U.S. Supreme Court will not revive Louisiana parish lawsuits that would have resulted in 'regulatory chaos'

NEW ORLEANS – BP PLC notched up a legal victory on Monday when the U.S. Supreme Court refused to hear an appeal on a case brought against the oil giant by 11 Louisiana parishes for alleged aquatic and wildlife damages stemming from the 2010 Deepwater Horizon Oil Spill.

The parishes seeking to recover penalties under the state's Wildlife Protection Statute included Plaquemines, Orleans, St. Bernard, Lafourche, Terrebonne, St. Charles, Jefferson, Iberia, St. Mary, St. Tammany and Cameron. They were represented by Stephen B. Murray Jr., of the New Orleans-based Murray Law Firm.

On appeal, the parishes argued that by dismissing their initial case the courts wrongfully stripped local governmental entities of the police power granted to them by the state constitution.

In a Feb. 24 ruling, the U.S. Fifth Circuit Court of Appeals disagreed. Writing for a three-judge panel that considered the appeal, Judge Edith Jones wrote that the district court was right in determining that the parishes’ claims were preempted by federal law under the Outer Continental Shelf Lands Act.

“Allowing up to five states along the Gulf Coast to apply their individual laws to discharges arising on the Shelf would foster the legal chaos described by [the Supreme Court's 1987 decision in International Paper Co. v.] Ouellette,” Jones wrote. “That three Gulf coast states submitted amicus briefs in this appeal, and all five Gulf Coast states filed suits to recover damages based on particular state laws testifies to the problem.”

In her opinion, Jones wrote that the district court was correct in dismissing the case because the source of the spill did not originate in the state’s jurisdiction, but in navigable waters and therefore was under the governance of federal maritime law.

“In sum, Ouellette forms a controlling backdrop for resolving claims caused by the blowout. Federal law, the law of the point source, exclusively applies to the claims generated by the oil spill in any affected state or locality,” she wrote.

In response to the appeals court rebuff, the parishes filed a petition for writ of certiorari on May 29 with the U.S. Supreme Court, which was provided to the Justices on Oct. 1 for conference in which they privately discuss cases.

“The Fifth Circuit’s ruling is an unprecedented expansion of federal regulation of ‘interstate pollution’ into the field of sea-to-shore oil pollution, which this Court has found to be a question of vital, historic State interest,” the writ said.

The U.S. Supreme Court provided no reason concerning its decision to not hear the appeal and only noted that  Justice Samuel Alito did not take part in the consideration or decision of the petition.

BP spokesman Geoff Morrell said the company is content with the decision to disallow a further appeal.

“We are gratified that the parishes’ request for Supreme Court review has been denied and that the books can now be closed on this case, which the Fifth Circuit found would have created ‘regulatory chaos’ had the plaintiffs prevailed,” he said.

The damages sought on the state level by the plaintiffs will be addressed on the federal jurisdictional level in January 2015 when the third phase on the Deepwater Horizon trial wraps up with the assessment of Clean Water Act violations that may see BP pay up to $18 billion in fines.

Case no. 13-1424 (LOUISIANA, EX REL. BALLAY V. BP EXPLORATION & PROD., ET AL.).