BP Oil Spill Lawsuits Centralized in New Orleans

The U.S. Judicial Panel on Multidistrict Litigation has decided that all federal lawsuits over the BP oil spill, which range from economic loss claims to wrongful death lawsuits stemming from the massive three-month spill, should be consolidated for pretrial litigation in the U.S. District Court for the Eastern District of Louisiana.  

The panel’s transfer order (pdf), issued August 10, will result in 77 BP oil spill lawsuits currently pending in seven different federal courts across the country being transferred to U.S. District Judge Carl J. Barbier in New Orleans. The location of the centralization has been a major issue, because BP (formerly British Petroleum) was trying to have the litigation centralized in Texas, which is the backyard of its U.S. operations and where it is likely to receive the most sympathy. The company has contended that it may not get a fair trial in New Orleans, whose economy, already anemic from damage due to Hurricane Katrina several years ago, was the hardest hit by the oil spill.

The panel, however, said that New Orleans was the most appropriate location for the multidistrict litigation, or MDL.

“Without discounting the spill’s effects on other states, if there is a geographic ‘center of gravity’ in this docket, then the Eastern District of Louisiana is closest to it,” the judges stated in their transfer order. They also rejected suggestions that the cases should be moved to neutral ground because neither Louisiana nor Texas would be appropriate. The panel said that a federal judge’s oath to impartiality should be considered valid unless there is direct evidence to the contrary

Oil spill lawsuits have been filed by shrimpers, oyster farmers, resorts and other businesses claiming that the man-made catastrophe has caused them to suffer economic loss. There are also lawsuits filed by states and environmental groups who are suing for damages over the environmental impact, and lawsuits from property owners whose beaches are now covered with tar balls and the corpses of fish and fowl dying as a result of the contamination from oil and dispersants used to break it up. In addition, there have been a number of Deepwater Horizon wrongful death lawsuits filed by family members of workers who died on the rig.

Consolidation of the BP oil spill lawsuits before one judge as part of an MDL is designed to eliminate duplicative discovery, avoid contradictory rulings from different judges and to serve the convenience of the court, witnesses and parties. While the pretrial management of the cases in an MDL is often managed similar to how a BP oil spill class action lawsuit would be handled, each claim would still remain an individual lawsuit.

While the majority of the media attention and government focus has been on BP, most of the lawsuits also name Transocean Ltd., Cameron International Corp. and Halliburton Energy Services Inc. as defendants. In addition to the 77 initial lawsuits, some experts say there are as many as 200 other “tag along” lawsuits that are likely to be included at some point as well.

The gulf coast oil spill started shortly after the April 20 explosion and fire on the Deepwater Horizon sent the oil drilling rig to the bottom of the Gulf and unleashed an oil spill in the Gulf that is shaping up to be the worst environmental disaster in history. The blast killed 11 workers and sent tens of thousands of gallons of oil gushing from a mile-deep well in the ocean floor. It took three months for BP to successfully cap the well and staunch the flow of oil into the gulf.

The oil slick is obliterating sea life, ecosystems and waterfowl in the Gulf and Gulf Coast states, and oil is washing ashore in Louisiana, Alabama, Mississippi and Florida. Last month, BP agreed to create a $20 billion fund to help gulf coast shrimpers, fishermen and oyster farmers, and other area businesses, recover from the damage of the disaster. But some experts say that the cost of litigation and environmental clean up could end up costing BP around $90 billion.