Preempting Liability Essay

William R. Gignilliat
2011 First Place Winner

I. Introduction


On the night of April 20, 2010, an explosion rocked the Deepwater Horizon, an oil drilling rig in the Gulf of Mexico.[1] Within ten days, an oil spill had spread across almost 4,000 square miles of ocean.[2] The massive release of oil from the Macondo reservoir continued unabated for eighty-six days until the well was capped on July 15, 2010.[3]

The Deepwater Horizon spill is the largest accidental oil spill in history.[4] Estimates indicate that the amount of oil released may be nearly five million barrels, or about 205 million gallons.[5] In comparison, the Exxon Valdez spilled only eleven million gallons.[6] Oil made landfall in all five of the gulf coast states: Louisiana, Mississippi, Alabama, Florida, and Texas.[7]

Communities dependent on marine harvesting and tourism have been devastated. Huge portions of the gulf were closed to fishing by the federal government.[8] The environmental harm is catastrophic; thousands of species were threatened and the whole ecosystem has suffered a devastating blow.[9] The true extent of the ecological damage remains relatively uncertain.[10]

The legal implications of the oil spill are also vast. The Department of Justice has filed suit against BP and eight other companies and criminal investigations are ongoing.[11] Wrongful death suits are being filed on behalf of the eleven men who were killed during the explosion and its aftermath.[12] State and local governments affected by the disaster have also initiated suits.[13] Even securities, racketeering, and animal cruelty litigation has begun.[14]

Over three hundred law suits have already been consolidated under Federal Judge Carl Barbier in New Orleans.[15] Similar to the Exxon Valdez case,[16] the multi-district litigation will be bifurcated.[17] An initial trial to determine fault and assign percentages of liability to defendants is scheduled to begin February 27, 2012.[18] Damage trials will be unlikely to be held until 2013.[19] If history is a good marker, appellate litigation could potentially last decades.[20]

This research paper focuses on the bulk of the claimants and potential civil liability. This group includes those affected economically by the spill, such as shrimpers, fisherman, seafood dealers, restaurants, hotel owners, other business owners, and individuals who assert claims.

Part II, the Background, first outlines the potential claims available to these plaintiffs. Part II.A examines federal claims under the Oil Pollution Act of 1990 (OPA) and explains the OPA savings clauses. The research also explores federal maritime claims and an array of statutory and common law claims arising under state law. Part II.B discusses preemption, displacement, maritime preemption and related caselaw.

In the Analysis, Part III.A determines that OPA preserves state law, in accord with most authorities on the subject. Part III.B demonstrates that OPA clearly does not displace general maritime law, contrary to two decisions premised on faulty reasoning. An issue which has not been addressed by the courts is whether maritime law might preempt state law independently from OPA. Part III.C argues that OPA’s savings clause is limited to statutory preemption analysis and does not affect maritime preemption.

The maritime preemption standard created by the Supreme Court in Southern Pacific Co. v. Jensen is rooted in the Admiralty Clause of the Constitution and developed over the years to promote the federal interest in maritime uniformity. The doctrine has not been applied clearly in the past. As one federal judge stated: “Discerning the law in this area is far from easy; one might tack a sailboat into a fog bank with more confidence.”[21] Nevertheless, this essay seeks to illuminate a path through the murky doctrine towards a fair and efficient outcome.

After applying the standard to the unique facts and legal dilemma of the gulf spill, this essay concludes that preemption of state law is warranted because the federal interest overwhelms state interests in the balancing test developed under Jensen‘s third prong. The spill originated in federal waters. It resulted from an activity heavily regulated by federal law and agencies. Its affects were not confined to a single state but were spread across an entire region. There is also a federal interest in the uniform recovery for citizens in gulf states. The state interests are minimal because the rights and remedies available under state law are generally duplicative of the federal scheme provided by OPA and maritime negligence. However, maritime courts may use their inherent rule-making power to incorporate certain aspects of state law into the litigation to alleviate the harshness of preemption and pay respect to the historic police power of states. This dual analysis balances the state’s historic police power and the federal interest in uniformity in maritime law. Its application creates results which are fair to the litigants and efficient for federal courts.


II. Background


A. Potential Claims

     1. OPA Claims. Congress enacted the Oil Pollution Act of 1990 (OPA) in the wake of the 1989 Exxon Valdez spill.[22]OPA establishes that a responsible party[23] is strictly liable for removal costs[24] and damages caused by the discharge of oil.[25] Private parties, as well as federal and local government agencies may recover.[26] Private plaintiffs may recover loss of subsistence use of natural resources,[27] damages to real or personal property,[28] and even pure economic damages.[29] By allowing claimants to recover pure economic losses without physical damage to property or personal injury, Congress effectively eliminated one of the greatest historical barriers of recovery in maritime pollution and tort cases.[30]

OPA’s strict liability for offshore facilities is unlimited in regards to removal costs, but is capped at $75 million for the other damage provisions.[31] Liability is unlimited, however, if the incident was caused by gross negligence, willful misconduct, violation of a federal safety regulation, or if the responsible party fails to report a spill or cooperate with government officials.[32] If the discharge resulted from an act of God, act of war, or an act or omission of a third party, the party has a viable defense.[33]

2. OPA Savings Clauses. Title I, of the statute, governing oil spill liability and compensation, is peppered with savings clauses.[34] Congress provides for strict liability “[n]otwithstanding any other provision or rule of law,” in the central liability provision of the statute.[35] The most extensive savings provision, Section 2718, preserves state law:


Nothing in this Act . . . shall–(1) affect, or be construed or interpreted as preempting, the authority of any State or political subdivision thereof from imposing any additional liability or requirements with respect to–(A) the discharge of oil or other pollution by oil within such State; or (B) any removal activities in connection with such a discharge; or (2) affect, or be construed to affect or modify in any way the obligations or liabilities of any person under . . . State law, including common law.[36]


OPA’s legislative history reinforces the broad language of the savings provisions.[37] Specifically, the Senate Report stated: “[t]he theory behind the [savings clause] is that the federal statute is designed to provide basic protection for the environment and victims damaged by spills of oil. Any state wishing to impose a greater degree of protection for its own resources and citizens is entitled to do so.”[38]

Maritime law is also preserved from displacement by OPA, as the “Act does not affect admiralty or maritime law” or jurisdiction of such claims.[39] The House Report further clarifies that OPA does not affect or supersede admiralty and maritime law, and that Congress wishes “to promote uniformity regarding these laws.”[40]

3. Maritime Claims. Maritime tort clearly recognizes an action for damages caused by oil pollution.[41]The primary claim available is negligence, comprised of its usual elements: duty, breach, causation, and damages.[42] The burden of proof is a preponderance of the evidence standard.[43] Punitive damages are available in cases of recklessness or greater fault.[44] However, the punitive-to-compensatory damages ratio may not exceed 1:1, at least in cases not involving intentional, malicious, profit-motivated, or surreptitious conduct.[45] Under the common law maritime rule announced in Robins Dry Dock, economic damages cannot be recovered without physical damage to a plaintiff’s property.[46] If negligence diminishes aquatic life, however, commercial fishermen, as “favorites of the admiralty,” may still recover pure economic damages.[47]

Strict products liability has been recognized in maritime law.[48] These claims could be relevant given the prominent role of the blow-out preventer in causing the spill.[49] A federal nuisance claim might be applicable, but there is doubt that nuisance claims exist in maritime law.[50] Other maritime actions, such as wrongful death and intentional torts, exist but are irrelevant to the current analysis.[51] In the Analysis, this research only considers the preemptive effect of maritime negligence claims.

4. State Law Claims. While delving into the intricacies of each of the gulf coast states’ common law and statutes is impossible here, a general overview is helpful. Common law claims include negligence, nuisance, strict products liability, and strict liability for abnormally dangerous substances.[52]

The negligence claims require a showing of the familiar elements, usually by a preponderance of the evidence. Similar to maritime claims, pure economic damages are not recoverable absent personal injury or property damage[53]and punitive damages can be awarded only upon showing recklessness or greater fault.[54] Unlike maritime claims, most states require a clear and convincing evidence for punitive claims.[55] Maximums for punitive damages vary. Florida and Alabama have a maximum ratio of 3:1 and Texas is 2:1.[56] Mississippi caps punitive awards at $20 million.[57] Louisiana does not allow punitive damages for oil pollution.[58]

Most states have adopted the Restatement’s definition of public nuisance: an unreasonable interference with a right common to the general public.”[59] Private nuisance, in contrast, requires substantial, unreasonable interference with private use and enjoyment of land.[60] Strict liability claims may be available if oil is determined to be an abnormally dangerous substance under state law.[61] Courts are reluctant to classify oil in this manner.[62]

Additionally, each gulf coast state has enacted legislation governing liability for oil spills, or water pollution generally.[63] Generally, these statutes create strict liability and a private right of action.[64] The rights and defenses under the Florida statute, for example, are quite similar to OPA.[65] Liability caps vary.[66]


B. Statutory Preemption, Displacement, and Maritime Preemption

1. Statutory Preemption and Displacement. The Supremacy Clause proclaims that federal law is the supreme law of the land.[67] In the bulk of cases, preemption doctrine evaluates whether a federal statute preempts state common law or a state statute. However, federal common law and regulations may also preempt state law.[68] There, are generally four types of preemption: express, field, implied, and conflict.[69] In all preemption and displacement caselaw, congressional intent is the “ultimate touchstone.”[70] Many federal statutes include savings clauses, which announce legislative intent to avoid preemption of related state claims.

Because OPA’s savings clause expressly preserves state law, extensive review of preemption doctrine is unnecessary. However, the mere presence of a savings clause is not dispositive.[71] Courts must evaluate the text of the provision, its location within the statutory framework, and its relationship to the federal regulatory scheme and the state law being challenged.[72] The Supreme Court has stated that it will “decline to give broad effect to savings clauses where doing so would upset the careful regulatory scheme established by federal law.”[73]

Displacement of federal common law by federal statute involves a similar but distinct analysis to preemption. Though courts have frequently confused the doctrines by using the term preemption when discussing displacement,[74] the Supreme Court has emphasized that “the appropriate analysis . . . is not the same.”[75] Displacement is more straight-forward than preemption because it only involves “an assessment of the scope of the legislation and whether the scheme established by Congress addresses the problem formerly governed by federal common law.”[76] The historic presence of state police powers, competing state and federal interests, and the presence of a savings provision preserving state law are all irrelevant.[77]

There is a preliminary assumption that “it is for Congress, not federal courts, to articulate” federal law.[78]Whether the federal statute is “comprehensive” in character is “quite relevant.”[79] Federal courts may fill a gap in a federal regulatory scheme with common law but may not do so if it would essentially create a different scheme or have “frustrating effect” on the federal scheme.[80] Displacement of federal maritime common law is governed by the same principles.[81]

2. Maritime Preemption and Caselaw. Under the Admiralty Clause, judicial power extends to all cases of admiralty and maritime jurisdiction.[82] Though not explicit in the clause, Congress has implied authority to legislate in the area.[83] In early maritime law, the interest of uniformity was held to be “unquestionable.”[84] Later cases, however, recognized that the uniformity interest is not absolute.[85]Preemption of state law by maritime law is governed by the three-prong test established in Southern Pacific Co. v. Jensen.[86] Under Jensen, state law may affect maritime affairs “to some extent” but is invalid if it: (1) “contravenes the essential purpose expressed by an act of Congress,” (2) “works material prejudice to the characteristic features of the general maritime law,” or (3) “interferes with the proper harmony and uniformity” of maritime law in its interstate and international relations.[87]

The first prong is a question of statutory preemption. Under the second prong, a characteristic feature of maritime law is a federal rule which “originated in admiralty” or “has exclusive application there.”[88] Under the third prong, the Supreme Court has adopted a balancing test that weighs state and federal interests in the matter.[89]

In the field of state water pollution control laws, the pertinent case is undoubtedly Askew v. American Waterway Operators.[90] In that case, the Supreme Court confronted a constitutional challenge to Florida’s Oil Spill Prevention and Pollution Control Act.[91] The Florida statute imposed strict liability for any damage incurred by the state or private plaintiffs as a result of an oil spill in Florida waters from a drilling facility or vessel.[92] At that time, the federal statute governing water pollution was the Water Quality Improvement Act of 1970 (WQIA), which subjected owners of vessels and facilities without fault to limited liability for cleanup costs incurred by the federal government as a result of oil spills.[93] Liability for federal removal costs was unlimited in the case of willful negligence or willful misconduct.[94] It also authorized the federal government to promulgate regulations requiring ships and facilities to maintain equipment for the prevention of oil spills.[95]

The Court explained that statutory preemption of the Florida Statute was unwarranted.[96] The WQIA savings clause clearly allowed state regulation and the legislative history supported this finding.[97] Though WQIA did provide a “pervasive system of federal control,” the Court held there was no conflict with the Florida provisions allowing recovery of property damage because WQIA only concerned removal costs.[98] As to removal costs, there was no conflict because WQIA only covered federal costs and the Florida statute only covered state costs.[99] The Court declined to address whether Florida could recoup costs above the federal cap.[100]

In the absence of federal statutory preemption, the Court then addressed the question of whether maritime law preempted the Florida statute under Jensen.[101] The Court determined that the Florida statute did not interfere with a characteristic feature of maritime law because, historically, damages to shore-side interests were not cognizable in admiralty.[102] While the Admiralty Extension Act did extend admiralty jurisdiction to include sea-to-shore injuries, the Court declined “to move the Jensen line of cases shoreward to oust state law from any situations involving shoreside injuries by ships on navigable waters.”[103] The Court emphasized the state interest in its traditional police powers over pollution within its borders.[104] Justice Douglas characterized oil spills as “an insidious form of pollution of vast concern to every coastal city or port and to all the estuaries on which the life of the ocean and the lives of coastal people are greatly dependent.”[105]

While the case can be read to give great deference to state pollution laws in matters of maritime preemption, it can also be read narrowly as allowing WQIA’s savings clause to survive a challenge to only its facial validity without addressing any actual conflicts which might result from its application.[106] Courts have reached divergent conclusions.[107]

During the Exxon Valdez litigation, maritime preemption arguments resurfaced. An Alaska statute imposed strict liability for discharges of hazardous substances and included pure economic damages.[108] However, economic damages without physical injury to person or property are barred in maritime tort actions under the Robins Dry Dockrule.[109] The Ninth Circuit, however, determined that the rule “neither ‘originated in the admiralty’ nor ‘had exclusive application in admiralty’ “.[110] The maritime rule is generally applied in land-based contexts and was traced back to the traditional tort rule which refuses recovery for negligent interference with contractual rights.[111]

After concluding Jensen‘s second prong did not warrant preemption, the court balanced state and federal interests to determine if application of the state law would interfere with maritime uniformity under the third prong.[112] The court found that Alaska had a strong interest in regulating oil pollution and providing damages caused by oil spills.[113] The federal interest in limiting liability in maritime commerce and providing a uniform maritime rule was minimized because two federal statutes governing oil pollution allowed recovery for pure economic harm.[114] While OPA did not apply retroactively to the case,[115] the Ninth Circuit believed it offered “compelling evidence that Congress does not view either expansion of liability to cover purely economic losses or enactment of comparable state oil pollution regimes as an excessive burden on maritime commerce.”[116] In accord with the Ninth Circuit, the Alaska Supreme Court also held that damages for pure economic harm were not preempted by the maritime rule.[117]Addressing the same issue, the First Circuit and various district courts have reached the same conclusion.[118]

3. Post-OPA Caselaw. Since OPA was enacted, several courts have addressed preemption and displacement issues related to oil spills, but the results do not clearly establish how the statute interacts with maritime and state law.

In Sekco Energy Inc. v. M/V Margaret Chouest, a seismic cable towed by vessels struck an oil drilling platform on the outer continental shelf.[119] Though the incident caused no physical damage to the platform, oil did spill from the cable after it was ripped open by barnacles.[120] Government officials ordered the platform to halt operations during an investigation.[121] After suffering economic losses following this period, the platform owners sued the vessel owners, asserting maritime tort claims, nuisance claims under state and federal law, and OPA claims.[122]

The District Court allowed the OPA claim for lost profits under Section 2702(b)(2)(E).[123] The court did not perform any analysis to determine if OPA displaced the federal maritime claims or federal nuisance claims. The court did determine that federal maritime law preempted the state law nuisance claim, but its reasoning was sparse. It stated only that the facts were that of a classic maritime case and that state law did not apply because maritime law applied “of its own force.”[124] The court did not consider the effect of OPA’s savings clause or the Jensen doctrine.

In South Port Marine, LLC v. Gulf Oil Ltd., a gasoline spill severely damaged a marina’s floating docks, causing property damage as well as lost profits and other economic losses.[125] The First Circuit addressed whether OPA displaced maritime law.[126] The plaintiff desired a maritime claim because punitive damages would be available, while OPA does not provide for punitive damages.[127] Relying heavily on Miles v. Apex Marine Corp.,[128] the court held that Congress intended OPA to be the exclusive federal law governing oil spills and refused to supplement the available OPA remedies with a general maritime claim.[129] It reasoned that OPA set forth a “comprehensive federal scheme for oil pollution liability” with a similarly “comprehensive list of recoverable damages” which did not include punitive.[130] The court mentioned but failed to adequately address the OPA provision which specifically states ” ‘this Act does not affect . . . admiralty and maritime law.’ “[131] It should be noted that the statutes at issue in Miles do not include any similar provisions preserving maritime law.[132]

The Supreme Court addressed the preemptive force of OPA in United States v. Locke.[133] Plaintiffs, a trade association of tanker owners, sought declaratory and injunctive relief against the enforcement of state regulations governing the design, equipment, reporting, and operating of tankers.[134] They argued that the state law impermissibly invaded an area long-governed by federal law and dependent upon national uniformity.[135] The Court generally agreed, holding that state regulations on watch procedures, training, English language skills, and casualty reporting are preempted and implying that the other requirements would be preempted on remand.[136]

Title IV of OPA governs oil spill prevention and amended a number of other federal statutes which regulate tanker design, construction, equipment, traffic, operating, training, reporting, and language requirements.[137] These new statutory provisions expanded an already “comprehensive federal regulatory scheme governing oil tankers.”[138]The Court noted that federal interest in regulating interstate navigation “has been manifest since the beginning of our Republic” and was one of the reasons for adopting the Constitution.[139]

Addressing the OPA savings clauses, the Court emphasized that the provisions were placed in Title I of OPA which governs oil pollution liability and compensation.[140] In addition to the location of the clauses within the statute, the court found that the text also referred only to liability provisions.[141] Believing that Congress did not intend to disrupt national uniformity of maritime commerce, the Court limited the savings clauses to Title I.[142]Legislative history, which specifically preserved the holding of Ray v. Atlantic Richfield Co., supported this determination.[143] The Court, in Ray, held that state laws regulating design, construction, maintenance, operation, equipment, and personnel qualifications of tanker vessels were preempted by the Ports and Waterways Safety Act,[144] one of the statutes amended by OPA.

The application of the OPA savings clause to matters of oil spill liability was not at issue in the litigation,[145]but Locke‘s dicta implies that state laws imposing liability for oil spills should be preserved. Citing Askew,[146] the Court mentioned that limiting the savings clauses to Title I of OPA would respect the “established federal-state balance in matters of maritime commerce.”[147] Without definitively ruling on the subject, the Court stated:


Placement of the saving clauses in Title I of OPA suggests that Congress intended to preserve state laws of a scope similar to the matters contained in Title I of OPA . . . The evident purpose of the saving clauses is to preserve state laws which, rather than imposing substantive regulation of a vessel’s primary conduct, establish liability rules and financial requirements relating to oil spills. . . . The clauses maypreserve a State’s ability to enact laws of a scope similar to Title I.[148]


While this language is strongly suggestive, application of the savings clauses to an actual scenario of facts and state oil spill liability law has only been performed by lower courts.

In Williams v. Potomac Electric Power Co., an oil pipeline burst over a marsh in Maryland.[149] Oil leaked into a river and washed ashore on land owned by numerous plaintiffs, who asserted negligence, trespass, strict liability, and nuisance claims under state law.[150] Without performing conflict or field preemption analysis, the District Court quoted the same passages from Locke referred to above and held that OPA did not preempt the common law claims.[151] It stated that Locke had “put to rest” the matter and “foreclosed” any preemption argument. As there were no maritime claims involved, no preemption analysis under Jensen was performed.

In Dostie Development, Inc. v. Artic Peace Shipping Co., oil spilled from a tanker into a Florida river and washed onto the plaintiff’s land.[152] The landowner asserted claims under OPA and common law negligence.[153] The defendant argued that the negligence claim was preempted by OPA.[154] The district court considered the plain language of the OPA savings clause and the persuasive legislative history.[155] The court held the preemption argument was without merit and allowed the negligence claim to proceed.[156] No maritime claims were involved soJensen analysis was unnecessary.

In National Shipping Co. of Saudi Arabia v. Moran, the Fourth Circuit confronted a more complex situation.[157]The case involved a collision between a tugboat and a cargo vessel and the resulting oil spill.[158] Under OPA, the “responsible party” is the vessel which actually discharges oil and is liable for all removal costs and damages.[159]However, the responsible party can reassign liability to a third party if that party was the sole cause of the spill.[160]The U.S. Coast Guard initially designated the cargo vessel as the responsible party.[161] Its owners paid about $870,000 to remove oil, $300,000 to the U.S. navy for costs incurred, and $106,806 to settle claims of those whose property was damaged by the spill.[162] This totals $1,276,806 in liability.

The district court determined that the tugboat’s negligence was the sole cause of the accident.[163] The cargo vessel’s owners then brought claims under OPA and state common law.[164] The district court granted relief under OPA, but capped damages at $500,000[165] which is the OPA cap for non-tanker vessels absent gross negligence, willful misconduct, or violation of federal regulation.[166] The district court did not allow the cargo vessel owners to circumvent the cap through its state law claims and the Fourth Circuit affirmed.[167]

The court reasoned that the OPA savings clause only protects the rights of parties to “bring additional claims based on liability which accrues under state law.”[168] State law, however, was never imposed to force the cargo vessel owners to clean up the spill or compensate private parties.[169] Because its liability derived solely from OPA, the court held that the plaintiffs could not recover from the tugboat owners beyond the $500,000 OPA cap.[170] In defiance to common-sense (and probably legislative intent), the non-negligent party incurred the most of the liability.

In summary, the First Circuit and a district court determined that OPA displaces maritime law despite the provision explicitly preserving it.[171] The Supreme Court’s dicta in Locke seems to indicate that state laws imposing oil spill liability are preserved by the OPA savings clause.[172] Two district courts reached similar conclusions in cases actually involving oil spills.[173] The Fourth Circuit has construed the savings clause very narrowly in context of contribution for removal costs.[174] Another district court confronted with OPA, maritime, and state claims basically avoided the effect of savings clause altogether by deciding the claims under other grounds.[175] This is the loose patchwork of caselaw which awaits Judge Barbier and the gulf oil spill litigants.


III. Analysis

a. statutory preemption

Under this line of analysis,[176] it is clear that state laws creating liability for oil pollution are not preempted. Section 2718 of OPA explicitly preserves the ability of states to enact laws providing additional liability or requirements with respect to oil discharges and removal.[177] It further provides that nothing in the Act shall affect (or be construed or interpreted to affect or modify in any way) the obligations or liabilities of state law, “including common law.”[178] Thus, both state statutory and common law are within the scope of the savings provision. Non-preemption of state law is reiterated throughout the OPA’s title on liability.[179]

While OPA is comprehensive and directly addresses the question of oil spill liability, the presence of savings clauses in Title I negates express preemption and any inference of implied or field preemption.[180] Conflict preemption also seems to be out of the question because OPA itself contemplates “additional liability or requirements” under state law.[181]

Unlike the Clean Water Act savings clause at issue in Ouellette,[182] the OPA savings clause is not generic. Actually, preemption was the most discussed issue by the Senate Committee, which endorsed the view that Section 2718 “does not embrace any preemption of State oil spill liability laws,” including additional requirements or penalties.[183] Finally, the Supreme Court in Locke strongly suggested that the OPA savings clause preserves all state laws which establish liability rules and financial requirements.[184] Simply stated, no state law governing oil spill liability is preempted by OPA.

Some commentators argue that the OPA savings clause is an unconstitutional intrusion upon admiralty and maritime law.[185] They argue that Congress cannot delegate such authority to the states because varying and inconsistent liability regimes for oil pollution under state law would lead to a lack of uniformity impermissible under the Constitution’s Admiralty clause.[186]

These arguments have been effectively laid to rest by the Supreme Court. In Askew, the Court held that the non-delegation principle is not applicable to areas historically governed by state police powers.[187] Specifically, it held that oil pollution is one of these areas and upheld a Florida statute imposing strict liability for oil pollution.[188] The cases relied upon by the commentators were expressly limited to their facts.[189] In 2000, the Court reaffirmed Askew inLocke.[190] It explained that upholding state oil spill liability laws would respect, not upset, the established federal-state balance in matters of maritime commerce.[191]


b.     displacement

The First Circuit and a district court in Oregon have held that OPA displaces federal maritime law.[192] This essay takes the opposite view. Section 2751(e) of OPA addresses admiralty and maritime law.[193] It explicitly states that the “Act does not affect– (1) admiralty and maritime law; or (2) [admiralty and maritime jurisdiction].”[194] Neither the First Circuit or the district court adequately addressed this provision.

The First Circuit relied heavily on Miles v. Apex Marine Corp.,[195] in determining that Congress intended OPA to be the exclusive federal law governing oil spills.[196] However, the two statutes at issue in Miles do not include any similar provisions preserving maritime law.[197]

In Milwaukee II, the Supreme Court held that the FWPCA displaced federal common law nuisance suits for interstate water pollution.[198] Though the FWPCA did contain a savings clause preserving “common law,” it did not explicitly address federal common law.[199] The Court believed it was generic and referred only to “the more routine state common law.”[200]

The same cannot be said about Section 2751(e) of OPA. Its preservation of admiralty and maritime law is clear and unambiguous. The legislative history also contradicts any displacement argument. The House Report clarifies that OPA does not affect or supersede admiralty and maritime law.[201] Maritime law should not be displaced by OPA. To hold otherwise would defy Congressional intent.


c.      maritime preemption

OPA’s savings clause does not affect maritime preemption. In Section 2751, Congress expressly indicated that OPA does not affect maritime law.[202] As maritime preemption is a subset of maritime law, OPA cannot affect maritime preemption. In Section 2718, OPA only dictates that “Nothing in this Act” shall affect state law.[203] The clause, however, does not speak to, let alone prevent, preemption of state law by maritime law. After reading Sections 2718 and 2751 together, courts should not foreclose upon maritime preemption solely because Section 2718 preserves state law from preemption by OPA. To do so would give unintended breadth to Section 2718,[204] especially when Congress intended to maintain and “promote uniformity regarding [maritime] laws.”[205]

To examine the possibility of maritime preemption, it is necessary to turn to the third prong of the maritime preemption test established in Jensen. There, the Supreme Court held that application of a state law cannot interfere with the proper harmony of maritime law in its international or interstate relations.[206] Courts must weigh federal and state interests in the matter.[207] Generally speaking, the federal interest is maritime uniformity and the state interest is the exercise of its historic police powers.

Askew, the primary case governing maritime preemption of state oil spill laws only confronted a challenge to the facial validity of a state oil spill statute.[208] It certainly did not consider the implications of an oil spill originating in federal water and reaching the shores of multiple states. Neither did Locke.[209] The matter of the gulf oil spill is certainly unique factually. After an extensive search, no cases were found involving an oil spill which originated in federal waters and affected multiple states. The Exxon Valdez oil spill, like most other oil spill cases, originated in a state’s territorial waters and only affected that state.

Also worth noting, at the time of Askew, the federal statute only allowed the federal government to recover removal costs.[210] Unlike OPA, it did not specifically permit recovery by state and local governments and did not create a private right of action with extensive damage provisions.[211] Legal regimes have changed and the factual scenario is unprecedented. The courts must perform a novel analysis of federal and state interests involved in the gulf oil spill.

There is a federal interest in providing citizens from different states with equal rights and remedies. If the varying law of each of the five gulf coast states is deemed to apply, citizens in some states might be entitled to greater rights and recovery than claimants in other states. For example, state statutes have different liability limits and punitive-to-compensatory damage ratio maximums.[212] Recovery should be uniform for those suffering similar harms. Divergent rights and recovery based on state citizenship would interfere with the proper harmony and uniformity of maritime law in its interstate relations.

Additionally, the spill originated in the exclusive economic zone of the United States,[213] outside of the borders of state territorial waters. There is a significant federal interest in regulating conduct which takes place in federal waters. Locality has always played a great role in admiralty tort jurisdiction.[214] Further, the Secretary of the Interior has been granted federal statutory authority to oversee oil and gas extraction on the outer continental shelf.[215] The Bureau of Ocean Energy Management, Regulation and Enforcement, a federal agency, grants federal leases, issues federal permits, and administers a complex and comprehensive federal regulatory scheme governing oil exploration and drilling.[216] The well-established federal presence in the regulation of oil extraction activities on the outer continental shelf, as well as the extensive federal response to this particular spill, is good evidence of the federal interest in the matter.

There is also a federal interest in resolving the multi-district litigation efficiently and compensating plaintiffs in a timely manner. Application of the varying law of each of the five states in the multi-district litigation could cause significant constraints and delays. A typical claimant might have three common law claims and one statutory claim under state law.[217] Multiplied by five states, there are probably at least twenty types of claims just from civil litigants with economic losses. Varying elements, burdens of proof, defenses, jury instructions, damage awards for each type of claim could easily overwhelm the litigation process.

The fact that the spill originated in federal waters does not lessen the terrible impact it has had on the lives of gulf coast residents and businesses. The oil entered state waters; each state still has a strong interest in compensating their residents and imposing liability to deter future spills which effect their waters and shores.

However, the interest of the states in applying their own law is greatly minimized because the state law claims being asserted are generally duplicative of federal claims. In fact, the state law claims would not provide any type of remedy beyond what is already available to plaintiffs under the federal scheme of maritime negligence and OPA. Between maritime negligence claims and OPA, claimants have access to punitive awards for reckless conduct, compensatory damages for property damage and pure economic recovery.[218] The latter two are available under OPA without having to show fault.[219]

Negligence claims under state law generally mirror negligence claims under maritime law.[220] The elements are the same and the same types of damages will be available: compensatory property damages, punitive awards, and economic losses.[221] Property damage is a prerequisite to recovery of economic damages under both state and maritime negligence.[222] Maritime claims actually provide a more, plaintiff-friendly burden of proof for punitive awards than under state law.[223]

While maritime punitive awards were capped at 1:1 in the Exxon Valdez litigation, the same may not be true in this litigation. The Supreme Court only established the 1:1 ratio for cases without exceptional conduct, such as dangerous behavior driven by financial gain.[224] An initial report found that the defendants in the gulf spill case took numerous actions which “saved time and money when less risky alternatives were available.”[225] Even if there was no exceptional conduct justifying a ratio greater than 1:1, maritime courts have broad power to draw from state law and adopt a ratio which more closely resembles the gulf state ratios.

The constitutional grant of judicial power in admiralty allows courts to continue the development of general maritime law.[226] As Justice Marshall stated: “the law, admiralty and maritime, as it has existed for ages, is applied by our courts to the cases as they arise.”[227] When new situations arise that are not directly governed by precedent, federal courts may fashion a rule by a variety of methods.[228]

Federal courts may, and often do, “borrow” state law and apply it as the federal admiralty rule.[229]


It has already been noted that the gulf oil spill is without precedent. The ability to borrow state law to create a uniform rule could prove to be the ultimate tool in handling the gulf oil spill litigation, working in conjunction with maritime preemption of state law to promote the federal interest in maritime uniformity while minimizing any intrusion of the admiralty into areas traditionally governed by state police powers.

For example, punitive-to-compensatory ratios in the gulf states range from a 4:1 maximum ratio to not recoverable at all.[230] Borrowing from the state rules, a federal judge could adopt a more representative and average ratio, perhaps at 2:1 or 3:1. The newly crafted maritime rule would preempt the varying state law rules without substantially reducing the remedies available to claimants located in states with the higher ratios. The federal interest in uniformity would be promoted while respecting historical state police powers in regulating pollution.

The state statutes providing strict liability and state common law claims for strict liability would be duplicative of OPA. It is unlikely that liability will be capped under OPA because a finding of gross negligence or violation of a federal regulation seems almost inevitable. Transocean, for example, did not perform an inspection of the blowout preventer as required by federal regulation.[231] However, in the event that liability was deemed to be capped under OPA but uncapped under a state law, the state interest in applying its own law would greatly increase and maritime preemption of state law would probably be unjustifiable.

The only type of state claim remaining would be nuisance claims. If seeking damages under nuisance, this would be duplicative of remedies available by OPA, which provides a better fault standard for claimants anyway. To the extent that parties were seeking some form of injunctive relief available under a state nuisance claim, and no similar right or remedy was available under federal nuisance claims, preemption of the state law would be ill-advised. However, the Supreme Court’s general dissatisfaction with the vague and indeterminate standards of nuisance might justify maritime preemption of state nuisance claims altogether.[232] In cases of multistate pollution such as the gulf oil spill, there is even more reason to believe so.

Because the state law claims are generally duplicative of claims under the federal scheme of maritime negligence and OPA, the interest of the states in applying their own law is minimal. The Supreme Court has noted that when similar claims exist under both state and federal common law, the federal claims govern.[233] Additionally, the federal interest in such a catastrophic oil spill is great, as the spill originating in federal waters, was caused by activities regulated by federal law and agencies. Further, the spill has contaminated many coastal states, while most spills in previous caselaw have been limited to a single state. The spill has affected a whole region, if not the whole nation. The overwhelming nature of the federal interest cannot be denied, and therefore, outweighs the state interests at issue. Federal maritime law should therefore preempt state law under the third prong of Jensen.

To the extent that state laws offer more generous substantive rights or procedural advantages, courts can seek to incorporate these benefits into general maritime law under the courts broad maritime rule-making authority after comparing the federal rule to the rules of each of the gulf states. This rule-making power can be wielded to balance the federal interest in maritime uniformity with the state interest in preserving historical police powers.

Finally, this essay does not address a distinct factual scenario in which oil pollution originates within one state’s borders or territorial waters but affects other states. The federal interest in such cases is reduced to some extent because of the locality. The federal interest in uniform recovery and efficiency is still present. The state in which the pollution originated has an even greater interest because of the locality.

In such scenarios, two options are available. The court could hold that maritime law does not preempt either of the states’ laws because the federal interest is diminished. Alternatively, maritime law would only preempt the law of the affected state because its interest is lesser based on locality. The latter alternative is analogous to the Court’s reasoning in Ouellette,[234] and for that reason, this essay advocates that interpretation. Ultimately, it is not necessary to address that factual scenario during the gulf coast litigation. In cases involving oil pollution originating within one state’s waters and only affecting the same state, there is no interference with interstate relations and state law should be applied. That state’s police power interest clearly outweighs any federal interest in the matter.

In summary, OPA’s savings clause should not be construed to affect maritime preemption. The text and legislative history support this line of reasoning. The two cases which have held otherwise are based on faulty reasoning.

In factual situations involving multistate oil pollution originating in federal waters, maritime law should preempt state laws governing oil spill liability. To offset any of the harshness of this holding, courts can incorporate some state law into the case under the maritime rule-making authority which permits borrowing rules from state law in novel situations. This construction of the law honors both the historic police powers of the states and the maritime interest in uniformity required by the Constitution.

IV. Conclusion


The research demonstrates that OPA’s savings clause is limited to OPA itself and does not affect maritime law or maritime preemption. This analysis is primarily textual in nature. However, its application properly balances constitutional interests in historic police powers and uniformity in maritime law. State law of each of the five gulf coast states should be preempted by general maritime law because most rights and remedies under state law are already available to claimants under federal maritime law and OPA. In some instances, the state laws may provide greater rights or remedies than maritime law, such as the punitive-to-compensatory maximum damage ratios. To address these situations, federal courts may use their maritime rule-making authority to adopt a standard which reflects the state law practices but is applied uniformly throughout the multi-district litigation.

Under this novel yet common-sense argument, duplicative state laws would be preempted in order to achieve fair and efficient resolution to litigation, which acknowledges the overwhelming federal interest and need for uniformity in recovery. The harshness of preemption would be alleviated and historic police powers of the states would be preserved through the maritime rule-making authority.

The courts could limit their preemptive holding to factual scenarios in which oil pollution originates in federal waters and affects multiple states. In these cases, state law interferes with the proper harmony of maritime law in interstate relations under the third prong of Jensen. In such cases, the federal interest in maritime uniformity outweighs any minor state interest in duplicative claims and remedies.


[1] Campbell Robertson, Search Continues After Oil Rig Blast, N.Y. Times, April 21, 2010,

[2] Leslie Kaufman & Campbell Robertson, Oil Spill Threatens Fragile La. Marshes, N.Y. Times, May 2, 2010,

[3]See Gulf of Mexico Oil Spill (2010), N.Y. Times, (last updated Jan. 11, 2011) (summarizing the spill and its aftermath).


[5] Henry Fountain, U.S. Says BP Well is Finally ‘Dead’, N.Y. Times, Sept. 19, 2010,

[6]In re Exxon Valdez, 270 F.3d 1215, 1223 (9th Cir. 2001). Just over three million barrels of oil were spilled into the Bay of Campeche by the Mexican rig Ixtoc I in 1979. Gulf of Mexico Oil Spill (2010)supra note 3.

[7]Gulf of Mexico Oil Spill (2010)supra note 3.

[8] CNN Wire Staff, Feds Close More Gulf Waters to Fishing Due to Oil Spill,

[9] David Biello, The BP Spill’s Growing Toll on the Sea Life of the Gulf, Yale Environment 360,

[10]See Leslie Kaufman & Shaila Dewan, Gulf May Avoid Direst Predictions After Oil Spill, N.Y. Times, Sept. 13, 2010, (discussing threats to wildlife and noting “scientists caution that much remains unknown” in regards to oil that remains on the sea floor and in underwater plumes).

[11] John Schwartz, U.S. Sues Companies for Spill Damages, N.Y. Times, Dec. 15, 2010,,%20doj,%20criminal%20&st=cse (alleging violations of federal safety regulations).

[12] Tresa Baldas, Third Wrongful-Death Suit Filed Over Oil Rig’s Lost Workers, Nat’l L. J., May 04, 2010,

[13] Amanda Bronstad, Plaintiffs Lawyers Say Oil Spill Fund Unlikely to Deter Litigation, Am. Lawyer Mag., Aug. 30, 2010,

[14] Ashby Jones, Big Gulf Spill Litigation Gets Sent to the Big Easy, Wall St. J. Law Blog, Aug. 10, 2010,; Anna S. Persky, Animal Protection Attorneys Are Pushing the Law to Treat Animals More Like Humans, A.B.A. J., Sept. 17, 2010,

[15] Ashby Jones, Big Gulf Spill Litigation Gets Sent to the Big Easy, Wall St. J. Law Blog, Aug. 10, 2010, The multi-district litigation has been consolidated in the Eastern District of Louisiana. Id.

[16]See In re Exxon Valdez, 270 F.3d 1215, 1225(9th Cir. 2001) (chronicling four phases of trial and post-trial litigation).

[17]Judge Postpones Trial in Gulf Oil Spill Cases, Associated Press, Oct. 7, 2010, available at



[20]See Exxon Shipping Co. v. Baker, 554 U.S. 471, 476 (2008) (noting spill occurred in 1989).

[21] Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 624 (1st Cir. 1994).

[22] S. Rep. No. 101-94, at 2-4 (1989), reprinted in 1990 U.S.C.C.A.N. 722, 723-25.

[23] A “responsible party” includes owners and operators of offshore facilities. 33 U.S.C. § 2701(32) (2010).

[24] Removal costs include all costs incurred by the federal government and individual states. Id.

[25]Seeid. § 2702(a) (“[E]ach responsible party for a vessel or facility from which oil is discharged . . . into or upon the navigable waters or adjoining shorelines or the exclusive economic zone is liable for the removal costs and damages specified in subsection (b) of this section that result from the incident.”).

[26]Seeid. §2702(b),(c),(e) (“any claimant”); §2702(b)(2)(d) (providing for recovery of lost taxes and other revenues by the federal, state, and local governments); § 2702(b)(2)(a) (providing recovery for loss of natural resources by various government entities).

[27]Seeid. § 2702(b)(2)(c) (providing recovery for any claimant who uses those resources without regard to the ownership or management of the resources).

[28]Seeid. §2702(b)(2)(b) (providing for recovery of actual damages or economic damages resulting from injury of real or personal property by any claimant).

[29]Seeid. §2702(b)(2)(e) (allowing recovery for lost profits and future earnings by any claimant).

[30]Seeinfra Part II.A.3. (discussing Robins Dry Dock rule); H.R. Conf. Rep. No. 101-653, at 3 (1990), reprinted in1990 U.S.C.C.A.N. 779, 781 (The Act will govern notwithstanding “existing requirements that physical damage to the proprietary interest of the claimant be shown.”). The limit of pure economic recovery under OPA is an interesting issue not addressed by this paper. One possible solution is borrowing limitations from traditional tort doctrine: duty, proximate causation, foreseeability, and temporal and geographic remoteness. See, e.g., Benefiel v. Exxon, 959 F.2d 805, 808 (9th Cir. 1992) (holding that Californians who claimed that their gasoline cost more as a result of the Exxon Valdez spill were barred from recovery because they lacked proximate causation despite an Alaska statute which created strict liability for pure economic harm resulting from hazardous substance spills).


[31]Id. at § 2704(a)(3).

[32]Id. at § 2704(c).

[33]Id. at § 2703(a). Third parties do not include “an employee or agent of the responsible party or a third party whose act or omission occurs in connection with any contractual relationship with the responsible party.” Id.

[34] Title I is codified at 33 U.S.C. § 2701-20.

[35] 33 U.S.C. § 2702(a).

[36]Id. at § 2718(a).

[37]See H.R. Conf. Rep. No. 101-653, at 21-22 (1990), reprinted in 1990 U.S.C.C.A.N. 779, 799-800; S. Rep. No. 101-94, at 6-7 (1989), reprinted in 1990 U.S.C.C.A.N. 722, 727-29.

[38] S. Rep. No. 101-94, at 6 (1989), reprinted in 1990 U.S.C.C.A.N. 722, 728.

[39] 33 U.S.C. § 2751(e).

[40] H.R. Conf. Rep. No. 101-653, at 57-58 (1990), 

Last week, the Supreme Court decided the first of a series of cases involving federal preemption and tort law that will occupy their attention over the next two terms. The outcome of the case resolved last week, Riegel v. Medtronic, Inc., was never really in doubt, but, as I will explain, the decision holds some clues about the Court will approach preemption in upcoming cases that are likely to prove far more difficult.

The Facts, Issues, and Judicial Outcomes In Riegel

The key legal issue in Riegel was whether the federal Medical Devices Amendments of 1976 (MDA) completely preempted the New York tort claims brought by Charles Riegel and his wife. The MDA expressly prohibits a state from establishing or continuing in effect "any requirement - which is different from, or in addition to, any requirement applicable" under the MDA.

Riegel had suffered severe and permanent injuries when a medical device manufactured by Medtronic, Inc., the Evergreen Balloon Catheter, burst when it was inserted by Riegel's doctor during a coronary angioplasty.

Riegel's doctor had inflated the catheter to ten atmospheres of pressure, even though the product's "rated pressure" was only eight atmospheres. Despite the doctor's apparent error, Riegel also sued Medtronic, alleging a host of state common law products liability claims, including negligence in the design, testing, inspection, distribution, labeling, marketing and sale of the catheter.

The federal district court in which the suit was brought granted summary judgment for Medtronic, on the ground that the state tort claims were preempted by the MDA. The U.S. Court of Appeals for the Second Circuit affirmed the grant. Last week, moreover, the Supreme Court, 8-1, affirmed the Second Circuit's decision.

Why the Supreme Court's Decision Was Expected by Court Observers

Despite this string of court losses, Riegel did have at least some basis for his attempt to sue Medtronic under New York products liability law. After all, in 1996, in Medtronic, Inc. v. Lohr, the Supreme Court has held that the MDA did not preempt state tort claims brought against Medtronic. In that case, the plaintiff had suffered severe injury when one of the metal leads on her pacemaker failed. The Supreme Court held that many of the state law claims brought against Medtronic, including claims of design defect and inadequate warning, did not conflict with the MDA's express preemption clause.

Still, no one was surprised when Medtronic won preemption ten years later in the Riegel case -- for two reasons.

First, Lohr involved a very different part of the MDA. The pacemaker in Lohr was "approved" by the FDA under a process that might be described as "approval lite": A "grandfathering" clause in the MDA permits manufacturers to submit to the FDA devices that are equivalent to devices that had been on the market prior to the passage of the MDA in 1976. The pacemaker in Lohr was just such a device. Thus, it was not subjected to the FDA's rigorous testing protocol.

Lohr represented a type of preemption case that was, in theory, supposed to wither away as time passed. From the perspective of statutory interpretation, it made little sense that the pacemaker in Lohr had been subjected to any FDA requirements at all, since it had been approved by the FDA as a result of a "grandfathering clause" that had been inserted into the MDA for political reasons. From the perspective of policy, it made sense for state tort law to continue to be in force against the pacemaker, since that was the only body of law that which constrained its manufacturer in any way, in light the fact that under the MDA, the pacemaker was already grandfathered in.

The second reason why Riegel could be distinguished from Lohr follows from the first reason: Riegel involved a device that had been approved through MDA's rigorous approval process. Practically every aspect of the Evergreen Balloon Catheter had been considered by the FDA before it received premarket approval as a new Class III device.

Court observers also had other strong indications that the Supreme Court might not decide Riegel as it had Lohr. Between 1996 and last week, the question of whether manufacturers of Class III devices that received premarket approval from the FDA could still be held liable under state tort law was one that the Supreme Court had never answered, although the Justices had hinted at the answer to this question in Lohr. But in the meantime, various federal appellate courts had been considering this question, and by the time the United States Supreme Court decided to review Riegel, the Third, Fifth, Sixth, Seventh and Eighth Circuits had all joined the Second in recommending complete preemption for this class of devices.

Furthermore, in the intervening years since Lohr was decided, the Supreme Court had become decidedly much more inclined to find preemption. The "presumption against preemption" that the Court cited time and again in Lohr has, over the years, become the exception that proves the rule. Now, more often than not, the Court has noted the presumption only to find that it does not apply in the cases before it, and to decide that federal law does indeed preempt state law in a given case.

Justice Scalia's Opinion in Riegel, and Justice Stevens's Separate Concurrence

The Riegel opinion, written by Justice Scalia, fully reflects these changes in recent Court preemption doctrine. In the opinion, Scalia recites the differences between the kind of approval that products in Lohr and Riegel received, and notes that it is hard to say that, after 1200 hours of testing by the FDA and constant feedback between the agency and the manufacturer, that the FDA did not impose "requirements" for everything from design to warning to manufacturing - leading the preemption clause of the MDA to very broadly apply to all of Riegel's claims. Scalia's recitation of the facts is so compelling that it is easy to see why seven other justices voted that state law was preempted.

But there was a concurrence in Riegel that bears noting. Justice Stevens wrote separately to insist that the preemption doctrine that is being developed by the Court should not be misunderstood by Court observers. Stevens agrees with Scalia that state common law judgments in products liability can count as "requirements" imposed by the states, under the language of the MDA's preemption clause, just as much as a regulation written by a state legislature can count as a "requirement." Stevens, in underscoring this point, seems to be reminding Scalia (or maybe those whom Scalia is now influencing) that it was Stevens who first developed this line of analysis in the 1992 case Cipollone v. Liggett Group, and later in Lohr, whose plurality opinion he authored.

In the concurrence, Stevens seems to be telling Scalia that the theory of preemption that Stevens had developed extends only to cases of express preemption--that is, in cases where Congress has clearly stated that it wants to supplant state law, including state common law. Stevens notes that the MDA extends further than its authors probably intended (which is the basis of Justice Ginsburg's lone dissent) but deems this an occupational hazard of drafting statutory language: Sometimes, Congress will sweep more broadly than it intended.

What Riegel Suggests About the Future of Preemption at the Court

The Court will be facing a number of difficult implied preemption cases over the next two terms, and Riegel may be a clue as to where the battle lines will be drawn.

Stevens seems to be saying to the younger conservative wing of the Court (led by Scalia) that he will fight any attempt to preempt state tort law through implied preemption. The questions, however, is how many of the eight votes for preemption in Riegel Stevens will be able to muster in the next few cases.

One thought on “Preempting Liability Essay

Leave a Reply

Your email address will not be published. Required fields are marked *