There have been many comparisons made between the 1989 Exxon Valdez oil spill in Alaska and the 2010 BP Deepwater Horizon oil spill in the Gulf of Mexico. Many experts believe that the size of the BP spill will be much greater than that of the Exxon spill and that the difference in the type of oil, temperature of the waters, and environment in which the accident occurred will create significant differences on the affected wildlife and on the environment. However, there are other, legal, differences that are also important and will create different outcomes for those affected by the spills.
Eligibility for Damages is Broader for the BP Spill than for the Exxon Valdez Spill
In 1989, federal law stated that only people who had been physically touched by the oil could collect damages for physical or economic damages caused by the oil spill. In 1990, in response to the Exxon Valdez spill, the federal government passed the Oil Protection Act which lifted that ban and allowed people who suffer economic damages to recover financial damages even if they have not been physically touched by the oil. Thus, property owners and others who are suffering from lack of tourist income due to the BP spill in the Gulf of Mexico may be able to file lawsuits and collect damages because of the change in federal law that occurred after the Valdez tragedy.
BP Faces the Possibility of Paying Greater Damages
The Oil Protection Act increased the potential l liability for companies that are found to be legally responsible for oil spills. As described above, the number of potential people with valid claims is higher now than it was at the time of the Exxon Valdez spill. Additionally, the Oil Protection Act allows for higher payments and greater penalties.
The Oil Protection may be most significant in that it expressly allows for victims to pursue damages at the state and local level without limits. Thus, a victim could bring a case alleging that BP violated a state statute or a common law tort and recover damages.
Punitive Damages and Legal Resolution of the Case
Punitive damages and the time that it will take to resolve legal disputes related to the Gulf spill remain two of the unsettled questions for BP after the Exxon Valdez lawsuits. It took 19 years for Exxon’s litigation to be settled. The oil spill happened in 1989 and the U.S. Supreme Court ruled on damages in June 2008. While the length of litigation doesn’t bode well for BP, the Supreme Court’s decision may be a good sign for the company. The Supreme Court slashed the punitive damages awarded against Exxon from $2.5 billion to just over $500 million. While that precedent could be favorable to BP, the Oil Protection Act and the allowance of state law claims could negate any savings in damages.
The BP Gulf Coast oil spill lawsuits are still in the beginning stages. As the full magnitude of this spill becomes apparent and the courts start hearing the cases, the Oil Protection Act will be tested and the true legal differences between these two tragic oil spills will be learned.
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