Oyster Mortality Due To Freshwater Diversions In The Deepwater Horizon Response Effort: Are Takings Claims Viable?

Many private parties sustained damage after the Deepwater Horizon incident on April 20, 2010 (the Spill). Since the Spill, many of these parties have attempted to recover their losses, and the news recently has been filled with stories detailing the settlement of some of these claims.1 After the Spill, British Petroleum (BP) set up the Gulf Coast Claims Facility, which paid over $6 billion before it was replaced with a courtsupervised claims process in June 2012. The U.S. District Court in Louisiana recently approved a settlement in the Spill’s multi-district litigation. While there is a $2.3 billion cap on the claims that BP will pay to seafood vessel owners, seafood boat crews and captains, commercial fishermen, and oyster leaseholders, other claims are not capped. Through this settlement, BP estimates that it will pay out more than $7.8 billion of the $20 billion trust to resolve all the claims. The U.S. government has also settled some of its civil and criminal cases from the Spill. In November 2012, BP settled with the U.S. Department of Justice to plead guilty to criminal charges and pay $4.5 billion in fines, one of largest criminal fines ever imposed by the U.S. government against a corporation. In addition, BP faces additional Clean Water Act claims that were not included in the settlement with the Department of Justice. Transocean Ltd., who owned the rig that exploded, recently settled with the U.S. Department of Justice to pay $1.4 billion to cover all federal civil and criminal charges against the company. Among those parties who sustained damage as a result of the Spill are oystermen who raise and harvest oysters in the Gulf of Mexico (Gulf). Oysters are in a unique position in the Gulf. In addition to being an economic commodity, oysters are a keystone species and provide ecosystem services such as filtering water. Unfortunately, the Spill occurred when oysters were spawning, so the oyster population was likely very damaged by the Spill. However, much of the oyster mortality is being attributed to the decision to flush freshwater into the Gulf as part of the response effort, and not due to oil from the Spill. The State of Louisiana decided to use its freshwater diversion system in an attempt to keep oil out of the state’s coastal marshes and wetlands. Louisiana and the U.S. Army Corps of Engineers began to flush unprecedented amounts of freshwater into Louisiana’s coastal waters beginning ten days after the Spill. Most parties concur that the freshwater diversions lowered the salinity level in Louisiana’s coastal marshes, and that the lower salinity levels led to massive amounts of oyster mortality in these areas. However, disagreement exists as to the effectiveness of the freshwater diversions. In addition, although most parties acknowledge that the freshwater diversions attributed to a drop of salinity that led to oyster mortality, some parties are claiming that the freshwater diversions were only one of several factors that caused salinity levels to drop in Louisiana’s coastal waters. Ironically, these diversion systems were planned and completed by the state of Louisiana and the federal government partly at the request of the oyster industry. The freshwater diversion systems were built as part of an effort to protect and preserve Louisiana’s coastline and remain part of Louisiana’s coastal restoration plan. Louisiana continues to use freshwater diversions to prevent further coastal erosion and salt water intrusion, as well as “to maintain and enhance the existing ecological framework” of Louisiana’s coastal areas. This article will look at possible recovery available against Louisiana and the federal government for oyster harvesters and distributors for damage done to their leased oyster beds by the freshwater diversions after the Spill. As stated above, oyster leaseholders had the option to join the $2.3 billion settlement for the seafood industry in the multidistrict litigation. Similarly, oyster leaseholders could have submitted claims to the Gulf Coast Claims Facility. However, this article will look at the ability of oyster leaseholders in Louisiana to bring takings claims under the U.S. and Louisiana constitutions. Part I will discuss the history of oysters and freshwater diversions in Louisiana. Part II of this article will discuss the Deepwater Horizon disaster and the freshwater diversions, including how the diversions impacted oysters. Part III will briefly discuss the other forms of recovery available to the oystermen. Part IV will discuss the recovery under state and federal law for takings claims. Part V will analyze whether these takings claims could be successful