Are Southern Governors Going Soft on Oil Spill Litigation?

Alabama Attorney General Troy King has filed a lawsuit against the companies involved in the BP oil spill, but Governor Bob Riley says such action is premature. In Mississippi, Attorney General Jim Hood is considering a similar lawsuit, and Governor Haley Barbour is saying it would be premature.

What is going on? Who is right--the AGs or the governors? And is someone more interested in protecting the interests of big oil than the interests of the people who elected them?

These are complex legal questions that involve state, federal, and maritime law. We don't claim to be an expert, but our research indicates the AGs know what they are doing. And that makes us think Riley and Barbour, both Republicans, are probably sucking up to corporate interests. Now isn't that a shocker?

Why does it appear the AGs are on the right track? Transocean, one of the three primary companies involved with the Deepwater Horizon rig, filed a Limitation of Liability action on May 13 in Houston federal court. Under admiralty law, any claim against the company not filed within 90 days of this limitation action could be discharged by the court.

In their public statements, Riley and Barbour have tended to give the impression that BP is the only defendant in the Gulf oil claims. But that is not the case. And at least one other defendant, Transocean, is working mightily behind the scenes to limit its liability.

That's why AG King probably is wise to have already filed a lawsuit. That's why AG Hood, a Democrat, probably would have been wise to follow suit.

The Alabama Corruption blog, which like Legal Schnauzer is based in Shelby County, has a special interest in environmental issues. In a compelling piece about the oil-claims issue, AC reports:

According to The Oil Pollution Act of 1990, 33 U.S.C. § 2701, et seq., (OPA), which was enacted in an effort to streamline federal law and compensate victims of such spills there is a "90 day presentment clause," but it does not preempt state laws governing liability and compensation from oil spills:

Any claim against the company not filed within 90 days can be discharged by the court. Should Transocean later be deemed to be responsible for any part of the disaster, that part of all later filed claims could be lost.

The last day to file and remain within the 90 day window was August 11th, Barbour halted the lawsuit on July 29th. Will this cause part of the claims to be lost due to the OPA? That may rely on what the Mississippi and Alabama laws are in addition to this being the first "hard test" of the OPA.

Haley Barbour's hands-off approach to Big Oil is curious, to say the least. The AC blog provides some important background:

Governor Barbour's reasons aren't passing the leak test, but his past history might help explain his hands-off approach to BPs crimes:

Barbour has long been at the intersection of special interest lobbying, elections, and campaign cash. He represents cash and carry politics at its worst:

• The oil & gas and utility industries were major contributor to his Mississippi gubernatorial campaigns, providing over $1.8 million in campaign cash. [National Institute on Money in State Politics, Accessed 7/2/09]

• According to the Center for Responsive Politics, coal companies and electric utilities lavished over half a million dollars on Barbour’s firm during his last two years as CEO and chairman, in 1998 and 1999. After taking time off to work on advisory committees for the presidential campaign of George B. Bush, Barbour returned to the firm in 2001. With the addition of new clients, including from the oil & gas industry, the firm made over a million dollars a year in dirty energy profits by the time he left again for his 2003 gubernatorial run, with $2.24 million in total for 2001-2002. [Center for Responsive Politics, accessed 7/2/09]

What else might be going on with Barbour and Riley? AC blog has some thoughts:

Add that to the push by the Gulf Coast Governors to persuade the federal government to relinquish some of its lion's share of the oil and gas lease profits in the Gulf, the millions of dollars being paid to Mississippi, Alabama, Florida and Louisiana in "grants and tourism advertising" by BP, along with numerous state employees working under BP contractors and the waters become a little clearer in motives.

If these states file lawsuits, their current money gushers are cut off and they upset the oil giants. The potential hundreds of millions of dollars they stand to gain in increased royalties from oil and gas drilling off their coastlines, and their inherent greed makes them play a dangerous game with the oil big boys.

These Governors are betting that all the money they have made these companies over the years will buy them favor now, and they are willing to"call" BPs bluff to be "responsible" by putting up their citizens and coastal environments as their chips.

Troy King never has been one of our favorites here at Legal Schnauzer. But he earned our respect by standing up to Bob Riley on gambling issues. And he seems to have the best interests of Alabama in mind now.