[Senate Hearing 111-1054]
[From the U.S. Government Publishing Office]
S. Hrg. 111-1054
THE DEEPWATER HORIZON TRAGEDY:
HOLDING RESPONSIBLE PARTIES ACCOUNTABLE
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JUNE 30, 2010
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas,
JOHN F. KERRY, Massachusetts Ranking
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California JOHN ENSIGN, Nevada
BILL NELSON, Florida JIM DeMINT, South Carolina
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas GEORGE S. LeMIEUX, Florida
CLAIRE McCASKILL, Missouri JOHNNY ISAKSON, Georgia
AMY KLOBUCHAR, Minnesota DAVID VITTER, Louisiana
TOM UDALL, New Mexico SAM BROWNBACK, Kansas
MARK WARNER, Virginia MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
Bruce H. Andrews, General Counsel
Ann Begeman, Republican Staff Director
Brian M. Hendricks, Republican General Counsel
Nick Rossi, Republican Chief Counsel
C O N T E N T S
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Page
Hearing held on June 30, 2010.................................... 1
Statement of Senator Rockefeller................................. 1
Prepared statement of Ernest Cannon and Ben Barnes on Behalf
of Shelley Anderson submitted by Hon. John D. Rockefeller
IV......................................................... 47
Statement of Senator Hutchison................................... 2
Prepared statement........................................... 4
Article, dated June 30, 2010, from The Times-Picayune,
entitled ``Cut Red Tape and Get More Skimming Vessels to
the Oil Spill''............................................ 34
Statement of Senator Wicker...................................... 5
Statement of Senator Lautenberg.................................. 12
Prepared statement........................................... 13
Statement of Senator Begich...................................... 36
Statement of Senator LeMieux..................................... 38
Statement of Senator Thune....................................... 41
Statement of Senator Vitter...................................... 42
Statement of Senator Klobuchar................................... 47
Witnesses
Shelley Anderson, Widow of Jason Anderson of Midfield, Texas..... 6
Prepared statement........................................... 8
Natalie Roshto, Widow of Shane Roshto of Liberty, Mississippi.... 8
Prepared statement........................................... 10
Courtney Kemp, Widow of Roy Wyatt Kemp, of Jonesville,
Louisiana, prepared statement.............................. 11
Thomas C. Galligan, Jr., President and Professor of Humanities,
Colby-Sawyer College and Scholar on Torts and Maritime Person
Injury Law..................................................... 14
Prepared statement........................................... 16
Fred McCallister, Vice President, Allegiance Capital Corporation. 25
Prepared statement........................................... 27
THE DEEPWATER HORIZON TRAGEDY:
HOLDING RESPONSIBLE PARTIES ACCOUNTABLE
----------
WEDNESDAY, JUNE 30, 2010
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
room SR-253, Russell Senate Office Building, Hon. John D.
Rockefeller IV, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. This hearing will come to order.
We welcome our witnesses, all of them, and others who might
be in the audience.
Seventy-one very difficult, very painful days have passed
since the enormous disaster in the Gulf began. And with every
day that goes by, the economic and environmental damage grows
worse and worse. While we don't know the exact number, experts
estimate that up to 6.9 million barrels of oil have spewed out
of the Gulf--out of the pipe, into the Gulf, wreaking one kind
of havoc on coastal communities, workers' livelihoods, and
fragile wetlands.
At the very heart of this--and the greatest environmental
catastrophe in American history is what we're talking about--is
something equally as important; that is, a very human tragedy.
The explosion that occurred on the Deepwater Horizon oil rig on
April 20 killed 11 workers, injured 17; since then, at least
two more response workers have been killed on the job.
Like so many men and women in the Gulf region and in
communities across America, they took pride in their jobs,
worked hard at their jobs--hard jobs, indeed--and they loved
their communities, they provided for their families, even if
their work was not always appreciated or understood by
outsiders and the rest of the world. It's that way in coal
mining. It certainly is that way in the work that was done by
these folks who were on those platforms.
For the survivors and loved ones, some of whom are here
today, the nightmare is obviously just beginning. Put another
way, it's far from over. Livelihoods have disappeared, and the
fabric binding these families together has been torn, leaving a
terrible sense of loss and incredible uncertainty.
I'm deeply disturbed by reports that different families
will have access to, in fact, different relief, depending on
their loved ones' jobs and where they were killed. It is my
understanding today that Transocean, the owner of the Deepwater
Horizon, is seeking to limit its liability for this loss, in
Federal court, under a legal loophole that is both
unconscionable and outdated. Hence, part of the reason for this
hearing.
Transocean's cold and calculated efforts to avoid taking
full responsibility for their actions--or, rather, inactions--
shines a very bright light on a serious problem, which is a
lack of accountability and equal treatment under the law. We
cannot allow that, in this Senator's judgment, to continue.
There are three simple questions that I hope we can answer
at today's hearing. One, Do our maritime laws need to be
updated? Two, Are all injured parties being treated fairly
under these laws? And do the distinctions that allow for people
to be treated differently make any sense at all? Are the
parties--three--responsible for causing the harm being held
fully accountable, or are they using outdated laws to escape
paying their fair share?
Let me be clear. Employers whose negligence causes an
employee or anyone else's death should be held fully
accountable for the pain and the suffering they cause,
regardless of where their death takes place. Companies that do
harm should not be able to hide behind statutes from 1851, for
heaven sakes, to avoid paying for the harm they have caused.
And the courts should have the power to make an example of a
company that disregards its workers' safety.
I firmly believe a consistent culture of workplace safety
must form the bedrock of any serious and responsible industry.
Whether you're operating a rig in the Gulf or, as I indicated,
a mine in the coal fields of West Virginia, these core
principles depend upon business doing the right thing, and
governments, by the way, enforcing the law. And that cannot be
allowed to change simply depending on the location of where the
work is and was done.
Today's hearing is an important opportunity to hear from
you, the families, who have been affected so painfully by this
awful disaster. You have our Nation's heartfelt sympathy. We
want to honor your loved one's sacrifice and make conditions
safer for all workers. Your voice today, in the weeks and
months ahead, is absolutely essential--again, the reason for
this hearing.
Thank you for being here and for sharing your stories with
the Committee today. I know full well that it cannot be easy.
Please know that the Committee will continue to work on these
issues to make sure workers and their families get the
protections they deserve and make sure those who cause the harm
are held fully accountable.
We have a fundamental obligation to bring real
accountability and fairness to a system where it has been
sorely missing. You have my commitment that we will do that.
I call on my very distinguished and very excellent Ranking
Member.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Well, thank you, Mr. Chairman.
Today, we are holding our second hearing in this committee
on this tragic oil spill, and the 44th hearing in Congress
since this happened. We're going to talk about the result of
the spill, the legal remedies, and the Jones Act. I want to,
first, say, to Mrs. Anderson and Mrs. Roshto, that our hearts
go out to you. What you have suffered, we know, is just
unimaginable. We just hope that we can settle some things here
that will keep, maybe, you from having to go through this type
of experience, or others like this experience, in the future.
We are now looking at a leak that started over 2 months
ago, and we're told that the leak will probably not really be
stopped for another month and a half. To date, 140 million
gallons of oil have leaked into the Gulf of Mexico. This is
unacceptable, and clearly we need to be looking for ways to
prevent this type of action in the future from happening, but
also learn how to respond more quickly to mitigate the damage.
I want to talk about the Jones Act. I'm glad that you're
with us, Mr. McCallister, because you have experience with
trying to bring skimmers in to be helpful. And I want you to
describe, later, the problems that you have encountered.
To date, over 20 countries have offered response vessels
and expertise to assist in the cleanup of the Gulf, but,
because of the 1920 Merchant Marine Act, known as the Jones
Act, foreign vessels are prohibited from operating within 3
nautical miles of the U.S. coastline, except after going
through an extended process for waivers. However, the waivers
have not been granted for foreign skimmers to come within the 3
nautical miles, and that's where we need them right now.
Three days after Hurricane Katrina, the previous
Administration waived the Jones Act so that foreign countries
could send vessels in to help. Yet, despite the situation that
we have, the Jones Act has not been granted any waivers in this
oil spill, and we are seeing the oil seep onto the shores.
I have introduced Senate Bill 3512, the Waiver Act,
cosponsored by Senators LeMieux, Cornyn, Isakson, McCain,
Barrasso, Bond, and Sessions. This would just allow the waivers
to occur immediately so that, obviously, under the auspices of
the Coast Guard, these foreign vessels could come in and help
with the mitigation of the damage. And with each hour that
passes, such a waiver is one more hour that the communities in
most need of assistance are forced to go without it. I hope
that, frankly, the President will waive it on his own. He can
do it. He should do it. We can get this hurdle out of the way
right now. I introduced the legislation. I hope that we can
pass it, because I think it will give some real help.
I want to also say that I think we can work together for
planning for the future, but, as I have said before, I don't
think we should stop drilling in the Gulf, where we have safely
drilled for 40 years. I think we need to take the steps to
assure that we do it safely, that we protect the Gulf, that we
protect the shores, and that we protect the environment. I
think we can do that, and I think we can do it in an
expeditious way if we all work together. And I hope that's what
we can achieve through these hearings and, hopefully,
legislation.
Thank you, Mr. Chairman.
[The prepared statement of Senator Hutchison follows:]
Prepared Statement of Hon. Kay Bailey Hutchison, U.S. Senator from
Texas
Thank you, Mr. Chairman, for holding today's hearing, which is our
Committee's second hearing so far on the tragic oil spill in the Gulf,
and the 44th (19 in the Senate, 25 in the House) in the Congress. Today
we will consider the various legal remedies available as a result of
the spill, as well as discuss the Jones Act.
On April 20, 2010, the Deepwater Horizon Mobile Offshore Drilling
Unit exploded, killing 11 employees onboard the rig and causing the
largest oil spill in U.S. history. To the widows of those workers who
perished and are here with us today, Shelley Anderson, from Midfield,
Texas, and Natalie Roshto, from Liberty, Mississippi, please know that
my thoughts and prayers continue to be with you and the others who have
lost a loved one on the Deepwater Horizon. I thank you for being with
us during this difficult time.
It has been 72 days since the oil spill began. An estimated 140
million gallons of oil have leaked into the water of the Gulf of
Mexico. We are told that the best chance for stopping the leak won't
happen until mid-August when BP hopes to complete the drilling of two
relief wells--almost 4 months after the leak began. This is
unacceptable. We must learn from this tragedy and fix what can be fixed
now, and continue to work to find solutions in those areas for which
answers have not yet been found.
WAIVER Act
As many of our domestic resources are being exhausted, we need to
look to our foreign friends for assistance. To date, over 20 countries
have offered response vessels and expertise to assist in cleanup of the
Gulf. Unfortunately, due provisions in the Merchant Marine Act of 1920,
also known as the Jones Act, foreign vessels are prohibited from
operating within three miles of the U.S. coastline.
Common sense dictates that three miles from the shore is the
crucial area that needs protection from all types of response vessels.
That is why there should be a temporary waiver of the Jones Act to
allow foreign response vessels to join with their domestic counterparts
to control and contain the oil leak--wherever they are most needed.
This is not without precedent. Just 3 days after Hurricane Katrina
made landfall, the previous Administration waived the Jones Act for
foreign response vessels to aid in the response efforts.
Yet, despite waiver requests, the Administration has not granted
any Jones Act waivers, while oil continues to wash ashore along the
Gulf Coast. That is why I have introduced S. 3512, the Water Assistance
from International Vessels for Emergency Response Act (WAIVER), along
with Senators LeMieux, Cornyn, Isakson, McCain, Barrasso, Bond and
Sessions.
Our legislation would provide a temporary waiver of the Jones Act
for a period of time associated with emergency response to the oil
spill. I would prefer the administration take immediate action and not
wait for legislation to grant a temporary waiver of the Jones Act so
the Gulf can receive assistance from all resources at our disposal.
After all, each hour that passes without such a waiver is one more hour
that the communities in most need of assistance are forced to go
without. But if it takes legislation, ours is ready to pass.
I am pleased that Fred McCallister, another Texas witness, was able
to join us today. He requested a Jones Act waiver nearly 2 weeks ago
(June 16) from the Coast Guard, and has yet to receive an acceptance or
rejection notice regarding his request.
Mr. McCallister's Dallas-based company has contracted for 25
foreign-flagged oil spill response vessels which he wanted to bring to
the Gulf to assist with 3 cleanup efforts. I hope he will describe the
hoops and hurdles he has gone through in requesting a Jones Act waiver
and hopefully we can learn from his experience and improve the waiver
process, or rather, what appears to be a lack of process, one way or
another.
Proposed Legislation
In addition to the lack of available resources to assist in the
Gulf, the lack of a clear response plan from BP and the Administration
is very troubling. For that reason, I am currently working with a
number of stakeholders to develop legislation that would help ensure
that responsible parties, including companies and Federal agencies,
establish meaningful response plans to address any size spill on day
one. We need to be able to better mitigate and control any spill so it
does not amplify into the massive spill we see today in the Gulf.
By enhancing coordination efforts among the private and public
sector in terms or response, response equipment and enhance research
and development for oil response, my legislation will allow responders
to ``hit the ground running.'' I look forward to working with my
colleagues on what I hope can be a bipartisan solution to many of the
ongoing problems we see today.
Again, I thank the Chairman for holding this hearing and I thank
the witnesses for being with us today.
The Chairman. Thank you, Senator Hutchison.
We will now--neither Senator Lautenberg nor Senator Thune
are here, and so, we will proceed to the witnesses. And----
Senator Wicker. Mr. Chairman?
The Chairman. Yes.
Senator Wicker. I understood I'd be allowed to make an
opening statement.
The Chairman. You had that understanding with my esteemed--
--
Senator Wicker. Staff to staff, I think.
The Chairman. Staff to staff. Well, that means that Mr.
Isakson also should have that right. OK. I hope it's short.
Senator Wicker. Yes, as are all of my statements.
[Laughter.]
Senator Wicker. But, I do appreciate the Chair indulging
me.
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. And thank you also, Mr. Chairman, for
holding this hearing today on the ongoing catastrophe and
related legal and regulatory impediments to the cleanup of our
Gulf Coast.
I appreciate Mrs. Roshto and Mrs. Anderson being here
today. It is under very unfortunate circumstances. Mrs. Roshto
and her late husband, Shane, from Liberty, Mississippi, are
constituents of mine. And my deepest condolences to both of
these ladies, and to the other families involved.
As news of the drilling operation's safeguards omitted in
the lead up to this tragic explosion come to light, I grow more
and more troubled at the negligence exhibited by the
responsible parties in the operation of Deepwater Horizon. I am
aware that debates took place on this oil rig as to what safety
precautions should be taken. And the ones who would cut corners
seem to have won that debate. So, I'm eager to hear the
testimony of both of these ladies today, and the testimony of
the other witnesses.
We're also witnessing a tragic situation unfold with regard
to the response. I had the opportunity, last weekend, to do
another flyover of the impacted waters, and witnessed oil in
Mississippi Sound for the first time, and in our passes near
the barrier islands. Since my flight, we've witnessed the
closures of several beaches, and almost all of our Mississippi
Sound fishing grounds.
I also witnessed the lack of skimming equipment, during my
flight. This is unacceptable. The Federal on-scene coordinator
determined there was an insufficient number of skimming vessels
engaged in the cleanup more than 2 weeks ago. This recognition
should have spurred action. It did not. Only yesterday did the
State Department follow, with their separate determination, and
declared that we would, finally, accept the invitations of some
of our foreign allies, in bringing their equipment here.
We still hear stories of domestic skimming assets sitting,
unused. We also hear stories of delays of the Administration's
ability to accept international assistance. We should hear
stories of armadas of vessels protecting our coast.
Unfortunately, this is not the case.
I understand there are many impediments to our plea for
more skimmers. It took some time, but the Administration
created an expedited waiver process for the Jones Act, and
seven vessels have been approved for use in our waters over the
past 48 hours. This is a start. The Administration could
simplify this further by waiving the Jones Act for skimming
vessels, as Senator Hutchison has mentioned, no different than
the waiver provided for oilspill tankers responding after
Hurricane Katrina. We need all domestic and international
resources responding.
I understand there are additional obstacles through the
Federal Water Pollution Control Act on skimmer discharge
limits. Unbelievably, our pollution control laws are preventing
us from cleaning up the pollution in our own waters.
We should not be discussing unresolved cleanup obstacles
more than 70 days after the start of this disaster. This is
clearly a failure of this Administration to fully grasp the
extent of the disaster.
Mr. Chairman and Ranking Member Hutchison, my fellow
members of the Committee, we need to work together to address
the issues that are impeding access to these skimming vessels
and equipment. We need to ensure the Administration is
providing the proper waivers, and doing so in a timely manner.
We need assurances that the State Department is resolving the
reciprocity issue. We also need to know that the Clean Water
Act is not one of the biggest obstacles to clean water in the
Gulf of Mexico. Congress must review any bureaucratic obstacles
to cleaning up this disaster, waive them in a responsible
manner, and help restore our Gulf Coast. We can no longer
afford to wait for action to occur. We owe it to the folks on
the coast who have lost their livelihoods and lost their way of
life.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And we will go now--Senator Lautenberg is on his way, and
he would need to make an opening statement, as well as Senator
Thune, should he come.
Mrs. Shelley Anderson, we welcome you and would like to
hear your testimony. And you need to turn the button on, and
put that fairly close to your mouth.
Mrs. Anderson. I don't know how to turn the button.
The Chairman. That--you did.
Mrs. Anderson. Did? OK, thank you.
STATEMENT OF SHELLEY ANDERSON, WIDOW OF JASON ANDERSON OF
MIDFIELD, TEXAS
Mrs. Anderson. My name is Shelley Anderson. My husband is
Jason Anderson, and he's a toolpusher on the Deepwater Horizon.
We have a 5-year-old daughter, named Lacy, and a 17-month-old
son, named Ryver. Our 8-month--our 8-year wedding anniversary
is next month.
Jason has been a--distant on his last few hitches, whenever
he would come home and whenever I would talk to him on the rig,
and I would ask him what the problem was, and he would always
tell me the same thing, that there's a lot of stuff going on,
on the rig, and that the walls were too thin, that he couldn't
talk about it right then, and that he would talk about it when
he got home. But, he never actually would talk about it when he
got home, because it would just be something else for me to
worry about, and Jason did not take care of me by making me
worry about anything. I never had to worry about anything.
Jason also talked about his will, this last time home, all
the way up to the point where I dropped him off at the airport
to go get on the rig. We talked about our future together, what
he wanted for the kids. We talked about how to plan. We made
plans together. And now I have to plan for a future without my
soulmate, without my husband, without my best friend. My
children are never going to have their father back. Ryver's
daddy is never going to throw him a football, and Lacy's daddy
is never going to walk her down the aisle at her wedding. Jason
will never be able to teach them how to ski or drive a car or
take them hunting or all the other things that daddies are
supposed to do. Jason's never going to be here again to put his
arms around me and comfort me and tell me that everything is
going to be OK, and make me feel like everything is going to be
OK. Now all I have to do is worry.
I believe that our damages should be considered under the
same standards as deaths that have occurred on land. And why
damages to be different for a family--why damages to a family
have to be different for deaths that occur on the--on an ocean
rather than on land.
I'm concerned that the responsible parties will use every
legal tactic and maneuver to delay our justice. In cases for
those killed in the tragedy are lumped in with other cases for
fishermen and landowners and businesses, in units of
government, it could be years for our cases to be heard or
resolved. I think I should be able to decide if I want to
pursue my case alone or along with the hundreds of other
claimants who have lost their income and property damage, but
have not lost their husbands and fathers.
Our damages were sustained at the time of the explosion,
and the property damage claims, which BP wishes to delay us, in
a result of failure to control the spill and perhaps the
dispersants being used in the ocean. These are separate and
distinct cases from ours, and our husbands' deaths should not
be handled as--they need to be separated.
We want to prevent the wives and families from ever being
in our shoes. Just as I'm trying to teach my 5-year-old
responsible behavior, I want to promote responsible behavior on
the rigs. We are not special, but we are survivors of our
husbands' lives. We want to be treated like any other survivor
that's out there.
And we want you to act quickly on this. We don't want it to
take years and years. And I know the legislative process can be
slow, but we just can't afford to wait. We need to get this
done. And we want the chance to be heard in a court, where the
judge can be trusted by everybody.
Thank you.
[The prepared statement of Mrs. Anderson follows:]
Prepared Statement of Shelley Anderson,
Widow of Jason Anderson of Midfield, Texas
My name is Shelley Anderson. My husband is Jason Anderson. Jason, a
tool pusher on the Deepwater Horizon, was killed in the April 20
explosion. We have a 5-year-old daughter, Lacy, and a 17-month-old son,
Ryver. Our 8 year wedding anniversary is next month.
Jason was a bit distant in his last few hitches when we talked on
the phone. I would ask him what the problem was. He always said the
same thing. ``. . . there is a bunch of stuff going on; I can't talk
about it now. The walls are too thin. I will talk to you when I get
home.'' Only he never would because it would have made me worry even
more. That was not the way he would take care of me. Jason also talked
of his will and the things he wanted for us and our children. We talked
of our future together and our children's future. Now, I have to plan
for a future without my soul mate, without the love of my life, without
my best friend. My children will never ever have their father back.
Lacy's daddy will never walk her down the aisle at her wedding. Ryver's
daddy will never throw him a football. Jason will never be able to
teach them to drive a car, ski behind a boat, take them hunting, or the
many other things a father teaches his children. Jason will never be
here to put his arms around me to comfort me to let me know that
everything is going to be all right and that I have nothing to worry
about. Now nothing is right and all I do is worry.
I believe our damages should be considered under the same standards
as if the deaths had occurred on land. Why would the damages to a
family be different if a death occurs on the ocean as opposed to
inland?
I am concerned that responsible parties will use every legal tactic
and maneuver to delay justice. If the cases for those killed in this
tragedy are lumped in with the other cases for the fishermen,
landowners, businesses and units of government, it could be years
before our cases are resolved. I think I should be able to decide if I
want to pursue my case alone, or along with the hundreds of other
claimants--who have lost income and had property damaged--but have not
lost husbands and fathers. Our damages were sustained at the time of
the explosion--the property damage claims with which BP wishes to
commingle and delay us are a result of a failure to control the spill
and perhaps the dispersants being used in the ocean. These are separate
and distinct cases from our husband's deaths and should be handled as
such--separately.
We want you to prevent wives and families from ever being in our
shoes. Just as I am trying to teach my 5-year-old responsible behavior,
we want to promote responsible behavior on the rigs. We may not be
special; but we are survivors of our husband's and father's life and we
want to be treated like any other survivor.
Finally, I urge you to act quickly. I know that the legislative
process can be slow, but this simply cannot afford to wait.
The Chairman. Thank you very much. That was powerful and
eloquent.
Mrs. Anderson. I'm trying.
The Chairman. We now are honored to hear from Mrs. Natalie
Roshto, from Mississippi.
STATEMENT OF NATALIE ROSHTO, WIDOW OF SHANE ROSHTO OF LIBERTY,
MISSISSIPPI
Mrs. Roshto. Good morning. Chairman Rockefeller and Ranking
Member Hutchison and other members----
The Chairman. Would you pull that a little bit closer, Ms.
Roshto?
Mrs. Roshto [continuing]. And other members of the Senate
Commerce Committee, I want to thank you for allowing me to
speak today on behalf of my husband, Shane Roshto, who was
tragically killed in the Deepwater Horizon explosion April 20,
myself, and our wonderful son, Blaine.
In the early hours of April 21, when I received the news of
the explosion and fire, I never thought I would be sitting
here. I never thought I would have to go home to a bright-eyed
3-year-old and have to face the fact that his dad, and my
husband, would never come home to us.
Every 3 weeks, when Blaine and I would give Shane our last
love, send him off for 3 weeks, I always feared the helicopter
ride, but never did this kind of tragedy ever come to my mind.
But, through God's grace, family, and wonderful new friends,
Blaine and I are making it through.
After all the safety schools, meetings, and fire drills, I
just knew he was safe out there. When the events of the
Deepwater Horizon explosion started to unfold, I asked myself,
``Will I ever personally recover? What if he's out there and
they just didn't look long enough?'' As the days passed,
Shane's absence became reality.
My husband took great pride in his job, loved his work and
all his Deepwater Horizon family, but, most importantly, he
knew that working out there provided a lifestyle for his son
that most 22- and 21-year-olds could not provide. He loved us
unselfishly, and provided a lifestyle that allowed me to attend
college and also be at home with Blaine. During Shane's off
weeks, he spent time every day with Blaine, passing on his love
for the outdoors, hunting and fishing, and doing for others,
most of all.
As the days passed, I asked, ``Why? What happened?'' The
life Blaine and I knew was truly over. My love story had came
to an end. Though he is a mirror-image of his dad, Blaine now
has a void that will never be filled. There is no amount of
money that Transocean or BP can pay to bring my husband back or
return Blaine's father. However, because of this tragedy, I
have, unfortunately, learned that, under current law, there
exists a huge discrepancy in the way that the death of a loved
one is valued on the high seas. It is my understanding that the
value of a loved one who dies at sea is valued far less than a
loved one who dies on land. I am not a lawyer, by any means,
but the policy behind this law does not make any sense to me,
and does seem unfair.
Under current law, because Shane died on an oil rig in
Federal waters, Shane's death is limited to pecuniary damages,
which essentially limits his loss to a value of his paycheck
and funeral expenses. If Shane had died on land, the law would
have recognized that Shane's life was more valuable, like the
loss of society, the loss of love, affection, and care for
Blaine, not only for Blaine, but for me, to help me, to give me
ways to raise Blaine, to help me.
The whole concept of valuing someone's life seems very
strange to me, in light of everything that has happened. But,
since this remedy that I'm left with to hold the party
responsible for Shane's death accountable, I want to make sure
that Congress acts quickly to change current law to ensure that
all victims of maritime damages are treated equally.
It should make no difference, in the eyes of the law, where
a loved one is killed because of the wrongful acts of another.
It should also make no difference whether the person killed
worked as a seaman, contractor, or simply a passenger. The law
should treat everyone the same.
I pray every day when I wake, and, at bedtime prayers with
Blaine, that I can sit him down one day and be able to tell him
his daddy was a hero, a hero to all oil field men and women,
because his dad changed the heart and soul of those who place
their business agendas over the importance of life.
In closing, I would like to ask that the next time you see
a picture of the Deepwater Horizon in flames or hear about the
oilspill, you think about this. The flow of oil will eventually
be stopped. Slowly, the environment will recover. The Gulf, I
pray, will continue to provide us with the oil and gas and many
other things that we enjoy. But, the lives of the 11 men, their
survivors, and the heroes of the Deepwater Horizon will forever
be changed but an unfortunate tragedy that prompted changes in
making the laws more equal for all maritime victims who die on
the high seas.
Thank you for your time, and I will be happy to answer any
questions.
[The prepared statement of Mrs. Roshto follows:]
Prepared Statement of Natalie Roshto, Widow of Shane Roshto
of Liberty, Mississippi
Chairman Rockefeller, Ranking Member Hutchison, and other members
of the Senate Commerce Committee, I want to thank you for allowing me
to speak today on behalf of my husband, Shane Roshto, who was
tragically killed in the Deepwater Horizon explosion April 20, myself
and our son Blaine.
In the early hours of April 21 when I received news of the
explosion and fire, I never thought that I would be sitting here. I
never thought that I would go home to a bright eyed 3 year old and have
to face the fact that his Daddy, my husband, would never come home to
us. Every 3 weeks when Blaine and I would give Shane our last loves
sending him off for 3 weeks, I always feared the helicopter ride, but
never did this kind of tragedy come to mind. Through God's grace,
family and friends, Blaine and I are making it through.
After all the safety schools, meetings, fire drills and safety
regulations I just knew he was safe. When the events of the Deepwater
Horizon explosion started to unfold I asked myself will I ever
personally recover; what if he's out there and they just didn't look
long enough? As the days passed Shane's absence became reality.
My husband took great pride in his job, loved his work and all his
Deepwater Horizon family, but most important he knew offshore work
provided the life he wanted for his son. He loved us unselfishly and
provided a lifestyle that allowed me to attend college and to be home
with Blaine. During Shane's off-weeks he spent time everyday with
Blaine passing on his love for the outdoors, hunting and fishing and
doing for others.
As the days pass I ask why? What happened? The life Blaine and I
knew is over. My love story came to an end. Though he is a mirror image
of his Daddy, Blaine now has a void that will never be filled.
There is no amount of money that Transocean or BP can pay to bring
back my husband or return Blaine's father to him. However, because of
this tragedy I have unfortunately learned that under current law, there
exists a huge discrepancy in the way the death of a loved one is valued
on the high seas. It is my understanding that the value of a loved one
who dies at sea is valued far less than a loved one who dies on land. I
am not a lawyer by any means, but the policy behind this law does not
make any sense to me and does not seem fair. Under current law, because
Shane died on an oil rig in Federal waters, Shane's death is limited to
pecuniary damages--which essentially limits his loss to the value of
his paycheck and funeral expenses. If Shane had died on land, the law
would have recognized that Shane's life was more valuable.
The whole concept of valuing someone's life seems very strange to
me in light of everything that is happened. But since this is the
remedy that I am left with to hold the party responsible for Shane's
death accountable, I want to make sure that Congress acts quickly to
change current law to ensure that all victims of maritime disasters are
treated equally. It should make no difference in the eyes of the law
where a loved one is killed because of the wrongful acts of another. It
should also make no difference whether the person killed worked as a
seamen, contractor, or was simply a passenger. The law should treat
everyone the same.
I pray every day when I awake and at bedtime prayers with Blaine
that I can sit him down one day and be able to tell him that his Daddy
is a hero--a hero to all oilfield men and women because his death
changed the heart and soul of those who place their business agenda
over the importance of life.
In closing, I would like to ask that the next time you see a
picture of the Deepwater Horizon in flames or hear about the oil spill
that you think about this: The flow of oil will eventually be stopped,
slowly the environment will recover, the Gulf I pray will continue to
provide us with oil and gas and many other things that we all enjoy,
but the lives of the 11 men, their survivors and heroes of the
Deepwater Horizon will forever be changed. We can only hope that the
legacy of this tragedy will be much more than a devastating oil spill,
but an unfortunate tragedy that prompted changes in making the laws
more equal for all maritime victims who die on the high seas. Thank you
for your time and I will be happy to answer any questions you may have.
The Chairman. Thank you very much----
Mrs. Roshto. And I would also like to introduce Courtney
Kemp's testimony into the record.
The Chairman. That will be the order.
[The information referred to follows:]
Prepared Statement of Courtney Kemp, Widow of Roy Wyatt Kemp,
of Jonesville, Louisiana
Hello, my husband is Roy Wyatt Kemp, one of the eleven men killed
on the Deepwater Horizon oil rig that exploded on April 20, 2010. I
reside in Jonesville, Louisiana, with our two beautiful daughters,
Kaylee, 3 and Maddison, 5 months.
I never thought I would be sitting before you today speaking on
behalf of my husband and advocating to change a law that would affect
my family and others. I appreciate the opportunity to tell you briefly
about my husband and express my concerns regarding some issues that
will affect many Americans.
First and foremost, Wyatt is a Christian, one who loved the Lord
with all of his heart. He had a tremendous amount of faith and seeked
God's will on a daily basis. Wyatt and I began dating while in high
school and we have been married for five and a half years. He was a
wonderful father, husband, son, brother, and friend to many. He was an
avid outdoorsman who enjoyed hunting, fishing, and spending time with
his duck dog, Ellie.
Wyatt began working for Transocean Deepwater Drilling approximately
four and a half years ago. He was only minutes away from completing his
final shift as a Derrick Hand and was scheduled to come home the
morning of April 21. He would have only been home for 2 weeks of his
normal 3 weeks in order to return to the rig to join his new crew as
Assistant Driller, a promotion he so deserved and one of which he was
very excited. Wyatt was so proud of the Deepwater Horizon and the
accomplishments it had made. Only a short time ago, the Horizon
succeeded in drilling the deepest well in the gulf and second deepest
in the world. Also, the rig was about to receive a safety award for
commemorating 7 years without a single injury. It is because of this
outstanding record that BP sought after the Deepwater Horizon because
it was simply the best at accomplishing its goals and the crew aboard
was outstanding in their field.
The main purpose of our being here today is to address the Death on
the High Seas Act. This Act was passed in 1920 and spells out the
limited benefits a family may recover from the loss of a loved one when
death is experienced on the high seas. Because this Act is outdated and
does not fit the needs of today, I am asking that you amend DOHSA in
order to make companies accountable for gross negligence such as the
incident on the Deepwater Horizon. By changing this Act, perhaps
companies will be more responsible for their wrongdoings and this type
of accident will be avoided in the future. It is time that we bring
DOHSA into the 21st century.
Upholding safety regulations should be the number one priority on a
rig. It is my belief that this terrible tragedy could have been
prevented if only proper safety procedures had been followed. It is no
secret the rig was behind schedule on this well due to the many
problems they had experienced. However, the safety of its workers
should not have been placed in jeopardy simply to bring in a well a few
days early. Had these safety issues been resolved, the cost to the
company would have only been measured in dollars and cents. The expense
now is much greater as it cost eleven men their lives, eleven families
their husbands, fathers, sons and brothers. How is it that the all
mighty dollar has become more important than a human life?
It is detrimental to the southern states economy as well as our
entire country when drilling in the gulf is discontinued. In the state
of Louisiana there are two primary sources of income, agriculture and
the oil and gas industry. If the moratorium continues it will be
devastating to our already crippled economy, especially in the south. I
understand, and want more than anything, that we need to know what
happened that tragic night in the gulf in order to prevent it from
happening again, but who's to say we will have all of the necessary
answers in 6 months.
Because of the Moratorium, there are many who have already been
laid off from their jobs in the gulf and thousands who worry every day
if they will be next. So you see, even though my husband lost his life
on an oil rig, I do not believe drilling should stop. Consider this, if
a plane crashes, do we stop flying for 6 months?
Finally, I would like to address a new issue that has recently come
to my attention. It is the proposed inclusion of the eleven families in
the Multi-Jurisdictional Class Action Suit that has been filed on
behalf of the fishermen, shrimpers, etc. who have been affected by the
spill. While I sympathize with those who make their living in the Gulf
waters and I feel they should be compensated, it is my belief that
although the loss of the two groups resulted from the same tragic
incident, the impact is totally different and should be handled
accordingly. I believe you will agree that the affect this tragedy has
imposed on fishermen is of no comparison to the loss the eleven
families who lost loved ones have suffered. Please do not allow this
group of trial lawyers who are working to incorporate the two succeed
in doing so.
In closing, I would like to leave you with this thought; if the
roles were reversed and you were standing in my shoes, would you be
advocating changing a law that is so outdated and unfair? Would you be
fighting to insure the livelihoods of many are not destroyed? My prayer
is that you will make the right decisions regarding these matters so
that no other families will have to endure the pain, grief, and
suffering that my family is experiencing. You see, this is not about
me; it is about honoring my husband and finding some type of justice
for him and the others who lost their lives that tragic night.
Thank you.
The Chairman. And, of course, all of your statements will
be automatically a part of the record.
That was a very--also a very powerful, probing, deep,
eloquent testimony, and I thank you very much for that.
Senator Lautenberg, who is Chairman of the relevant
Subcommittee, is here.
And if you have something you'd like to say.
STATEMENT OF HON. FRANK R. LAUTENBERG,
U.S. SENATOR FROM NEW JERSEY
Senator Lautenberg. Thank you very much, Mr. Chairman.
And I thank Mrs. Roshto for her testimony. I heard enough
of it to get some sense about the cost to your family and your
well-being--has been as a result of what I will say is some
questionable behavior on the part of BP.
And I want to express my condolences to all of those who
have lost loved ones in the Deepwater Horizon catastrophe,
including our witnesses--Mrs. Anderson, Mrs. Roshto.
Eleven men were killed when the BP rig exploded, and
nothing is going to bring these people back. But, we can honor
their losses by making sure that oil companies understand that
a first responsibility of theirs is to protect the lives and
well-being of the people that they have performing these tasks
on these rigs.
In the weeks before the catastrophic blowout, BP repeatedly
chose to cut corners and put worker safety on the back burner.
BP ignored countless warnings from engineers and subcontractors
about the troubles with the well, and even discounted an e-
mail--they called it ``a nightmare well.'' Just 4 days before
the blowout, one BP executive admitted that the company was
moving forward in the face of danger, and he said, and I quote,
``Who cares? It's done. It's the end of a story. We'll probably
be fine.''
Mr. Chairman, I was one of the first Senators to visit
Alaska after the Exxon Valdez crash, and I saw the destruction
caused by that first--that oilspill firsthand. When the press
coverage was intent--intense, Exxon issued a string of
apologies, it promised to do right by the community, and it
vowed to make sure the way of life these Alaskans knew would
resume. But, as soon as the cameras were shut down, Exxon
changed its tune. And I use this as an example. It fought the
communities, the families, and the fishermen over every penny.
Instead of making those victims whole, Exxon chose to make its
lawyers rich. After 20 years--20 years of legal fights--Exxon
succeeded in getting punitive damage claims reduced from $5
billion to $500 million.
And we're not going to let history repeat itself in this
instance. Transocean, the largest oil--offshore rig operator in
the world, has already gone to court to reduce its liability
for the Gulf disaster by citing an 1851 maritime law. And
that's why the $20-billion fund that President Obama has
established is so important.
Mr. Chairman, offshore drilling is a risky, dangerous, and
imperfect practice, but it's also highly profitable. And when
oil companies enter into this practice, they have to be
prepared to pay whatever price their--to make their victims
whole. We can't afford, any longer, to shield big oil from the
costs of offshore drilling.
And again, I express my sorrow to those who lost a son, a
brother, a father, or a friend in the Deepwater explosion. We
want to hear our witnesses give us their views on holding the
oil companies accountable.
And I brought this along to see--this is directly from the
waters in the Gulf, and it wasn't unclean bathers, it wasn't
fish specimens spewing pollution. This is it, as ugly as it is.
And you see what happens when this carelessness--carelessness--
took over. BP had a chance, in its initial decisions about what
kind of a rescue system they would use, and it--they took the
one that was supposedly less costly.
Thank you, Mr. Chairman, for the opportunity to issue a
statement.
[The prepared statement of Senator Lautenberg follows:]
Prepared Statement of Hon. Frank R. Lautenberg,
U.S. Senator from New Jersey
Mr. Chairman, thank you for holding this hearing.
I would like to first express my condolences to those who lost
loved ones in the Deepwater Horizon catastrophe, including our
witnesses, Mrs. Anderson and Mrs. Roshto.
Eleven men were killed when the BP rig exploded--nothing will bring
these men back, but we can honor their loss by making sure oil
companies don't continue to take risks that jeopardize lives.
In the weeks before the catastrophic blowout, BP repeatedly chose
to cut corners and put worker safety on the back burner.
BP ignored countless warnings from engineers and subcontractors
about the troubles with the well and even discounted an e-mail that
called it a ``nightmare well.''
Just 4 days before the blowout, one BP executive admitted that the
company was moving forward in the face of the danger and said ``who
cares, it's done, end of story, will probably be fine.''
Mr. Chairman, I was one of the first Senators to visit Alaska after
the Exxon Valdez crash, and I saw the destruction caused by that oil
spill firsthand.
When the press coverage was intense--Exxon issued a string of
apologies, it promised to do right by the communities, and it vowed to
make sure the way of life these Alaskans knew would resume.
But as soon as the cameras were shut off--Exxon changed its tune.
It fought the communities, the families and the fishermen over
every penny. Instead of making those victims whole, Exxon chose to make
its lawyers rich.
After twenty years of legal fights, Exxon succeeded in getting
punitive damages reduced from five billion dollars to five hundred
million dollars.
We can't let history repeat itself.
Transocean--the largest offshore rig operator in the world--has
already gone to court to reduce its liability for the Gulf disaster by
citing an 1851 maritime law.
That's why the $20 billion fund that President Obama has
established is so important.
Mr. Chairman, offshore drilling is a risky, dangerous and imperfect
practice--but it's also highly profitable.
When oil companies enter into this practice, they have to be
prepared to pay whatever price to make their victims whole.
We can no longer afford to shield Big Oil from the costs of
offshore drilling.
I want to again express my sorrow to those who lost a son, a
brother, a father, or a friend in the Deepwater explosion. We want to
hear our witnesses give us their views on holding oil companies
accountable.
Thank you.
The Chairman. Thank you, Senator Lautenberg.
Our next witness is Dr. Tom Galligan, who is President,
Professor of Humanities, at Colby-Sawyer College.
STATEMENT OF THOMAS C. GALLIGAN, JR., PRESIDENT AND PROFESSOR
OF HUMANITIES, COLBY-SAWYER COLLEGE AND SCHOLAR ON TORTS AND
MARITIME PERSON INJURY LAW
Dr. Galligan. Chairman Rockefeller, Ranking Member
Hutchison, and members of the Committee, thank you for inviting
me to appear before you.
My name is Tom Galligan, and I am the President of Colby-
Sawyer College, in New London, New Hampshire, and I have
written and spoken frequently throughout the years on torts and
maritime law, and was a Law Professor and Dean for 20 years
before moving to Colby-Sawyer.
I'd like to talk about three issues: the outdated and
limited damages available in high seas maritime wrongful death
cases; the 1851 Shipowners' Limitation of Liability Act; and
the availability and measure of punitive damages in admiralty.
Let me begin with wrongful death recovery by the survivors
of seamen and others under the Jones Act. And this isn't the
part of the Jones Act about waivers of the Jones Act; this is
the part about recovery of a seaman in negligence actions, and
his or her survivors, and others, under the Death on the High
Seas Act.
Both of these statutes were passed in 1920, another era. As
interpreted, neither of them allows recovery for ``loss of
society'' damages to the survivors of those killed in high seas
maritime disasters.
Now, what are ``loss of society damages''? They are
compensation for the loss of care, comfort, and companionship
caused by the death of a loved one. They are compensation for
the loss of the relationship itself. The majority of American
jurisdictions today recognize some right to recover for loss of
society in wrongful death cases, but not the Jones Act and not
DOHSA. The Jones Act and DOHSA do allow the survivors of
someone killed on the high seas to recover their pecuniary or
economic loss, but neither allows any recovery for the loss of
the relationship itself. Thus, a surviving spouse or child may
recover loss of economic support or funeral expenses or loss of
services, like cooking or cutting the lawn, but the survivors
recover nothing for the very real emotional loss of the loved
one. And a parent who is not financially dependent upon a child
who is killed on the high seas would recover nothing at all for
that child's death.
Today, under the Jones Act and DOHSA, the relationship
itself between the decedent and his or her spouse, child, or
parent is treated as if it has no value. Senators, a spouse,
child, or parent who loses a loved one suffers a very real
loss, as we have heard, and the law, to be just, must recognize
it.
Now, there's one exception to the rule barring recovery of
loss of society under DOHSA, and that exception points up
current inconsistencies in the law.
In 2000, after the Korean airline and TWA air disasters,
you retroactively amended DOHSA to provide recovery of loss of
society to the survivors of those killed in high seas
commercial aviation disasters, but for anyone else killed on
the high seas, including the 11 workers who died on the
Deepwater Horizon, the survivors may not recover for the loss
of society. The law should be the same for all.
Senator Leahy's proposed Survivors Equality Act of 2010
would appropriately amend DOHSA to include recovery for loss of
society.
Now, tort law is concerned with corrective justice--with
fairness, with consistency, and with compensation--but, it is
also concerned with deterring unsafe behavior posing risks to
people, property, and the environment. As the title of this
hearing points out, law is concerned with holding people
accountable. By not allowing recovery of loss of society, the
applicable maritime law undercompensates. And if tort law
undercompensates, it underdeters, because it does not hold
those responsible accountable for all of the real, direct
damages that they cause.
Now, undercompensation and underdeterrence and increased
risk in the maritime setting is exacerbated by the Shipowners'
Limitation of Liability Act. Originally passed in 1851 to
encourage investment in maritime shipping and commerce, the Act
allows a vessel owner to limit its liability to the post-voyage
value of the vessel if the liability is incurred without the
owner's privity or knowledge. The Act was passed before the
development of the modern corporate forum and before the
evolution of bankruptcy law. The Act's operation today can lead
to drastic undercompensation for the victims of maritime
disasters.
Senator Schumer's proposed bill, S. 3478, would repeal the
relevant portions of the Limitation Act.
Finally, these cumulative problems of limited liability and
maritime law might be alleviated by the recovery of punitive
damages in cases involving egregious fault. Punitive damages
are an additional way to hold people accountable. Twice in the
past two and one half years, the U.S. Supreme Court has
recognized the right to recover punitive damages in maritime
cases. However, the Court has limited the recovery of punitive
damages, in most cases, to a one-to-one ratio between the
punitive damages awarded and the compensatory damages awarded.
In uttering that rule, the Court was quick to point out,
however, that if Congress were to choose a different rule, the
Court would have to defer to that different rule.
What does that ratio cap do? It deprives a judge or jury of
the traditionally available availability to tailor a punitive
award, within due process limits, to the particular facts of
the case, including the level of blame-worthiness, the harm,
the threatened harm, and the profitability of the activity.
Senator Whitehouse's proposed bill on maritime punitive
damages, S. 3345, would restore that traditional ability to
tailor a punitive award to the facts of the case.
Thank you for listening, and I'm happy to answer any
questions.
[The prepared statement of Dr. Galligan follows:]
Prepared Statement of Thomas C. Galligan, Jr., President and Professor
of Humanities, Colby-Sawyer College and Scholar on Torts and Maritime
Person Injury Law
I. Introduction
Chairman Rockefeller, Ranking Member Hutchison and members of the
Committee, thank you for inviting me to appear before you today. My
name is Tom Galligan and since 2006, it has been my good fortune to
serve as the President of Colby-Sawyer College in New London, New
Hampshire, where I am also a Professor in the Humanities Department.
From 1998-2006, I was the Dean of the University of Tennessee College
of Law where I also held a distinguished professorship. From 1986-1998,
I was a Professor at the LSU Paul M. Hebert Law Center in Baton Rouge,
where I also held an endowed professorship. From 1996-1998, I also
served as the Executive Director of the Louisiana Judicial College. At
both Tennessee and LSU, I taught and wrote about torts and maritime
law. I am the author or co-author of several books and many articles on
tort law and punitive damages. Along with Frank Maraist, I am the
author of three books on maritime law, one of which is and another of
which will soon be co-authored by Catherine Maraist. I have also
written law review articles on various aspects of maritime law and
given countless speeches on torts and maritime law; and I continue to
speak and write on those subjects. It is an honor to appear before you
today.
The disaster in the Gulf of Mexico has already resulted in death,
injury, environmental devastation, and economic loss to individuals,
businesses, and governmental entities. Additional damage is occurring
every day. The staggering consequences of the spill force us to ask
whether applicable laws are fair, consistent, and up-to-date. Do they
provide adequate compensation to the victims of maritime and
environmental disasters? And, do our laws provide economic actors with
proper incentives to ensure efficient investments in accident avoiding
activities? Does our law appropriately hold tortfeasors accountable?
Sadly, an analysis of the relevant laws reveals a climate of limited
liability and under compensation.
The law under compensates, in part, because, the Jones Act and the
Death on the High Seas Act (DOHSA), as interpreted, do not provide
damages to the survivors of Jones Act seamen and others killed in high
seas maritime disasters for the loss of care, comfort, and
companionship suffered as a result of their loved ones' deaths.
Aggravating the situation, some courts have inappropriately relied on
those recovery denying rules to further limit recovery of nonpecuniary
damages in other maritime cases. These failures to fully compensate
raise basic issues of fairness and corrective justice. Is it right,
consistent with modern law and values, and just to deny recovery for
very real damages such as the loss of care, comfort, and companionship
one suffers when a loved one is killed? In addition, the failure to
compensate raises important issues concerning tort law, deterrence, and
accountability.
If the law under compensates, economic actors, when deciding what
to do and how to do it, face less than the total costs of their
activities. This economic reality may, in turn, lead to under
deterrence and increased risk. If the law does not hold people
accountable, the risk of injury, death, and damage is increased. In the
maritime setting, the climate of limitation is exacerbated by the
existence of the 1851 Ship Owner's Limitation of Liability Act. That
law allows a ship owner to limit its liability to the post-disaster
value of a vessel, providing the relevant events occurred without the
privity or knowledge of the ship owner. While punitive damages might
make up for the lack of deterrence in some areas, the deterrent role of
punitive damages in admiralty is less significant because of the rule
that limits the recovery of punitive damages to compensatory damages in
maritime cases at a 1:1 ratio.
I will begin my analysis with a discussion of the legal fact that
loss of society damages are not recoverable by the survivors of many
who are killed in maritime disasters. In failing to allow recovery of
loss of society damages--damages for loss of care, comfort, or
companionship--maritime law is contrary to the rule prevailing in the
majority of the states. Katherine J. Stanton, The Worth of Human Life,
85 N.D. L. Rev. 123, 130-31 (2009). Consequently, maritime law under
compensates the surviving families of seamen and those killed in high
seas maritime tort disasters. Congress has the chance and ability to
change this state of affairs by amending the relevant statutes. Indeed
Senator Leahy's proposed 2010 Survivor's Equality Act of 2010, S. 3463,
would appropriately amend DOHSA to make loss of society damages
recoverable.
Second, I will discuss the extension of the seamen and high seas no
loss of society recovery rules to other maritime cases, thereby further
limiting potential overall liability. Third, I will describe the
anomalous high seas death rule that pre-death pain and suffering
damages are not recoverable in a maritime survival actions where death
occurs on the high seas. S. 3463 would supersede this anomalous rule.
Fourth, I will briefly explain how under compensation can lead to
under deterrence and increased risk. Next, I will address the maritime
doctrine of limitation of liability. Senator Schumer's proposed bill,
S. 3478, would repeal the relevant provisions of the limitation act and
assure more adequate compensation and deterrence.
Finally, I will review the impact of maritime punitive damages
rules on risk and deterrence. Senator Whitehouse's proposed bill on
maritime punitive damages, S. 3345, would improve those punitive
damages rules by restoring the traditional ability to tailor a punitive
award to the facts of the case.
II. Loss of Society in Maritime Wrongful Death Cases--Seaman and the
High Seas
Loss of society damages are not recoverable in Jones Act wrongful
death cases and/or in any case where death occurs on the high seas.
This harsh legal reality is inconsistent with modern American law and
does not fully or fairly compensate survivors for loss arising from the
maritime wrongful death of a loved one. This no recovery rule is also
inconsistent with the more progressive recovery available in high seas
commercial aviation disasters.
A. Seamen
The analytical starting point in any work place maritime tort case
is to determine whether an injured or deceased person was a seaman
because that status determines the legal rights of the claimant and
family members. A seaman is a person who does the work of a vessel,
McDermott International, Inc. v. Wilander, 498 U.S. 337 (1991), and who
has an employment-related connection to a vessel which is substantial
in duration (more than 30 percent of one's work time is spent on a
vessel or fleet of commonly owned or controlled vessels), Chandris,
Inc. v. Latsis, 515 U.S. 347 (1995), and nature (the worker is exposed
to the perils of the sea). Harbor Tug and Barge Company v. Papai, 520
U.S. 548 (1997). Maritime law treats a semi-submersible drilling rig as
a vessel. Marathon Pipe Line Co. v. Drilling Rig/Odessa, 761 F.2d
229,233 (5th Cir. 1985). The moveable drilling rig is a vessel because
it is ``capable of being used as a means of transportation on water.''
3 U.S.C.A. 3; Stewart v. Dutra Construction Company, 543 U.S. 481
(2005). The Deepwater Horizon was a moveable drilling rig and,
therefore, under maritime law, it is a vessel. Interestingly, a
permanently attached drilling platform, as opposed to a semi-
submersible drilling rig, is not a vessel.
Assuming that the Deepwater Horizon was a vessel, workers with a
substantial employment-related connection to the Deepwater Horizon
would be seamen. A seaman has several possible claims against his or
her employer: (1) the right to recover maintenance and cure; (2) the
right to recover injury caused by the unseaworthiness of the vessel on
which he or she served (a vessel is unseaworthy if it presents an
unreasonably unsafe condition to the seamen on board); and (3) a Jones
Act, 46 U.S.C.A. 30104, right to recover in negligence against his or
her employer. Frank L. Maraist & Thomas C. Galligan, Jr., Admiralty in
Nutshell, 194-99 (5th ed. 2005).
1. Jones Act Negligence
The Jones Act incorporates the provisions of the Federal Employers
Liability Act (FELA). 45 U.S.C.A. 51. The Jones Act (through the
FELA) provides certain survivors of seaman killed as a result of their
employer's negligence with wrongful death and survival action claims
against the employer. Basically, a wrongful death action is an action
that compensates certain beneficiaries for the loss they suffer as a
result of the death of the victim. A survival action provides recovery
for the damages that the decedent suffered before his or her death.
Critically, what do the recoverable damages include and what do
they not include in a Jones Act negligence wrongful death action? The
survivors can recover any loss of economic support, any lost services,
and other traditional types of pecuniary damages. That is they recover
economic losses. The survivors cannot recover loss of society damages.
That is, they cannot recover for the loss of care, comfort, or
companionship caused by the death. Loss of society damages are, in
essence, those damages survivors suffer as a result of the fact that
the deceased is no longer there to share the joys of life with the
them. Thus a surviving spouse may recover any loss of support (net of
taxes and what the decedent would have spent on themselves) and loss of
service, such as cooking or painting or cutting the lawn and any other
economic damages. But the spouse recovers nothing for the loss of the
relationship. Likewise, a parent who is not financially dependent upon
a child who is killed would recover nothing.
The inability of the Jones Act seaman's survivors to recover loss
of society damages in the negligence action does not result from the
language of the Jones Act or the FELA. Rather, it is the combination of
a 1913 decision of the U.S. Supreme Court, Michigan Central R.R. Co. v.
Vreeland, 227 U.S. 59 (1913), which refused to recognize the right to
recover loss of society damages under the FELA (and which actually
predated the passage of the Jones Act by 7 years) and the result of the
Court's reliance on that decision in Miles v. Apex Marine, 498 U.S. 19
(1990).
One might arguably understand and appreciate the Vreeland holding
in an era when the law of wrongful death was still in its relative
infancy; human life spans were shorter, and given the state of
technology, industry, and law, accidental death was a more common part
of the American landscape than it is today. However, to deny recovery
of loss of society damages in a wrongful death case today is out of the
legal mainstream and is a throwback to a past era. A spouse, child,
parent, or sibling of a seaman killed in a maritime disaster suffers a
very real loss of society and the law should recognize it.
Congress could easily remedy this state of affairs by amending 45
U.S.C.A. 51, the FELA wrongful death statute, to state that recovery
by a named beneficiary in a wrongful death action shall ``include
nonpecuniary damages for loss of care, comfort, and companionship.''
That amendment would bring the Jones Act and FELA much more into line
with modern tort law regarding the recovery of damages in wrongful
death cases, as well as the economic, social, and familial realities of
today. Representative Conyer's proposed bill, Securing Protection for
the Injured from Limitations on Liability Act, H.R. 5503, would, among
other things, amend the Jones Act to make loss of society damages
recoverable in seaman negligence based wrongful death cases.
2. Unseaworthiness
Moving from the negligence claim for wrongful death to the
unseaworthiness claim for wrongful death, the general maritime law
provides certain survivors with wrongful death and survival actions
against a vessel owner (or operator under many circumstances) if the
seaman is killed as a result of the vessel's unseaworthiness. If the
death occurs on the high seas, then DOHSA, 46 U.S.C.A. 30302, governs
the recoverable wrongful death damages arising from the vessel's
unseaworthiness. DOHSA limits recovery to ``pecuniary loss.'' 46
U.S.C.A. 30303. Thus, the survivors of seamen killed as a result of a
vessel's unseaworthy condition on the high seas may not recover loss of
society damages. Consequently, the spouse, parent, or child, who has no
claim for pecuniary damages, recovers nothing for the losses caused by
the death of a loved one and all of the issues raised concerning the
inequity, incongruity, and antiquated nature of that limitation on
recovery discussed above in conjunction with the Jones Act apply to
DOHSA. One case worthy of note is Rux v. Republic of Sudan, 495
F.Supp.2d 541 (E.D. Va. 2007), which chillingly presents the operation
of DOHSA. There, 56 surviving family members of the 17 sailors killed
in the terrorist bombing of the U.S.S. Cole sued the Republic of Sudan
under the Foreign Sovereign Immunities Act, 28 U.S.C.A. 1605(a)(7),
alleging that Sudan was at fault for providing material assistance and
support to Al Qaeda, the group responsible for the attack. The court
held that DOHSA applied and because nonpecuniary damages were not
recoverable, 22 family members, including parents and siblings
recovered nothing as a result of the deaths even though the court
noted:
The court sympathizes greatly with plaintiffs, who continue to
suffer terribly years after their loved ones died. But the
court is bound to follow the legal precedent before it.
Congress makes the laws; courts merely interpret them. Whether
to amend DOHSA to allow more liberal recovery in cases of death
caused by terrorism on the high seas, as Congress did in 2000
for cases of commercial aviation accidents on the high seas, is
a question for Congress alone. Accordingly, plaintiffs' IIED
[intentional infliction of emotional distress] and maritime
wrongful death claims are dismissed for failure to state a
claim upon which relief can be granted.
495 F.Supp.2d at 565. See also, Rux, 461 F.3d 461 (4th Cir. 2006),
cert. denied, 127 S.Ct. 1325 (2007); Rux, 672 F.Supp.3d 726 (E.D.Va.
2009). See generally, Ross M. Diamond, Damage--Unequal Recovery for
Death on the High Seas, 45 Sept.--Trial 34 (2009).
Here, as in Rux, in addition to the general and very substantial
reasons to allow recovery of loss of society damages in DOHSA cases,
there is an additional analytical prong involving a 2000 amendment to
DOHSA (referred to in the quote from Rux above) that points to the need
to amend DOHSA . In response to several highly publicized commercial
airline disasters--KAL 007 and TWA 800--Congress amended DOHSA to
provide for recovery of nonpecuniary damages (loss of care, comfort,
and companionship), 46 U.S.C.A. 30307(a), for death resulting from
``a commercial aviation disaster occurring on the high seas beyond 12
nautical miles from the shore of the United States . . . but punitive
damages are not recoverable.'' 46 U.S.C.A. 30307(b). See generally,
Stephen R. Ginger and Will S. Skinner, DOHSA's Commercial Aviation
Exception: How Mass Commercial Aviation Disasters Influenced Congress
on Compensation for Deaths on the High Seas, 75 J. of Air Law & Comm.
137 (2010) (discussing the legislation and the jurisprudence). This
amendment, which was made retroactive to the day before one of the
relevant air disasters, brought DOHSA into the legal mainstream as far
as the survivors of victims of commercial aviation disasters. But,
while the survivors of the victims of a commercial aviation disaster on
the high seas may now recover nonpecuniary damages the survivors of
anyone else killed on the high seas may not. It strains reason to come
up with a meaningful, rational principle to justify the differential
treatment, other than the very real social and political turmoil that
followed the high profile tragic air disasters. The disaster of the
Deepwater Horizon is, of course, a similarly tragic event, which
presents an opportunity to bring the law into some logical, sensible,
compassionate symmetry. S. 3463 would make loss of society damages
recoverable for the survivors of anyone killed on the high seas.
To add another relevant point to the analysis, OPA 90, 33 U.S.C.A.
2701 et seq., allows victims of oil spills to recover various
damages, including removal costs, 2702(b)(1); damage to real or
personal property, 2702(b)(2)(B); damage to natural resources used
for subsistence, 2702(b)(2)(C); and economic damages because of
damage to property or natural resources even if the claimant does not
own the property. 2702(b)(2)(E). These rights to recover damages
assure compensation to persons injured in various ways by an oil spill.
But, critically, OPA 90 does not apply to personal injury or
wrongful death claims. See generally, Gabrick v. Lauren Maritime
(America), Inc., 623 F.Supp.2d 741 (E.D. La. 2009)(OPA does not cover
bodily injury claims damage). Consequently, the survivors of the seaman
(or others) killed on the high seas as a result of negligence or
unseaworthiness do not recover for loss of society while the persons
whose property was damaged or who lost profits do recover. This is not
to say that recovery for damaged property or lost profits is not
appropriate, it is merely to point out that currently recovery of
economic loss is more readily available than recovery for loss of a
loved one.
I have noted above how a possible amendment to the Jones Act would
deal with the seaman's negligence claim; DOHSA could also be amended to
delete the word ``pecuniary'' before ``loss'' in 46 U.S.C.A. 30303
and to add the language, ``including nonpecuniary damages for loss of
care, comfort, and companionship'' after ``loss'' and S. 3463 would do
exactly that.
III. Seaman's Survivors Wrongful Death Claims Against Third-Parties and
Non-Seaman Wrongful Death Claims
The beneficiaries of a seaman killed on the high seas may have
claims not only against the vessel but may also have general maritime
tort claims against other parties, such as manufacturers, contractors,
or others. Likewise, the survivors of non-seamen tortuously killed on
the high seas may have maritime wrongful death claims. But by
definition, if death results on the high seas (or is caused by events
on the high seas) then DOHSA applies and nonpecuniary damages would not
be recoverable.
As noted, if workers, who are not seaman, are killed as a result of
a maritime disaster on the high seas, DOHSA would also govern their
survivors' recovery which would be limited to pecuniary damages, as
currently defined. The amendments to DOHSA, proposed in S. 3463, making
nonpecuniary damages and pre-death pain and suffering damages
recoverable, would apply to those claimants as well.
Concomitantly, if the death occurs in territorial waters,
nonpecuniary damages would seem to more likely be recoverable. Sea-Land
Services, Inc. v. Gaudet, 414 U.S. 573 (1974) (allowing the survivors
of an LHWCA worker killed in territorial waters to recover loss of
society). See also, Yamaha Motor Corp. v. Calhoun, 516 U.S. 199 (1995)
(allowing the survivors of a non-seafarer killed in territorial waters
to rely on state law to seek recovery of loss of society damages). Thus
where one dies may be more relevant to recovery than other critical
circumstances, such as the injury to the relevant survivors.
Notably, if a worker is killed on a stationary drilling platform
located over the high seas, as opposed to being killed on a semi-
submersible mobile rig, state law normally would govern his or her tort
recovery rights against third persons and state law very probably would
mean survivors could recover loss of society and pre-death pain and
suffering damages from third persons in a wrongful death action. This
is because the Outer Continental Shelf Lands Act, 43 U.S.C.A.
(a)(2)(A), adopts the laws of each adjacent state as the governing law
on OCS platforms, which are treated as islands in an upland state
(recall that platforms, unlike rigs, are not vessels). See generally,
Frank L. Maraist & Thomas C. Galligan, Jr., Admiralty in a Nutshell,
323-27 (5th ed. 2005); Alleman v. Omni Energy Services Corp, 580 F.3d
280 (5th Cir. 2009). Thus the measure of recovery in a fatal injury
action on an off-shore oil or gas production facility (a rig or
platform) would depend upon whether the relevant vehicle was a platform
or a rig, even though the job that the killed worker was doing and the
cause of the death was exactly the same. The point is that the
potential recovery would illogically and unfairly depend upon
happenstance not substance.
IV. Expanded Under Compensation
As noted above, the fact that the survivors of seamen and anyone
killed on the high seas cannot recover for loss of society damages
under compensates and is inconsistent with the current majority rule in
America. Aggravating the situation, some courts have actually extended
the scope of the Jones Act and DOHSA no recovery rules beyond their
express reach and have applied them to limit or deny recovery in other
maritime contexts. In Moragne v. States Marine Lines, Inc., 389 U.S.
375 (1970), the U.S. Supreme Court created a general maritime law
action for wrongful death that filled some of the gaps in maritime
wrongful death law and that provided recovery in some cases not covered
by DOHSA and the Jones Act. Then in, Sea-Land Services, Inc. v. Gaudet,
414 U.S. 573 (1974) the Court held that the Moragne claim allowed the
survivors of an LHWCA worker killed in territorial waters to recover
loss of society damages. In so holding, the Court's decision was
consistent with the modern American majority rule allowing recovery of
loss of society in wrongful death cases. Thereafter, the Court, in
American Export Lines, Inc. v. Alvez, 446 U.S. 274 (1980), held that
the spouse of an injured long shore worker could recover loss of
society of consortium in a case where the worker was injured but not
killed.
However, 2 years before Alvez, the Court began a trend of liability
limiting decisions ostensibly based on Congressional intent. In Mobil
Oil Corporation v. Higginbotham, 436 U.S. 618 (1978), the Court refused
to allow the survivors of someone killed on the high seas to rely upon
the Moragne claim to recover loss of society damages because those
damages were not recoverable under DOHSA. The Court decided that
because Congress had spoken to the subject in DOHSA (limiting recovery
to pecuniary damages), the Court was not free to supplement the
recovery through the general maritime law. The trend to extend
liability limitation was on. Thereafter, in Offshore Logistics, Inc. v.
Tallentire, 477 U.S. 207 (1986), the Court refused to allow the
plaintiffs in a high seas death case to ``borrow'' state law to
supplement DOHSA recovery. The limitation trend continued.
Then, in Miles v. Apex Marine Corporation, 498 U.S. 19 (1990), the
Court considered a case involving a seaman killed in territorial
waters. There, a seaman was brutally murdered by a bellicose fellow
crew member, who repeatedly stabbed the decedent. The decedent's mother
sued the employer alleging, among other things, a Jones Act negligence
wrongful death claim and a Moragne general maritime law wrongful action
claim arising out of an unseaworthy condition of the vessel (the
presence of the bellicose seaman). In a somewhat surprising decision,
the Court refused to allow the mother to recover her loss of society
damages on the unseaworthiness general maritime law wrongful death
claim. The Court reasoned that when Congress enacted the Jones Act in
1920 and incorporated the FELA, it must have been aware of the Vreeland
decision, holding that the FELA did not authorize wrongful death
recovery for loss of society damages, and so Congress must have
incorporated that holding in the Jones Act as judicial ``gloss.'' Id.
at 32. The Miles Court then reasoned that since Congress supposedly did
not intend to allow recovery for loss of society damages in a Jones Act
based wrongful death claim for negligence, such damages were not
available in a general maritime law (Moragne/Gaudet) wrongful death
action based on unseaworthiness. This was because, the Court said: ``It
would be inconsistent with our place in the constitutional scheme were
we to sanction more expansive remedies in a judicially created cause of
action in which liability is without fault [unseaworthiness] than
Congress has allowed in cases of death resulting from negligence.'' Id.
at 32-33. See generally, David W. Robertson, Punitive Damages in U.S.
Maritime Law: Miles, Baker, and Townsend, 70 La. L. Rev. 463 (2010).
The Miles decision was, of course, arguably inconsistent with the
spirit, if not the holding, of Gaudet and Moragne, and scholars have
criticized it. See Hon. John R. Brown, Admiralty Judges: Flotsam on the
Sea of Maritime Law?, 24 J. Mar. L. & Com. 249 (1993); Robert Force,
The Curse of Miles v. Apex Marine Corp: The Mischief of Seeking
``Uniformity'' and ``Legislative Intent'' in Maritime Personal Injury
Cases, 55 La. L. Rev. 745 (1995). Moreover the Supreme Court has twice
refused to extend the holding of Miles. Atlantic Sounding Co., Inc. v.
Townsend, 129 S.Ct. 2561 (2009)(recognizing right to recover punitive
damages in case alleging the arbitrary and willful failure to pay
maintenance and cure); Yamaha Motor Corp. v. Calhoun, 516 U.S. 199
(1995) (allowing the survivors of a non-seafarer killed in territorial
waters to rely on state law to seek recovery of loss of society
damages).
However, despite the scholarly criticism and the Court's failure to
extend the holding of Miles, some lower courts have relied upon Miles,
Tallentire, and Higginbotham to limit recovery of nonpecuniary damages
in maritime cases that do not fall under those holdings. For instance,
in Scarborough v. Clemco Industries, 391 F.3d 660 (5th Cir. 2004), the
fifth circuit said that loss of society damages were not recoverable in
any wrongful death action involving a seaman, even when the claim was
against a third party, who was not the decedent seaman's employer or
the owner of the vessel on which he or she was killed. In Doyle v.
Graske, 579 F.3d 898 (8th Cir. 2009)(boat passenger and spouse brought
action in admiralty for personal injuries and loss of consortium
damages sustained in boating accident off the coast of Grand Cayman
Island when steering linkage disengaged), the court held that general
maritime law did not allow loss of consortium recovery for the spouse
of a non-seafarer (non-seaman/non-longshore worker) injured, as opposed
to killed, on the high seas. See also, Chan v. Society Expeditions,
Inc., 39 F.3d 1398 (9th Cir. 1994). And, in Tucker v. Fearn, 333 F.3d
1216 (11 th Cir. 2003), the court, again relying upon Miles held that
the father of a minor killed in a sailboat accident in Alabama
territorial waters could not recover loss of society damages under the
general maritime law. In Guevara v. Maritime Overseas Corp., 59 F.3d
1496 (5th Cir. 1995), the court relied on Miles to deny recovery of
punitive damages in a case involving the alleged arbitrary failure to
pay maintenance and cure. Of course the Supreme Court abrogated the
holding of Guevara in Atlantic Sounding Co., Inc. v. Townsend, 129
S.Ct. 2561 (2009) (allowing punitive damages).
Of course all courts have not extended Miles beyond its holding.
See, Kahumoku v. Titan Maritime, LLC, 486 F.Supp.2d 1144 (D.Hawai'i
2007)(law entitles LHWCA worker to recover punitive damages in maritime
tort case); Clark v. W & M Kraft, Inc., 2007 WL 120136 (S.D. Ohio 2007)
(loss of consortium recovery claim available for seaman's spouse and
son against third party); In re Consolidated Coal Co., 228 F.Supp.2d
764 (N.D.W.Va. 2001)) (loss of consortium recovery claim available for
seaman's spouse against third party); Rebardi v. Crewboats, Inc., 906
So.2d 455 (La. App. 1st Cir. 2005) (punitive damages available).
The fact that some courts have not extended Miles beyond its
holding and some have done so results in inconsistency. But, more
importantly, the fact that courts have extended Miles increases the
number of cases in which the law fails to recognize the reality of
injury and loss and in so doing either fails to compensate for that
loss at all or, at best, under compensates. The extension of limited
liability and under compensation expands the general climate of limited
liability in maritime tort cases and hence maritime disasters. The
extensions increase the possibility of under deterrence and the
potential for increased and inefficient risk. Amending the Jones Act
(actually the FELA) and DOHSA, to allow recovery for loss of care,
comfort, and companionship would solve the problem because the
amendments would do away with the language upon which courts have
relied to limit recovery and increase risk.
V. Survival Action Pre-Death Pain and Pain and Suffering
Additionally, shifting from the wrongful death claim to the
survival action claim, the Supreme Court in a case that did not involve
a seaman has refused to allow recovery of pre-death pain and suffering
as part of a survival action claim if death occurs on the high seas.
Dooley v. Korean Air Lines Co., Ltd., 524 U.S. 116 (1998). The law does
allow the Jones Act seaman's survivors to recover for pre-death pain
and suffering. See, David W. Robertson & Michael F. Sturley, Recent
Developments in Admiralty and Maritime Law at the National Level and in
the Fifth and Eleventh Circuits, 32 Tul. Mar. L.J. 493 (2008). Thus,
Dooley does not apply to those seaman claims but in any case covered by
Dooley, involving a death caused by events on the high seas, no matter
how much the decedent may have suffered before his or her death, those
damages are not recoverable.
To remedy this situation, Congress could amend the law to not only
make loss of society damages recoverable, as suggested above, but also
to make pre-death pain and suffering available in maritime survival
actions. S. 3463 would do exactly that by making damages for pre-death
pain and suffering recoverable.
VI. Under Compensation Leads to Under Deterrence and Increased Risk
Critically, in terms of the subject of this hearing-holding
industry accountable--if the law under compensates, it will, by
definition, under deter which will lead to lower than optimal
investments in safety. Lower investments in safety and accident
avoidance can lead to increased risk. This is true because when
deciding what to do and how to do it, the rational economic actor will
consider the costs of its activities. To the extent that a person does
not have to pay a cost, it is much less likely to take that unpaid cost
into account when deciding what to do and how to do it. As Judge Guido
Calabresi so ably noted many years ago in The Costs of Accidents: A
Legal and Economic Analysis (1970), one of the costs economic actors
must consider is the costs of accidents. The costs of accidents are
just as real and important as the costs of goods, the costs of raw
materials, and the costs of labor. The critical importance of
encouraging actors to take account of accident costs is also at the
heart of Judge Richard Posner's important law and economics scholarship
and jurisprudence on negligence. See, e.g., Richard A. Posner, A Theory
of Negligence, 1 J. of Legal Stud. 29 (1972). This truism about taking
account of accident costs is also the crux of Judge Learned Hand's
famous negligence formula that provides that one is negligent if the
burden or cost of avoiding a loss is less than the probability of the
loss occurring times the anticipated magnitude (or value) of the loss
if the loss arises and the actor fails to incur the burden, i.e., the
costs of accident avoidance. Put algebraically as Judge Hand himself
did, one is negligent if B < P x L and the actor does not avoid the
loss by making the investment in safety. Interestingly Judge Hand
originally articulated his famous and influential negligence formula in
a maritime tort case. United States v. Carroll Towing Co., 159 F.2d
169, 173 (2d Cir. 1947) .
If a person does not take account of the costs of accidents when
deciding what to do and how to do it, he or she will under invest in
safety. Of course, compensatory damages are based in corrective justice
and are designed to make the plaintiff whole--to put him or her in the
position he or she would have been in if the wrong had never occurred.
Professor Douglas Laycock has called it the ``plaintiff's rightful
position.'' Douglas Laycock, Modern American Remedies 14 (1985).
However, compensatory damages also play another role in the regulation
of American tort law because tort law not only compensates, it also
deters unsafe conduct. And compensatory damages play a critical role in
deterrence. Damages in tort cases force people to consider the costs of
accidents when making decisions about engaging in risk. Moreover, as I
have written:
In addition to forcing actors to pay some accident costs,
compensation performs a second efficiency related function. The
tort system operates as a data bank providing actors access to
information on the number of accidents that do occur, the
damages that accident victims suffer, and the dollar value of
those damages. In this regard the ``fault'' system facilitates
actors' ex ante [beforehand] calculations by providing them
with the data they need to calculate the value of the damages
that their activities impose on others. Given a large number of
similarly situated actors, over time damages paid might be
expected to somewhat equal the actual value ex ante of an
activity's accident costs . . . But in order for our current
system to operate most effectively, some real relationship must
exist between the accident costs society wants the actor to
consider beforehand and the damages we force the actor to pay
after the fact. The damages we award to compensate plaintiffs
in personal injury cases and the categories of accident costs
we want actors to consider ex ante should highly correlate. If
actual damages awarded in tort suits do not reflect the costs
we want actors to consider ex ante, but the system relies upon
those actual awards as a ``definition'' of accident costs, then
the system will not optimally deter. If the damages awarded in
tort suits are less than the total costs we want actors to
discount ex ante, we are encouraging people to consider less
than all of the costs of that activity and to over-engage in
it. Likewise, if we overcompensate accident victims we are
encouraging actors to under-engage in the activity.
Thomas C. Galligan, Jr., Augmented Awards: The Efficient Evolution
of Punitive Damages, 51 La. L. Rev. 3, 25-29 (1990) (footnotes
omitted).
To reiterate, to the extent tort law does not adequately
compensate, it under deters and contributes to a more dangerous world
than people have a right to expect. And, in the maritime setting the
law under compensates because it does not compensate for loss of
society in seaman and high sea death cases (other than commercial
aviation disasters) and because courts have extended those no recovery
rules to other maritime contexts. Of course maritime disasters and oil
spills can cause more harm than injury and death. They cause damage to
the environment and that damage to the environment devastates
lifestyle, culture, and global well-being. It harms everyone.
Moreover, there is evidence that environmental disasters can have
devastating mental health effects. See, Brief Amici Curiae of
Sociologists, Psychologists, and Law and Economic Scholars in Support
of Respondents in Exxon Shipping Co. v. Baker, 128 S.Ct. 2605
(2008)(No. 07-219) at 8. In natural disasters the effects typically
subside within 2 years, id. (citing Catalina M. Arata et al., Coping
with Technological Disaster: An Application of the Conservation of
Resources Model to the Exxon Valdez Oil Spill, 13 J. Traumatic Stress
23, 24 (2000)). But, technological disasters resulting from breakdowns
by humans ``consistently have social, cultural and psychological
effects that are both more severe and longer-lasting.'' Brief Amici
Curiae of Sociologists, Psychologists, and Law and Economic Scholars,
supra at 8 (citations omitted). The effects are particularly acute
where the disaster impacts renewable resource communities like
fisheries. Id. at 9. These effects manifested themselves in the Prince
William Sound community in the wake of the Exxon Valdez spill in:
chronic feelings of helplessness, betrayal, and anger; high rates of
anxiety, depression, and post-traumatic stress; increased health care
demands; increased crime rates; and more. Id. at 13-18. These injuries
were very real and absent some compensation or device to force actors
to consider them when deciding what to do and how to do it (i.e., some
device to hold them accountable), they will not be forced to do so,
tending toward under deterrence and increased risk.
While OPA 90 provides liability for removal costs, property damage,
economic loss, and more, it does not cure the problem of under
compensation and under deterrence in maritime personal injury and
wrongful death cases because it does not apply to maritime personal
injury and wrongful death cases. The under compensation resulting from
the current state of maritime personal injury and wrongful death law
and the serious emotional harm that can result from a maritime,
environmental disaster is not only unfair and inconsistent but it will
potentially lead to increased risk. These economic realities are
exacerbated in the maritime setting by the existence of the 1851 Ship
Owner's Limitation of Liability Act.
VII. Limitation of Liability
The Limitation of Liability Act, 46 U.S.C.A. 30501 et seq.,
applies to these events. Originally passed in 1851 to encourage
investment in maritime shipping and commerce, the limitation act allows
a vessel owner (and some others) to limit its liability to the post-
voyage value of the vessel if the liability is incurred without the
privity or knowledge of the owner. 46 U.S.C.A. 30505(a), (b), and
30506(e). And, the owner is entitled to retain any hull insurance. One
may justifiably wonder whether an act passed at a time before the
modern development of the corporate form (and other liability limiting
devices) and the evolution of bankruptcy law is still salient; however,
limitation is still extant as a matter of maritime law. The vessel
owner creates a fund equal to the post-accident value of the ship (not
including the hull insurance). The claimants then share the fund in
proportion to the value of their claims. Personal injury and wrongful
death claimants share with other claimants but if the vessel is a
seagoing vessel and the fund is not adequate to provide the personal
injury and wrongful death claimants with recovery equal to $420 times
the gross tonnage of the vessel, the owner must provide the difference,
up to $420 per ton but no more. 46 U.S.C.A. 30506(b).
OPA 90 has its own liability limitation scheme and the applicable
limit in this matter seems to be $75,000,000. While the Supreme Court
has not considered the matter, lower Federal courts have held that the
OPA 90 supersedes the limitation act on OPA 90 claims. See, e.g.,
Complaint of Metlife Capital Corp., 132 F.3d 818 (1st Cir. 1997); In re
Southern Scrap Material Co., LLC, 541 F.3d 584, 595 (5th Cir. 2008)
(dicta); Gabrick v. Lauren Maritime (America), Inc., 623 F.Supp.2d 741
(E.D. La. 2009).
But, as noted, OPA 90 does not apply to personal injury or wrongful
death. Thus the Limitation of Liability Act is applicable in a maritime
disaster to allow a vessel owner to limit its liability for personal
injury and wrongful death claims. Clearly, this liability limiting
device can lead to drastic under compensation to the victims of
maritime disasters. Repealing the relevant portions of the Limitation
of Liability Act would, of course, cure the problem of under
compensation and under deterrence in general. Senator Schumer's
proposed bill, S. 3478 would do exactly that.
VIII. Maritime Punitive Damages
The under compensation and under deterrence resulting from the
dated, inconsistent no recovery rules described above and the
Limitation of Liability Act might be alleviated by the availability of
punitive damages; however, the U.S. Supreme Court in Exxon Shipping Co.
v. Baker, 128 S.Ct. 2605 (2008), held that punitive damages in most
maritime cases are limited to or capped by a 1:1 ratio between the
punitive damages awarded and the compensatory damages awarded.
Punitive damages are damages in addition to compensation which are
designed to punish and deter. They are only awarded where the plaintiff
has proven fault; compensatory damages are awarded; and the plaintiff
proves that the defendant's conduct was worse than negligence; i.e, it
was intentional, willful, wanton, or reckless.
But how could punitive damages potentially alleviate the under
deterrence caused by under compensatory damage awards?
It is common ground among legal scholars and economists that
inefficient behavior will not be deterred unless actors are
forced to internalize all of the costs associated with their
activities. Although adequate deterrence may generally be
achieved through an award of compensatory damages, an award of
punitive damages may be necessary to achieve complete
deterrence in cases in which compensatory damages fail to fully
account for the costs of a tortfeasor's actions.
Brief Amici Curiae of Sociologists, Psychologists, and Law and
Economic Scholars, supra at 2.
The U.S. Supreme Court has twice in the last two and one half years
held that punitive damages are recoverable under general maritime law.
See, e.g., Atlantic Sounding Co., Inc. v. Townsend, 129 S.Ct. 2561
(2009); Exxon Shipping Co. v. Baker, 128 S.Ct. 2605 (2008).
After these two decisions punitive damages are arguably are
available in seaman related cases given the holding in Townsend that a
seaman may recover punitive damages under the general maritime law
arising out of the arbitrary and willful failure to pay maintenance and
cure. But punitive damages have not been traditionally recoverable in
DOHSA cases. The matter will now be the subject of future argument and
litigation. Notably, however, the potential absence of punitive damages
in cases involving deaths for which no loss of society and/or no
recovery of pre-death pain and suffering are available may inadequately
deter those who engage in activities that may cause injury or loss of
life because it can result in an undervaluing of human life and the
tragic ramifications when it is lost. See, Thomas C. Galligan, Jr.
Augmented Awards: The Efficient Evolution of Punitive Damages, 51 La.
L. Rev. 3 (1990).
Additionally, even if available, the Court in Exxon Shipping Co. v.
Baker, limited the amount of punitive damages recoverable in maritime
cases to a 1:1 ratio between the punitive damages awarded and the
compensatory damages awarded. Justice Stevens was among the dissenters
and of one of the reasons for his disagreement with the majority was
that maritime law was under compensatory.
The majority noted that studies did not indicate a ``marked
increase'' in the frequency of punitive damages over recent years. Id.
at 2624. It also noted that the dollars awarded had not grown over time
in real terms. Id. And the Court pointed out that the mean ratio of
punitive damages to compensatory damages in the cases studied was less
than one to one. Id. But the Court was apparently concerned with the
potential unpredictable spread between high and low punitive awards and
it was that concern which prompted the decision to generally limit the
ratio of punitives to compensatories to 1:1. Id. at 2625. Critically,
the Court pointed out that the case before it involved conduct which
was worse than negligence but not malicious. Id. at 2631. It also noted
that the activity was ``profitless'' to the tortfeasor. Id. The
decision and the ratios should arguably not apply to cases involving
higher levels of blameworthiness or ``strategic financial wrongdoing.''
Id. n.24.
Whatever one might argue about cases to which the Exxon Shipping
Co. v. Baker 1:1 ratio should not apply, I believe that most lower
court judges sitting in admiralty cases would apply the ratio to
maritime cases they decide due to a concern about being overruled. The
ratio cap then deprives a judge or jury of the traditionally available
ability to tailor a punitive award, within Constitutional due process
limits, see BMW of North America v. Gore, 517 U.S. 559 (1996), to the
particular facts of the case, including the level of blameworthiness,
the harm suffered, the harm threatened, the profitability of the
activity, and other relevant factors. Indeed one wonders if the 1:1
ratio aspect of Exxon Shipping Co. v. Baker would have been decided the
same way if another maritime environmental disaster had occurred before
the decision.
Senator Whitehouse's proposed bill, S. 3345, would restore the
traditional ability to tailor a punitive award to the facts of the case
by providing: ``[I]n a civil action for damages arising out of a
maritime tort, punitive damages may be assessed without reference to
the amount of compensatory damages assessed in the action.'' The effect
of the proposed amendment would be to increase the deterrent impact of
punitive damage awards in maritime cases.
While the Supreme Court has never considered the issue, several
courts have held that punitive damages are not available under OPA 90.
See, e.g., South Port Marine LLC v. Gulf Oil Ltd., 234 F.3d 58 (1 st
Cir. 2000); Clausen v. M/V NEW CARISSA, 171 F.Supp.2d 1127 (D. Ore.
2001) . See the discussion in: Wright, Roy, Stephens, and Colomb, BP
Deepwater Horizon Gulf of Mexico Oil Pollution Disaster, Preliminary
Analysis: Law, Damages, and Procedure May 2010 (Available from
Louisiana State Bar Association and the authors). The cited decisions
say that OPA 90 preempts maritime law and therefore punitive damages
are not available in a case involving maritime law and OPA 90.
Interestingly, OPA 90 actually provides that it does not affect
admiralty or maritime law. 33 U.S.C.A. 2751(e). Moreover, OPA 90 does
not provide that punitive damages are not recoverable; it is merely
silent on the subject. And both South Port Marine LLC v. Gulf Oil Ltd.,
234 F.3d 58 (1st Cir. 2000) and Clausen v. M/V NEW CARISSA, 171 F.
Supp.2d 1127 (D. Ore. 2001) were decided before the Supreme Court's
affirmation of the right to recover punitive damages in Townsend and
Exxon. Indeed in Exxon, the Court refused to find that the Clean Water
Act, 33 U.S.C.A. 1321 et seq., which was silent on the subject of
punitive damages, precluded the recovery of punitive damages under
maritime law. Finally, OPA 90 does not, as noted, apply to personal
injury and wrongful death claims. Consequently, any preemptive affect
OPA 90 might have on punitive damages in personal injury and wrongful
death cases would seem to be limited.
IX. Conclusion
Recovery in maritime tort cases is under compensatory. The failure
to allow recovery of loss of society damages in seaman and high seas
maritime wrongful death cases (other than commercial aviations
disasters) is unjust, dated, inconsistent, and out of alignment with
current values. The rules not only fail to compensate but they arguably
lead to under deterrence and increased risk because economic actors do
not have to take those risks into account in deciding what to do and
how to do it. S. 3463 remedy that injustice. The extension of those
rules beyond the contexts in which they arose exacerbates the problems
and extends the climate of liability limitation. This risky state of
affairs is aggravated by the 1851 Ship Owner's Limitation of Liability
Act, the relevant parts of which S. 3478 would repeal, and the
potential positive effect of punitive damages is limited by the 1:1
punitive damages to compensatory damages rule of Exxon Shipping Co. v.
Baker. S. 3345 would restore traditional flexibility in maritime
punitive damages cases. As noted and as the various proposed bills
referred to herein show, amendment and reform is both possible and
necessary. The tragedy in the Gulf of Mexico provides a sad but
necessary opportunity for our Nation to reconsider our law and make it
more just in the aftermath of this disaster.
The Chairman. Thank you very much, sir.
And now Mr. Fred McCallister, who is Vice President of
Allegiance Capital Corporation.
STATEMENT OF FRED McCALLISTER, VICE PRESIDENT, ALLEGIANCE
CAPITAL CORPORATION
Mr. McCallister. Good morning, Senators. It's an honor to
be here before you.
I'm here to just tell you a story about my experience with
trying to solve a problem, that seemed obvious to me on its
face, which was that we needed additional equipment in the Gulf
of Mexico to deal with the oilspill.
I--by--my day job is to provide financial advisory services
to small/mid-sized companies. I had a client in Mississippi who
approached me, in May, and said, ``BP is needing additional
vessels in the Gulf, particularly housing vessels.'' They knew
we had some experience with vessel transactions. Partially as a
favor and partially as doing work for my client, we began to
put together some vessels, some foreign flag vessels that we
saw that were needed. Quite honestly, Senators, at that time I
didn't have a full appreciation of the Jones Act. The kind of
transactions we handle typically do not involve the Jones Act.
And so, we put together proposals, submitted them through their
current channels at that time, which were subcontractors to BP.
The subcontractors' initial response to those proposals
were very positive. These are vessels that are suited for this
activity, and they put them forward to BP.
After that, we got radio silence--my client did. We then
saw all of the news regarding the need for skimmers. We saw
Billy Nunn Gusser, we saw Governor Bob Jindahl down there,
trying to jerry-rig devices to clean up the spill, and we just
could not reconcile the two things we were seeing. It was--on
one hand, we had vessels that we thought were appropriate for
the cleanup; on the other hand, we saw these governmental
entities down there, struggling, trying to do whatever they
could to defend their coast.
So, we put together a skimmer package and submitted it to
BP. Same response.
After my client got frustrated and would not--could not get
a response, I took it on myself. I'm from the Gulf region, my
wife is from the Gulf region, I have property on the Gulf, I
have family on the Gulf. We've lost--we lost homes in Katrina
down there. So, it's a very personal issue to me, as well,
because I understand the Gulf-centric culture down there, and
the Gulf-centric economy.
So, we then started to raise a question. We made a public
dialogue out of it. And certainly, when we got into the media,
we started at least getting calls from BP, but could not get
any kind of meaningful dialogue going as to why they weren't
using these types of vessels.
So, after trying to educate myself, for the last month, on
what's going on in the Jones Act, we took it on ourselves to
make a Jones Act waiver filing, actually went through to--we
went to--first, to Admiral Thad Allen's office. He--about the
same time we made that filing, the expedited process was--press
release--was issued. Didn't have a lot of guidance in there,
but it certainly directed us to Rear Admiral James Watson's
office, so we immediately made our waiver request to his
office.
Since then, we've had no response whatsoever, even after
multiple inquiries as to the status. Senator Hutchison's office
has made inquiries on our behalf, and did get some feedback, so
we at least know that they have our request in their hand and
that it is in some stage of process.
When we initially tried to contact them through--
ourselves--we got unanswered phones, no voice mail. We did get
a callback after calling the press contact at the office, and
the response that we got was, ``We're in the process of
creating forms. We don't know the timeline.'' We asked how many
vessels--skimmer vessels are still available--U.S.-hull skimmer
vessels, because that's a trigger for waiving the Jones Act.
The answer was, ``We are working on that, but it's not public
record, it's not something we can release to you.''
So, the bottom line is that, at this stage of the game,
we're quite frustrated with the fact that we haven't had
waivers issued, we haven't had even any response. BP is going
to have to be the ultimate accountable party for using this
equipment. But, also, from our perspective, if the States want
to take issues into their own hands, which a lot of them are
saying that they need to do--Mississippi, Louisiana, Florida--
that they are not going to want to use equipment that's
impaired with some sort of cloud of being illegal under the
Jones Act or some risk of some sort of injunction against using
this equipment in the Gulf.
So, I--what I'm here today to ask the Committee to do is to
support the Jones--this limited Jones Act waiver. I have no
reason to ask that the Jones Act be gutted. It's not--I don't
know that that's appropriate. But, certainly for this
situations--in situations like this, we need to be able to take
the expertise from the other parts of the world, because what
we're doing in the Gulf, by sinking this oil rather than
floating it and skimming it with the right equipment, is not
the right thing to do. No one else in the world does this. And
I--I'm concerned that, consistent with BP's behavior, this is
being done in their financial interest, to keep the oil below
the surface, out of sight, out of mind, and amortize this
cleanup over 10 or 15 years, rather than attacking it with the
right equipment and--getting it to the surface and extricating
it from the Gulf.
Thank you very much.
[The prepared statement of Mr. McCallister follows:]
Prepared Statement of Fred McCallister, Vice President,
Allegiance Capital Corporation
Thank you for this opportunity to speak to you this morning.
As an advisor and broker who works exclusively with closely-held
and privately-held companies, I was contacted by one of my clients who
currently supplies equipment to BP via United States Environmental
Services asking that I and my firm, Allegiance Capital Corporation,
help them in identifying specialty vessels that could be used for
worker housing in the Gulf.
Allegiance Capital has contacts worldwide through a network of
marine brokers who have many different types of vessels available. We
found a few unique vessels, mainly Greek cruise ships that also were
car carriers. These ships could carry 500 or more workers with all of
the amenities of a cruise ship, but also had a large car carrier deck
where booms and smaller boats could be stored and oil clean up work
could be performed. As we became engaged in this work, the need for
skimmers became apparent. We quickly discovered that the total
availability of skimmers in the world was around 2,000 specialty built
vessels, some for deep water and others for closer in to shore work and
that most of the vessels in the U.S. that were available were already
deployed in the Gulf. We found that this was a little bit like moving
all the fire engines in the country to one area leaving other areas in
the country somewhat exposed. As a result, we assembled a fleet of 25
skimmers, boom deployment vessels and two housing and equipment ships.
Information is provided in the packet we assembled for you.
Proposals were provided on June 5 (40mm gallons ago) via the
established channels through which our client is currently supplying
equipment. The BP subcontractor was excited about the vessels being a
good fit but could not get a response from BP. After our client tried
every possible avenue they could, they turned to us for assistance.
Allegiance Capital then began to reach out to BP's subcontractor, who
had procured equipment for BP in May, with the results being the same,
no response. With growing frustration we started a public discussion
regarding the issues we were facing.
BP's PR department called me within hours of being contacted by CNN
and within a couple of days put me in touch with the Team Leader for
vessel procurement, Veronica Brown.
Veronica Brown called me on a Sunday, June 13, before my CNN
interview on Monday the 14th and promised that our vessels would get
expedited consideration.
We submitted the proposals to Veronica Brown on Monday June 14
(25mm gallons ago), and were promised they would be reviewed on an
expedited basis. To date, we have received no meaningful response.
Even though the Jones Act was not raised as an issue, we became
aware that BP may need to request a Jones Act waiver if they wanted to
utilize our equipment. Given that BP has the need, the standing to make
a request, and the ear of Adm. Thad Allen, we were satisfied that BP
would make the request when needed.
With a continued lack of response from BP and the news from the
states, parishes and counties that they needed skimmers and were going
to take matters into their own hands, Allegiance Capital took it on
itself to submit a request for a Jones Act waiver. Our request was
first submitted to Adm. Thad Allen's office on June 16.
After learning that Adm. Allen had issued a press release on June
15 saying that he was providing guidance to ensure expedited Jones Act
waiver processing, we began trying to contact the numbers that had been
provided in the press release to learn about the new guidance. After 2
days of unanswered phones, not even a voice mail, and one conversation
with a press contact at Adm. Thad Allen's office, we received a call
from a Lt. Petta who had called us at the press contact's request. Lt.
Petta told us on June 16 that there are no procedures set up as yet for
the waiver process; that they were working on the forms, but could not
provide any other guidance or provide a copy of Adm. Allen's guidance
referred to in the press release. We also asked if they could provide
the number of U.S. hulled skimmer vessels, given that ``an adequate
number of U.S. hulled vessels can not be engaged'' is a trigger for a
Jones Act waiver. On this subject we were told this was not public
information. In spite of this lack of direction, we filed our request
with Rear Adm. James Watson's office on Monday June 21, as was
generally directed in the press release.
To date we have not received any correspondence relative to either
of our requests. Through the efforts of Todd Bertoson of Senator
Hutchinson's office, we were told that our request is being reviewed by
Matthew Weakley of the Unified Area Command Center Critical Resource
Unit. We have e-mailed Mr. Weakley for questions and status updates but
have not received a response. Mr. Weakley informed Mr. Bertoson that
one of our non-skimmer vessels will be rejected because there are U.S.
vessels that can fill the need. This is not the case given that there
are no U.S. hulled vessels with both boarding and ferry capabilities in
the U.S. We will respond to this anticipated rejection if and when they
engage in communication.
We have heard on many occasions that Jones Act waivers have not
been requested. Even though that is an incorrect statement, it begs the
question as to why the company with the most standing to make such a
request, BP, has not made requests for waivers for these specialized
vessels when there are no more U.S. hulled skimmers available.
The explanation is that BP has chosen to ``disperse and sink'' the
oil rather than to ``surface and collect'' the oil. Sinking and
emulsifying the oil keeps the problem out of site and better serves
BP's financial interest than does removing the oil from the water. By
sinking and dispersing the oil, BP can amortize the cost of the clean
up over the next 15 years, or so, as tar balls continue to roll up on
the beaches, rather than dealing with the issue now by removing the oil
from the water with the proper equipment. As a financial advisor, I
understand financial engineering and BP's desire to stretch out its
costs of remediating the oil spill in the Gulf. By managing the clean
up over a period of many years, BP is able to minimize the financial
damage as opposed to a huge expenditure in a period of a few years.
There are arguments on both sides of the dispersants debate and
unfortunately, the cost of this grand and unprecedented experiment they
are conducting with the environment and people of the Gulf will not be
fully determined for another 20 years.
Even if BP continues to refuse to utilize specialized equipment for
remediating the oil, providing a Jones Act waiver for these specific
purpose vessels will allow other governmental entities such as states,
parishes and counties the option of utilizing this type of equipment to
defend their shores.
I, therefore, respectfully request the Committee's support of the
following actions:
Continue to support BP's efforts to close and cap the
Deepwater Horizon Well but not at the expense of removal and
recovery of existing oil in the gulf.
Take all steps necessary to force BP to recover and remove
oil from the surface of the Gulf.
Take steps to cause BP to stop using sinking agents and
dispersants so that the oil remains on the surface where it can
be identified, tracked and removed.
Cause the Jones Act to be waived for specific efforts of oil
removal and recovery, thereby paving the way for foreign
equipment and experts to assist in the Gulf.
Force BP to focus on removal and recovery efforts in both
shallow and deep water zones.
Thank you for your consideration of allowing a Jones Act waiver for
these specialized vessels.
BP Timeline
Spill rate 1.6mm gallons per day
Saturday, June 5th--ship proposal sent to USES via Chain
Wednesday, June 9th--skimmer proposal sent to USES via Chain
Friday, June 11th--call from Ray Veatore, BP Public Relations
Saturday, June 12th--Call from Mark Truxillo, BP Acting Team
Lead Equipment Logistics
Sunday, June 13th--proposals for ship and skimmers sent to BP,
Mark Truxillo
Sunday, June 13th--call from Veronica Brown, BP Team Lead
Vessels
Monday, June 14th--proposal for ship and skimmers set to BP,
Veronica Brown
Wednesday, June 16th--waiver request sent to Adm. Thad Allen's
office
Monday, June 21st--waiver request sent to Rear Adm. James
Watson's office
______
Supplement to Commerce Committee Testimony--June 30, 2010
Presented by: Fred McCallister, Allegiance Capital Corporation
I. Introduction:
1. Allegiance Capital represents European based foreign flagged,
highly specialized marine equipment and the experts that have the scale
and capacity to effectively participate in the removal of the surface
oil in the Gulf.
2. We are testifying to express our deep concerns as to why BP
continues to resist the use of an armada of specialized oil recovery
and removal vessels that today are parked in foreign ports awaiting the
opportunity to help.
3. We believe key to minimizing the continued damage to our marine
environment and the economies of the Gulf States is the removal the oil
rather than dispersing and sinking the oil. The only certain way of
limiting the impact of the spill is to:
successful closure and capping of the well, and;
the recovery of the 3,500 sq. miles of oil currently on the
surface of the Gulf.
II. Key elements to this effort require this Committee's understanding
of:
1. BP's current policies in the Gulf can be characterized as:
``Disperse and Sink'' Policy
The unprecedented use of dispersants and sinking agents
being used below the surface as well as on the surface to cause
the oil to break up and sink, or remain below the surface has
the following benefits for BP:
Dramatically reduces the measurability of the spill and
therefore reduces the amount of statutory damages and
royalties that can be assessed against BP. (BP faces fines
and penalties related to the Oil Pollution Act of 1990 and
the Clean Water Act. Of note is the fact that under the Oil
Pollution Act BP may be held responsible to pay an 18.75
percent royalty for all oil lost from the well. Also, under
the Clean Water Act BP may be fined $4,300 for every barrel
of oil released into the Gulf.)
Allows BP to conduct its clean up as tar balls arrive on
the shores in the marshes of the Gulf over the next 15
years rather that removing the oil in a few concentrated
months.
``Keep in Control'' Policy
BP has kept control of all aspects of the oil recovery and
cleanup efforts. This policy was highlighted by their eagerness
to establish the $20 Billion Dollar Escrow Fund as a gesture to
our government in return to be allowed to continue to operate
with policies that are in the best interest of BP but not in
the best interest of the environment and the Gulf region.
``Defer and Delay'' Policy
By deferring action, BP can delay cost today and amortize
the cost over future years with less impact to BP's shareholder
value.
``Out of Sight, Out of Mind'' Policy
by keeping as much of the oil below the surface as possible
they are keeping the magnitude of the spill from being apparent
to us all.
Ill. A few key data points:
Experts today estimate the collective area of the patches of
oil on the surface of the Gulf is 3,500 square miles (the
equivalent of 2,240,000 square acres). The largest foreign oil
recovery vessels can, if operating on a 24 hr shift, remove and
recover 170 square acres per day. This equates to 13,176 vessel
days. Reduced to practical terms, should the well stop flowing
oil into the Gulf today, and should the vast amounts of oil not
re-suspend itself, and if we immediately deployed the six of
the world's largest oil recovery and removal vessels, the
effort of removing the surface oil from the Gulf would take 6
years.
Pursuant to our National Contingency Plan, or NCP, which is
the Federal Government's blueprint for responding to both oil
spills and hazardous substance releases, Section 300.310(b)
states: ``as appropriate, actions shall be taken to recover the
oil or mitigate its effects. Of the numerous chemical or
physical methods that may be used, the chosen methods shall be
the most consistent with protecting public health and welfare
and the environment. Sinking agents shall not be used.''
Oil suspended below the surface will, at unpredictable
times, move to our Gulf shorelines and marshes below the
surface making surface removal impossible. This situation
currently exists and will magnify itself exponentially if the
continued use of sinking agents are allowed. Some of our best
experts are predicting that these problems could last for
several years.
Surface removal of the oil is the only way to mitigate the
problem with certainty. BP's policy of ``Out of sight, Out of
Mind'' promoted through their use of sinking agents must be
stopped and re-focused on surface recovery and removal of the
oil. For the past several weeks we have worked closely with our
foreign oil removal experts and carefully responded to BP's
questions, only to find ourselves caught up in BP's ``Defer and
Delay'' and ``Disperse and Sink'' policies. As a result we have
been told by BP that they are studying the problem and
analyzing the available resources. As of today BP has not
engaged in meaningful discussions about the equipment we have
offered. This is why we are here today asking for the
Committee's intervention to this situation.
Our foreign partners and their governments have, as early as
4 days after the Deepwater Horizon explosion, offered equipment
and technical expertise to address this environmental disaster.
Should BP's actions be allowed to continue we will truly be
facing a very long term environmental disaster in the Gulf.
IV. We ask the Committee to take the following actions:
Continue to support BP's efforts to close and cap the
Deepwater Horizon Well but not at the expense of removal and
recovery of existing oil in the gulf.
Take all steps necessary to force BP to recover and remove
oil from the surface of the Gulf.
Take steps to cause BP to stop using sinking agents and
dispersants so that the oil remains on the surface where it can
be identified, tracked and removed.
Cause the Jones Act to be waived for specific efforts of oil
removal and recovery, thereby paving the way for foreign
equipment and experts to assist in the Gulf.
Force BP to focus on removal and recovery efforts both
shallow and deep water zones.
By taking such actions this committee can initiate a global
response to this massive disaster. By any measure, continued delay will
cause unnecessary damage to our marine environment, wetlands, and to
the citizens of the Gulf Region.
We continue to stand by waiting for someone in control to give us
the opportunity to respond. Our vessels and experts can be in the Gulf
Region within days.
In the supplemental information we have provided you will find
information describing in detail the types of equipment and
technologies available. We stand ready to work with this committee in
any way that you find helpful in order to address this most important
problem.
The Chairman. Thank you very much.
I'm going to ask a question, Mrs. Anderson, Mrs. Roshto,
that's--is--will be hard on you, emotionally, but which is
extraordinarily important for setting the whole concept of what
we're discussing here, and that is the meaning of the word
``loss of society.'' Each of you, in your testimony, talked
about it, but there's a little difference between giving
testimony and between answering questions about that.
So, you know, your husbands were working offshore, on a
mobile oil drilling rig. They were working under maritime laws
that, as you indicated, yourselves, don't apply to those of us
who work on land. These laws have a variety of names, like the
Merchant Marine Act, the Death on the High Seas Act, and the
Limitation of Liability Act. Professor Galligan and other
lawyers in the hearing room can tell us more about these laws.
But, the bottom line has to do with accountability. And
when people get killed or injured on a mobile offshore oil rig,
they can't hold companies accountable in the same way as if it
had happened on land. But, the key to all of that, it seems to
me, is the meaning of the word ``loss of society,'' which, if
you present that to the American public, they don't really know
what one means by that.
You uniquely, both of you, understand that fully. You've
talked about that. But, I would like to have you again stress
what that means, in terms of your families, the adjustments
that you have to make, what you're going through, the pain and
suffering aspect of all of this. It's very important that we
understand that very closely.
So, Ms. Anderson, I don't want to put that burden on you or
Ms. Roshto, but, Ms. Anderson, could you please say--respond to
that?
Ms. Roshto. Go ahead.
Mrs. Anderson. It's a--the loss of the love of my life.
It's very hard to explain, but I will try my best, and, with
Jason's help, maybe I can convey it to you.
It's everything. It's his touch. It's being able to talk to
him. It's being able to confide in him, and him confide in me.
It's being able to ask for his advice in something, not just
to--how to mow the grass or how to--when to take out the
garbage. It's not just that. It's having him sit beside me in
church, and, when he understands the message, he holds my hand.
It's the one person--Jason is the one person that I knew would
always be there for me, no matter what. Even if he disagreed
with me, he would still be on my side, and somehow we would
come up with a compromise together.
It's not just a job. Jason loves his job. But, his job as a
husband and his job as a father, too. All of those things are
gone.
I don't--I'd give it all back and--to have him come home,
even if he was jobless. If I could just have him come home,
and--I know that that can't happen. He--he's everything. He's
the breath in my lungs. He's the beat of my heart. He's the
skip in my step and the--the dances that we shared together,
all--it's all gone.
I am trying to convey that to you as best that I can, but
the love that I have for Jason is more oil that's spilled out
in the Gulf than anything. It's more water that's on the Earth,
more air that's here in this room. It's more than anything.
Thank you for letting me say that. Thank you for letting us
be here.
The Chairman. Thank you very, very much.
Mrs. Roshto.
Mrs. Roshto. A loss of society consists of the positive
benefits that derived from Shane's existence. What would he
have contributed if he would have survived, in terms of
support, assistance, training, comfort. And in that, what Shane
would have not only provided for me, but for Blaine, the moral
support that he could give a son. I can give support to Blaine,
I can tell him, you know, ``You hit the ball right, son,'' or,
you know, ``You played good today.'' But, it's different coming
from a father to a son.
The support that Shane--that now I have to pay somebody to
mow my lawn, I now have to pay somebody to come in and fix what
breaks at my house; whereas, when Shane was home, the 3 weeks
he was home, he dealt with that, he fixed it, he did it. Now I
have to spend extra time making sure that what I do around the
house is done right, or now I have to make sure that I'm giving
Blaine the support of both parents, a father and a mother. I
celebrated Father's Day this year. I mean, now I am the mother
and the father.
And that's what a loss of society, to me, is--a loss of his
assistance and support. He supported me. Shane, when he decided
to go offshore was because I got pregnant. He stayed offshore
to put me through school. I went to school every day of the
week, but I was at home with my son every day of the week.
Shane stayed offshore to provide a lifestyle for that. That's
the type of support that I lost.
I didn't get to just receive my diploma from college
because of the accident, but he stayed offshore to provide a
lifestyle for that. And that's the support that I lost. That's
the loss of society, to me.
The Chairman. I thank you both very, very much.
Senator Hutchison.
Senator Hutchison. Well, Mrs. Anderson and Mrs. Roshto, you
have been so compelling, and I appreciate that you have come
here to talk about your personal problems with the lack of
conformity and understandable laws that would affect your
future. So, thank you for putting that in such personal terms.
I want to ask Professor Galligan just about how we got to
this point, where the Limitation on Liability Act put this
bifurcation of rights in place, between land and sea, and the
different liability that can be assessed to the different
entities. And let me just ask you to put it in perspective,
also, in conjunction with what other countries do. Is there
this type of confusion in the law in other countries, or
limitations that would make it a norm in the maritime industry,
or are we unique in that?
Dr. Galligan. Let me try to answer it this way. You said
the limitation law and then talked about the damage
differences, so let me start with the damage differences and
then move to the limitation law.
I think we arrived at having different measures of damages,
for several reasons. One is history, is--as the law of wrongful
death was evolving, both on land and at sea, in the latter part
of the 19th century and the early part of the 20th century, it
was a different world. Workplace death was, sadly, much more
common than it is today. The law's view of children and family
members focused much more on the economic than it did on the
familial/relational aspect.
Albeit at that same time, law land was evolving to begin to
recognize loss of society damages. But, what happened was that
the Jones Act--and the same Jones Act that Mr. McCallister's
talking about, but, again, a different section--and the Death
on the High Seas Act were both passed in 1920. It really was a
different time.
Since 1920, land law has evolved to predominantly allow
loss of society damages, but maritime law, in the case of the
Jones Act and the Death on the High Seas Act, have not. And I
think one of the reasons is, is that you have not
comprehensively gone back and looked at the comparison between
the two schemes--land-based law, maritime law, territorial
waters, high seas.
The one time that you really did go back and look at it was
2000, after Korean airline and TWA, and, at that time, you
amended the law to make loss of society damages more common.
Now, shifting to limitation. Limitation of Liability is,
again, 1851, passed to encouraged investment in maritime
shipping and commerce. Other countries do also have limitation
of liability acts. There's an international convention on
limitation of liability. I wish that I had more carefully gone
back and looked at international law for this hearing than I
did, and I'd be happy to supplement any answers I give.
But, it is a hodgepodge of different approaches. The
international convention is based on monetary units, not
dollars, based on types of damages. So, there are differences.
I would say, though, in looking at an--even if it is a norm
in the maritime industry, the question is, Is that norm
sensible and fair today? And my answer would be that it is
outdated, and that, too, deserves your reconsideration.
Senator Hutchison. Thank you. I just want to say, Mr.
McCallister, I think you laid out the problem very well, and
certainly, from your personal experience, it's clear that there
is no intention whatsoever to make it easy to waive the Jones
Act in this response.
In fact, I want to clarify the record, because I was a
little confused by earlier opening statements. There has been
no Jones Act waiver within the 3 nautical miles of the
coastline to date in this accident. And that is a fact. I know
that you have had that same experience, but it was confirmed to
me by my staff, that the ships that are available can go in the
international waters, they just can't come in within the 3
nautical-mile limit. Is that your understanding, as well?
Mr. McCallister. That's correct, Senator. And my
understanding is that, yesterday, there was actually some
waivers issued for the vessels that have been working outside
the 3-mile limit but now need to come to port. And so, for
those specific vessels, my understanding is that there has been
a waiver issued for the--for those vessels. And I don't know
what that number is.
Senator Hutchison. But, you have still not heard anything
with your offer of skimmers, is that correct?
Mr. McCallister. That's correct. We have not.
Senator Hutchison. OK. With that, then, I thank you very
much, all of you, for adding so much to our body of knowledge.
Thank you.
The Chairman. Thank you, Senator Hutchison.
Senator Hutchison. Oh, Mr. Chairman, could I submit, for
the record, the editorial from the New Orleans Times-Picayune
today, saying, ``Cut Red Tape and Get More Skimming Vessels to
the Oil Spill''?
The Chairman. So ordered.
Senator Hutchison. Thank you.
[The information referred to follows:]
Cut Red Tape and Get More Skimming Vessels to Oil Spill: an Editorial
The Times-Picayune--June 30, 2010
U.S. Coast Guard Adm. Thad Allen talks like he understands how
crucial skimming vessels are to removing oil from the Gulf of Mexico
before it washes ashore.
More skimming vessels are needed to remove oil from the Gulf of
Mexico.
``Skimmers are our critical mass right now,'' he said recently.
``We need to put those wherever we can get them. And we want to get
them from wherever they are available.''
But Adm. Allen, who is the national incident commander for the oil
spill, hasn't backed up those words with action. According to BP's most
recent estimate, 433 vessels are collecting oil from the runaway oil
well, but only a third of them are designed specifically for oil
skimming.
In the meantime, vessels that could be used to clean up the massive
amounts of oil are being blocked by a sea of red tape. There are 850
skimmers in the southeast United States and 1,600 nationwide, but the
Oil Pollution Act of 1990, which requires regions to maintain levels of
equipment such as skimmers, is preventing some resources from coming to
the Gulf. The Jones Act, a maritime law designed to promote U.S.
shipping interests, is complicating efforts to get foreign boats here.
``It is hard to believe that the response is this anemic,'' Sen.
George LeMieux of Florida said on the Senate floor last week. ``It is
hard to believe that there is this lack of urgency or sense of purpose
in getting this done.''
The government isn't alone in showing a lack of urgency. BP has
declined an offer from Shell to bring an oil recovery boat that is
sitting idle in Alaska to the Gulf. ``Nothing would prevent it from
working right now in the Gulf of Mexico,'' said Curtis Smith, a Shell
spokesman. ``It remains available in the event that BP reconsiders.''
BP's refusal to accept help from Shell is frustrating. Doug
Suttles, BP America's chief operating officer, told The Times-Picayune
last week that the company ``threw everything at'' the out-of-control
well. But everything apparently doesn't include the Nanuq.
As for the Oil Pollution Act, Adm. Allen says that discussions are
going on within the administration about how to free up equipment.
That's a change from the admiral's initial position, when he said that
leaving other areas vulnerable was one of his biggest concerns. Given
the scope of this disaster, it's hard to understand why the government
hasn't moved more quickly from discussion to action.
When it comes to the Jones Act, even less is happening. Adm. Allen
has promised to process waivers to the act quickly, but so far none
have been granted. The admiral has downplayed the effect of the law on
the cleanup, but the experience of Ecoceane, a French company with a
fleet of skimming boats, suggests that it is an impediment. Eric Vial,
the company's President, said it sold nine boats to a Florida
contractor so that the Jones Act wouldn't be a factor. Those boats
could have been in the Gulf much sooner, he said.
Sens. Kay Bailey Hutchinson and John Cornyn of Texas, along with
Sen. LeMieux, have proposed legislation to temporarily waive the Jones
Act for oil spill response vessels, and that's a reasonable step in the
face of this disaster.
Local officials who have been begging for more skimmers shouldn't
have to wait for help because the Federal Government refused to deal
with bureaucratic barriers.
The Chairman. Senator Wicker, you're next, but I also
notice that Senator Thune has come, and he is Ranking on the
relevant Subcommittee.
So, when we come to you, you get an extra 2 minutes to sort
of say something, and then also ask your questions.
Senator Wicker.
Senator Wicker. Well, thank you.
And let me say, to Mrs. Anderson and Mrs. Roshto, we all
appreciate your testimony, and we appreciate the difficulty
that you must have had in coming here. You shouldn't have to be
sitting there, talking about legal points. But, it has become
necessary.
I think everyone here would agree that you're entitled to
equal treatment under the law. And to the extent that your
claim is not deemed as valuable as the claim of other people in
like circumstances, we appreciate the difficulty you had in
coming here and bringing that to our attention, and we
appreciate it. And I hope there is a remedy for you, and I
believe there is.
Let me just ask, with regard to Mr. McCallister's
testimony, How long now have you been pursuing this waiver?
Mr. McCallister. The waiver filing--first waiver filing,
with Admiral Allen's office, was on June 16.
Senator Wicker. OK, so 2 weeks. And how many different
offices, corporate and government, have you contacted or been
to?
Mr. McCallister. Just a--probably a fairly accurate guess
would be about eight.
Senator Wicker. OK. And have you calculated the potential
oil that could have been skimmed if these hurdles had not been
in place, had you been able to skim at your capacity each day?
Mr. McCallister. Well, Senator, I have not added that up
entirely. The--each one of the skimmers that we proposed--and
these are relative to the largest skimmers that can be made
available, which we currently have available now, that's come
available to us within the last 2 or 3 days--but, the skimmers
that were proposed originally will skim about 3,500 gallons per
hour, and we have a fleet of 25 of those that we proposed to be
made available.
So, in addition to that, there are very large skimmers with
higher capacity. The skimmers are very efficient. They are
specialized vessels that, you know, unlike what you see, which
is dragging boom behind boats and gathering up and either burn
or trying to siphon off the oil, these are skimmers that
actually collect the oil in the belly of the vessel, run it
through a weir system, and separate the oil from the water. So,
these are highly efficient, specialized vessels.
Senator Wicker. Now, once that separation is made, what is
then done with the water?
Mr. McCallister. Well, the water that's clarified can go
back into the Gulf if it's--you know, meets the standards to go
back into the Gulf. But, it--but, these particular vessels are
not--they don't have centrifuges on them, like the--you know,
like Kevin Costner's centrifuge that they're trying to get
approved, so the water would have to be treated before it can
go back in the Gulf. But, the bulk of the oil is separated, so
you can treat lightly contaminated water, take the bulk oil and
either process it or dispose of it, as appropriate.
Senator Wicker. Yes. Well, you know, we've all developed a
degree of expertise, which is growing daily in this two-and-a-
half-month tragedy. It seems astonishing to most people, but
environmental statutes sometimes are preventing us from
cleaning up the water, because not all of the water that is
redischarged back into the Gulf is 100 percent oil-free. But--
--
Mr. McCallister. Correct.
Senator Wicker--to me, if we can accept a process where 100
percent of the oil is taken out of the water and only--and the
water that is put back in only contains 1 or 2 percent, then,
to me, you have a 98 percent or 99 percent success rate.
The Chairman. Senator Wicker, I----
Senator Wicker. We ought----
The Chairman--I don't----
Senator Wicker--we ought to be----
The Chairman--mean to disrespectful, sir--and you can ask
any questions you want--but, it is fully my impression that
this hearing is about the two young women, and others similarly
suffering, and what--how they are to be treated, under
different sets of laws, in a much more fair manner. I thought
the point of this hearing was to have--to share in their grief,
to share in their solution to the problem that they face, as
opposed to an analysis of the environmental cleanup. I think
that's the subject of the hearing, but it doesn't----
Senator Wicker. Well----
The Chairman--seem to me to be appropriate to their----
Senator Wicker. Well, my questioning----
The Chairman--suffering.
Senator Wicker--my questioning is over, but I would simply
point out to the Chair that a great deal of Mr. McCallister's
testimony was about his frustration. And the Ranking Member
also has expressed her frustration about the process. So, I was
merely following up on comments that were already made. But,
I----
The Chairman. Well, we all share that.
Senator Wicker. But, my questioning is over.
The Chairman. We all share that. But, the point, to me, is
the two very courageous young women who have no husbands.
I thank you, and I go to Senator Isakson. He's not here.
Senator Pryor? Not here.
Senator Begich.
STATEMENT OF HON. MARK BEGICH,
U.S. SENATOR FROM ALASKA
Senator Begich. Thank you. Thank you, Mr. Chairman. And
thank you for redirecting the conversation, because that's what
I came to at least hear and listen.
I sympathize with your loss, your two losses, but also the
nine other families that need also be recognized. And I
sympathize with your story, because I lost my father in a
tragic plane accident when I was 10. My mother was 34, had to
raise six kids--four boys, the youngest being four. So, I
sympathize with you a great deal.
And so, today--and I'm glad, again, Mr. Chairman, you
redirected the conversation, because I appreciate Mr.
McCallister's issues, and I hope that the Administration works
forward and moves all the equipment. They're doing an
incredible job.
But, I want to dive into the issue that we hear, and that
is really, How do we ensure proper compensation? And there is
no real compensation that can be done in numbers.
Someone from Alaska, myself, I saw what the Exxon Valdez
did. We had waited 20 years for resolution. We had no loss of
life, but--except, we had loss of life over 20 years. Twenty
percent of the people who waited patiently for their claims to
be settled--took 20 years--twenty percent of them died in that
process, waiting.
I am hopeful, whatever we do here and on the floor of the
Senate, that we do not have that same delay, not only for
those, as you've mentioned in your testimony, of those who lost
business in--impact--but specifically to the 11 families that
lost life. And so, hopefully we will get focused on this issue
in a way that really makes sure the laws are equalized.
And I think, Professor, you gave an interesting comment,
and I just want to ask you this question. And I'm a new member
to the Senate. I'm going to claim this for as long as I'm here.
And I'm from Alaska, so I get a double. And so--and I don't
want to be cynical, but we're going to make a lot of great
statements. People like me are very passioned about making sure
people get just compensation. Because, I can tell you, in our
loss, we did not. And that was, you know, 30-plus years ago, as
an individual or a family. So, I'm anxious--and this will--
you're going to step--I'm going to ask you to step out a little
bit here on it--and that is, even though the laws have not been
changed in so many years, and we tinkered with them a little
bit, some years ago, do you think there's the political will to
get beyond the debate of liability caps and torts and all that
that's--you know, ``trial lawyers versus corporate America''
debate that I have a feeling this will fall into, which is
really too bad, because it's really about people? It's about
ensuring that families get what they deserve with what's owed
to them for their loss. Do you think, honestly, that we can
get, in this political body, beyond that debate, which will be
trial lawyers versus corporate America and who represents who?
Dr. Galligan. I--you are asking me to step out----
Senator Begich. Darn right. People who come and testify, at
least while I'm here, and I'm sitting here, are going to do
that.
Dr. Galligan. I certainly hope that you can get outside
that debate. I think the issue, when we talk about loss of
society damages under the Death on the High Seas Act, or we
talk about it under the Jones Act, or we talk about it on land,
I couldn't speak more eloquently than Ms. Anderson and Ms.
Roshto spoke about how real that loss is. So, I don't think
that's about lawyers who represent primarily plaintiffs or
lawyers who represent primarily defendants, and I don't think
that's about business in corporate America. I think that really
is about people and about holding other people accountable.
I would say this--and now I'm really out on the limb--if
there's----
Senator Begich. I like that.
Dr. Galligan--some other reason to protect some industry or
some business, I don't think it's right--moral statement by the
professor--to do it at the expense of people who suffer a very,
very real loss. It should be a separate issue.
Senator Begich. Well, I appreciate that. And I didn't mean
to put you on the spot, but I am very sympathetic, and want to
make sure these laws are corrected. Because it's unfair that,
as very eloquently spoken, that, you know, on land versus on
sea, there are two different methods, which doesn't seem
logical at all. And I think to the American people it doesn't
make sense--not only to the 11 families, but to the American
people, in general, it just doesn't make sense. And sometimes
things we do around this place don't make sense. And this is a
moment, probably, that we can make some sense here, and do the
right thing in quick order.
Again, I come from two ends of the equation, someone who
was 10 years old, who lost a father, to sitting here and
looking back at what happened down at Exxon Valdez, and saw
what it took, for 20 years. And then, when it finally made it
to the Supreme Court, in my personal opinion, the victims got
ripped off. They went from $5 billion down to 500 million. And
then Exxon waited and argued over paying the interest that was
due on that 20 years. So, that's just not right.
And so, again, your two testimonies were passionate--
without doubt, convincing to me. And I recognize that you don't
want to be lumped in, but you want to have that choice. You
make that decision of how you will gather that compensation and
that just result, but, at the same time, not in a delayed
action. So, I really appreciate your two testimonies.
Professor, thank you very much.
Mr. McCallister, I didn't have anything for you, because I
think we could take your issue off record and go figure it out.
But, this is what I came to hear, were these three. So, no
disrespect to you.
Thank you all very much.
The Chairman. Thank you, Senator.
Senator LeMieux.
STATEMENT OF HON. GEORGE S. LeMIEUX,
U.S. SENATOR FROM FLORIDA
Senator LeMieux. Thank you, Mr. Chairman.
I want to extend my condolences to you, Mrs. Anderson and
Mrs. Roshto, and thank you for being here. I know it must have
been incredibly difficult for you to talk today about your loss
and how much your husbands mean to you. And, to echo the
comments of my colleague from Mississippi, Senator Wicker, we
all believe that there should be equal justice under the law.
There is no reason that your losses should be treated
differently than losses that occur when someone has a tragedy
like this on the land versus on the water.
So, I hope that we can work, Mr. Chairman, in a bipartisan
way to address that, going forward.
Now, Mr. Chairman, we do have Mr. McCallister here. And if
you will indulge me, I do want to speak to him about this issue
of skimmers, because, this tragedy is an ongoing tragedy that
has been described by some as ``a slow hurricane.'' And the
reason why is that, for a state like mine, in Florida, this oil
is washing onshore. We are creating victims every day, maybe
not as pronounced as Mrs. Anderson and Mrs. Roshto's
experiences. But, for example, domestic violence is going
through the roof in northwest Florida right now, because of the
stress that this situation is causing on people. People have
anguish in their eyes.
When I was in Pensacola on Monday, I talked to people there
who are seeing all this oil wash up on the beach and ruin their
way of life. People move to Florida because they love the
water. And it's not just a recreational thing for us, it's part
of who we are in Florida, like it is in many other Gulf states.
I have tremendous frustration about the lack of these
skimmers. Now, I've been talking about it for weeks. And this
is not a Democrat or Republican issue. This is an issue of
getting the job done.
Now, you talked about trying to get a waiver of the Jones
Act. Senator Hutchison and I have legislation to waive the
Jones Act. We've been told by the Coast Guard, we don't need
it. But, the truth is, is that there have been 64 offers of
foreign assistance, and 7 accepted. The Coast Guard now says
that they will be accepting 22 offers. We have 2,000 skimmers
in this country, domestically, yet only 400 are in use. The
Coast Guard and EPA signed an Executive Order, which I'm
thankful for, yesterday, to waive the restrictions on domestic
skimmers to bring them to the Gulf of Mexico. But, that's 70
days into this. And we need more help.
There's a ship right now that's steaming to the Gulf--it's
actually, probably in the Gulf, that you probably have seen on
television, called ``A Whale.'' It's the world's largest
skimmer. It's bigger than an aircraft carrier. It can do more
work in a single day than half of the skimmers that are out
there, combined. And it doesn't yet have approval to do this
work.
So, I want to thank you, Mr. McCallister, for bringing this
issue. I want to thank our Ranking Member for having you come
and testify here today, because this oil, Mr. Chairman, is
going to have profound effects upon the Gulf Coast states. It's
not going to just affect them for months. It's going to affect
people for years.
It's not only people losing their ability to make their
wages. You know, in Florida and other Gulf states, these folks
make their living, for the whole year, between Memorial Day and
Labor Day. And no one is coming to the beach anymore because of
this. Plus, what's it going to do to the seafood industry?
What's it going to do to the folks who work on these offshore
rigs? Are they going to be able to continue their way of life?
This disaster is having a profound effect upon my state, as
well as Mississippi, Alabama, Louisiana, and Texas. And we just
need to see some more urgency, Mr. Chairman.
So, if today is not the day to talk about this, I would
ask, and I think other colleagues would join me, sir, that we
have another hearing to talk about the lack of response, and
what we can do to create a sense of urgency. I know it's
something that you care about. And you've been passionate, Mr.
Chairman, about this government, when it has the responsibility
to do its job, whether it's a coal mine disaster or this
disaster, that the government does its job.
So, I would respectfully suggest that maybe on another day
we could have a hearing to talk about that more fully.
And I thank you for calling this hearing today.
The Chairman. Thank you Senator.
And, Senator Lautenberg, you're next.
Senator Lautenberg. Thank you, Mr. Chairman.
And, once again, we appreciate the difficulties, to Mrs.
Roshto and Mrs. Anderson, in having to review your personal
pain. But, we thank you for doing it. And each of you has made
a comment--OK, point it in the right direction--the--each of
you--Mrs. Roshto, you said that your husband said that he was
worried about all the mud they were losing from the well, and
pressure the men felt to deliver more oil quickly. I quote you
correctly here. Mrs. Anderson, husband said, Jason, that
``There's a bunch of stuff going on, and I can't talk about it
now. The walls are too thin. I will talk to you when I get
home.''
So, each one of your husbands worried about the safety of
the rig. Fair enough? Do you think that your husbands would
have been--thought they would have been punished for speaking
out about this?
Mrs. Anderson?
Mrs. Anderson. I don't know if he would have--Jason would
have been punished, per se, if he had spoken out. I know that
Jason would have spoken out if he felt like he wasn't going to
be able to come home. He would not have done anything that
would have prevented him from coming home. He would have not
done anything that would have harmed anyone.
Senator Lautenberg. OK. But, he was--but, said that he
``can't talk about it.'' So, he indicated that there was
concern about----
Mrs. Anderson. There--yes. He very much so indicated that
he was concerned about something, and just didn't want me to
worry about it. He didn't give----
Senator Lautenberg. Mrs. Roshto----
Mrs. Anderson--want to give me something else to worry
about.
Senator Lautenberg. Thank you.
Mrs. Roshto, your husband indicated that he was worried
about the mud they were losing from the well, and felt that it
was unsafe for them--those on the rig. Is that correct to
conclude?
Mrs. Roshto. I don't think he ever felt personally unsafe,
per se, to the point to where he would have----
Senator Lautenberg. Endanger, yes.
Mrs. Roshto. Yes, endangered. But, he did, numerous times--
the last time he was home, the weeks leading up to the accident
that he was on the rig. There were many conversations that we
had that we had never had before. He had never shown more
concern on the rig than he had on this hole.
Senator Lautenberg. Thank you.
Mr. McCallister, hundreds of American vessels have
responded to the cleanup. A number of foreign vessels also
assisting in the cleanup efforts. However, there are a number
of American vessels standing by, waiting to be called. Now, do
you think that we ought to give preference to American vessels,
American workers in the Gulf Coast cleanup, or should we look
to competition between foreign flags and American flags?
Mr. McCallister. Senator, to the extent that we have the
types of vessels and the quantities of vessels that are U.S.-
hulled, we should use them. We have to keep in mind that there
are a couple of factors.
One is that the types of vessels that we're talking about
are not commonly available in the U.S.----
Senator Lautenberg. Well, I----
Mr. McCallister--specialized----
Senator Lautenberg.--I think it's fair to say that Admiral
Allen, who is making the decisions about that--and everyone
seems to agree that he's really thorough, that he's on the job.
I know him, as the Coast Guard Commandant, for some years. He's
a man whose judgment is beyond question. So, do you think he's
wrong here to say that we ought to move over to the foreign
vessels?
You know, I was stunned to read--to reflect on your
testimony--``Ships could carry 500 workers or more, with all
the amenities of a cruise ship.'' Well, that strikes me as not
being very impressive, I must tell you. I was on a cruise ship,
and they--someone who's working every day to get something done
as important as removing this oil doesn't need those amenities.
And I think that it's quite clear that we're looking, here, at
bringing this large cruise ship to house workers--say the Jones
Act is the only reason this proposal has been rejected. But,
that doesn't seem to be the case. It's not because the Jones
Act has its limitations to a couple of miles off coast, and
they can be called upon. But, I think the challenge to Admiral
Allen's judgment, who has shown incredible leadership in this
terrible situation, leaves us scratching our head and wondering
what it is.
Do you have any experience in operating--I know you work
for a fund, or own a fund, however, do you have any experience
in operating or owning skim vessels or cruise ship vessels?
Mr. McCallister. No, sir.
Senator Lautenberg. Mr. Chairman, we have problems here.
And we have two women who survived enormous pain. My mother was
37 when my father died. I had already enlisted in the Army; I
was 18. And the pain of my father's death was incalculable in
any way. He didn't make much money. It wasn't his money, it was
his presence that counted. It was his part of the family. It
was being dad to two kids. That's what it was. And not to
recognize pain and suffering at--if some is working at sea or
someone's working on land--strikes me as being incredulous.
Thank you very much, Mr. Chairman.
Thank you both, again, for your testimony.
The Chairman. Thank you, Senator.
And now Senator Thune.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Mr. Chairman. I want to thank you
and our Ranking Member for holding today's hearing.
And I also want to thank our witnesses for joining us. In
particular, Shelley Anderson and Natalie Roshto, who are
testifying today.
As we look for ways to stop and clean up this spill, we
cannot lose sight that not only is this an economic and an
environmental tragedy, but it's a human tragedy, first and
foremost. And we can't lose sight of the 11 lives that were
lost during the explosion of that rig.
So, we thank the two wives for being with us today and for
honoring their husbands' memories by joining us as we look for
ways to improve the industry and the government response to
this tragedy.
Mr. Chairman, British Petroleum has publicly declared that
they are the responsible party. It's critical that they be held
to account for the environmental/economic damages caused by the
ongoing oilspill in the Gulf. Victims, like the two wives who
are with us today, must be made whole as fairly and quickly as
possible. Beaches and marshes must be cleaned, and local
economies put back on strong economic footing.
It is equally important that the Federal Government
response is adequate to address the ongoing concerns in and
around the Gulf. And we also need to look at ways that we can
cut through the red tape, some of which has been mentioned
today, and provide as much flexibility as possible to local
governments as they are dealing with this tragic spill.
It's important, Mr. Chairman, that Congress take the
necessary steps to prevent such an accident from occurring in
the future. And of course, it's widely discussed that Congress
may turn to an oilspill response bill soon after the 4th of
July break. I'm hopeful that we can find bipartisan policy
solutions that will speed up the cleanup efforts, minimize
potential for future spills, and address the concerns that are
raised here today by the wives of the two gentlemen who were
lost.
So, Mr. Chairman, I don't have any questions. I think the
subjects have been covered fairly well here. I just wanted to
express my condolences to these two ladies, and welcome the
other members of the panel, as well, and thank them for the
input that they provided on what is a very difficult and
ongoing and tragic circumstance for, not only that area of the
country, but our entire country.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Thune.
Senator Vitter.
STATEMENT OF HON. DAVID VITTER,
U.S. SENATOR FROM LOUISIANA
Senator Vitter. Thank you, Mr. Chairman.
I'll be brief, as well. But, I just wanted to express three
things.
First of all, I join with everyone in expressing our deep
condolences to Mrs. Roshto and Mrs. Anderson. You have helped
highlight that there is a clear injustice here. So, I look
forward to working with others to solve that on a bipartisan
basis. But, we certainly continue to hold you all up in our
prayers, and your families, and the families of the other
victims, very, very much so.
Second, I certainly want to join with Senator LeMieux in
suggesting that it would be an appropriate topic for a further
hearing to talk about the Federal response. I think, in many
different ways, the Federal response has been, and remains,
inadequate. I don't think we have enough assets on the problem.
That's one of the major inadequacies. And I don't think that's
fundamentally a Jones Act issue. I think that's an
aggressiveness/Federal-response issue, because I talk to a lot
of folks, with significant assets ready and waiting to go, who
have not been deployed. And 90-plus percent of those are
domestic assets. So, I join with Senator LeMieux in suggesting
we look further into that, Mr. Chairman, because,
unfortunately, that's an ongoing issue.
And third, and finally, I have a particular concern and, I
guess, question for Mr. McCallister about the cruise ship
proposal. My experience in coastal Louisiana is that there are
businesses right on the coast, from the Texas border to the
Mississippi border, devastated economically by this event. They
certainly include a lot of hotels, a lot of catering services,
and a lot of folks who can provide, right on the coast, all of
those resources. And I think it's fair and reasonable that we
look to them first to mitigate their losses, before we do
anything else. So, I am really at a loss for the immediate need
for major use of cruise-ship-type vessels.
Mr. McCallister. May I respond, Senator?
Senator Vitter. Certainly. And I'm sorry I missed your
testimony, but if you can lay out what the evidence is, or the
study is, that supports the need for that.
Mr. McCallister. Well, I appreciate your raising the
question again, because it's--even though I may have used the
term ``cruise ship amenities,'' what we're talking about here
is a vessel that has boarding accommodations and also has a
ferry deck. And the reason that this particular vessel could be
useful in the Gulf is that you have a very large parking area
on the bottom that could be used for equipment storage, boom
transportation, boat storage, animal rescue, that type of
thing.
And it was also--this particular vessel was submitted,
initially, in response to a request for boarding vessels. So,
you know, we didn't conceive that this was a vessel that was
needed, of our own design, and try to throw it at them. This
was actually something that was an out-bound request from BP
through environmental--U.S. Environmental Services. And so, we
tried to respond with a vessel that could house people with
respectable accommodations, but also provide an excellent work
platform that could move up and down the coast, as necessary.
I agree, 100 percent. You know, taking away jobs or taking
away economic opportunity is not a good thing. These vessels
can be manned by local labor force and local workers, and that
would be the intention. But, certainly, if this type of vessel
is not needed by BP, you have no argument from me. I'm not
trying to push it on anyone. They requested a boarding vessel.
We did the work, brought them something for them to consider.
Senator Vitter. Well, just two things. First of all, I
understand your description of the vessel. We're not talking
about cruise ships----
Mr. McCallister. No.
Senator Vitter--or two shows nightly. I get that.
Mr. McCallister. Exactly.
Senator Vitter. Second, quite frankly, the fact that BP put
out some solicitation about some category of ships doesn't
boost my confidence.
And I'll tell you this anecdote. Very early on in the
event, when I was in Grand Isle, which is our only inhabited
barrier island, they had just closed the beaches on Grand Isle
during the summer, at their peak season, because of this event.
So, at their peak economic season, Grand Isle was being shut
down. At the same time, BP starts pulling in temporary
housing----
Mr. McCallister. Right.
Senator Vitter--to put on Grand Isle, when every hotel and
motel in sight has just been emptied out. So, I just offer you
that one anecdote to suggest that the fact that BP may have
asked for it at some point doesn't necessarily bolster my
confidence. And I would encourage us all, again, to look to the
areas and the people hit economically by this event, and give
them the business first, and mitigate their losses first.
Thank you very much, Mr. Chairman.
The Chairman. Thank you, Senator Vitter.
I want to return to the two people who I think this is--or,
the three people who I think this hearing is about.
And I have to, in a sense, apologize. I understand the
Ranking Member--people have rights to ask who they want to a
committee hearing, but this was not my idea of what the
Committee hearing was going to be. My idea was, it was going to
be about you two fine young women. And the professor here, who
knows about the law, and how we can make this right, which is
our business as a committee. The other is also our business as
a committee, but it was not, in my judgment, our business
today. And I apologize, if you feel others have been sort of
talking past you, because that's not fair. I've been to many
coal mine disasters in my life, and when you're dealing with
people who are hurting, you focus on the people who are
hurting, and the investigations take place, and all of that
happens, but you focus on the people first. That's my--at
least, that's my code of conduct.
I want to ask something which doesn't make a lot of sense
to me. There's a sort of difference in emphasis. A lot of
people have said that Transocean spent a lot of time and money
on safety training for their employees. Transocean says that
its safety goal is an incident-free workplace, all the time and
everywhere.
They evidently were--they won a safety award in 2008, were
about to receive an award for going 7 years without a lost-time
accident. Then--so, that's sort of over here.
Then over here, what we're trying to do now is to figure
out what went wrong on April 20. The investigations aren't
complete, but what we are trying to learn is that--BP and
Transocean, with the approval of Mineral Management Service,
MMS, that particular government agency that nobody had ever
heard of until this oilspill, and now everybody has heard of
them, and they've heard of them with an enormous amount of
disapproval--but, they decided, in a sense, to cut corners to
get the job done quickly--BP and Transocean.
The drilling project was, in fact, behind schedule, and it
was, in fact, over budget. So, BP wanted it done, because it
was losing money--my interpretation of it. So, my question to
each of you would be, Do you have any thoughts about whether
oil rig workers get pressured to cut corners or engage in
unsafe practices?
And I ask this question because it's exactly what happens
in coal mine country. It's just exactly what happens.
Mrs. Anderson. I think if anybody is going to be in
business, they're going to be in business to make money or
they're not going to be in business very long. As far as my
specific husband being pressured to do anything, I don't know
that for a fact. I would--I do know that my husband, Jason,
would not do something that would prevent him from coming home.
If he knew about it, and he knew that it would prevent him from
coming home, which is his number-one goal every time, is to--
just to come home, he wouldn't participate in something that
would prevent him from coming home.
The Chairman. Mrs. Roshto?
Mrs. Roshto. I personally don't think Transocean acted
unsafely on purpose. My husband never--he had actually stopped
a job, not too long ago, because of some things that were going
wrong. And he did not lose his job. He always felt he could go
to Transocean.
Now, let me say--Did I say BP? No. He went to Transocean,
and told Transocean, you know, there was a problem. And he was
able to stop the job.
Now, the weeks leading up to the accident, I do believe
that Shane felt unsafe at times. He never--the words never came
out of his mouth, and he never said, ``I feel unsafe.'' From
the conversations that we had, I gathered that he was unsafe.
I don't think that it was intentional on behalf of
Transocean or BP. I believe that calls that were being made
from higher above were forcing Transocean to have to cut
corners, because of the contract they have. I do believe that
it was coming from higher above, and the trickle-down effect
was causing Transocean to have to cut corners.
The Chairman. Ms. Anderson, would you agree with what she
said?
Mrs. Anderson. Yes, sir, mostly. I just would like to say
that if somebody was cutting corners, and they think that the
price of my husband's life is worth a battery not being changed
or a boatload of drilling mud being unloaded sooner, they are
strongly mistaken.
The Chairman. Yes, see, because, to me, it doesn't--it
really doesn't matter if there is pressure.
Mrs. Anderson. That's right.
The Chairman. If it comes from on the rig, from the people
there, or if it comes from, you know, Great Britain, or
anywhere else. Pressure that comes from within a corporation
comes from within a corporation, and the corporation is
responsible, if that pressure does come, no matter in what way
it comes. And that's why I think the consideration of how you
are to be treated is so incredibly important.
I make the assumption that there was unsafe practice. I've
just heard too much evidence. I'm not a scientist, I'm not--you
know, but we have people on this committee, behind me, staff,
who are experts in these matters, and I think there's a concern
that there was unsafe hurry.
What I would ask to you, Professor Galligan, is to sum up
what you think we ought to do, as a committee, to solve the
problems as best as we possibly can--and of course, we can't do
that entirely, but financially we can--of these two very
courageous young women.
Dr. Galligan. Well, I think, first and foremost, you ought
to take a look at the Death on the High Seas Act, which does
not allow recovery of loss to society damages for the survivors
of victims who are killed on the high seas. And you ought to
change that to allow loss of society damages to be recoverable,
as Senator Leahy's bill proposes.
I would also encourage you to take a look at the Jones Act,
as Representative Conyers' bill, which is in the House side,
amends the Jones Act to also allow loss to society damages for
seamen, and that would really line up everything so that it
really was consistent.
I would urge you to seriously consider Senator Schumer's
bill on the Limitation of Liability Act, and ask yourselves
whether or not that Act, passed 160 years ago, when the world
was a very different place, is still needed, is still
essential, is still fair, and whether America ought to be a
leader in saying, ``We need to hold the maritime industry
accountable.'' I would point out, on that regard, that we have
many foreign ships who come to our courts and seek to limit
their liability under the Limitation of Liability Act.
And third, I would ask you to consider the Exxon case, and
the one-to-one ratio between punitive damages and compensatory
damages in maritime punitive damages cases. That case decided
an issue solely of maritime law. And let me repeat what I said
before. The majority opinion says, ``If Congress thinks another
rule is appropriate, it is within Congress's power to
articulate that rule.'' So, it is within your power.
And I would also remind you, as you well know, that that
decision was uttered about 2 years ago, before something like
the Exxon Valdez happened again. And now it has happened again.
The Chairman. I thank you for that, very much. It's a
phenomenon, and an unfortunate one--and maybe it's not just us,
in America, maybe it's people elsewhere--but, we--as a country,
we do hold lives to be precious. We are shamed when things go
wrong. We do find wrongness in companies. And it's always after
something bad has been affected. I come from West Virginia,
where the whole coal mining situation is--you have a disaster,
and then, all of a sudden, people get together and we pass mine
safety laws. And we did that several years ago. And there was
the first Federal mine safety laws in 30 years. I'm embarrassed
by that fact. Now we've had another disaster, with 21--now 31
people--or, actually 29, in that particular incident, but 31,
in effect--have died. And once again, we're going to pass mine
safety legislation.
And you ask, ``Why can't we do it before?'' And what I
think you discovered, partly, is that there is tremendous
pressure on corporations to make profits, and that that has its
consequences--that has its consequences. And the consequences
have been eloquently expressed by these two distinguished and
courageous women.
I would now ask unanimous consent to put two statements in
the record of the hearing. I ask that--and this will be done--a
short statement by Shelley Anderson's lawyers, Ernest Cannon
and Ben Barnes be put in the record.
[The information referred to follows:]
Prepared Statement of Ernest Cannon and Ben Barnes
on Behalf of Shelley Anderson
We have a sincere concern about the rights of those who died and
were injured aboard the Deepwater Horizon. Almost a century ago,
Congress enacted the ``Jones Act'' to protect those who were injured
working on offshore vessels because of their hazardous occupation and
because of their vital service to our economy. The Supreme Court of the
United States and many appellate courts have recognized the need to
protect seaman as wards of the court for these very same reasons.
Unfortunately, there are those who caused the explosion, the deaths
and the injuries who are attempting to use other legislation called
multidistrict litigation to frustrate the rights given by the Jones Act
and the courts and to delay the injured and the families of the dead
from enforcing those rights.
In the two months since this tragedy occurred, BP and Cameron have
done everything in their power to prevent the victims from pursuing
their rights in the forum of their choice and have instead filed
motions to stay all proceedings against them until a committee called a
MDL committee meets in Idaho in July. They have asked that committee to
join all of the seaman's cases to those of the commercial fishermen,
landowners and countless municipal and states claims. Instead of the
judge or judges that were randomly assigned the cases, BP and Cameron
want one judge appointed by that committee to hear all of the cases. It
is reported that they have even lobbied for one judge by name. They are
so convinced that their tactics will work that they have filed court
papers saying it is a virtual certainty that these cases will be
consolidated into the MDL.
If BP and Cameron get the results they want to achieve, it will be
many years before any of these families are able to enforce the rights
which Congress has given to them. Combining the families' cases with
thousands of other cases in front of one judge cannot possibly serve
the ends of justice.
We cannot allow these claims to be combined with commercial claims
such as the claims in the Exxon Valdez tragedy which 20 years later are
still not resolved. We cannot allow these claims to be combined with
all other claims in an MDL as was done in the Toyota acceleration cases
where the dead and injured will not see a courtroom for years.
The only solution is to allow Jones Act Seaman and their families
the right to choose whether they want to be a part of the MDL.
Therefore, I propose that seaman can opt-in or out of the MDL. This is
the only way to fairly protect the rights of those who have given their
lives and their livelihood as result of this tragedy.
The Chairman. Is Senator Klobuchar coming in? Otherwise,
I'm going to give closing remarks.
[Pause.]
The Chairman. I'm going to give closing remarks.
This oilspill----
Senator Klobuchar, you're welcome to say what you want.
[Pause.]
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. I'm sorry. I was at the Supreme Court
hearing.
Thank you. And thank you for your patience. Thank you,
Chairman Rockefeller, for your patience.
I did an event in my state last week, and it was a little
unrelated to the liability issues here you're talking about
today. But, in some ways, it's completely related. And it was
about the migratory birds, which no one's really dealt with
yet, but we have 13 million birds, many of them from my State,
and a half a million that are going to be heading down to the
Gulf. That's where they make their home in the winter. As the
oil goes into the marshes, we have no idea the effect it's
going to have on all of these waterfowl. And the concern here
is that they won't react to oil in a marsh. They react to
predators, but not to oil in a marsh. And we can't exactly hold
up a sign and said, ``Go to Texas instead, or go to Mexico
instead.'' So, it's just one example of what you don't expect
to be happening.
And obviously, there are much greater losses. And I
appreciate--I heard, from my staff, about your testimony, and
thank you very much for that. And I'm very, very sorry for your
loss.
What I wanted to ask about, actually, was something that
has a strange relationship to Minnesota. And that was the Exxon
Valdez case, because it was a Minnesota law firm that
represented the fishermen in that case. And so, I'm very well--
there's a--aware of it. There's, in fact, a book, that I helped
to edit at one point, called ``Cleaning Up,'' about that trial
and what happened with that case.
And I know that it took over 20 years, and 32,000 people
saw damages delayed and slashed. Eight thousand of plaintiffs
died before they ever got paid. I know Senator Begich asked
some about that.
But, my question is if you think that there is a way to
structure the law that we're looking at so that the companies
are incentivized to pay claims in a timely manner?
Any ideas? Dr. Galligan?
Dr. Galligan. Well, I--I'll start by saying that one way is
to make the law clear. And so, the clearer the law is, the
better able a company is to pay damages. So, if a company faces
law that's unclear, then it doesn't know what the damages are.
I think the Death on the High Seas Act here today presents an
excellent example. People know there are bills that are
pending, but they haven't been passed yet, and so, I think
they're probably waiting to consider what Congress does. So,
moving quickly on that would be important.
Another way, Senator, is to make punitive damages available
for the arbitrary or willful failure to pay claims on time.
Maritime law does that in the case of what's called
``maintenance and cure,'' which is when a seaman is hurt and
she or he has a right to recover a payment for maintenance and
medical expenses until they reach maximum medical cure. If the
employer arbitrarily or willfully doesn't make those payments,
then punitive damages are available.
It's a little bit, Senator, like in bad-faith insurance
cases in many States, when an insurer doesn't pay a claim, that
there are penalties or attorney's fees that will be available.
So, those are certainly all vehicles that you could
consider to use to encourage the timely resolution and fair
settlement of claims.
Senator Klobuchar. Mr. McCallister, do you have anything to
add?
Mr. McCallister. No.
Senator Klobuchar. OK.
Mrs. Anderson. I do----
Senator Klobuchar. OK.
Mrs. Anderson--if you don't mind.
Senator Klobuchar. No, that would be very good.
Mrs. Anderson. With my husband and what we have gone
through, our loss was absolutely instant. And in 20 years, my--
if I've done my job correctly, my kids are going to be self-
supportive in 20 years. They're going to be 25 and 21. They
should be able to be fine by themselves. We don't want to be
lumped in with everyone else. We want the choice to go where we
want to go to file our claims. And our loss was instant.
I'm not a lawyer, I don't know about the laws, but it seems
to me the easiest way to pay all this is to get your checkbook
out and write the check and be done.
Senator Klobuchar. I would agree.
Mrs. Roshto. Can I say something----
Senator Klobuchar. And I know we need to do some amending
of the Death on the High Seas Act, as well, given the
difference with--we had a hearing on this in my Judiciary
Committee--but, about the difference with the airlines, and how
that's handled, and use those same standards over--which I
think would be helpful.
Yes, Mrs.----
Mrs. Roshto. Thank you.
Senator Klobuchar--Mrs. Roshto.
Mrs. Roshto. The core of all this--I mean, really, I
think--we lost 11 men that day, 11 men that we cannot bring
back, 11 men that all had children, that their children will
never be able to have fathers again. But, if--after this law is
passed and it is made clear to these companies--not just BP,
not just Transocean, any offshore drilling company--if it made
clear to them that they, from the very begin with, will be held
accountable in the end for these men's lives, I think that if
they know that from the very begin with, that they will be
safer, to begin with. Because they knew--they knew the law.
They knew that they could just throw these men out there and
just, you know, give them a little safety every now and then.
And if something happened, they didn't think that we would be
sitting here today, doing this.
Senator Klobuchar. Right. So, it goes into a cost-benefit--
--
Mrs. Roshto. Right.
Senator Klobuchar--analysis.
Mrs. Roshto. That's right. If you make them know, from the
very begin with, that they have to be safe, I think that our
men ultimately would be here today, in the end.
Senator Klobuchar. Yes. I thought about this when we had a
hearing--Chairman had a hearing on the Toyota issue, and--
remember, with their brakes, and that they--they actually
calculated in and were cheering when they had to pay less money
when they worked with the regulatory agency on how much they
owed. And it was a really good example of how companies
actually make a cost-benefit analysis and think, ``Oh, it's
going to cost me less. So, that's great, so I don't have to
worry about it anymore.'' And I think you're exactly right,
that we look at this right now, understandably, to compensate
Mrs. Anderson and others for their losses, and the wildlife of
Minnesota, and everything else. But, we have to also look at it
as a preventative measure. So.
All right. Well, very good. I really appreciate it. I don't
want to hold up the Chairman any longer.
And thank you so much for being here today. We look forward
to working with you.
The Chairman. Thank you, Senator Klobuchar.
And you did, in fact, come over from a rather important
hearing. So, we're glad that you cared enough to come.
Let me just--in closing remarks, we earlier talked about
Courtney Kemp, and I have now, as you know, put her statement
in the record, but it's interesting what she says in her
testimony. She says, ``It is my belief that this terrible
tragedy could have been prevented, if only proper safety
procedures had been followed,'' close quote. Pretty direct.
The cost of following safety rules--these are my words, not
hers--have been a few dollars--would have meant a few dollars
for BP and Transocean. Cost of cutting corners and rushing the
job was 11 human lives and goodness knows what other kind of
tragedy for those who were injured.
Ms. Kemp asks us to, quote--says to us, ``How is it that
the almighty dollar has become more important than a human
life?'' and that closes her quote.
So, what I would say to the two of you, and then, Mr.
Galligan, to you, over the next few weeks we're going to be
working very hard on legislation to address this problem that
we've been discussing this morning, and to come to a
resolution, such as you have all, in different ways, suggested
to us, because it's a matter of national necessity, and it has
everything to do with the quality of lives, the way others look
at their futures, not just--and also the way you look at your
future in--which will be more painful than for others.
Various committees will be working on this, and it will be
difficult to juggle that. But, I think our focus on this will
be very clear. This committee obviously will be playing a key
role in this process.
So, our top priority is to make sure that safety always
comes first on an oil rig--and elsewhere, for that matter, over
what we have jurisdiction. And if safety doesn't come first,
and people are injured or killed, we're going to update our
laws to make sure that companies can be held fully accountable.
That is the view of this particular Senator and, I think, the
view of the great majority of those on this committee.
I thank all of you for taking your time to come here. You
came distances. You've testified quite marvelously in public.
You've done an enormous amount of--I would say, especially to
the two wonderful young women, you've done an enormous favor to
everybody who works in the businesses that your husband worked
in. And you've--what you've spoken about, I think will be a
comfort to all families, whether their husbands died or were
injured or not, simply by the way you said what you said, the
passion and the righteousness and the rightness of what you
said.
And so, know that, as you go home. Really understand that,
that you made a tremendous difference here today.
We will do the right thing by you, I promise you that.
This hearing is adjourned.
[Whereupon, at 11:50 a.m., the hearing was adjourned.]