Thoughts on the Gulf Spill

In anticipation of the President’s speech tonight, I thought I’d make some observations about the situation in the Gulf.

1.  When I taught Admiralty last semester, I pointed out to my students that many of the statutes in this area are obsolete.  But, I quickly added, Congress won’t do anything about this until there’s a crisis.  Now we see a slew of proposals to amend the Jones Act, amend the Death on the High Seas Act, amend the Limitation of Liability Act, and overturn the Court’s decision on punitive damages in the Exxon Valdez case.  Maritime law is hot!  Of course, whether this sort of knee-jerk response leads to thoughtful changes is another matter, but overall it’s probably better that these neglected topics just get attention.

2.  The discussion about setting up a 9/11 style Fund (paid for by BP) to address claims arising from the disaster is intriguing.  It seems to me, though, that some new statute will required to make this work.  In particular, I’m not clear on how such a fund would interact with bankruptcy law.  Suppose BP puts $10 billion in escrow for the fund.  Then later they have to file for Chapter 11.  I don’t think that the fund would be immune from other creditors or that litigants would have priority over them (admittedly, though, some of my co-bloggers know far more about this than I do).

3.  A far less important point.  This crisis shows why the AALS Annual Meeting should not require such an early date for setting up panels.  Obviously, I’d like to do this year’s Admiralty Section panel on the spill.  But now I can’t — the deadline for setting up the panel was two months ago.  Granted, AALS can organize a separate one on the issue, but their rigidity with respect to the sections is rather irritating.

You may also like...

1 Response

  1. Jim Maloney says:

    As I’ve posted elsewhere, an honest evaluation of any retroactively applicable legislation expanding punitive damages beyond Exxon’s 1:1 punitive-to-actual ratio should examine whether the Ex Post Facto clause applies. Whether one calls punitive damages civil or criminal, the stated purpose of awarding punitive damages is to punish (note the common root in both words) and, correlatively, to discourage wrongful conduct. I say this not because I’m a BP defender (they are not a client of mine) but because calling essentially criminal-type sanctions (imposed retroactively) “civil” is an end-run around the Ex Post Facto clause. Accepting such rubric-based sophistry is not all that far from accepting that email is not “speech” protected by the First Amendment. But a point raised in Prof. Magliocca’s para 2 is worth some further thought: Congress has pretty wide latitude in amending the Bankruptcy Law, so insulating the “Fund” from future potential creditors in a bankruptcy ought to be fairly easy provided the political will is there. Of course, that may be like summoning up demons: what other pre-petition sheltering might it allow? To extend the pun further and to borrow from an ancient Currie article about ferderalism and the admiralty, the devil in that particular mess is in in the details. It would require some “slick” drafting.