co., 448 F.3d 760 (5th Cir. 2006), a case involving an accident during construction of a tower for an offshore drilling rig. Because the accident occurred on a vessel that was not itself attached to the seabed, the parties assumed that maritime law governed. But this Court did "not rely upon the parties' bare conclusion that substantive maritime law applies." Instead, it held that activities "connected with the development of the Outer Continental Shelf and an installation for the production of resources there ... are insufficiently connected to traditional maritime activity to support the application of admiralty law." Of special import here, the Court held that even the involvement of a vessel "in the accident and other elements of maritime activity that precede or surround the compliant tower's construction on the Shelf are insufficient to support either admiralty jurisdiction or the application of substantive maritime law." That holding fits this case like a glove. Maritime law does not apply "of its own force" to the claims against Cameron.
3. State law is not inconsistent with federal law.
With respect to the third prong of the test, Louisiana is the "adjacent State" within the meaning of § 1333(a)(2)(A), and neither the district court nor any party has suggested that the applicable substantive Louisiana tort law is inconsistent with federal law. The third prong of the PLT test is satisfied.
The District Court's Effort to Evade OCSLA Is Unsound
The district court apparently determined that general maritime law applies "of its own force" to the claims against Cameron under the second prong of the PLT test. The court reasoned that (i) the discharge of oil emanated from the Deepwater Horizon; (ii) the fact that the Deepwater Horizon was a "vessel" was independently sufficient to invoke admiralty jurisdiction; and (iii) admiralty jurisdiction supports the application of maritime law. Id. at 4-8. There are many flaws in this chain of logic, but the fundamental error rests in the district court's assumption that the Deepwater Horizon's status as a "vessel" is legally dispositive of any significant issue in this case.
First, as a matter of law, this Court has held explicitly that "vessel" status is not dispositive of either the OCSLA situs or maritime activity issues. Demette v. Falcon Drilling Co., 280 F.3d 492, 497-98 (5th Cir. 2002) (OCSLA situs not controlled by vessel status); AmClyde, 448 F.3d at 775 (involvement of vessel does not make petroleum exploration a traditional maritime activity). The district court relied on Demette and suggested that this Court "rejected the very same argument that Cameron makes in this case," but that is precisely backwards. Actually, this Court acknowledged vessel status yet it still proceeded to hold that the situs requirement was satisfied - following the same statutory construction that Cameron has advocated in this case. See Demette, 280 F.3d at 497-98.
Second, as a matter of indisputable fact, Cameron's BOP was affixed to the wellhead on the seafloor and was being used for mineral resource development. The claims against Cameron all revolve around that BOP erected on the seabed. Therefore, with respect to the claims against Cameron, this is a classic case for OCSLA jurisdiction.
The district court dismissed this point summarily, noting that the BOP was "part of the vessel's gear or appurtenances" and declaring that "[m]aritime law ordinarily treats an 'appurtenance' attached to a vessel in navigable waters as part of the vessel itself"' (citing Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 535 (1995)). But Grubart was not even an OCSLA case; it involved the Admiralty Extension Act, and it simply reaffirmed the principle that an injury caused by an appurtenance attached to a vessel (there, a crane) is caused "by a vessel" within the meaning of that Act. Grubart, 513 U.S. at 535. That rationale is irrelevant here, because the fact that the BOP was attached to the vessel does not alter the fact that it was a "fixed structure" and "attached to the seabed" within the meaning of OCSLA.
Indeed, this fact also exposes the district court's error as to the drilling rig. The district court's discussion of "vessel status" is founded on the premise that the oil spill emanated from the drilling unit instead of the well, but that is not the case. This is not a case like the Exxon Valdez litigation, where oil was spilling out of a grounded tanker; here, the oil was gushing out of a well and well equipment affixed to the seabed. Under these circumstances, vessel status is wholly irrelevant.
Furthermore, that the drilling unit was a "vessel" does not, standing alone, have any jurisdictional or choice-of-law significance. A basic requirement of admiralty jurisdiction is "that the wrong have a significant connection with traditional maritime activity." Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674 (1982). Grubart itself reiterated that admiralty jurisdiction may be invoked only "if the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity." Grubart, 513 U.S. at 534; see also Sisson v. Ruby, 497 U.S. 358, 364 (1990) (same).
At the time of the Macondo well blowout, the Deepwater Horizon "was stationary and physically attached to the seabed by means of 5,000 feet of drill pipe." It was engaged in well completion, not maritime navigation. Well completion is not a traditional maritime activity and thus does not satisfy the essential requirement for admiralty jurisdiction. That conclusion is supported and affirmed by a line of Supreme Court and Fifth Circuit cases. Even with its fixation on the Deepwater Horizon, therefore, the district court reached the wrong conclusion. The claims against Cameron are governed entirely by OCSLA, so there is no room for the district court's sweeping conclusion that "'the case is to be governed by maritime law."'
The district court sidestepped all these authorities by quoting, out of context, this Court's observation 25 years ago that "'oil and gas drilling on navigable waters aboard a vessel is recognized to be maritime commerce."' (quoting Theriot v. Bay Drilling Corp., 783 F.2d 527, 538-39 (5th Cir. 1986)). That misreads Theriot, which was carefully written to avoid being misunderstood. In the cited passage, Theriot distinguished a Supreme Court case on the basis that "the Court's holding must be read in the context of the opinion." The district court should have heeded that same advice.
Before finalizing plans for the bench trial, the district court ruled on motions to dismiss the private oil pollution claims. Those motions raised choice-of-law issues that impact the right to a jury trial. Although the court had "already held in this MDL that it has OCSLA jurisdiction," it declined to follow OCSLA's choice-of-law provisions. Instead, the court chose to apply general maritime law to Cameron.
Application of OCSLA rather than general maritime law is crucial because it forecloses the MDL 2179 court's effort to try all the liability questions in a bench trial. The district court's trial plan is founded on the tradition that maritime claims are tried to the bench. But money damage claims governed by Louisiana law as borrowed federal law trigger the right to a jury under the Seventh Amendment. Thus, the trial plan violates the Seventh Amendment, and it is settled that mandamus will lie to correct this constitutional error.
Unlike the personal injury and wrongful death actions, the cases alleging economic loss due to the oil spill are governed by OPA. Moreover, all actions were consolidated solely for "pretrial proceedings" before the Hon. Carl Barbier. see 28 U.S.C. § 1407(a) (MDL consolidation only for "pretrial proceedings").
The MDL 2179 court did rule that OPA displaces general maritime law for the oil pollution claims, but only as to procedure. The MDL 2179 court correctly noted that "OPA clearly requires that OPA claimants must first 'present' their OPA claim to the Responsible Party before filing suit." But the court decided that it "would be impractical, time-consuming, and disruptive to the orderly conduct of this MDL and the current scheduling orders if the Court or the parties were required to sort through in excess of 100,000 individual B1 claims" to resolve whether any one of them had satisfied the statutory requirement of presentment. It explained that "[n]o matter how many of the individual B1 claims might be dismissed without prejudice" for lack of presentment, "the trial scheduled in February would still go forward with essentially the same evidence."
The vast majority of the claims (both numerically and financially) arise under OPA, but with respect to the choice-of-law question it is only necessary to know that Cameron is not a statutorily defined "responsible party" made liable under OPA. See 33 U.S.C. §§ 2701(32), 2702(a). Instead, OPA subjects Cameron only to claims brought by responsible parties in subrogation or for contribution, and those claims are governed not by OPA but by "other law." 33 U.S.C. §§ 2715(a), 2709. Here, that "other law" is dictated by OCSLA. Consequently, borrowing adjacent state law is not "inconsistent with federal law;" it is called for by OPA.
The Trial Plan
Pursuant to the court's trial plan, which "applies to all cases," the trial will address "bases of liability," not actual liability to any individual claimant. This novel approach to an aggregate trial of "allocation of fault issues" will entail a staged investigation that focuses on the chronology of events, rather than the claims of particular litigants:
Phase I "will address issues arising out of the well blowout and spill "initiation" as of April 22, 2010;
Phase II "will address Source Control and Quantification of Discharge issues" from April 22, 2010 and thereafter; and
Phase III "will address issues" pertaining to the efforts to contain the spill.
The MDL 2179 court's trial plan, when read together with its previous orders, provides for a bench trial to address issues related to allocation of fault among all defendants in this litigation (who are alleged to have caused, in any way, the deaths, injuries, property damages, or economic losses resulting from the explosion of the Deepwater Horizon and the spill from the Macondo well) based on the false premise that general maritime law governs this case. This judicial determination is to be made apart from any finding of an actual injury suffered by any plaintiff. In short, this "trial" of liability for monetary damages will not include a plaintiff, nor will it include a jury. It is squarely contrary to the federal rules and/or federal statutes and the Constitution in each respect.
Cameron manufactured and sold equipment that was later affixed to the wellhead on the seafloor on the outer continental shelf; the claims against it have nothing to do with general maritime law. Instead, the claims against Cameron arise under and are subject to OCSLA. That conclusion is dictated by controlling decisions of the Supreme Court and the Fifth Circuit's own precedent. OCSLA, in turn, adopts the law of the adjacent state (here, Louisiana) as surrogate federal law. In short, all the injury, death, property damage, and economic loss claims against Cameron are governed by OCSLA, and thus by the substantive standards of Louisiana tort law.
The trial plan suffers from a second set of serious procedural flaws, which also have constitutional implications.
First, in divorcing the claims of individual plaintiffs from the questions of "liability" and "allocation of fault," this plan departs from the most cherished traditions of the Anglo-American adversarial system, which are embodied in the Federal Rules of Civil Procedure and the Rules Enabling Act. It is impossible to adjudicate "allocation of fault" in a vacuum without adjudicating the underlying claim of an individual plaintiff. The Fifth Circuit's Fibreboard and Castano decisions, and the Rhone-Poulenc decision from the Seventh Circuit, forbid "innovations" that exceed the rules and alter substantive rights. Indeed, this trial plan goes so far afield that it crosses the boundaries of Article III.
Second, this plan radically departs from OPA's carefully structured and comprehensive remedial scheme. As a condition precedent to suit, OPA requires presentment to a designated "responsible party" of all claims for response costs and economic losses caused by the discharge of oil in navigable waters. If the responsible party settles the claim, it may seek recovery from third parties like Cameron as subrogee of the paid claim. If it cannot settle a claim and is then sued, it may then seek contribution from third parties like Cameron. But the trial plan inverts the Congressional order, dispensing with presentment entirely, deferring compensation of verifiable claims, and forcing Cameron's potential liability to be determined in the abstract and in the first instance.
The District Court Cannot Try All the Plaintiffs' Claims Without Violating Rule 23, Lloyd's Leasing, and Lexecon
The order of proceedings envisioned by the trial plan is extremely curious. To begin the trial, "the Claimants, through the Plaintiffs' Steering Committee" (along with counsel for the governmental parties) will offer "evidence in support of those parties' claims against all defendants" in the aggregate. Later, defendants will present "evidence in support of their defenses to plaintiffs' claims" in the aggregate. Yet the trial plan does not actually propose to adjudicate those claims in the aggregate. The district court has structured the trial in this way because it cannot actually try all of the claimants' claims in this limitation action, for three reasons.
First, the only device that would permit a trial of all the claimants' claims in the aggregate would be a class action under Rule 23, but the district court has stayed all class action proceedings and has not appointed a class representative. As such, trying all plaintiffs' claims in the aggregate would be a blatant violation of Rule 23 by permitting a class-wide adjudication without establishing the mandatory prerequisites for a class action.
Second, the court could not have certified a class in the limitation action even if it had wanted to do so, because it would contravene this Court's holding in Lloyds Leasing Ltd. v. Bates, 902 F.2d 368 (5th Cir. 1990), that class actions are not permitted in limitation proceedings.
The Supreme Court has explained that a core purpose of the limitation action under Admiralty Rule F is to "marshal claims," which can then be adjudicated. Lewis v. Lewis & Clark Marine, Inc., 531 U.S. 438, 448 (2001). In that context, the Fifth Circuit has held that "the entire thrust of Supplemental Rule F is that each claimant must appear individually." In re Lloyd's Leasing, 902 F.2d 368, 370 (5th Cir. 1990). Each claim must be prosecuted "individually" and liability must be resolved on the basis of individual claims.
Third, trying all the plaintiffs' claims in the aggregate would violate the rule of Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), which holds that an MDL judge may not try the actions transferred from other judicial districts under 28 U.S.C. § 1407. When the JPML transfers a matter to a MDL judge, "[e]ach action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated." 28 U.S.C. § 1407(a). In Lexecon, the Supreme Court read that language strictly and reversed a judgment entered after trial of a matter that the JPML had transferred pursuant to § 1407. The Court held that "considerations of 'finality, efficiency and economy"' do not justify "defiance of the congressional condition" that such an action be remanded to the transferor court for trial.
In this case the JPML has transferred over 300 cases filed in other districts. Those actions, which include the claims of thousands of plaintiffs, were transferred to Judge Barbier for "coordinated or consolidated pretrial proceedings." Because Judge Barbier cannot try the cases transferred for "pretrial proceedings," he could not try all of the plaintiffs' claims in the aggregate in this proceeding. Nor can the rule of Lexecon be circumvented by the device of permitting claimants to file "short-form joinders" injecting themselves into the limitation action on the theory that it was transferred to the district court under 28 U.S.C. § 1404 for trial. That would make a mockery of Lexecon.
The district judge, a seasoned and able jurist, recognized that he was not free to fashion a trial plan that is flawed in these fundamental respects. For that reason, the trial plan does not seek to adjudicate all the plaintiffs' claims in the aggregate. Instead, it plans a trial of "issues" related to "allocation of fault" in the abstract. Unable to try all the plaintiffs' claims, the judge has chosen to try none of them. This proposal is still defective, as a trial of "issues" would try parts of actions that under Lexecon the MDL judge must not try and would amount to a class action in a limitations proceeding contrary to Rule 23 and Lloyd's Leasing. Indeed, such a trial would resemble an unsanctioned class action in almost everything but name. But even on its own terms, this plan exceeds the boundaries of the federal rules and contravenes the prior decisions of the Fifth Circuit.
The District Court's Plan to Try "Issues" Without Trying Any Plaintiffs' Claims Violates Rule 42, Fibreboard, and Article III
The district court evidently grounded its decision to order a trial of "issues" in Rule 42. But that trial plan cannot be sustained under the Fifth Circuit's precedent. The Fifth Circuit recognizes that "separation of issues is not the usual course that should be followed." Castano v. American Tobacco Co., 84 F.3d 734, 750 (5th Cir. 1996) (quoting Alabama v. Blue Bird Body Co., 573 F.2d 309, 318 (5th Cir. 1978)). When a district court proposes to depart from the usual practice, "the issue to be tried must be so distinct and separable from the others that a trial of it alone may be had without injustice."
Here, the "allocation of fault issues" that the district court intends to try are not "distinct and separable" from the underlying claims of individual plaintiffs. Just the opposite. It is impossible to decide "allocation of fault" in the abstract; these questions cannot be decided without addressing liability, proximate cause, and comparative fault with reference to the claims of an individual plaintiff. Castano rejected a trial plan "to divide core liability from other issues such as comparative negligence," Castano, 84 F.3d at 749, and this plan suffers from the same flaw. Rule 42(b) does not permit a separate trial on those issues in a vacuum, and the effort to use it in this way violates the Rules Enabling Act: "Such rules shall not abridge, enlarge or modify any substantive right." 28 U.S.C. § 2072.
In a series of decisions, the Fifth Circuit (and others) has emphasized that courts cannot order separate trials of "issues" that aggregate individualized questions, such as causation, simply because it would be "convenient" or "efficient." E.g., Castano, 84 F.3d at 751; In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1302-04 (7th Cir. 1995); In re Fibreboard Corp., 893 F.2d 706, 709-12 (5th Cir. 1990). Fibreboard was a seminal case, rejecting a trial plan that proposed to try the claims of 41 representative plaintiffs as a means to secure percentage findings that would then be extrapolated to an entire class of plaintiffs. By this device, the claims of the plaintiffs were to be aggregated and "the claim of a unit of 2,990 persons will be presented." This procedure would mean the defendants "are exposed to liability not only in 41 cases actually tried with success to the jury, but in 2,990 additional cases whose claims are indexed to those tried." "[E]ach plaintiff will be present in a theoretical, if not practical, sense."
The Fifth Circuit held that such an aggregate trial plan "cannot focus upon such issues as individual causation," and as a result, it would not permit a trial of individual claims. "This is the inevitable consequence of treating discrete claims as fungible claims." Such a plan could proceed "only by lifting the description of the claims to a level of generality that tears them from their substantively required moorings to actual causation and discrete injury." This, the Court held, was "alteration of substantive principle."
The innovative plan proposed by the district court violates these principles. By planning a "trial" of all defendants' "bases of liability" and "allocation of fault" in the abstract, without reference to any individual plaintiff's claim, this trial plan goes even further than the one rejected by Fibreboard. In the name of efficiency, it alters Cameron's substantive rights in precisely the way the Fifth Circuit has forbidden. "There is a point ... where cumulative changes in procedure work a change in the very character of a trial." Id. at 711. This plan has crossed that line.
This conclusion is inescapable regardless of the controlling substantive law. The claims against Cameron all turn on allegations that its product was defective, and Cameron cannot be liable on such a claim without proof that an alleged defect proximately caused some plaintiffs injury. Under Louisiana law, borrowed as surrogate federal law under OCSLA, Cameron could be "liable to a claimant" only "for damage proximately caused by" its product. LA. REV. STAT. 9:2800.54.A. Likewise, even if the district court were correct that general maritime law governs, "there is properly no application of comparative fault where there is an absence of proximate causation." Exxon Co. v. Sofec, Inc., 517 U.S. 830, 838 (1996). Thus, the causation inquiry cannot proceed without reference to some plaintiff's claim. See United States v. Atlantic Research Corp., 127 S. Ct. 2331, 2337-38 (2007) (statutory claims for contribution, like the cross-claims here, require a finding that the parties are "responsible for the same tort").
Furthermore, no liability can be imposed on Cameron under Louisiana or maritime product liability law, and therefore no fault can be allocated to Cameron, unless a plaintiff satisfies the "economic loss" rule by proving an injury to either person or property. See Wiltz v. Bayer Cropscience, Inc., 645 F.3d 690, 695-703 (5th Cir. 2011) (Louisiana law); East River SS Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 867-75 (1986) (maritime law).
In short, regardless of the choice-of-law ruling, the notion that a court can adjudicate "allocation of fault issues" in a vacuum, divorced from the claims of any individual plaintiff, alters Cameron's substantive rights in violation of Rule 42 and the Castano and Fibreboard decisions. This plan is a violation of due process. See Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2560-61 (2011).
At bottom, the trial plan goes so far in seeking to adjudicate abstract issues without reference to any individual claim that it violates Article III. A plaintiff with standing to sue is the "irreducible constitutional minimum" under Article III. Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 102-03 (1998). Individual standing is "the core of Article III's case-or-controversy requirement," Id. at 104, and it "must be supported adequately by the evidence adduced at trial."' LuJan v. Defenders of Wildlife, 504 U.S. 555, 561 ( 1992) . Because this trial plan would adjudicate "issues" in the abstract, not the claims of individual claimants who seek redress for identifiable injuries, it violates Article III.
The Trial Plan Does Not Accord With the Congressionally Mandated Remedial Scheme Prescribed by OPA
It should not escape notice that the district court's effort to achieve a global "allocation of fault" is not only irreconcilable with the ordinary rules of procedure, but also with the specific scheme fashioned by Congress for oil pollution claims - by far the most numerous and financially significant claims in this litigation.
OPA establishes a comprehensive remedial scheme governing claims arising from the discharge of oil into navigable waters. The OPA scheme focuses on statutorily designated "responsible parties." 33 U.S.C. § 2701(32). In this case, the designated "responsible parties" are the vessel owner or operator (Transocean) and the Macondo well lessees (BP, Anadarko, and MOEX). Cameron is not a statutorily designated "responsible party."
OPA makes the responsible parties strictly liable for specific categories of removal costs and damages "[n]otwithstanding any other provision or rule of law." 33 U.S.C. § 2702(a); § 2702(b) (specifying the recoverable costs and damages). It sets forth a streamlined process to facilitate prompt payment of verifiable claims. First, as a means of expediting payment and minimizing litigation, OPA imposes a presentment requirement: "[A]11 claims for removal costs or damages shall be presented first to the responsible party." 33 U.S.C. § 2713(a). Only if a claim is not paid within 90 days may "the claimant ... elect to commence an action in court against the responsible party ...." Id. § 2713(c).
OPA does not authorize claimants to sue third persons like Cameron who are not statutorily designated responsible parties. Instead, the statute interposes the responsible parties between claimants and third persons. Once a responsible party "pays compensation pursuant to this chapter to any claimant for removal costs or damages," the responsible party becomes "subrogated to all rights, claims, and causes of action that the claimant has under any other law." 33 U.S.C. § 2715(a); see also Id. § 2702(d)(1)(B). Alternatively, a responsible party may bring an "action for contribution against any other person who is liable or potentially liable under this Act or another law." Id. § 2709.
In short, OPA prescribes a streamlined procedure providing for payment of damages first, litigation of liability later. Responsible parties must promptly compensate all claimants who present verifiable claims; ultimate financial liability is then resolved in separate litigation to which the claimants are not even parties. The legislative history makes this two-stage process explicit: "Whenever possible, the burden is to be on the discharger to first bear the costs of removal and provide compensation for any damages. . . . [L]itigation or lengthy adjudicatory proceedings over liability, defenses, or the propriety of claims should be reserved for subrogation actions ...." S. Rep. 101-94, 101″ Cong., 0 Sess. 1989, 1990 U.S. Code Cong. & Admin. News 722, 732.
First, failure to enforce the presentment requirement delays indefinitely the verification and satisfaction of claims advanced by individual plaintiffs (if any) who have presented claims and been denied compensation by a responsible party; under the proposed trial plan those plaintiffs now will be lumped together with the "large numbers of ... plaintiffs who have completely bypassed the OPA claim presentation requirement," and will sit back to await the outcome of what Congress presciently called "lengthy adjudicatory proceedings over liability." This is precisely contrary to the prompt payment of compensation that lies at the heart of the OPA remedial scheme.
Second, by proceeding directly to matters of liability instead of resolving the claims of individual plaintiffs, the trial plan invites the PSC to participate in a potentially riotous free-for-all over fault on behalf of an undifferentiated mass of unidentified plaintiffs. The PSC will play this role even though (a) those plaintiffs have not been demonstrated to have satisfied OPA's prerequisite for bringing suit, (b) those plaintiffs do not need to prove fault to secure compensation under OPA, and (c) those plaintiffs have no statutory right to sue third persons like Cameron who are not statutorily designated responsible parties.
The district court may have believed that its multiple departures from the OPA remedial scheme were justified under the Limitation Act, but that is not so. The Limitation Act's procedures for marshaling claims and allocating fault cannot be used to circumvent the orderly OPA scheme. As the First Circuit correctly held, "claims arising under the OPA (for pollution removal costs and damages) are not subject to the substantive or procedural law of the Limitation Act or to the concursus of claims [allowed by the Limitation Act]." In re Metlife Capital Corp.,132 F.3 d 818, 819 (1st Cir. 1997). "OPA repealed the Limitation Act with respect to removal costs and damages claims against responsible parties." Id. at 821. Congress stated that OPA "completely supersedes"' the Limitation Act. M. at 822 (quoting legislative history). Thus, after careful evaluation, the First Circuit held "the OPA's scheme is in irreconcilable conflict with the Limitation Act."
The plaintiffs' OPA claims should be adjudicated in the manner deliberately chosen by Congress, i.e., only plaintiffs satisfying the presentment requirement may have their day in court; plaintiffs who do satisfy the presentment requirement are entitled to compensation for all verified claims without awaiting litigation over fault or ultimate financial responsibility, but those plaintiffs may not proceed against third persons who are not statutorily designated responsible parties. Instead, the district court has inverted the congressional order by confusing Transocean's limitation action with the OPA claims that this case is mainly about. This has become a case of the caboose driving the train, and it needs to be put back on the tracks.
When viewed as a whole, the proceeding envisioned by the MDL 2179 court's plan is not a "trial" as it is known in Anglo-American law. Its three phases are reminiscent of the procedures followed by European courts in which the judges are active prosecutors in search of justice while the litigants are virtually bystanders. But this procedure is a novelty in American law. It should not be allowed.
THE FIFTH CIRCUIT ORDER
The United States Court of Appeals for the Fifth Circuit chose not to address the issues raised in Cameron's Petition for Writ of Mandamus. On December 26, 2011, the three-judge panel (Judges Higginbotham, Davis, and Elrod) issued the following three-sentence Order:
"The application for mandamus is denied. The district court did not clearly err in concluding that the limitation proceeding is within the court's admiralty jurisdiction. The remaining issues fail the demands for mandamus review."
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