Tuesday, December 7, 2010

Goldberg on Liability for Economic Loss in Connection with the Deepwater Horizon Spill

At the request of Ken Feinberg, the administrator of BP's compensation fund for the Deepwater Horizon Spill, John Goldberg (Harvard) prepared an analysis of BP's potential liability for economic loss claims under the Oil Pollution Act (OPA).  Goldberg concludes:

Under OPA, a person may obtain compensation for economic loss from a party responsible for a spill if she can prove that her loss is "due to" harm to property or resources that "result[s] from" the spill, irrespective of whether she owns that property or those resources.  This statutory language is best understood to allow recovery only by those economic loss claimants who can prove that they have suffered economic loss because a spill has damaged, destroyed, or otherwise rendered physically unavailable to them property or resources that they have a right to put to commercial use.  Thus, if a spill were to deprive commercial fisherman of expected profits by killing fish they ordinarily would catch and sell, or by causing authorities to bar the fishermen from accessing those fish for a period of time, the fishermen would be entitled to recover.  By contrast, operators of beach resorts in areas physically unaffected by the spill, but that nonetheless suffer economic loss because of a general downturn in tourism resulting from the spill, are among those who are not entitled to recover under OPA.

(Page 6).  Economic loss claims under state law are also discussed briefly. 

You can download the full report here:  Download Goldberg Report on Economic Loss Liability 11 22 10

- SBS

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