Monthly Archives: May 2012

Student Blawg: The Costa Concordia

By: An Anonymous Student

During the night of January 13, 2012, the 955-foot Italian-flagged COSTA CONCORDIA struck rocks and capsized near the coast of Giglio, Italy, resulting in evacuation of the 4,252 people on board. Thirty-two people are known to have died during this tragic event, others were injured and two are still missing.

This tragedy raises a number of issues including cruise ship safety and the rights of cruise ship passengers, particularly pertaining to the matter of legal jurisdiction. A cruise ship ticket is also known as a “cruise ticket contract.” By purchasing the ticket, a passenger arguably enters a contract and agrees to its conditions, which include a series of limitations and waivers in case of dispute. Two clauses of concern on the Costa Concordia ticket address the jurisdiction and which laws apply for possible legal claims against the company. The “forum selection” clause stipulates the specific court in which a plaintiff may file a claim against Costa. The “choice of law” clause is where Costa names which country’s laws will apply to that claim. Despite the fact that the cruise ship has its headquarters in Miami, FL, the forum is in Italy and the choice of law is Italian law. According to Beard Stacey and Jacobsen, LLP, maritime injury law firm in Washington, this clause gives the passengers a huge disadvantage of bringing their lawsuits in Italy versus the US where it is typically easier to recover damages for pain and sufferings. Time limits on legal notices and actions are stated on the contract, and there is also a clause in the Costa contract barring the filing of a class action lawsuit.

At last report, Costa Concordia has said it will reimburse passengers for travel expenses and medical expenses. The company is also offering uninjured passengers about $14,460 each to compensate for lost luggage and psychological trauma. It is obvious that not all the passengers agree that this amount is sufficient to cover the terrifying experience of being on a sinking ship. Costa plans to address compensation to those with physical injuries and to the families of those who died on an individual basis. The Costa ticket contains a clause limiting its liability for the death or injury of a passenger to about $71,000, although that doesn’t apply in cases of recklessness and some legal experts say it could be successfully challenged.

Despite the terms on the Costa cruise ticket contract, lawsuits, including class action suits, by U.S. citizens and citizens of other countries are being filed in Florida and other states. The families of those who lost their lives fear that Italian law and courts will not appropriately address their losses. It is unclear whether the Florida court will keep the case or uphold the forum selection clause in favor of the Italian court. Even if the Florida court finds a way to keep the case on jurisdictional grounds, it may still uphold the choice of law clause stated in the cruise ticket contract. In such a case, damages would be governed by Italian law.

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Student Blawg: Two thoughts about the Lower North Fork Fire

Lower North Fork Fire, Raise the Cap?

By, An Anonymous Student

On March 26 2012 a fire now known as the Lower North Fork fire raged near Conifer resulting in three deaths and the destruction of 23 homes.  Total damage amounts to at least $11.3 million.  However, since the Colorado State Forrest Service started the fire as a controlled burn, the state has a cap of $600K against lawsuits.  The Colorado Governmental Immunity Act limits the state’s combined claims to $600,000 and is divided among hundreds of claimants. The seemingly paltry sum would barely begin to compensate the victims against the states’ negligence. Governor Hickenlooper’s solution is to centralize the command by placing controlled burns under the authority of the Department of Public Safety, instead of Local Affairs and CSU. A special state commission was recently created by Republicans to review individual claims and pay out compensation on losses not covered by insurance.  Supporters of the commission state the legislation opens up an avenue for victims to collect more than the current immunity cap. Detractors state that it sets a dangerous precedent.  How do you compensate others for legitimate claims but are limited by the $600K cap?  For cash strapped Colorado, where does the money come from?  Are Colorado taxpayers now going to have to foot the bill for prescribed burns to protect the state from possible negligence claims? Do taxpayers need to pay for homeowner damages that choose to live in high-risk fire zones?

 

By, Another Anonymous Student

 

There have been several articles on the State’s liability to home owners and families that lost loved ones during the recent Lower North Fork Fire that have caused me to pause and ask “what is wrong here?”   The answer is that several things went wrong.

First, the Colorado State Forest Service under the direction of the Colorado State University set a “prescribed burn” on March 22, 2012 during one of the driest and windiest March’s that Colorado has seen in a long time.  Second, under proper procedures, any prescribed burn is supposed to be patrolled for three days after it has been extinguished.  The North Fork Fire was only patrolled for two days.  The Jefferson County Sheriff’s office in conjunction with the U.S. Department of the Interior, U.S. Bureau of Land Management and the U.S. Forest Service investigation indicated that even if the fire would have been patrolled on March 25, that the site did not seem (appear) to be dangerous.  But on March 26, 2012 the fire reignited because of dry conditions and 80 mph wind gusts and suddenly was out of control.

Governor John Hickenlooper commissioned an investigation into the cause and origin of the fire that resulted in the death of three people, destruction of 23 homes at an estimated value of $11.3 million, the destruction of thousands of acres of land and utilities, and an unstated cost to the state for the cost of extinguishing the fire.

The commission found that (i) there was no criminal wrong doing on the part of the Colorado State Forest Service, (ii) failure in communications delayed coordination of fighting the fire, and (iii) there were problems with the reverse notification system and getting residents evacuated in a timely manner.  Specifically, the first reverse notification did not go specifically to residents in the fire’s path, the second call was placed by a private company hired by Jefferson County with to a list of homes that did not include all of the homes in the path of the fire, and door to door evacuations were sporadic and did not include all of the homes that were destroyed.  But again no one seems to be responsible.

Under the Colorado Governmental Immunity Act the state’s liability is limited to $150,000 per individual up to a total of $600,000.  Up until 1987, the maximum liability was $400,000 until the then Governor Roy Romer increased the limit to $600,000 when the Colorado Department of Transportation loosened a boulder on Berthoud Pass that killed nine passengers in a bus.   Currently there have been nine notices of intent to file suit as a result of the Lower North Fork Fire.  IREA has filed a claim of $1.2 million for destruction of transmission lines.  The American Family Insurance company has also filed a “notice of claim.”

I can understand how the liability of the state must be limited to ensure that it has the funds to continue to serve the public.  But it is the public’s tax dollars that fund the government!  Errors were made and lives and homes were lost.  The general public is required to carry all kinds of insurance to replace their belongings due to destruction and to protect against claims of liability.  Corporations also carry all kinds of insurance including large “umbrella” policies to cover the unexpected and claims that exceed stated insurance policy limits.  Why can’t the State also carry these large umbrella policies?  A total of $600,000 is a drop in the bucket.  Most states run their state agencies like a corporation, and therefore, they should also have to carry that additional insurance to protect against instances like this.  This is especially true when the State seems to pursue any individual that can be found guilty of setting a fire, whether intentionally or not, and sending them the bill for the cost associated with the extinguishing of the fire.  If it is found that a fire was set intentionally, then criminal charges are also levied against the individuals.  The Lower North Fork Fire was “intentionally” set and resulted in lose of life and property.  Since Colorado is a heavily forested state and susceptible to droughts, the State’s legislature should pass legislation to ensure that the State has umbrella insurance policies to pay for its errors that result in lose of life and property because raising the maximum total by another $200,000 isn’t going to cut it.

 


Student Blawg: Oil and Gas Producers Don’t Belong in the Free Lunch Line

By: Anonymous Student

 

I applaud the U.S. Environmental Protection Agency for finalizing a rule which includes the first federal air pollution standards for hydraulic fracturing operations under the Clean Air Act. Now it is time for EPA to do the same for water quality standards under the Safe Drinking Water Act (SDWA) and Clean Water Act (CWA).

Oil and gas developers currently take advantage of a major exemption from the SDWA. Specifically, hydraulic fracturing operations are not subject to provisions relating to the Underground Injection Control (UIC) program. The UIC program regulates injection of fluids into the subsurface for purposes of disposing contaminated wastewater or storing gas. Even though hydraulic fracturing involves injecting fracking fluids into the subsurface, oil and gas developers are exempt from the UIC program. This means they do not have to monitor groundwater before, during, or after drilling operations.

Similarly, the entire oil and gas industry enjoys a broad exemption from the CWA. In this case, hydraulic fracturing operations are not required to obtain a NPDES permit for non-reportable storm water discharge. A 2007 study by EPA, which evaluates the impact of gas well sites on storm water runoff in City of Denton, Texas, concluded this exemption allows the industry to release, without a permit, storm water which contains high levels of total suspended and dissolved solids, chlorides, metals, alkalinity, and pH.

These exemptions allow oil and gas producers to operate with impunity. They are not being held accountable for groundwater and surface water contamination caused by their wells. This is most distressing because the Colorado Oil and Gas Conservation Commission plans to increase hydraulic fracturing permits, at a minimum, by 20% every year for the next three years. If oil and gas producers are allowed to increase production without monitoring groundwater or applying for storm water discharge permits, it is conceivable aquifers, wells, and tributary streams all over the country will become devastated.

A strong argument can be made hydraulic fracturing contaminates groundwater. The EPA is currently reviewing scientific evidence and reports from local water districts and residents which suggest a direct link between hydraulic fracturing operations and contaminated groundwater and surface water. It is my hope EPA, state agencies, and producers will take these findings seriously and adjust regulatory requirements and industry practices accordingly.

With that in mind, the time has come to eliminate the UIC and NPDES permit exemptions in the SDWA and CWA. Oil and gas producers can certainly afford compliance requirements, especially since modern hydraulic fracturing techniques have made oil and gas extraction much cheaper. In addition, the regulatory framework within the SDWA and CWA already exists, and the oil and gas industry exemption provisions need only be repealed.

I am confident the oil and gas lobby will claim this is an enormous regulatory burden, and I can already hear folks arguing federal environmental agencies should be dismantled, not empowered. To this I say: I do not want to be the oil and gas industry’s next victim in The Tragedy of the Commons. The oil and gas industry has never effectively regulated themselves in regards to minimizing their impact on the environment. We cannot expect them to start now.

The oil and gas industry should be held to the same standards as other industries. Producers have filed through the free lunch line long enough. When EPA and Congress are asked to repeal the oil and gas industry exemptions from SDWA and CWA, let’s support them.