Golden Gate University Environmental Law Journal


Alfred R. Light


Two months after the April 2010 Deepwater Horizon explosion, BP and the Obama White House announced the creation of the $20 billion Deepwater Horizon Oil Spill Trust (“the Trust”) to pay individuals and businesses suffering losses arising from the disaster. Although BP initially paid certain claimants, Kenneth R. Feinberg, a Washington lawyer who previously administered the 9/11 Compensation Fund, opened the Gulf Coast Claims Facility (“the Facility” or GCCF) in August to “independently” resolve disaster claims against BP. As publicly advertised, the Facility and the $20 billion Trust, to which it has access to pay claims, are designed to address claims by individuals and businesses but do not cover governmental claims for cleanup costs, lost revenues, or natural resource damages.

The Superfund “myth” is that a trust fund would compensate victims expeditiously and avoid (or at least defer) litigation over the liability of potentially responsible parties. The myth of the GCCF created last year is the same – those injured by the Deepwater Horizon disaster will be compensated expeditiously without the delays and costs associated with litigation. This Article explores some of the issues present in the GCCF context that are analogous to those that appeared during the formative years of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). CERCLA’s unfortunate realities need not be the GCCF’s realities, at least not entirely. CERCLA is a law of unintended consequences, where the quest for quick compensation and remedial response (“shovels first, lawsuits later”) became a ponderous litigation-oriented regime with high transaction costs. This Article identifies potential unintended and undesired consequences for the GCCF by exploring the surrounding myths, with the hope that by doing so, some of those consequences experienced under CERCLA may be avoided.

Part II explores the myth of the Superfund, examining the similarities between CERCLA and the Oil Pollution Act of 1990 (OPA), which is directly implicated in the Deepwater Horizon Disaster. Part III compares and contrasts the Deepwater Horizon Oil Spill Trust Agreement, which establishes the $20 billion Trust with BP money and authorizes expenditures related to the incident, with the protocols now governing the Gulf Coast Claims Facility administered by Feinberg. Part IV compares aspects of CERCLA’s and OPA’s liability regimes, focusing on affirmative and partial defenses, the role of causation (especially proximate cause), the equitable allocation of responsibility among liable parties, and the related issue of the effect of partial settlements. Part V hones in on the ultimate critical issue – the competition among various categories of claimants, including the federal government, states, local governments, private businesses, and individuals, for BP’s money. Finally, Part VI shows how the GCCF has evolved while unintended consequences of the Facility’s original design have surfaced and continue to exist.