Oil liability bill could face court challenge

But Barry Hartman, an attorney with K&L Gates and a former Justice Department official who helped prosecute the case related to the Exxon Valdez oil spill, said the legislation could face a court challenge. 

“Any retroactive application has Constitutional issues with ex post facto,” Hartman said.

Right after the Constitution declares that Habeas corpus shall not be suspended, it adds that, “No bill of attainder or ex post facto law shall be passed.”

The courts may decide that Congress is penalizing a specific entity – in this case BP -- and that it is doing so “after the fact,” or ex post facto, that an act occurred.

Backers of the bill say there is legal precedent to what they want to do. Superfund legislation, for example, forces companies to clean-up pollution they caused years before the act’s passage. 

“We have been advised that retroactivity is sound,” said Dan McLaughlin, a spokesman for Nelson.

A Senate counsel involved with crafting the bill said she didn’t believe the legislation violated bill of attainder provisions, which prevent Congress from penalizing specific individuals or entities, because all companies responsible for an oil spill would face the higher liability cap, not just BP.

Hartman said the oil spill liability bill – called the “Big Oil Bailout Prevention Act” – is different than Superfund legislation because it seeks to force companies to pay for economic damages caused by a spill, not just clean-up costs. (The OPA also requires companies pay for clean-up and does not put a cap on those costs.) It may also violate the bill of attainder provisions by reaching back in time to include the accident that BP says it will take responsibility for, Hartman said.

In the end, the liability bill may not even be necessary.

BP CEO Tony Hayward has said the company will pay all legitimate claims and that he expected those claims would exceed the $75 million cap.

Hartman also noted that OPA includes a number of instances in which the cap could be exceeded. For example, the cap does not apply if companies are grossly negligent or operated with willful misconduct or are found to have violated federal regulations. Hartman said those caveats may mean the $75 million cap already would not apply in the case of the Gulf spill.