Environmental -- 2016

In re Deepwater Horizon   (5th Circuit)

Standard for punitive damages in Clean Water Act litigation

On June 8, 2015, the NAM filed an amicus brief in this appeal supporting BP’s challenge to a district court’s improper findings regarding punitive damages under the Clean Water Act and other law for the Deepwater Horizon accident. Under a procedure known as multidistrict litigation (MDL), most cases in federal courts involving the accident were sent to a single district court in Louisiana for consolidated pretrial proceedings to ensure the most efficient use of the parties’ and the judicial system’s resources as well as fairness and uniformity in the application of federal law across every case. If a case is not dismissed or resolved in the pretrial proceedings, it returns to its original district court for trial.

Under general maritime law a court may impose punitive damages for reckless, willful, and wanton conduct. The Fifth Circuit requires that to qualify the conduct must be the result of corporate policy or a corporate official with policy-making authority. The MDL trial judge in this case correctly determined that under the Fifth Circuit’s standard BP is not liable for punitive damages, but then went on to find that BP would be liable in the First or Ninth Circuits (in which some of the cases consolidated in the MDL originated and to which they may ultimately return for trial).

The NAM’s brief supports BP’s argument that the MDL judge wrongly opined on the availability of punitive damages under standards applied by the other circuits and should have focused only on the law of the Fifth Circuit. The MDL judge must decide pretrial issues only by the rules of the circuit in which he or she sits. Allowing the court to do otherwise would undermine the efficiency and fairness that Congress established by creating the MDL procedure.

This case was dismissed by stipulation of the parties in October, 2016.

Related Documents:
NAM brief  (June 8, 2015)


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