WHAT ARE THE LOSSES, CLAIMS OR POTENTIAL CLAIMS?

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1 Volume 1, Issue 1 NEWSLETTER 2010 Edition Article: Gulf of Mexico Disaster: Beyond Precedent T he Deepwater Horizon semi-submersible mobile offshore drilling rig explosion in the Gulf of Mexico on April 20, 2010, and its aftereffects (referenced all-inclusively in this article as the Oil Spill ), have proven to be a disaster of unparalleled magnitude. Beyond the human lives lost and the bodily injuries from the original blowout, the subsequent sea floor oil gusher, massive, prolonged spill, and resulting environmental and economic devastation has affected even those who are unrelated to the oil industry in ways previously unimagined by the victims. For individuals and businesses, the losses are broad, widespread and still developing; and the legal implications, unprecedented. In Gulf states like Louisiana, Mississippi, and Texas, seafood, fishing and tourism - particularly along the coastal areas - are intertwined and are the lifeblood of the economy. This means that the environmental damage caused by the Oil Spill can ultimately impact every individual and business that relies on such local products and services. The ongoing nature of the event means that losses and damages continue to accrue and some have yet to be discovered. WHO IS AFFECTED? The Oil Spill has caused and continues to wreak profound damage and destruction upon the Gulf of Mexico's marine environments, coastal wetlands, and estuarine areas. Anyone who uses these areas or relies on products or services from them, whether for recreational, commercial or industrial purposes, is affected. For example, environmental contamination and damage caused by the Oil Spill in the Gulf of Photograph courtesy of Rae Cupit. Mexico have resulted in the closure of about one-third of the Gulf to fishing, including both commercial and recreational, shrimping, oyster harvesting, and crabbing. Obviously, those involved in or who rely upon the regional fishing and seafood industry are affected. Tourism has suffered, as well. Beaches were closed along the Louisiana, Mississippi, Alabama, and Florida coasts. Travelers cancelled their plans because they feared the contaminated coastlines and food supply, whether or not those concerns were or remain justified. As a result, many besides those involved in the oil industry may suffer economic losses and damages in various forms. The extent of who the Oil Spill has affected or may affect is extraordinarily broad and will likely continue to expand. Those impacted include: Fishermen, shrimpers, oystermen, crab fishermen, crawfish farmers, etc. Fish and seafood processors and distributors. Dock owners, operators, and employees. Marina owners, operators, and employees. Boat owners, boat dealers, and their employees. Transporters and distributors of fish and seafood. Restaurants, supermarkets, hotels, and their employees. Travelers who have been forced to cancel or change their travel plans due to contaminated sites. Photograph courtesy of Rae Cupit. Other individuals and commercial entities who handle fish or seafood or who otherwise earn a livelihood from industry-related activities. Other individuals and commercial entities involved in the travel and tourism industries. WHAT ARE THE LOSSES, CLAIMS OR POTENTIAL CLAIMS? As with any legal situation, a party s losses and related claims depend upon the specific facts of the case. And, because (cont. on p. 2)

2 (cont. from p. 1) of the Oil Spill s protracted occurrence and continuing, related issues, there are losses that have yet to occur and/or which cannot be determined at this time. Many victims will suffer multiple forms of losses or damage, much of which would have been unexpected for them in their usual course of activity or in their lifetimes. Some of the losses identified or which may now be expected might include: Business and income loss. Unemployed fishermen and fishing/seafood industry workers. Unemployed workers due to the drilling moratorium imposed in response to the spill. Reduction in business transactions. Higher prices for fish and seafood products, if they are even available. Lack of necessary services. Loss of clients and customers. Real estate property damage. Damage to or loss of movable property, such as boats. Diminished value of movable and real property. Loss of accommodation deposits. Inconvenience; loss of enjoyment of vacation or property. Photograph courtesy of Chrissy Changho Bruneau Personal injuries suffered by clean-up workers and other exposed persons. LITIGATION ISSUES Under the federal Oil Pollution Act, recovery seems to be clear for victims suffering financial loss due to the Oil Spill. The Act imposes liability upon a responsible party for a... facility from which oil is discharged...into or upon navigable waters or adjoining shorelines for the damages that result from such incident. 33 U.S.C Damages may be recovered by any claimant which are equal to the loss of profits or impairment of earning capacity due to the injury, destruction, or loss of real property, personal property, or natural resources. 33 U.S.C. 2702(b)(2)(E). The regulations promulgated under the Act confirm, in this regard, that such a claimant does not have to be the owner of the damaged property or resources. See, 33 C.F.R (a). However, litigation over the claims related to the Oil Spill disaster will be lengthy and rife with confusion. The Oil Pollution Act allows for a very broad range of claimants and injuries. The Act itself should allow any claimant who can prove damages that result from the Oil Spill to recover. However, it remains unclear what the connection is between the Oil Pollution Act and the Claims Facility Process, headed by Ken Feinburg, and whether the Claims Facility Process will interpret the Oil Pollution Act to allow for the broad range of claimants, no matter how far removed they are. To date, thousands of individual claims have been filed with BP, and hundreds of lawsuits have already been filed against the parties deemed responsible or at least partially responsible, including: BP, Transocean, Cameron International Corporation, and Halliburton Energy Services. Yet, the procedure for filing individual claims with BP is ever-changing. And, questions of legal liability and litigation procedure, and how and where these cases will ultimately be litigated, remain to be answered. For example, although BP has been determined to be the responsible party under the federal Oil Pollution Act, Anadarko Petroleum Corporation and Mitsui Oil Exploration Company of Japan have been identified as joint venturers in the drilling project at issue, and could be targeted as contributing tortfeasors, as could other entities. Employees may seek to file claims against their employers for failure to protect their interests. Property owners could file suit against property managers for failure to respond or react or mitigate. Recovery workers might file claims against manufacturers of products used to extract or disperse oil from the Gulf waters. Questions exist as to how conflicting state and federal laws will apply; which state s laws will apply; whether multidistrict litigation court will be established; and where such a court would be located. Moreover, the nature and extent of a victim s particular legal status, losses or injuries may trigger different avenues for or limitations on recovery; Jones Act, general maritime law, Outer Continental Shelf Lands Act, and the Oil Pollution Act are particular examples which may come into play. HOW CAN COTTEN SCHMIDT & ABBOTT HELP YOU? If you have suffered loss or injury due to the Gulf Oil Spill, Cotten Schmidt & Abbott can navigate the ever-changing claims process on your behalf, determine if and when litigation is appropriate, and help you successfully resolve your matter. We are knowledgeable and experienced in the areas affected by the spill, from commercial issues to toxic tort, environmental, product liability, premises, personal injury and maritime claims. We provide innovative and exceptional legal service to the individuals, businesses and institutions we represent, in any jurisdiction. For more information about how Cotten Schmidt & Abbott can assist you with your BP Oil Spill related claim, please contact Charles Abbott at cabbott@csalawfirm.com. In any legal situation, Cotten Schmidt & Abbott puts your interests and business first. We make what works for our clients work for us. 2

3 Accolades and Accomplishments U.S. Fifth Circuit Dismisses Climate Change Class Action Lawsuit Larry Abbott, Charles Abbott and Amy Maccherone, of the Firm s New Orleans office, and Dennis Conrad, from the Firm s Forth Worth office, successfully represented E. I. du Pont de Nemours and Company ( DuPont ) in the United States Fifth Circuit Court of Appeals recent dismissal of plaintiffs appeal in Comer v. Murphy Oil USA, a significant climate change class action lawsuit. The Comer case involves Mississippi residents who sued an assorted group of energy, oil and chemical companies for damages related to Hurricane Katrina. Plaintiffs argued that the defendants were responsible for greenhouse gas emissions that increased the severity of Hurricane Katrina and resulting damage. LARRY ABBOTT CHARLES ABBOTT The Mississippi federal district court dismissed plaintiffs claims based on both political question and standing grounds. Subsequently, a three-judge panel of the Fifth Circuit reversed, holding that the case did not present a non-justiciable political question and that plaintiffs had standing to pursue state law damages claims for negligence, trespass, and nuisance. Defendants, including DuPont, applied for rehearing en banc, which was granted. However, prior to rehearing, the Fifth Circuit lost its quorum due to a number of recusals. The remaining judges concluded that, without a quorum, they lacked judicial authority over the case and dismissed the appeal. Because the Court s grant of rehearing en banc vacated the prior AMY MACCHERONE DENNIS CONRAD panel decision, the decision of the district court, which dismissed the case, was reinstated. The Fifth Circuit's dismissal order also advised plaintiffs of their right to petition for review by the United States Supreme Court. For more information about the ligation and appellate services provided by the above attorneys, they can be contacted, as follows: Mr. Larry Abbott, labbott@csa-lawfirm.com; Mr. Charles Abbott, cabbott@csalawfirm.com; Ms. Maccherone, amaccherone@csa-lawfirm.com; Mr. Conrad, mconrad@csa-lawfirm.com. AIDS Outreach Center of Tarrant County Appoints Keanan Hall as Treasurer Keanan Hall, from the Firm s Fort Worth office, has been appointed as the Treasurer of the AIDS Outreach Center of Tarrant County ( AOC ). Through outreach, prevention and community information programs, AOC educates the public about HIV prevention while offering free and/or low-cost services to HIV positive individuals and their families. AOC was founded in 1986 by volunteers to help HIV-positive individuals in Fort Worth deal with end-of-life issues. Today, AOC stands as the largest AIDS social service organization in Tarrant County in the fight against AIDS. Due to its long-standing history of quality and comprehensive support services, AOC has become the most highly utilized non-medical referral destination for more than 1,900 persons per year living with HIV/AIDS in Tarrant County and the surrounding areas. Current services include: anonymous and confidential testing HIV testing, mental health counseling, support groups, the Sandy Lanier Nutrition Center and nutritional counseling, the Geisel-Morris Dental Clinic, minority outreach, transportation, housing, emergency assistance, and insurance continuation programs. KEANAN HALL 3

4 Church s Roof Claims Resolved in Favorable Settlement Attorneys for Cotten Schmidt & Abbott obtained a very favorable settlement for Birchman Baptist Church regarding a claim for hail damage to the church s roof. In the spring of 2008, a hailstorm damaged the roofs of four (4) buildings in the Birchman Baptist Church Complex in west Fort Worth. The Church, which has a congregation of over 2,500, had a replacement value casualty insurance policy. As a result of the hail damage, water leaks began to appear throughout the Church Complex. The Church retained Cotten Schmidt & Abbott to assist it with its claims against the insurance company. After initial demands and negotiations failed, the Firm filed suit on behalf of the Church. The litigation team for Birchman Baptist consisted of RANDALL SCHMIDT Randall Schmidt, Robert Martinez, Matthew McLain and paralegal, Debbie Wade, from the Firm s Fort Worth office. ROBERT MARTINEZ MATTHEW MCLAIN BIRCHMAN BAPTIST CHURCH, FORTH WORTH, TEXAS The lawsuit centered on three (3) of the buildings in the Church Complex that had built-up, flat roofs. The hail damage to those roofs was somewhat atypical in that it had more of a scouring effect than traditional hail markings. The scouring removed a substantial part of the granular surface of the built-up bitumen roofs. The insurance company refused to acknowledge any hail damage to those roofs. Cotten Schmidt & Abbott retained a hail damage expert, Steve Patterson with Roof Technical Services, Inc., who provided a report that the three (3) flat roofs were damaged by hail and needed to be replaced. The Firm also retained the Chief Meteorologist from a local television station to confirm the hail size and event at the Church Complex. With a trial setting less than two (2) months away, the insurance company had made no offers to pay for any repairs or for the replacement of the roofs in question. However, working through a mediator, the insurance company agreed to pay the Church $623, That agreement came one day before Robert Martinez was scheduled to depose the insurance company s hail damage expert. The settlement funds will allow the Church to remove the damaged roofs and put new roofs on all three (3) of the flat roof buildings. In addition, the Church will recoup all of its attorneys and experts fees and court costs. For information about the litigation services offered by Mr. Schmidt, Mr. Martinez and Mr. McLain, they can be contacted, respectively, at rschmidt@csa-lawfirm.com, rmartinez@csa-lawfirm.com, and mmclain@csalawfirm.com. Angela Hoyt Elected Chair of Tarrant County Bar Association Labor & Employment Law Section Angela Hoyt, of the Firm s Fort Worth office, was elected to a one-year term as Chair of the Labor & Employment Law Section of the Tarrant County Bar Association. Ms. Hoyt is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization. She has been practicing labor and employment law for the past 12 years. Ms. Hoyt primarily represents employers and management in employment discrimination and retaliation cases as well as other employment-related disputes. A large part of her practice involves providing advice and counsel to clients on a variety of workplace issues and policies, in an effort to help employers implement sound policies and practices in order to avoid legal disputes. For more information about Ms. Hoyt s labor and employment law services, please contact her at ahoyt@csa-lawfirm.com. ANGELA HOYT 4

5 Louisiana Asian Pacific American Bar Association Founded, Firm Hosts NAPABA Quarterly Executive Board Meeting in New Orleans Chrissy Changho Bruneau, from the Firm s New Orleans office, is Founding President of the Louisiana Asian Pacific Bar Association ( LAPABA ). CHRISSY CHANGHO BRUNEAU LAPABA is a non-profit, professional legal organization for attorneys, judges, law professors, and law students of Asian and Pacific heritage throughout Louisiana, and others who support the interests of Asian Pacific American lawyers, the legal profession, and Asian Pacific American communities. LAPABA was founded to provide a network for its members and foster professional development, legal scholarship, advocacy and community involvement. LAPABA is an affiliate of the National Asian Pacific American Bar Association ( NAPABA ). In connection with this relationship, the Firm was proud to host NAPABA s Executive Board in its new office in New Orleans for the Board s quarterly meeting on May 15, The individuals who make up the NAPABA Executive Board traveled to New Orleans from their various locales throughout the country. As a new organization, LAPABA is in the process of building its membership and establishing its presence in the legal community. For more information about LAPABA, or to become a member or sponsor, please contact Ms. Bruneau at cbruneau@csa-lawfirm.com. Maritime Plaintiff Verdict Reversed on Appeal Following a plaintiff verdict in a maritime personal injury matter, Michael Kivort, of the Firm's Houston office, was lead author of a defense appellate brief that resulted in a reversal of a verdict by the 14th Texas Court of Appeals and a remand for new trial The client defendant owned and operated a vessel which was used to perform seismic testing in the Gulf of Mexico. At the time of the incident in question, the plaintiff, an experienced Jones Act seaman, worked aboard the vessel as a handling specialist. The plaintiff deployed and retrieved seismic air guns using an overhead trolley system as part of his duties. On a December morning in 2003, the plaintiff stood up from a squatting position and allegedly hit his hard hat-protected head on an I-beam in the slipway of the vessel. The I- beam supported the overhead trolley system on which the plaintiff worked. The plaintiff, who had been aware of the location of the I-beam before his head hit it, claimed resulting injuries to his neck and shoulder. MICHAEL KIVORT Our client disputed that the alleged shoulder injury was related to the incident at issue. During trial, the defendant moved for separate jury questions regarding damages related to the two claimed injuries. The key issue was whether the jury believed that the plaintiff's shoulder condition arose from his hitting his head on the I- beam, or from his unrelated work on an overhead garage door approximately two months after the incident in question. The trial court refused to permit the defendant s requested jury questions. Instead, the trial court instructed the jury to not include any amount for any condition not resulting from the occurrence in question and, over defense objections, provided to the jury broad-form questions. As a result of the trial court s action, it was unclear whether the jury found that the claimed shoulder injury was related to the December 2003 vessel incident, or not. The jury s answers to the broad-form questions did not provide any insight into their determined cause of the shoulder condition, nor how much of the damages awarded was attributed to the shoulder condition. This became one of the primary issues on appeal. The appellate court determined that the trial court committed reversible error by submitting the broad-form questions to the jury because doing so left the appellate court unable to determine if damages were awarded for particular injuries or for all of the injuries claimed. On April 1, 2010, the appellate court reversed the verdict and remanded the case for a new trial on those grounds. Please contact Mr. Kivort at mkivort@csa-lawfirm.com for more information about his litigation and appellate services. 5

6 Charles Abbott Presents Toxic Tort Lecture On February 11, 2010, Charles Abbott spoke as a guest lecturer at the Louisiana State University Paul M. Hebert Law Center in Baton Rouge. Mr. Abbott gave a presentation to the Toxic Torts class, which consisted of second and third-year law students. Mr. Abbott's lecture focused primarily on practical tips related to handling expert witnesses in toxic tort litigation. St. Tammany Young Lawyers Association to Receive LSBA Award, Hosts Successful Fundraiser Nancy Brechtel, of Cotten Schmidt & Abbott s New Orleans office, serves as President and a Board Member of the St. Tammany Young Lawyers Association ( STYLA ). NANCY BRECHTEL STYLA s "Day With the Court" program has been selected as the recipient of the Louisiana State Bar Association, Young Lawyers Section Local Affiliate Support Award. As President, Ms. Brechtel drafted the award application. When awarding the funds, an LSBA representative commented that: we were tremendously impressed with the STYLA program and feel that it truly embodies the mission of our organization. The funded program will educate local students on the judicial process and on potential careers in all aspects of the legal arena. On May 22, 2010, STYLA hosted its inaugural Court Chase 5K, benefitting the Youth Service Bureau (YSB) of St. Tammany Parish. YSB provides advocacy, counseling and intervention for at-risk youth and their families, helping them reach their full potential. The Court Chase fundraiser was an unprecedented success in its first year, bringing in more than 220 participants and substantial sponsorships. Cotten Schmidt & Abbott was a Magistrate Sponsor. Robert Martinez Honored as Volunteer of the Year Robert Martinez, from the Firm s Fort Worth office, was recognized by the Greater Irving-Las Colinas Chamber of Commerce as its 2010 Volunteer of the Year, for his work as General Counsel and Chair of the Chamber s Transportation and Infrastructure Committee. Robert is also the Chair-Elect of the Chamber s Board of Directors and will become Chairman of the Chamber in October The Chamber is one of only two Texas chambers of commerce to achieve Five Star status with the U.S. Chamber of Commerce, and counts among its members many Fortune 100 companies headquartered or having large facilities in Irving. Firm Attorney Assists in Resolving S Corporation Tax Claims The Internal Revenue Service has apparently taken a new interest in small, closely held S corporations that do not pay any salary to their owners. As this is not an unusual set of facts for mom and pop companies, this new area of interest by the IRS could have a significant impact on small business owners. In these cases, the IRS takes the position that all of the net income of the S corporation is compensation to the owners and subject to employment taxes. The net effect on the corporation and its owners can be substantial when the IRS adds failure to deposit, failure to file and failure to pay penalties to the proposed increased tax liability. Rick Disney, of the Firm s Fort Worth office, has substantial experience in tax controversy, and is assisting a number of small business owners in resolving these types of claims with the IRS. To request more information about Mr. Disney s services, him at rdisney@csa-lawfirm.com RICK DISNEY 6

7 ERISA Seminar Conducted by Ryan Wallis Ryan Wallis from the Firm s New Orleans office, presented ERISA 404(c): The Scope and Requirements of the Defense to the Association of Employee Benefit Planners of New Orleans on June 7, The Association of Employee Benefit Planners of New Orleans is an organization that promotes the exchange of information among professionals in the field of employee benefits, including but not limited to pension, profit-sharing, and 401(k) plans that are qualified under the Internal Revenue Code. Mr. Wallis s presentation drew from his experience litigating class actions against 401(k) plan sponsors for breaches of fiduciary duty, and focused on the scope of the safe harbor under ERISA 404 (c) as defined in recent jurisprudence. For more information on Mr. Wallis s services pertaining to employee benefit plans, please him at rwallis@csa-lawfirm.com. RYAN WALLIS Lisa Brindle Talbot Appointed to Professional, Community Board Positions Lisa Brindle Talbot, of the Firm s Houston office, has been appointed to the Editorial Board of The Houston Lawyer, the bi-monthly magazine publication of the Houston Bar Association. Lisa will serve on the Board for bar year 2010 through The Houston Lawyer s March/April 2010 Edition features an article written by Ms. Talbot, entitled: "Attorneys Creating Their Home Sweet Office." The article weighs the benefits and challenges faced by attorneys maintaining an office out of their home, and additionally highlights the efforts of the Firm s own Jan Hueber, a partner in the Fort Worth office who practices from her home in Virginia. The article can be found in print and online at: LISA BRINDLE TALBOT Ms. Talbot also serves as a Board member of Education-N-Hoops, Inc., an organization that promotes service, advocacy, and empowerment for youth in the Houston area. The goal of Education-N-Hoops is to instill in the community s youth the importance of scholastic excellence and the value of physical fitness. It JAN HUEBER provides academic tutoring, computer training, sports instruction, dance and theater classes, cultural awareness classes and field trips. It also hosts seminars focused on the dangers of drug abuse and avoiding peer pressure. These programs are provided free of charge as an incentive to get children and their parents actively involved. Photograph courtesy of Lisa Brindle Talbot To raise awareness about the group, Ms. Talbot recently assisted in running its First Annual Celebrity Basketball Charity Game in downtown Houston. Over 100 children participated in the event and enjoyed games with former and present Houston Rockets players, as well as former WNBC players from the Houston Comets. Photograph courtesy of Lisa Brindle Talbot 7