If BP's liability for the oil spill is limited to $75 million, who pays for the damages over that amount? If some fisherman loses a business he has had for 50 years and BP has paid out a day or two of its earnings for damages -- reached the cap -- does the fisherman absorb the loss or does the government (the taxpayer) pay the difference? I expect that in reality, BP will be responsible for more than the $75 million in damage claims, but I have to wonder what Congress was thinking when it adopted the limitation of liability.
There are other instances in which industries have been granted immunity or limitations on liability, but they usually have been to protect those companies or persons who are satisfying some national need or emergency, such as the production of a vaccine to prevent an epidemic. I suppose that it can be argued that the spill limitation was enacted to encourage offshore exploration for oil, but there are hundreds of other endeavors far more worthwhile that do not receive such protection.
In the constant conservative cry for tort reform and caps on liability, the same question needs to be asked: Who pays or absorbs the balance over and above the cap? Limitations of liability by their very definition protect the wrongdoer and adversely affect the victim. If ever there was a need to question limitations on liability, it is in the case of oil companies who literally earn billions, but can say to a fisherman whose business they have destroyed: We've paid our maximum---the cap has been reached. Sorry you are on your own.
As I have said in an earlier post, Congress should not be debating increasing the limitation but rather eliminating it entirely.
Rev. Chuck Freeman: Hearing the Prophetic Call in the Gulf Oil Disaster
In the way we conceptualize recovery from addiction, we acknowledge the truth of passages like Jeremiah 8:8-12: the addict has to "hit rock bottom" before he can muster the humility and fortitude to move toward the light.
From the NYT today:
NEW ORLEANS — Over six days in May, far from the familiar choreography of Washington hearings, federal investigators grilled workers involved in the Deepwater Horizon disaster in a chilly, sterile conference room at a hotel near the airport here.
http://www.nytimes.com/2010/06/07/us/07capture.html?
http://www.nytimes.com/2010/06/06/us/06rig.html?hp
http://www.reuters.com/article/idUSTRE62G2DO20100317
http://krugman.blogs.nytimes.com/2010/03/17/demons-and-demonization/
"Under threat of receivership and criminal investigation for its destruction of the Gulf of Mexico, foreign oil giant BP has hired a former top aide for Vice President Dick Cheney to be their new spokeswoman. Anne Womack-Kolton has been hired to be “head of U.S. media relations.” A rising star in the Bush-Cheney White House since the 2000 campaign, Womack-Kolton served as Cheney’s press secretary during the 2004 election before running public affairs in the Bush Department of Energy:"
This is probably a good hire for BP: It was press aides to Cheney that made us think that there was WMD in Iraq; outted CIA operative Valerie Plame, and also pushed the idea of giving taxpayer money from the war to private contractors for Iraq.
http://www.boston.com/news/world/articles/2008/03/06/top_iraq_contractor_skirts_us_taxes_offshore/
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2004/02/25/cheneys_unprecedented_power/
http://www.nationaljournal.com/about/njweekly/stories/2006/0209nj1.htm
http://www.theatlantic.com/murray-waas/
Restricting access to the court does little to solve the problem and allows for people to be harmed without recourse.
My understanding is that BP and medical are two different things.
Medical has become out of hand because insurance companies settle uncontested and pass increased premiums on to doctors to the point where doctors have to earn hundreds of thousands a year just to start even. Then they squeeze doctor and patient with restrictions upon how much compensation they will pay for medical procedures and visits. I agree with Apple that restricting court access is not the answer, lest you restrict legitimate petitions for relief, but we do need regulations that break up that easy pass-along.
BP is ridiculous in a very different way. Their engineers started by trying capping and other techniques on a 5000 foot deep blowout. Those solutions were tried 39 years ago for a 200 hundred foot deep "event" in the same Gulf area AND they didn't work even then. Now they are down thousands of feet with vastly more complicated problems for which they have not done even minimal precautionary planning. The only solution in hand right now is a relief well which will take three months to dig. Thirty nine years ago that was also the only solution that worked.
Oil companies can take huge risks with minimal prevention because there are minimal consequences. These are not ordinary creative business risks. Compare BP's "risks" to the insane derivatives market if you will. We darn well want to stifle both.
I would have a question Judge, about the current efforts to change (or eliminate) the caps for BP. Could such a change be applied retroactively? Given that much the congressional record talks about BP specifically right now, would they be able to defeat the change in cap by claiming this was a bill of attainder aimed at them?
When I check into a hotel with my dog (a trip without puppy does not a vacation make) the standard arrangement is that I have to pay a security deposit against potential damages and the security is 2 layered: Some small amount - usually about $10 - which defrays the cost of some flea spray I guess if she has "cooties". I don't get that back.But it's also understood that they have my credit card on file and if I check out and she's eaten the front of the dresser and a 1/2 a bedspread, then they're going to charge it to me. No questions asked.
Why can't they do the same with businesses, oil companies, who risk a gulf to their drilling. They pay a security deposit. If they don't do any damage - they lose nothing or precious little. If they do - Visa or Master Card? Pay up. That's not a question. Or at the very least tie damages to a merit system. If they implement the extra safety measures in good faith, then their cap is adjusted accordingly. A company that tried to be responsible before the fact isn't as liable as a company that didn't.
Or they could just get rid of that cap. .
Power does not tolerate dissent. The powerful have purchased the Congress. The only place left for common people to seek justice is in Court, and "tort reform" is simply an effort by the powerful to eliminate that remaining hope for justice.
Given the year Congress approved it, they were thinking one thing: cha-ching
It seems to me that a fair way to have such caps would be to also put in place an identical profit cap - any excess profits over the cap would be sequestered to help defray the excess costs of the inevitable disaster.
Read the story of the late Frank Cornelius, a lobbyist who helped Indiana pass tort reform. When he later got sick, his doctors slowly murdered him with neglect. His claims totaled over $5 million, but his own law capped his recovery at $500,000. And his law did nothing to slow the increase of health care costs in Indiana. It just left human beings crippled by major costs with no way to pay for the treatment they needed.
Karma? See "Crushed by My Own Reform" at http://www.coalitionforpatientsrights.org/tort-reform.shtml
If a liability is measurable then it's insurable and the result of lifting notional tort damage limits will be simply to drive insurance costs higher with the results being passed along to consumers. In the case of the gulf disaster, a complete lift on liabilities would have resulted in either no drilling of any sort ever because it is an uninsurable risk or simply higher oil prices. If the gov't wants to limit drilling then limit drilling don't create a get rich program for the lawyers.
When lawyers can use the system to drive 1/3 contingency fees without limitations, then the number of gun slinging lawyers and lawsuits will increase and more John Edwards will emerge. Hmm, a double whammy
Who pays or absorbs the balance over and above the cap?
When was this law passed?
I care alot more about what members in congress voted for this law than the party who was in charge. I want to know if they are still in congress no matter the party.
Rep. Gary Ackerman [D-NY5]
Sen. Daniel Akaka [D-HI]
Sen. Barbara Boxer [D-CA]
Sen. Thomas Carper [D-DE]
Rep. Howard Coble [R-NC6]
Rep. Peter DeFazio [D-OR4]
Rep. Norman (Norm) Dicks [D-WA6]
Rep. John Dingell [D-MI15]
Rep. Barney Frank [D-MA4]
Rep. John Lewis [D-GA5]
Rep. Nita Lowey [D-NY18]
Rep. James Oberstar [D-MN8]
Rep. Solomon Ortiz [D-TX27]
Rep. Frank Pallone, Jr. [D-NJ6]
Rep. Nancy Pelosi [D-CA8]
Rep. David Price [D-NC4]
Rep. Donald (Don) Young [R-AK]
Congress members that voted for it who's name I recognize for being in the news:
Rep. Henry Waxman [D-CA30]
Rep. Barney Frank [D-MA4]
Rep. Edward (Ed) Markey [D-MA7]
Rep. Charles Rangel [D-NY15]
It was a fairly partisan vote:
D For: 190
D Against: 57
R For: 39
R Against: 134
What would be curious to understand is the total amount of monetary awards that would have be eliminated or reduced in a tort reform scheme in a given period, compared against the total damages of this disaster.