2nd UPDATE: US House Panel Passes Oil-Spill-Liability Bill

23rd Jun 2010 21:41

(Adds details starting in 9th paragraph) By Brent Kendall Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--A U.S. House panel approved legislation Wednesday that would repeal a century-and-a-half-old law that Transocean Ltd. (RIG) has sought to use to limit its liability in the Gulf oil spill disaster. The legislation also would make it easier for the families of the 11 victims of the Deepwater Horizon oil accident to collect certain financial damages. The bill would apply to both pending and future cases. The House Judiciary Committee passed the bill on a 16-11 vote, sending the measure to the full House for consideration. Two Republicans joined 14 Democrats in supporting the measure. In a related matter, the committee voted to authorize the issuing of subpoenas to BP America for documents related to the company's claims process for victims of the Gulf of Mexico spill. The subpoenas will seek documents regarding the amount of reported claims from the oil spill that have not been paid, and for other documents related to claims and processing. Committee Democrats said the liability bill would offer justice to oil-spill victims and their families, while most Republicans said the bill was too broad, unnecessarily rushed and could have a variety of unintended consequences. Transocean, the owner and operator of the Deepwater Horizon rig, filed legal papers last month under the Limitation of Liability Act of 1851 to limit its liability to just under $27 million. The House bill would repeal this law. Under the act, a vessel owner is liable only for the post-accident value of the vessel and cargo, so long as the owner can show no knowledge of negligence in the accident. The act could allow Transocean to limit its liability for personal-injury, wrongful-death and other non-pollution related lawsuits stemming from the rig's explosion and collapse. A federal judge in Houston said last week the 1851 law doesn't shield the company against most lawsuits filed under the nation's environmental laws, including the Oil Pollution Act. A Transocean spokesman declined to comment. BP PLC (BP, BP.LN), which leased the rig, bears most of the liability in the spill disaster. It is unclear how much the companies ultimately may have to pay in damages and penalties. The House legislation also would allow the families of spill victims to collect noneconomic damages, such as damages for pain and suffering and loss of care and companionship. Supporters of the bill say current law only allows families to recover for economic losses such as the loss of the victim's income and funeral expenses. In an interesting development, one Democrat, Rep. Mel Watt of North Carolina, sought to amend the bill so that it would not apply retroactively to pending cases involving the current spill. Watt questioned whether imposing the legislation retroactively was constitutional. The proposed amendment sparked verbal sparring between Watt and Rep. John Conyers (D., Mich.), the committee chairman and lead sponsor of the liability legislation. Conyers said Congress has been enacting retroactive bills for a long time "and we're not going to stop now." Watt's amendment was rejected on a voice vote. On the subpoena matter, Conyers said the panel was "not getting anywhere" getting certain documents from BP, which made the subpoenas necessary. The panel's top Republican, Lamar Smith of Texas, also supported the issuance of subpoenas to BP America. Smith said he hoped that in the future, BP would provide the committee with documents without the panel having to exercise its subpoena authority. -By Brent Kendall, Dow Jones Newswires; 202-862-9222; [email protected] (Mark Long contributed to this article.) (END) Dow Jones Newswires June 23, 2010 16:41 ET (20:41 GMT)