Congress to Address Bill Related to Liability for Gulf Oil Spill

The U.S. House Judiciary Committee is tentaively scheduled to take the first action next week on a bill related to the liability of the companies which operated the Deepwater Horizon oil rig, by debating and voting on the “Securing Protections for the Injured from Limitations on Liability Act,” or “SPILL Act,” to lift outdated limits on liability for deaths caused by disasters such as the Deepwater Horizon explosion. The SPILL Act would enable the families of the 11 men killed on the rig to recover damages just as if the accident had occurred on land in the United States, a dichotomy that makes no sense but has never been redressed in federal law. Indeed, if the men who died on the rig had instead been seated in a helicopter five feet off the rig, and the chopper had exploded, the families would not now face the artificial limits on any recovery that they currently face under federal law.

Several federal laws govern that accident, and all are decades old, reflecting a world of days gone by not only without oil drilling in federal waters on enormous platforms built by multinational corporations headquartered anywhere in the world, but also without modern mechanisms of insurance or asset management. So, for instance, the 151-year-old “Limitation on Liability Act” (LOLA) limits the liability for accidents on “vessels” to the market value after an accident. Strangely, movable ocean rigs are considered “vessels” under LOLA. So Transocean, which owned the rig, has claimed in court that its liability is limited to the current market value of the destroyed rig on the ocean floor plus freight costs – about $27 million, a pittance for a disaster of this magnitude. Similarly, another law limits the amount due to the parents of one of the victims to $1,000, since he wasn’t married and they were not his “economic dependents.” Hopefully the Congress will repeal the antiquated and non-Constitutional liability limits in these laws. You can read a brief description of the SPILL Act on the Judiciary Committee’s website and download a copy of the act from here.