Court Issues Significant Ruling Regarding Personal Injury Claims In The Deep Water Horizon Litigation

In a recent Alert, we advised of an important decision affecting maritime interests and their insurers in the multidistricted Deepwater Horizon litigation currently pending before Judge Barbier in federal court in New Orleans. (In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico on April 20, 2010, MDL No. 2179.) On October 4, 2011, Judge Barbier rendered yet another significant decision, this time relating primarily to personal injury claims.

The Deepwater Horizon was the mobile offshore drilling unit (MODU) that caught fire and exploded on April 20, 2010, killing 11 workers, injuring numerous others, and resulting in the discharge of tens of millions of gallons of oil into the Gulf of Mexico before the well from which the MODU was drilling was finally capped approximately three months later. The case pending in New Orleans involves thousands of claims, including those of the survivors of the 11 deceased individuals, numerous claims for personal injury, and many varieties of claims for environmental and economic damages. The October 4 decision relates to one of a series of master complaints that involves claims for personal injury due to exposure to the oil during cleanup operations and the use of dispersants. Essentially, the claimants assert federal and state law claims for negligence, negligence per se, strict products liability, nuisance, and battery. The claims include recovery of medical monitoring costs or an order requiring that the defendants implement and fund a medical monitoring program, as well as attorneys' fees. Certain defendants moved for a declaration that they are immune from suit, relying on the doctrine of "derivative immunity," which essentially holds that, because the federal government would be immune from liability arising from decisions or actions taken in response to the oil spill, any "Clean-Up Defendants" — including one dispersant manufacturer — are similarly entitled to immunity.

Prior to reaching the immunity issue, the court first reaffirmed its previous rulings that a) maritime law applied to the claims asserted in the action, to the exclusion of state law and b) the state law claims for negligence, negligence per se, products liability, nuisance, and battery were preempted by maritime law. The court also reaffirmed its previous ruling, that the Oil Pollution Act of 1990 (OPA) preempted general maritime claims against Responsible Parties under OPA. Therefore, because OPA claims were...