```

[House Report 111-521]
[From the U.S. Government Publishing Office]

111th Congress                                            Rept. 111-521
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================

 
 SECURING PROTECTIONS FOR THE INJURED FROM LIMITATIONS ON LIABILITY ACT

                                _______
                                

 June 30, 2010.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 5503]

                  [Including Committee Cost Estimate]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 5503) to revise laws regarding liability in certain civil 
actions arising from maritime incidents, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     4
Background and Need for the Legislation..........................     4
Supporters of H.R. 5503..........................................    16
Hearings.........................................................    17
Committee Consideration..........................................    17
Committee Votes..................................................    17
Committee Oversight Findings.....................................    19
New Budget Authority and Tax Expenditures........................    20
Committee Cost Cost Estimate.....................................    20
Performance Goals and Objectives.................................    20
Constitutional Authority Statement...............................    20
Advisory on Earmarks.............................................    20
Section-by-Section Analysis......................................    21
Changes in Existing Law Made by the Bill, as Reported............    22
Additional Views.................................................    31

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Securing Protections for the Injured 
from Limitations on Liability Act''.

SEC. 2. AMENDMENTS TO DEATH ON THE HIGH SEAS ACT.

  The Death on the High Seas Act (chapter 303 of title 46, United 
States Code), is amended--
          (1) in section 30302--
                  (A) by inserting ``or law'' after ``admiralty'';
                  (B) by striking ``3 nautical miles'' and inserting 
                ``12 nautical miles''; and
                  (C) by striking the last sentence;
          (2) in section 30303--
                  (A) by inserting ``and nonpecuniary loss'' after 
                ``pecuniary loss'';
                  (B) by striking ``by'' and all that follows through 
                the end, and inserting ``, plus a fair compensation for 
                the decedent's pain and suffering.''; and
                  (C) by adding at the end the following: ``In this 
                section, the term `nonpecuniary loss' means loss of 
                care, comfort, and companionship.'';
          (3) in section 30305 by inserting ``or law'' after 
        ``admiralty'';
          (4) in section 30306, by inserting ``or law'' after 
        ``admiralty'';
          (5) by striking section 30307, and redesignating section 
        30308 as section 30307;
          (6) in section 30307, as so redesignated, by amending 
        subsection (b) to read as follows:
  ``(b) Internal and Territorial Waters.--This chapter does not apply 
to the waters of the Great Lakes or waters within the territorial 
limits of a State that do not exceed 12 nautical miles from the shore 
of the United States. In such waters, the rules applicable under 
Federal, State, maritime, and other appropriate law shall apply.''; and
          (7) in the table of sections at the beginning of such 
        chapter, by striking the items relating to sections 30307 and 
        30308 and inserting the following:

``30307. Nonapplication.''.

SEC. 3. AMENDMENTS TO JONES ACT.

  Title 46, United States Code, is amended--
          (1) in section 30104, by adding at the end the following: 
        ``In addition to other amounts authorized under such laws, the 
        recovery for a seaman who so dies shall include recovery for 
        loss of care, comfort, and companionship.''; and
          (2) by striking section 30105 and the item relating to that 
        section in the table of sections at the beginning of chapter 
        301.

SEC. 4. REPEAL OF LIMITATION OF LIABILITY ACT.

  Chapter 305 of title 46, United States Code, is amended by repealing 
sections 30505, 30506, 30507, 30511, and 30512 and the items relating 
to those sections in the table of sections at the beginning of chapter 
305.

SEC. 5. AMENDMENT TO CLASS ACTION FAIRNESS ACT.

  Title 28, United States Code, is amended--
          (1) in section 1711(2), by inserting ``, but does not include 
        an action brought by a State or subdivision of a State on 
        behalf of its citizens'' before the period;
          (2) in section 1332(d)(1)(B), by inserting ``, but does not 
        include an action brought by a State or subdivision of a State 
        on behalf of its citizens'' before the semicolon; and
          (3) in section 1332(d)(11)(B)(ii)--
                  (A) by striking ``or'' at the end of subclause (III);
                  (B) by striking the period at the end of subclause 
                (IV) and inserting ``; or''; and
                  (C) by adding at the end the following:
          ``(V) the claims are made by a State or subdivision of a 
        State on behalf of its citizens.''.

SEC. 6. UNENFORCEABILITY OF CERTAIN SECRECY AGREEMENTS.

  (a) In General.--Part VI of title 28, United States Code, is amended 
by adding at the end the following:

     ``CHAPTER 181--UNENFORCEABILITY OF CERTAIN SECRECY AGREEMENTS

``Sec.
``4101. Unenforceability of certain secrecy agreements.

``Sec. 4101. Unenforceability of certain secrecy agreements

  ``(a) In General.--Subject to subsection (b), an agreement, promise, 
or directive to restrict the dissemination of information regarding the 
cause of a discharge into waters off the shore of the United States of 
a substance that contaminates a marine or coastal environment or 
endangers public health, regarding the nature or extent of such a 
discharge, regarding the damage caused or threatened by such a 
discharge, or regarding the efforts to remediate the effects of such a 
discharge, shall be void as against public policy and unenforceable in 
any legal proceeding.
  ``(b) Exception.--
          ``(1) Generally.--Subsection (a) does not apply with respect 
        to a directive contained in a court order, or issued by a 
        Government agency with authority to enforce such a directive in 
        a court, restricting dissemination of information as necessary 
        to protect public health or safety.
          ``(2) Procedure relating to exception.--
                  ``(A) A court shall not grant judicial enforcement of 
                a directive or order described in paragraph (1) unless 
                the proponent of the directive or order proves by clear 
                and convincing evidence that such enforcement is 
                permitted under paragraph (1).
                  ``(B) If a court grants judicial enforcement of any 
                directive or order described in paragraph (1), the 
                court shall state the court's factual findings and 
                conclusions of law relating to that enforcement on the 
                record.''.
  (b) Clerical Amendment.--The table of chapters for part VI of title 
28, United States Code, is amended by adding at the end the following 
new item:

``181. Unenforceability of Certain Secrecy Agreements.......    4101''.

SEC. 7. AMENDMENTS TO TITLE 11 OF THE UNITED STATES CODE.

  (a) Treatment of Certain Property in Bankruptcy.--
          (1) Limitation on sale or lease of certain property in 
        bankruptcy.--Section 363 of title 11, United States Code, is 
        amended by adding at the end the following:
  ``(q) Notwithstanding any other provision of this section, if the 
debtor is liable under any law for a claim arising from an incident (as 
defined in section 1001 of the Oil Pollution Act of 1990, and that 
gives rise to liability under such Act), the trustee may not sell or 
lease all or substantially all property of the estate of the debtor 
(or, to the extent that the court has or can obtain jurisdiction over 
any affiliate of the debtor, property of such affiliate) unless the 
entity that acquires such property (including any affiliate of such 
entity) assumes the obligation to pay the amount of allowed unsecured 
claims arising from such incident that is not paid by the debtor, or 
unless creditors holding at least two-thirds in amount, and more than 
one-half in number, of such claims consent to different treatment.''.
          (2) Limitation on treatment of certain property under a plan 
        of reorganization.--Section 1129(b)(2)(B) of title 11, United 
        States Code, is amended--
                  (A) in clause (i) by striking ``or'' at the end;
                  (B) in clause (ii) by striking the period at the end 
                and inserting ``; or''; and
                  (C) by adding at the end the following:
                  ``(iii) that includes claims of the kind described in 
                section 363(q), if the plan provides for a sale or 
                lease of all or substantially all of property of the 
                estate, the plan requires the entity that acquires such 
                property (including any affiliate of such entity) to 
                assume the obligation to pay the amount of allowed 
                unsecured claims arising from an incident described in 
                section 363(q) that is not paid by the debtor, or 
                creditors holding at least two-thirds in amount, and 
                more than one-half in number, of such claims consent to 
                different treatment.''.
  (b) Conforming Amendment.--Section 303(f) of title 11, United States 
Code, is amended by adding at the end the following: ``If the debtor is 
liable under any law for a claim arising from an incident (as defined 
in section 1001 of the Oil Pollution Act of 1990, and that gives rise 
to liability under such Act), the debtor may not sell or lease all or 
substantially all property of the debtor (or, to the extent that the 
court has or can obtain jurisdiction over any affiliate of the debtor, 
property of such affiliate) unless the entity that acquires such 
property (including any affiliate of such entity) assumes the 
obligation to pay the amount of allowed unsecured claims arising from 
such incident that is not paid by the debtor, or creditors holding at 
least two-thirds in amount, and more than one-half in number, of such 
claims consent to different treatment.''.

SEC. 8. EFFECTIVE DATE.

  This Act and the amendments made by this Act shall take effect on the 
date of enactment of this Act and shall apply to cases pending on or 
after such date.

                          Purpose and Summary

    H.R. 5503, the Securing Protections for the Injured from 
Limitations on Liability Act, will revise outdated laws 
regarding liability in certain civil actions arising from 
maritime incidents, to ensure fair and just compensation to the 
injured and their families. It will also make supplemental 
changes in other laws to prevent companies with widespread 
liability from offshore oil disasters from using bankruptcy to 
remove significant assets from availability to pay victims, to 
restrict enforceability of secrecy agreements regarding the 
contamination or the cleanup efforts, and to clarify the 
authority of State attorneys general to pursue claims on behalf 
of their citizens.

                Background and Need for the Legislation

                             I. BACKGROUND

    On April 20, 2010, there was an explosion on the Deepwater 
Horizon oil drilling platform that ultimately engulfed the 
vessel in flames, sank it, and caused a massive oil spill in 
the Gulf of Mexico that continues to spread throughout the Gulf 
Coast, and perhaps beyond. Of the 126 crew members, 11 men were 
killed, and at least 17 others were physically injured.\1\
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    \1\The 126-member crew reportedly consisted of forty-one contract 
workers, including four Halliburton employees and five M-I SWACO 
employees; six or seven BP employees; and seventy-nine Transocean 
employees, including the rig commander, Captain Curt Kuchta. Of the 
eleven fatalities, nine of the men were employed by Transocean and two 
by M-I SWACO.
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    The Deepwater Horizon (DWH) was owned by Transocean, Ltd., 
a leading offshore drilling contractor with more than 18,000 
employees worldwide. British Petroleum (BP) is a global energy 
company (including BP America). It leased the DWH from 
Transocean, and was also the operator and principal developer 
of the oil field on which the Deepwater Horizon oil drilling 
platform was located. Halliburton, a global oil field services 
company with over 50,000 employees worldwide, was the cement 
contractor aboard the vessel. Cameron International is a global 
provider of pressure control, processing, flow control, and 
compression systems, and was the manufacturer of the blowout 
preventer (BOP) aboard the oil vessel.
    BP's partners in the DWH drilling project were Anadarko 
Petroleum Corporation and Mitsui Oil Exploration. Anadarko was 
a non-operating investor with a 25% stake in the project, and 
had no employees stationed on the rig. Mitsui, which 
specializes in natural gas exploration and development, had a 
10% investment in the well. There have been no published 
reports about whether Mitsui had any employees on board the rig 
on the day of the explosion.
    M-I SWACO was subcontracted as the DWH's mud engineer. 
Weatherford International Ltd. was the casing subcontractor. 
Finally, Schlumberger Ltd. was contracted by BP to conduct 
wireline services. Schlumberger had a crew on board the DWH, 
but according to company officials, they left the rig several 
hours before the fire and explosion.\2\
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    \2\Henry Fountain, ``Documents Show Risky Decisions Before BP 
Blowout,'' N.Y. Times, June 14, 2010.
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    Each of these companies has been implicated in the events 
leading up to the explosion and the continuing oil spillage, 
and each may bear some legal responsibility for the resulting 
harm.\3\
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    \3\John Schwartz, ``Liability Questions Loom for BP and Ex-
Partners,'' N.Y. Times,. June 24, 2010.
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    Although the legal issues are complex and still taking 
shape, there are at least several general categories of 
responsibility arising out of the Gulf Coast oil disaster. 
First, there is the legal responsibility of the companies for 
the deaths and injuries of the workers that resulted from the 
April 20 explosion.\4\ The current statutory regime governing 
this aspect of the legal liabilities is exceedingly complex and 
outdated, in some instances resting on laws written in the mid-
19th century to protect American merchant sailing ship owners. 
In addition to general maritime law, at least two Federal 
statutes--the Death on the High Seas Act\5\ (DOHSA) and the 
Jones Act\6\--will likely govern the extent to which injured 
workers and dependent family members of deceased or injured 
workers can recover damages.
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    \4\It is difficult to estimate the potential costs of the DWH 
disaster, but a 2005 explosion at a BP refinery in Texas, killing 15 
and injuring scores more, reportedly resulted in a settlement totaling 
some $1.6 billion, albeit under a different applicable liability 
scheme. Stephanie Mencimer, ``Screwed if By Sea,'' Slate, June 16, 
2010.
    \5\46 U.S.C. Sec. Sec. 30301-30308.
    \6\46 U.S.C. Sec. Sec. 30104-30106. There are two maritime 
statutes, both enacted as part of the Merchant Marine Act of 1920, that 
are commonly known as the ``Jones Act,'' both named for the sponsor of 
the provisions, Senator Wesley Jones. Section 27 of the 1920 Act, now 
codified at 46 U.S.C. Sec. 55102, is a cabotage law that requires that 
all waterborne shipping between points within the United States be 
carried out by vessels built in the United States, owned by U.S. 
citizens (at least 75%), and manned with U.S. citizen crews. The Act 
essentially bars foreign-built and -operated vessels from engaging in 
U.S. domestic commerce. The second, at issue here, is section 33 of the 
1920 Act, now codified at 46 U.S.C. Sec. Sec. 30104-30106, It governs 
liability for the personal injury or death of a seaman occurring during 
the course of employment.
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    In addition, for its part, Transocean filed suit in 
Houston, Texas, on May 13, 2010 under another statute that may 
be relevant to further proceedings. That statute, the 
Limitation of Liability Act\7\ (LOLA), enacted in 1851, is 
designed to limit rather than facilitate recovery. It permits a 
vessel owner to limit its liability for all personal injury 
claims that may be brought against it to the value of the 
vessel and its cargo. With its ``vessel'' on the Gulf floor, 
Transocean has estimated that amount in this case to be 
approximately $27 million.
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    \7\46 U.S.C. Sec. 30501 et. seq.
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    Second, there is responsibility for the broader economic 
damages resulting from the spill, under the Oil Pollution Act 
of 1990\8\ (OPA). Passed in the aftermath of the Exxon Valdez 
oil spill in Prince William Sound, OPA establishes a framework 
for those harmed by the offshore discharge of oil to recover 
for specified damages. Under OPA, the ``responsible party'' is 
strictly liable for all economic damages associated with a 
discharge of oil into the waters of the United States, as well 
as cleanup and removal costs. A ``responsible party'' may 
recoup some costs from third parties under certain 
circumstances.\9\ Where an oil spill emanates from a vessel, 
the ``responsible party'' is the owner or operator of the 
vessel from which the oil is discharged.\10\ As the operator of 
the DWH, BP is responsible for the economic damages associated 
with the spill. As of June 22, 2010, BP estimated that it had 
paid out $118,044,258 to Gulf Coast claimants, but the ultimate 
responsibility will be far more. For example, on June 2, 2010, 
Credit Suisse estimated that these economic damages could total 
$14 billion.\11\
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    \8\33 U.S.C. Sec. Sec. 2701-2761.
    \9\33 U.S.C. Sec. 2702(d). ``The responsible party is able to 
recover through subrogation from a third party solely at fault, but is 
not relieved of strict liability for the payment of claims up to the 
limitations provided by OPA. The sole fault third party, once complete 
fault has been established, then steps into the shoes of the 
responsible party, theerby becoming subject to the liabilities, 
limitations and defenses of the Act. There is, however, no mention of 
the liabilities or defenses available to third parties only partially 
at fault.'' Gregg L. McCurdy, Comment, An Overview of OPA 1990 and its 
Relationship to Other Laws, 5 U.S.F. Mar. L.J. 423, 426-27 
(1993)(footnotes omitted).
    \10\33 U.S.C. Sec. 2701(32).
    \11\See ``CS Sees Total BP Oil Spill Cost Up To $37 Billion.'' June 
2, 2010. at http://www.zerohedge.com/article/cs-sees-total-bp-oil-
spill-cost-37-billion-eat-3-years-free-cash-flow-will-require-10-rise-
g.
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    OPA sets liability limits, or caps, on what the responsible 
party pays beyond the cleanup costs, at $75 million per 
incident (as defined by the Act). This liability cap does not 
apply if the responsible party or any of its contractors 
violated any Federal or State safety regulations or acted with 
gross negligence.\12\ The damages expressly recoverable under 
OPA are limited to (1) property damage; (2) subsistence loss; 
(3) net lost government revenue; (4) net lost profits or 
earning capacity; (5) cost of increased public services; and 
(6) damage to natural resources. OPA does not apply to personal 
injury or wrongful death. However, BP representatives have 
testified that it would not seek to avail itself of the cap--
that it would pay ``all legitimate claims''--though it has not 
yet explained what it will consider legitimate, nor has it 
formally agreed to extend its liability beyond the OPA cap.\13\
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    \12\In addition, liability limits are unavailable if the violation 
of a Federal safety, construction, or operating requirement proximately 
caused the spill. Spillers must also report the incident and cooperate 
with response officials to take advantage of the liability caps. OPA 
Section 1004(c).
    \13\See Liability Issues Surrounding the Gulf Coast Oil Disaster: 
Hearing Before the House Committee on the Judiciary, 111th Cong. (2010) 
(testimony of Darryl Willis, Vice President, Resources, BP America). 
See also Jackie Calmes, ``For Gulf Victims, Mediator With Deep Pockets 
and Broad Power,'' N.Y.Times, June 22, 2010 (```All of the design, all 
of the implementation and all of the administration' of the claims 
process `is basically a handshake between the Obama administration, BP 
and me,' Mr. Feinberg said Tuesday.'').
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    The third category of legal responsibility is the broader 
responsibility for cleanup costs. Under OPA, the responsible 
party is obligated to reimburse all cleanup costs incurred by 
others, not only by a government entity, but also by a private 
party,\14\ although it may seek contribution or subrogation 
from other companies.\15\ As of June 21, 2010, BP had 
reportedly spent approximately $2 billion in cleanup and 
containment efforts,\16\ but a recent estimate by The New York 
Times estimated eventual cleanup costs of perhaps as high as 
$14 billion.\17\ If BP is unwilling or unable to pay all 
cleanup costs, the Oil Spill Liability Trust Fund (OSLTF) 
provides a backstop for relief. The OSLTF was established by 
Congress in 1986 to create a pool of readily available funds 
for oil spill response needs.\18\ The Fund is primarily used to 
finance the costs incurred by Federal and State agencies for 
prompt oil spill removal and to reimburse Federal, State and 
Indian tribe trustees for recoverable costs associated with oil 
spills, including natural resource damages.\19\ The OSLTF is 
presently estimated to contain roughly $1.6 billion.\20\ The 
maximum amount of money that may be withdrawn from the OSLTF is 
$1 billion per incident (as defined by OPA).\21\
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    \14\OPA Section 1002(b)(1).
    \15\33 U.S.C. Sec. 2715.
    \16\See, BP has spent $2 billion on Oil Spill cleanup: Company Says 
it has paid out $105 Million to Victims; Overall Cleanup Cost Expected 
to Continue Rising, June 21, 2010, http://www.cbsnews.com/stories/2010/
06/21/national/main6602994.shtml
    \17\Fiona Marharg-Bravo and Rolfe Winkler, ``Could BP's Money Stop 
Flowing?'' N.Y. Times, June 18, 2010.
    \18\See Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509). 
However, Congress did not authorize its use or fund it until after the 
Exxon Valdez incident. In 1990, OPA provided the statutory 
authorization necessary to put the fund into effect. The OSLTF was 
initially funded by a five-cent-per-barrel tax on the oil industry. The 
Emergency Economic Stabilization Act of 2008 (P.L. 110-343) increased 
the tax rate to eight cents through 2016. In 2017, the rate will 
increase to nine cents, and the tax is scheduled to terminate at the 
end of 2017. See section 405 of P.L. 110-343. The fund is administered 
by the U.S. Coast Guard. Other revenue sources for the fund include 
interest earned on fund deposits, cost recovery from the parties 
responsible for spills, and any fines or civil penalties collected.
    \19\``Could BP's Money Stop Flowing,'' N.Y. Times, June 18, 2010, 
B2.
    \20\Matthew Wald, ``Tax on Oil May Help Pay for Cleanup,'' N.Y. 
Times, May 1, 2010.
    \21\26 U.S.C. Sec. 9509(c)(2)(A).
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    OPA was designed to encourage administrative resolution of 
claims directly with the responsible party. Therefore, a 
government claimant seeking reimbursement for removal or 
cleanup costs, or any claimant seeking economic damages, must 
first present the claim to the responsible party. If the 
responsible party denies the claim or does not settle the claim 
within 90 days, a claimant may seek funds from the OSLTF or 
initiate action in a court of law. To date, no money has been 
withdrawn from the Fund in connection with the Gulf spill 
cleanup.
    In regard to these two broader categories of 
responsibility, BP announced that it will establish a $20 
billion escrow account--a claims fund--as urged by President 
Obama, which adds another layer of complexity to the evaluation 
and resolution of claims. This fund will be set aside as part 
of the ``Independent Claims Facility'' (ICF), which will be 
managed by Kenneth Feinberg. The fund will be built up over a 
three-and-a-half-year period and be available ``to satisfy 
legitimate claims including natural resource damages and state 
and local response costs.''\22\ The fund reportedly will not 
pay out fines or penalties, but will honor claims that are 
adjudicated, whether by the ICF or by a court, or as agreed to 
by BP. According to initial accounts, the fund is not intended 
to represent a cap on BP liabilities, and will proceed on 
parallel tracks with other efforts by claimants to obtain 
redress for harms caused by the spill. Although the contours of 
this fund, and of the overall claims process, are not entirely 
clear at this point, claimants apparently may choose to pursue 
their claims wherever they wish, and are not precluded from 
accessing multiple forums.
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    \22\Press Release, BP, BP Establishes $20 Billion Claims Fund for 
Deepwater Horizon Spill and Outlines Dividend Decisions (June 16, 2010) 
(www.bp.com).
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    Many of the general areas of liability present overlapping 
and interrelated issues. As of June 11, 2010, more than 160 
cases are going forward as class actions.\23\ BP has already 
filed a motion to consolidate the cases before one multi-
district litigation court, and the Judicial Panel for 
Multidistrict Litigation is scheduled to hold a hearing on July 
29 in Boise, Idaho.\24\ In addition, personal injury claims 
stemming from the spill and cleanup have been submitted to BP 
or are being pursued in the courts under various theories of 
relief. It is unclear to what extent these type claims are 
candidates for resolution by the ICF.
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    \23\Anna Fifield, ``Lawyers file class action suits against BP,'' 
Financial Times, FT.com. June 11, 2010.
    \24\Marilyn Tennissen, ``BP seeks MDL in Houston for Deepwater 
Horizon cases,'' LegalNewline.com, May 19, 2010.
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    Finally, there are the fines due under the Clean Water 
Act\25\ and related statutes. It has been estimated by some 
that the civil fines due under this statute could be as high as 
$22 billion, and a private lawsuit has recently been filed 
seeking a similar amount.\26\ It has also been asserted that BP 
will be responsible for royalties to the Federal Government for 
each barrel of oil lost, which could cost large additional 
amounts.\27\ A further factor is the criminal probe that 
Attorney General Eric Holder announced on June 1, 2010, along 
with the Justice Department's civil investigation. The 
threshold for a criminal investigation has ``certainly been 
passed,'' Attorney General Holder said, although he would not 
disclose the exact targets of the probe. Prosecutors are 
reportedly looking at possible violations of the Clean Water 
Act, the Migratory Bird Treaty Act, the Endangered Species Act, 
and the Oil Pollution Act.\28\ In addition, lawsuits have been 
filed or are contemplated by the attorneys general of the 
affected States.\29\
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    \25\33 U.S.C. Sec. 1251 et seq.
    \26\Press Release, Center for Biological Diversity, Lawsuit Seeks 
$19 Billion in Clean Water Act Penalties From BP (June 21, 2010).
    \27\Jim Efstathiou Jr., ``BP May Owe U.S. $1 Million a Day in 
Royalties on Spilled Oil,'' Bloomberg.com, May 21, 2010.
    \28\Helene Cooper and Peter Baker, ``U.S. Opens Criminal Inquiry 
Into Oil Spill,'' N.Y.Times, June 1, 2010.
    \29\See Liability Issues Surrounding the Gulf Coast Oil Disaster: 
Hearing Before the House Committee on the Judiciary, 111th Cong. (2010) 
(testimony of Jim Hood, Attorney General, State of Mississippi) (``[M]y 
office has begun the process of reviewing all potential legal claims on 
behalf of the state arising out of the oil spill incident.''). See 
also, ``UPDATE 1-Florida could sue BP over any spill damage-governor.'' 
Reuters, May 4, 2010.
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                      II. NEED FOR THE LEGISLATION

A. Remedies for maritime death and injury due to negligence
    Maritime law is a patchwork of Federal rules and principles 
emanating from judicial opinions, statutory enactments, and 
international treaties. In the wake of what is projected to be 
the largest oil spill in U.S. history, it is evident that 
raising the $75 million cap provided by the Oil Pollution Act 
of 1990 (OPA) is not sufficient, now or in the future, to 
address the bodily harm to those caught in the explosion or 
those involved in cleanup of the resulting spill. The OPA cap 
applies to commercial loss; it does not reach the losses of 
those who suffered personal injuries or who died in the 
explosion, or those who may be harmed in the cleanup efforts.
    The Death on the High Seas Act (DOHSA) is the primary 
statute applicable to wrongful deaths occurring on board 
vessels further than three nautical miles from U.S. shores and 
on commercial aircraft further than twelve nautical miles out. 
It allows for specified dependent relatives of the decedent to 
seek pecuniary damages for accidents at sea, and both pecuniary 
and non-pecuniary damages for certain aviation accidents.
    Congress enacted DOSHA in 1920\30\ to create a cause of 
action for wrongful deaths occurring on the high seas beyond 3 
nautical miles from U.S. shores, after a series of Supreme 
Court cases left the availability of damages for deaths at sea 
in confusion.\31\ DOHSA allows the spouse, parents, child, or 
dependent relative of a seafarer or vessel passenger to seek 
recovery for pecuniary damages only. But DOHSA generally does 
not provide recovery for pre-death pain and suffering, or for 
non-pecuniary loss of care, comfort, and companionship. This 
means, for example, that when a child or retired worker is 
killed, the surviving family's recovery would essentially be 
limited to funeral expenses. Indeed, the fact that many of the 
passengers aboard TWA Flight 800 were children, who had no 
income on which to base pecuniary loss, was a significant 
driving factor in Congress's decision to amend DOHSA as to 
commercial aviation accidents.
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    \30\Originally codified at 46 U.S.C. Sec. 761, et seq, the statute 
is now found at 46 U.S.C. Sec. 30301 through Sec. 30308.
    \31\See The Harrisburg, 119 U.S. 199 (1886); The Alaska, 130 U.S. 
201 (1889); La Bourgoyne, 210 U.S. 95 (1908).
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    The Jones Act, also passed in 1920, provides a cause of 
action for wrongful death or personal injury for ``seamen'' who 
die in the course of employment as the result of negligence. 
The Jones Act allows pecuniary damages from the employer for 
the negligence of the shipowner, the captain, or fellow members 
of the crew.
    In the area of wrongful death, both the Jones Act and DOHSA 
generally confine recovery for negligent loss of life to 
pecuniary losses. Both statutes, however, have legislatively or 
judicially mandated exceptions that have produced irrational 
anomalies in the law. This legislation addresses those 
anomalies.
    When Congress first considered and enacted DOHSA, overseas 
commercial aviation simply did not exist. Still, anyone who 
died as the result of a plane crash on the high seas was 
covered under the terms of the statute. Following the TWA 
Flight 800 crash in 1996, Congress amended DOHSA to provide for 
non-pecuniary damages--specifically, the loss of care, comfort 
and companionship--for victims of commercial aviation crashes 
that occur more than 12 nautical miles from the coast.\32\ The 
change was made effective from the day before the TWA crash.
---------------------------------------------------------------------------
    \32\46 U.S.C. Sec. 30307.
---------------------------------------------------------------------------
    The Jones Act\33\ provides protections for seamen on 
vessels, including benefits for injured seamen and a cause of 
action for injuries or death resulting from negligence on the 
part of their employer. Liability for the wrongful death of a 
Jones Act seaman may also be based on the unseaworthiness of 
the vessel under DOHSA.\34\
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    \33\There are two very different laws commonly referred to as the 
Jones Act. See supra note 6.
    \34\See Kernan v. American Dredging Co., 355 U.S. 426, 430 n.4 
(1958); Moragne v. States Marine Lines, Inc., 398 U.S. 375, 399-401 
(1970) (discussing unseaworthiness remedy under DOHSA).
---------------------------------------------------------------------------
    Only seamen can bring claims under the Jones Act, and then 
only against their employer. The test for seaman status is 
three-pronged: a worker must (1) be assigned to a vessel or 
identifiable fleet of vessels that is not permanently moored 
and is operating on a navigable waterway; (2) contribute to the 
mission of the vessel; and (3) spend a significant amount of 
time on board the vessel.\35\ There is no doubt that the 
regular crew of the Deepwater Horizon were seamen under the 
Jones Act. The available damages are claims for injuries--in 
which case seamen are entitled to regular tort damages--and for 
wrongful death claims, in which case the damages are limited to 
pecuniary loss and pre-death pain and suffering.\36\ Damages 
stemming from loss of society are not recoverable under either 
type of claim. The underlying cause of action for Jones Act 
claims is negligence on the part of the employer, although 
injured seamen also have the right to obtain maintenance and 
cure (generally a daily stipend as well as the payment of 
medical bills) for injuries that do not stem from negligence.
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    \35\``Seaman Status,'' website prepared and hosted by Arnold & 
Itkin LLP, available at: http://www.jones-act-maritime-lawyer.com/
jones-act/jones-act-seaman-status.php.
    \36\46 U.S.C. 30104. In Miles v. Apex Marine Corp., 498 U.S. 19 
(1990), the Supreme Court held that the Jones Act precludes recovery of 
non-pecuniary losses by the dependants of a deceased seaman.
---------------------------------------------------------------------------
    The bill corrects these shortcomings. It amends DOHSA to 
permit recovery for non-pecuniary loss and pre-death pain the 
suffering, to allow trial by jury, and to permit State law to 
govern which surviving family members are eligible to recover. 
It amends the Jones Act to permit recovery of non-pecuniary 
loss in cases of wrongful death, and to ensure that these 
protections apply to all offshore oil rig workers.
B. Limitation of Liability Act
    In addition to the restrictions on damages recoverable 
under DOHSA and the Jones Act, the Limitation of Liability Act 
(LOLA) is another Federal law that could operate to arbitrarily 
limit the liability owed to the dead and injured workers who 
were serving on the Deepwater Horizon. Passed in 1851, LOLA 
limits a vessel owner's liability to the post-accident value of 
the vessel and her pending freight. Like much of maritime law, 
U.S. law borrowed this principle of British maritime law. The 
British Parliament passed legislation in 1734 to limit the 
liability of shipowners to the value of the ship, in order to 
give the British shipping industry a competitive advantage over 
shipping companies based in continental Europe. The American 
shipping industry sought a similar limitation.\37\
---------------------------------------------------------------------------
    \37\Thomas J. Schoenbaum, Admiralty and Maritime Law 805 (4th ed. 
2004).
---------------------------------------------------------------------------
    When LOLA was enacted in 1851, the ship's master controlled 
and managed the ship and stood in place of the ship's owner--
usually an individual, not the shipping conglomerates of 
today--during voyages that took months and often years. The 
absence of modern technology and communications equipment left 
shipowners vulnerable to the improper acts of the master, 
including embezzlement and other criminal acts. In 1848, the 
U.S. Supreme Court held steamboat owners responsible for the 
loss of gold and silver coins contained in a wooden crate after 
a fire destroyed the ship.\38\ This decision prompted Congress 
to legislate for the protection of the American maritime 
industry.
---------------------------------------------------------------------------
    \38\New Jersey Steam Nav. Co. v. Merchant's Bank of Boston, 47 U.S. 
344 (1848)
---------------------------------------------------------------------------
    Congress enacted the LOLA in 1851. The Act restricts the 
liability of shipowners to the value of the vessel and pending 
freight. Liability resulting from an employee's negligence or 
other bad act exists only if there was ``privity or knowledge'' 
of the owner. In 1934, Congress amended LOLA, after a fire on a 
ship caused 134 deaths, to require that a shipowner's liability 
for personal injury or death be based on a dollar amount--then 
$60 per ton. That amount was raised to $420 per ton in 1984.
    LOLA does not provide for liability, but rather limits the 
liability of a shipowner for personal injury and property 
damage. A shipowner can initiate a limitation action by 
petitioning the Federal court within 6 months after receiving a 
notice that a suit has been filed. The petition stays 
proceedings elsewhere, and consolidates all State claims into 
Federal court.
    In a filing in a Federal court in Texas, Transocean has 
invoked this antiquated law in an effort to have its liability 
``for all claims for any loss of life, injury, loss, 
destruction and damages arising out of or occurring on the 
voyage of the . . . Deepwater Horizon''\39\ limited to the 
post-accident value of the Deepwater Horizon--essentially a 
$26.7 million cap. All other proceedings against Transocean 
have been suspended pending a determination by the court 
whether the LOLA limitation applies.\40\ For victims of the DWH 
disaster and their families, LOLA prolongs their grief, and 
threatens to limit severely their ability to provide economic 
stability for the future. If the court grants the limitation, 
multiple claimants--including the DWH survivors and the 
families of those who died--will be eligible for only a pro 
rata share of the limitation fund.
---------------------------------------------------------------------------
    \39\Complaint and Petition for Exoneration from or Limitation of 
Liability, In re the complaint and petition of Triton Asset Leasing 
GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling 
Inc., and Transocean Deepwater Inc., as owner, managing owners, owners 
pro-hoc vice, and/or Operators of the MODU Deepwater Horizon, in a 
Cause for Exoneration From or Limitation of Liability, Complaint and 
Petition No. 4:10-cv-01721 (S.D.Tex. May 13, 2010).
    \40\Mary Flood, ``Judge stays spill cases at Transocean's 
request,'' Houston Chronicle. May 13, 2010.
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    LOLA has clearly outlived any legitimate purpose it may 
once have served. Its original purpose--to promote American 
shipping interests--is now largely serving the interests of 
carriers incorporated in Third World countries and using 
foreign-flagged vessels in order to avoid having to pay U.S. 
taxes or follow U.S. health and safety regulations. Moreover, 
Congress could not possibly have envisioned in 1851 that 
movable industrial oil exploration and development platforms 
would qualify as ``vessels'' under LOLA and attempt to shield 
their liability in this type of disaster.
    When LOLA was enacted, a shipowner could communicate with 
the captain and crew of a vessel away from home port only 
through documents transshipped on other vessels. LOLA was 
intended to protect those owners in light of that difficulty in 
staying in communication. Today's communication technology 
allows shipowners to oversee their vessels as constantly as 
they wish, even when the vessel is on the other side of the 
world. Owners today have direct communication by radio, 
computers, and phone, and a ship can be positioned and 
monitored constantly using satellite systems. Continued use of 
LOLA simply removes healthy incentives for owners to properly 
oversee their ships.
    Finally, there are better, more sophisticated alternatives 
for protecting shipowners than LOLA. Today, shipowners have a 
wide variety of legal tools available that better protect their 
financial interests. For example, insurance, contract, charter, 
mortgage, and the separate incorporation of vessels are 
alternative methods that offer more appropriate financial 
protection than LOLA.
    In this current case, LOLA could even hamper BP from 
seeking reimbursement from Transocean for Transocean's own 
negligence in the Deepwater Horizon explosion and resulting 
spill. Repealing LOLA will enable BP to hold Transocean 
accountable for any appropriate share of responsibility under 
the Oil Pollution Act. This is yet another illustration of why 
LOLA should be repealed.
C. Clarification of state enforcement authority
    Congress enacted the Class Action Fairness Act of 2005 
(CAFA) to facilitate the removal of ``interstate cases of 
national significance'' to Federal court under diversity 
jurisdiction, and to provide for greater regulation of class 
and mass actions.\41\ Although the statutory definitions in 
CAFA of ``class action'' and ``mass action'' are phrased 
broadly,\42\ the congressional debates in both the House\43\ 
and Senate\44\ indicate an intent to preserve the authority of 
a State government to bring and keep cases in its own State 
courts when the action involves its own citizens and its own 
laws. Nevertheless, the Fifth Circuit held in 2008 that an 
action brought by a State attorney general as a parens patriae 
action was subject to CAFA.\45\
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    \41\Class Action Fairness Act Sec. 2, 28 U.S.C. 1332(d).
    \42\Under CAFA, a ``class action'' is ``any civil action filed in a 
district court of the United States under rule 23 of the Federal Rules 
of Civil Procedure or any civil action that is removed to a district 
court of the United States that was originally filed under a State 
statute or rule of judicial procedure authorizing an action to be 
brought by 1 or more representatives as a class action.'' 28 U.S.C. 
Sec. 1711(2). ``Mass action'' is defined as ``any civil action (except 
a civil action within the scope of section 1711(2) in which monetary 
relief claims of 100 or more persons are proposed to be tried jointly 
on the ground that the plaintiffs' claims involve common questions of 
law or fact, except that jurisdiction shall exist only over those 
plaintiffs whose claims in a mass action satisfy the jurisdictional 
amount requirements under subsection (a).'' 28 U.S.C. 
Sec. 1332(d)(11)(B)(i).
    \43\151 Cong. Rec. 746 (2005) (statement of Rep. James F. 
Sensenbrenner) (``[W]hen State attorneys general sue on behalf of their 
citizens, those actions are almost always `parens patriae' actions, and 
not class actions; and the former will be in no way affected by this 
bill.'').
    \44\151 Cong. Rec. 1161 (2005) (statement of Sen. Thomas R. Carper) 
(``For most attorneys general who wish to file a case on behalf of 
their citizens against some defendant, they have the opportunity to use 
parens patriae. For those who do not, in my judgment, they still have 
the opportunity to use the class action lawsuit.''); id. at 1162 
(statement of Sen. John Cornyn) (``But clearly, when State law and the 
State Constitution specifically provide for the right of . . . a State 
attorney general, to sue on behalf of his State's citizens, then this 
bill, when made a law, will not in any way impede that endeavor.''); 
id. at 1163 (statement of Sen. Chuck Grassley) (``because almost all 
civil suits brought by State attorneys general are parens patriae 
suits, similar representative suits or direct enforcement actions, it 
is clear they . . . will not be affected by this bill.''); id. at 1164 
(statement of Sen. Pryor) (``I hope the courts will recognize the 
legislative history we developed today. The intention of this Senate 
and the conference is not to limit any existing rights or any existing 
abilities of the State attorneys general in pursuing cases they may 
deem appropriate to pursue.'').
    \45\In re Katrina Canal Breaches Litigation, 524 F.3d 700, 706 (5th 
Cir. 2008); Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 
418 (5th Cir. 2008).
---------------------------------------------------------------------------
    During the Committee's hearing on the legal liability 
issues stemming from the Gulf Coast oil spill, Mississippi 
Attorney General Jim Hood testified that CAFA impeded his 
ability to pursue claims on behalf of the State of Mississippi 
against parties responsible for violating State law.\46\ H.R. 
5503 will clarify that actions brought by a State attorney 
general in his official capacity under his State's law, in its 
courts, on behalf of its citizens, are not subject to removal 
to Federal court under CAFA.\47\
---------------------------------------------------------------------------
    \46\Liability Issues Surrounding the Gulf Coast Oil Disaster: 
Hearing Before the H. Comm. on the Judiciary, 111th Cong. (2010) 
(testimony of Jim Hood, Attorney General of Mississippi).
    \47\Connecticut v. Moody's Corp., 664 F. Supp. 2d 196, 200 (D. 
Conn. 2009) (citing Connecticut v. Levi Strauss & Co., 471 F. Supp. 
363, 370-71 (D. Conn. 1979) (``[I]t has long been recognized that a 
state can act as parens patriae for a circumscribed group of its 
citizens.'').
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D. Protections against unwarranted secrecy regarding pollutant 
        discharges
    In the days following the DWH explosion and rescue efforts, 
reports emerged that BP had required unemployed fishermen, as a 
condition for assistance, employment, or access to the affected 
area, to sign an agreement not to provide information to the 
news media, investigators, or others regarding the oil spill, 
the clean-up and containment efforts, or the public health 
implications.\48\ Indeed, in a lawsuit brought by the president 
of the United Commercial Fishermen Association in Louisiana, 
U.S. District Judge Helen G. Berrigan granted a restraining 
order against the agreements, finding them unconscionable. To 
prevent further abuses in this and future disasters, H.R. 5503 
specifies that agreements or directives of this nature are 
unenforceable, as they interfere with the public's right to be 
informed. It provides an exception for court orders or 
government agency directives when there is a determination that 
the dissemination of information could endanger public health 
or safety.
---------------------------------------------------------------------------
    \48\See ``Federal judge says BP can't force local workers to sign 
waivers of liability,'' at http://thelensnola.org/2010/05/03/bp-worker-
agreemen/. There were also other reports of statements being signed 
under apparent duress. For example, in early May, National Public Radio 
(NPR) reported that DWH rig workers were required ``to sign form 
letters about what they had seen and whether they had been injured'' 
before being released to their families. This account was verified in 
testimony before the Committee by Stephen Stone, a roustabout employed 
by Transocean who was on the DWH on April 20. Mr. Stone testified that 
they ``were told we had to give a written statement before we could 
leave the boat'' and that it was ``28 hours after the explosion'' 
before he ``was given access to a phone, and was allowed to call [his] 
wife'' to let her know that he had survived.
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E. Protections in bankruptcy for maritime oil spill claimants
    Under section 363(f) of the Bankruptcy Code, assets of a 
company in a bankruptcy case may be sold ``free and clear of 
any interest in such property'' if certain conditions are 
met.\49\ Unsecured creditors generally are entitled to share 
only in the unencumbered proceeds of the sale and in the 
remaining unencumbered assets. In actuality, the sale may 
generate proceeds sufficient only to satisfy the claims of 
secured creditors having an interest in the transferred 
property, thereby leaving little or no money for unsecured 
creditors.
---------------------------------------------------------------------------
    \49\Section 363(f) provides:
---------------------------------------------------------------------------
  G  The trustee may sell property under subsection (b) or (c) of this 
section free and clear of any interest in such property of an entity 
other than the estate only if--

        (1) applicable nonbankruptcy law permits sale of such 
      property free and clear of such interest;

        (2) such entity consents;

        (3) such interest is a lien and the price at which such 
      property is to be sold is greater than the aggregate value 
      of all liens on such property;

        (4) such interest is in bona fide dispute; or

        (5) such entity could be compelled, in a legal or 
      equitable proceeding, to accept a money satisfaction of 
      such interest.

11 U.S.C. Sec. 363(f).
    The rights of future creditors may also be terminated. 
Successor liability is an equitable principle largely 
determined under applicable State law.\50\ A number of courts 
have sought to protect purchasers of assets in bankruptcy, 
against possible claims to which they might otherwise be 
subject under principles of successor liability, by approving 
sales ``free of all present or future claims against the debtor 
or the estate,''\51\ although some courts have questioned the 
ability of a bankruptcy court to override principles of 
successor liability under section 363(f).\52\
---------------------------------------------------------------------------
    \50\In general, successor liability will attach if: (1) the 
purchaser expressly or impliedly assumed the liability; (2) the 
transaction amounted to a merger or consolidation of the businesses; 
(3) the purchaser was merely a continuation of the seller; or (4) the 
transaction was entered into fraudulently in order to avoid liability 
for the obligations. Alan N. Resnick & Henry J. Sommer, Collier on 
Bankruptcy,  363.06[7] (15th ed. rev'd 2007).
    \51\Id.
    \52\Id.; see, e.g., Chicago Truck Drivers, Helpers and Warehouse 
Workers Union (Independent) Pension Fund v. Tasemkin, Inc., 59 F.3d 48, 
51 (7th Cir. 1995) (noting that ``it is not clear why an intervening 
bankruptcy proceeding, in particular, should have a per se preclusive 
effect on the creditor's chances'').
---------------------------------------------------------------------------
    A company in chapter 11 reorganization may also choose to 
dispose of all its assets under a reorganization plan.\53\ 
While creditors have the right to object, a court can confirm a 
plan anyway if it finds that the plan is ``fair and equitable'' 
within the meaning of section 1129(b)(2).\54\ A plan can 
satisfy this standard with respect to a class of unsecured 
claims even if it does not propose to pay them in full, as long 
as they receive as much as they would in liquidation, and as 
long as no claims junior to them receive any payment.\55\
---------------------------------------------------------------------------
    \53\Under section 1123(a)(5)(D), a plan may be implemented through 
the ``sale of all or any part of the property of the estate, either 
subject to or free of any lien, or the distribution of all or any part 
of the property of the estate among those having an interest in such 
property of the estate.''
    \54\11 U.S.C. Sec. 1129(b)(2).
    \55\11 U.S.C. Sec. Sec. 1129(b)(2)(B), 1129(a)(7)(A)(ii).
---------------------------------------------------------------------------
    A company in involuntary bankruptcy may also sell all or 
substantially all its assets if no order for relief has yet 
been entered. During the so-called ``gap period'' between the 
filing of the petition and the entry of the order for relief, 
the company may dispose of property ``as if an involuntary case 
concerning the debtor had not been commenced,'' notwithstanding 
section 363, unless the court orders otherwise.\56\
---------------------------------------------------------------------------
    \56\11 U.S.C. Sec. 303(f).
---------------------------------------------------------------------------
    In a bankruptcy case where the debtor is liable under any 
law for claims arising from an Oil Pollution Act (OPA) 
incident,\57\ section 7 of this bill makes several amendments 
to the Bankruptcy Code to protect the holders of such claims. 
First, the bill amends section 363 to condition the sale or 
lease of all or substantially all of the debtor's assets in a 
bankruptcy case where the company is liable for such claims. 
The sale or lease may not occur unless either: (1) the acquirer 
(including any affiliate thereof) assumes the obligation to pay 
the amount of allowed unsecured claims arising from such 
incident not paid by the debtor; or (2) creditors holding at 
least two-thirds in amount, and more than one-half in number, 
of such claims consent to different treatment.
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    \57\33 U.S.C. Sec. 2701(14)(```incident' means any occurrence or 
series of occurrences having the same origin, involving one or more 
vessels, facilities, or any combination thereof, resulting in the 
discharge or substantial threat of discharge of oil''); 33 U.S.C. 
Sec. 1321(7)(A) (establishing civil liability for entities responsible 
for an incident).
---------------------------------------------------------------------------
    The amendment to 363 applies not only to property of the 
estate of the debtor, but also to property of any affiliate of 
the debtor to the extent the court has or can obtain 
jurisdiction over the affiliate. The Bankruptcy Code defines 
``affiliate,'' in pertinent part, to include the parents and 
subsidiaries of corporate debtors who meet certain specified 
ownership criteria.\58\ Thus, in a chapter 11 case filed by a 
subsidiary with few assets, this bill will also condition sales 
by the debtor's parent if the court has jurisdiction over the 
parent.
---------------------------------------------------------------------------
    \58\11 U.S.C. Sec. 101(2).
---------------------------------------------------------------------------
    The bill also amends Bankruptcy Code section 1129(b)(2)(B) 
to impose the same conditions on confirming a chapter 11 plan 
of reorganization. Thus, a plan of reorganization that proposes 
to sell or lease all or substantially all of the debtor's 
assets must provide that either the acquirer (including any 
affiliate) will assume the obligation to pay the claims arising 
from the OPA incident if not paid by the debtor, or creditors 
holding at least two-thirds in amount, and more than one-half 
in number, of such claims must consent to different treatment.
    Finally, this bill amends Bankruptcy Code section 303(f) to 
ensure that creditors with claims arising from an incident 
under the OPA will be similarly protected during the period 
between an involuntary bankruptcy petition and an order for 
relief.
F. Ensuring immediate applicability of improvements in the law
    Based on evidence gathered during the hearing on Liability 
Issues Surrounding the Gulf Coast Oil Disaster, the Committee 
determined that there were several reasons to apply this 
legislation to pending cases, including the gravity of the 
disaster on April 20, 2010, the antiquated and inconsistent 
nature of much of the legal framework in maritime law, and the 
need for comprehensive and uniform application of the new 
legislation.
    It is long settled that as long as Congress has a rational 
purpose, it may elect to respond to an issue of public policy 
with legislation that is immediate in effect, without running 
afoul of the Constitution.\59\ The 9th Circuit, in Seariver 
Maritime Financial Holdings v. Mineta,\60\ held that 
legislation providing for immediate liability adjustments, even 
if it could apply to identifiable parties on the basis of 
``irreversible past actions,'' is permissible so long as it 
furthers a ``nonpunitive legislative purpose.''
---------------------------------------------------------------------------
    \59\See, e.g., Landgraf v.USI Film Products, 511 U.S. 265 (1994); 
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15-16 (1976); U.S. v. 
Schooner Peggy, 5 U.S. (Cranch 1) 103, 110 (1801) (``It is in the 
general true that the province of an appellate court is only to enquire 
whether a judgment when rendered was erroneous or not. But if 
subsequent to the judgment and before the decision of the appellate 
court, a law intervenes and positively changes the rule which governs, 
the law must be obeyed, or its obligation denied.'').
    \60\309 F.3d 662, 674 (9th Cir. 2002).
---------------------------------------------------------------------------
    Moreover, analysis by the non-partisan Congressional 
Research Service confirms that ``because H.R. 5503 does not 
impose criminal penalties, it raises no constitutionality 
concerns under the Ex Post Facto Clause.''\61\
---------------------------------------------------------------------------
    \61\Robert Meltz and Kenneth Thomas, ``Constitutional Issues Raised 
By Pending Bill to Expand Liability Under the Death on the High Seas 
Act and the Jones Act,'' Congressional Research Service, June 28, 2010.
---------------------------------------------------------------------------
    This provision is consistent with a number of statutory 
changes to liability law enacted in recent years, including 
laws partially immunizing gun sellers and manufacturers;\62\ 
limiting liability of airlines and providing compensation for 
victims of the September 11, 2001 attack;\63\ providing 
compensation to workers subjected to unlawful employment 
practices;\64\ expanding recovery under State law retroactively 
for cases stemming from the Minot, North Dakota train 
derailment;\65\ and permitting non-pecuniary damages under 
DOSHA for aviation accidents on the high seas.\66\ Relevant 
Supreme Court precedent, in cases such as Usery v. Turner 
Elkhorn Mining Co.,\67\ have upheld immediate application of 
civil law changes of this nature.
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    \62\H.R. 800, the Protection of Lawful Commerce in Arms Act, 
introduced by Rep. Stearns (R-FL) in the 109th Congress (Senate 
version, S. 397, became Pub. L. 109-124) (``A qualified civil liability 
action [against gun manufacturers or sellers] that is pending on the 
date of the enactment of this Act shall be dismissed immediately by the 
court in which the action was brought or is currently pending.'').
    \63\H.R. 2926, Air Transportation Safety and System Stabilization 
Act, introduced by Rep. Young (R-AK) on September 21, 2001, and became 
Pub. L. 107-42 on September 22, 2001. (``SEC. 408. Limitation on Air 
Carrier Liability (a) In General.'' Notwithstanding any other provision 
of law, liability for all claims, whether for compensatory or punitive 
damages, arising from the terrorist-related aircraft crashes of 
September 11, 2001, against any air carrier shall not be in an amount 
greater than the limits of the liability coverage maintained by the air 
carrier.'')
    \64\S. 181, Lilly Ledbetter Fair Pay Act of 2009, introduced by 
Sen. Mikulski (D-MD) on January 8, 2009 in the 111th Congress, became 
Pub. L. 111-2 on January 29, 2009 (``This Act, and the amendments made 
by this Act, take effect as if enacted on May 28, 2007 and apply to all 
claims of discrimination in compensation under title VII of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e et seq.) the Age Discrimination in 
Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 
of the Americans with Disabilities Act of 1990, and sections 501 and 
504 of the Rehabilitation Act of 1973, that are pending on or after 
that date.'')
    \65\Implementing Recommendations of the 9/11 Commission Act of 
2007, Pub. L. No. 110-53 (2007) (legislation contains a retroactivity 
provision, which clarifies that 49 U.S.C. Sec. 20106 applies to all 
pending State law causes of action arising from activities or events 
occurring on or after January 18, 2002, the date of the Minot, North 
Dakota train derailment).
    \66\H.R. 1000, The Wendell H. Ford Aviation Investment and Reform 
Act for the 21st Century, introduced by Rep. Shuster (R-PA) on March 3, 
1999 in response to the Continental Express Flight 2574 in 1991 (became 
Pub. L. 106-181 on April 4, 2000) (``The amendments [to DOHSA] made by 
subsections (a) and (b) shall apply to any death occurring after July 
16, 1996'').
    \67\428 U.S. 1 (1976). In Turner Elkhorn Mining Co., the Court 
upheld a statute which required mine operators to provide compensation 
for a former employee's death or disability due to pneumoconiosis who 
terminated before the act's passage and was challenged as a violation 
of the Due Process Clause of the Fifth Amendment. The Court held that 
immediate application of such civil liability statutes will be upheld 
as constitutional so long as there is a rational governmental purpose.
---------------------------------------------------------------------------

                        Supporters of H.R. 5503

    The following individuals and organizations have written in 
support of H.R. 5503:

 LSurvivors of workers killed in the Deepwater Horizon 
explosion, including Michelle, Keith, and Chris Jones, the 
widow, father, and brother of Gordon Jones; Natalie Roshto and 
Denise Arnold, widow and mother of Shane Roshto; Rhonda 
Burkeen, widow of Aaron Dale Burkeen; and Jacqueline Duncan, 
sister of Wyatt Kemp

 LDavid Erickson, father of Christopher Blair Erickson, 
killed by electrocution while working aboard the oil tanker S/R 
Wilmington, owned by a subsidary of Exxon-Mobile

 LLynda Sanford, who was injured in a cruise ship 
accident that killed her mother and two other women and injured 
13 other passengers

 LMississippi Attorney General Jim Hood

 LThe International Cruise Victims Association

 LThe National Center for Victims of Crime

 LThe National Organization of Parents of Murdered 
Children

 LPublic Citizen

 LAlliance for Justice

 LNational Consumers League

 LConsumerWatchdog

 LCenter for Justice & Democracy

 LCenter for Biological Diversity

 LFriends of the Earth

 LU.S. Action

                                Hearings

    The full Committee on the Judiciary held 1 day of hearings 
on May 27, 2010, to examine the liability issues stemming from 
the explosion on the Deepwater Horizon and the resulting oil 
spill. The witnesses who testified before the Committee were 
Keith D. Jones, Esq., father of Gordon Jones, who died while 
working on the Deepwater Horizon; Douglas Harold Brown, a 
Transocean, Ltd. employee and survivor of the Deepwater Horizon 
explosion; Stephen Stone, a Transocean, Ltd. employee and 
survivor of the Deepwater Horizon explosion; Bryan Encalade, 
President, Louisiana Oysters Association; Jim Hood, Attorney 
General for the State of Mississippi; Darryl Willis, Vice 
President, Resources, BP America; Rachel Clingman, Acting 
General Counsel, Transocean, Ltd.; James W. Ferguson, Vice 
President and Deputy General Counsel, Halliburton; William C. 
Lemmer, General Counsel, Cameron International Corporation; 
Vincent J. Foley, Partner, Holland & Knight; and Thomas C. 
Galligan, Jr., President and Professor, Colby-Sawyer College.

                        Committee Consideration

    On June 23, 2010, the Committee met in open session to mark 
up the bill H.R. 5503, and ordered the bill, as amended, 
favorably reported by a rollcall vote of 16 to 11, a quorum 
being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 5503.
    1. An amendment offered by Mr. Smith to limit the bill's 
coverage to claims arising out of an oil spill. Defeated 19 to 
14.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman......................................                              X
Mr. Berman......................................................                              X
Mr. Boucher.....................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................                              X
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................
Mr. Delahunt....................................................
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................                              X
Mr. Quigley.....................................................                              X
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Mr. Gutierrez...................................................
Ms. Baldwin.....................................................                              X
Mr. Gonzalez....................................................                              X
Mr. Weiner......................................................                              X
Mr. Schiff......................................................                              X
Ms. Sanchez.....................................................                              X
Mr. Maffei......................................................                              X
Mr. Polis.......................................................
Mr. Smith, Ranking Member.......................................              X
Mr. Sensenbrenner, Jr...........................................              X
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................
Mr. Issa........................................................              X
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................              X
Mr. Poe.........................................................              X
Mr. Chaffetz....................................................              X
Mr. Rooney......................................................              X
Mr. Harper......................................................              X
                                                                 -----------------------------------------------
    Total.......................................................             14              19
----------------------------------------------------------------------------------------------------------------

    2. An amendment offered by Mr. Goodlatte to limit the Class 
Action Fairness Act amendment to class actions arising out of 
an oil spill. Defeated 16 to 12.

                                                 ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman......................................                              X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................                              X
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................                              X
Mr. Delahunt....................................................
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................                              X
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Mr. Gutierrez...................................................
Ms. Baldwin.....................................................                              X
Mr. Gonzalez....................................................
Mr. Weiner......................................................                              X
Mr. Schiff......................................................                              X
Ms. Sanchez.....................................................
Mr. Maffei......................................................                              X
Mr. Polis.......................................................
Mr. Smith, Ranking Member.......................................              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................              X
Mr. Issa........................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................              X
Mr. Poe.........................................................              X
Mr. Chaffetz....................................................              X
Mr. Rooney......................................................              X
Mr. Harper......................................................              X
                                                                 -----------------------------------------------
    Total.......................................................             12              16
----------------------------------------------------------------------------------------------------------------

    3. Motion to order the bill favorably reported, as amended. 
Approved 16-11.

                                                 ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman......................................              X
Mr. Berman......................................................
Mr. Boucher.....................................................              X
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Delahunt....................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Mr. Gutierrez...................................................
Ms. Baldwin.....................................................              X
Mr. Gonzalez....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Mr. Maffei......................................................              X
Mr. Polis.......................................................              X
Mr. Smith, Ranking Member.......................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................              X
Mr. Issa........................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Rooney......................................................              X
Mr. Harper......................................................
                                                                 -----------------------------------------------
    Total.......................................................             16              11
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

                        Committee Cost Estimate

    The Congressional Budget Office (CBO) estimate of the costs 
of implementing H.R. 5503 was not available as the time of 
filing this report. When the CBO letter setting forth its 
official cost estimate becomes available, it will be printed in 
the Congressional Record. In compliance with clause 3(d)(2) of 
rule XIII of the Rules of the House of Representatives, the 
Committee estimates the costs as follows:
    The Committee does not anticipate that the bill will have 
any significant effect on the Federal budget, nor that it will 
result in any unfunded mandate or any significant new costs to 
the U.S. economy. The bill amends various existing laws 
governing private and State government actions for recovery of 
damages for tortious conduct, conditions the sale of certain 
assets in bankruptcy under certain conditions, and adds a new 
restriction on the enforcement of secrecy agreements unless 
necessary to protect public health or safety.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
5503 amends the Death on the High Seas Act, the Jones Act, the 
Class Action Fairness Act, and the Bankruptcy Code, repeals the 
Limitations on Liability Act, and limits the enforceability of 
secrecy agreements regarding the discharge of dangerous 
materials into waters off the shore of the United States. This 
will improve the relief available for death or injury on the 
high seas, help ensure accountability of companies responsible 
for environmental and physical disasters at sea, hold polluting 
entities accountable to a high level of transparency, and 
secure the right of State attorneys general to bring court 
actions on behalf of citizens of their State, under the law of 
their State, in their State courts.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds authority for 
this legislation in article I, section 8, clauses 4 and 18 of 
the Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 5503 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in such clause 9.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Short Title. Section 1 sets forth the short title 
of the bill as the ``Securing Protection for the Injured from 
Limitations on Liability Act.''
    Sec. 2. Amendments to Death on the High Seas Act. Section 2 
makes various amendments to the Death on the High Seas Act 
(DOHSA). Section 2(1) amends 46 U.S.C. Sec. 30302 to allow the 
personal representative to bring suit under law as well as 
admiralty, thus permitting a jury trial; to standardize the 
threshold for DOHSA's applicability at beyond 12 nautical miles 
from the U.S. shore; and to permit State law to govern who is 
eligible to receive compensation, by deleting language that 
confines those eligible to the decedent's spouse, parent, 
child, or dependent relative.
    Section 2(2) amends 46 U.S.C. Sec. 30303 to permit recovery 
for non-pecuniary loss (defined as the survivors' loss of the 
care, comfort, and companionship provided by the decedent), as 
well as for the pain and suffering endured by the decedent 
prior to death.
    Sections 2(3) and 2(4) make conforming changes to other 
sections of DOHSA to ensure that actions can be brought in law 
as well as in admiralty.
    Section 2(5) strikes 46 U.S.C. Sec. 30307, which provides 
special rules governing commercial aviation. As the bill now 
essentially makes these special rules applicable universally, 
this section is unnecessary.
    Section 2(6) revises the clarifications, in what is now 46 
U.S.C. Sec. 30308, and will become redesignated as 46 U.S.C. 
Sec. 30307, as to what law applies on the Great Lakes and in 
waters within the 12-mile limit. It confirms that the rules 
applicable under Federal, State, maritime, and other 
appropriate law shall apply.
    Section 2(7) makes a conforming change to the table of 
sections in chapter 303 of 46 U.S.C.
    Sec. 3. Amendments to Jones Act. Section 3 makes two 
amendments to the Jones Act. Section 3(1) amends 46 U.S.C. 
30104 to add non-pecuniary loss to the recovery permitted by 
the survivors of a seaman who is killed in the course of 
employment. Section 3(2) strikes 46 U.S.C. Sec. 30105, which 
currently bars recovery by a worker who is not a U.S. citizen 
or permanent resident, or the worker's survivors, against 
mineral or energy companies for personal injury or death 
occurring in the territorial waters or continental shelf of a 
foreign state, unless neither the law of that foreign state nor 
the law of the worker's country of citizenship or residence 
makes any remedy available.
    Sec. 4. Repeal of Limitation of Liability Act. Section 4 
repeals the Limitation of Liability Act, now found in 46 U.S.C. 
Sec. Sec. 30505, 30506, 30507, 30511, and 30512.
    Sec. 5. Amendment to Class Action Fairness Act. Section 5 
amends the Class Action Fairness Act to clarify that the right 
to remove class actions and mass actions to Federal court does 
not apply to an action brought by a State (or subdivision of a 
State) in its own State court on behalf of citizens of that 
State. Substantively equivalent clarifications are made to 28 
U.S.C. Sec. Sec. 1711(2), 1332(d)(1)(B), and 
1332(d)(11)(B)(ii).
    Sec. 6. Unenforceability of Certain Secrecy Agreements. 
Section 6 adds a new section 4101 to 28 U.S.C., to make 
unenforceable in any legal proceeding secrecy agreements or 
directives regarding the cause of a discharge of contaminants 
into the waters off the shore of the United States or regarding 
the cleanup efforts. There is an exception for directives in 
court orders or by a government agency determination that the 
restriction is necessary to protect public health or safety. 
Any court order enforcing a restriction on this basis must be 
based on clear and convincing evidence, and must be accompanied 
by findings of fact and conclusions of law supporting it.
    Sec. 7. Amendments to Title 11 of the United States Code. 
Section 7 amends the Bankruptcy Code to place conditions on the 
sale or lease of all or substantially all property of a company 
in bankruptcy that is liable under any law for claims arising 
from an incident covered under the Oil Pollution Act. Related 
amendments are made to 11 U.S.C. Sec. Sec. 363, 1129(b)(2)(B), 
and 303(f). No such sale or lease is permitted unless (1) the 
entity that acquires the property (including all the entity's 
affiliates, if any) assumes the obligation to pay whatever 
amount of those claims is not paid by the company in 
bankruptcy, or (2) more than one-half the claimants, holding at 
least two-thirds the dollar aggregate amount of the claims, 
consent to different treatment.
    Sec. 8. Effective Date. Section 8 provides that the bill 
and the amendments made by it take effect immediately on the 
date of enactment and apply to all pending and future cases.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      TITLE 46, UNITED STATES CODE

           *       *       *       *       *       *       *
Subtitle III--Maritime Liability

           *       *       *       *       *       *       *

               CHAPTER 301--GENERAL LIABILITY PROVISIONS

Sec.
30101. Extension of jurisdiction to cases of damage or injury on land.
     * * * * * * *
[30105. Restriction on recovery by non-citizens and non-resident aliens 
          for incidents in waters of other countries.]

           *       *       *       *       *       *       *

Sec. 30104. Personal injury to or death of seamen

  A seaman injured in the course of employment or, if the 
seaman dies from the injury, the personal representative of the 
seaman may elect to bring a civil action at law, with the right 
of trial by jury, against the employer. Laws of the United 
States regulating recovery for personal injury to, or death of, 
a railway employee apply to an action under this section. In 
addition to other amounts authorized under such laws, the 
recovery for a seaman who so dies shall include recovery for 
loss of care, comfort, and companionship.

[Sec. 30105. Restriction on recovery by non-citizens and non-resident 
                    aliens for incidents in waters of other countries

  [(a) Definition.--In this section, the term ``continental 
shelf'' has the meaning given that term in article I of the 
1958 Convention on the Continental Shelf.
  [(b) Restriction.--Except as provided in subsection (c), a 
civil action for maintenance and cure or for damages for 
personal injury or death may not be brought under a maritime 
law of the United States if--
          [(1) the individual suffering the injury or death was 
        not a citizen or permanent resident alien of the United 
        States at the time of the incident giving rise to the 
        action;
          [(2) the incident occurred in the territorial waters 
        or waters overlaying the continental shelf of a country 
        other than the United States; and
          [(3) the individual suffering the injury or death was 
        employed at the time of the incident by a person 
        engaged in the exploration, development, or production 
        of offshore mineral or energy resources, including 
        drilling, mapping, surveying, diving, pipelaying, 
        maintaining, repairing, constructing, or transporting 
        supplies, equipment, or personnel, but not including 
        transporting those resources by a vessel constructed or 
        adapted primarily to carry oil in bulk in the cargo 
        spaces.
  [(c) Nonapplication.--Subsection (b) does not apply if the 
individual bringing the action establishes that a remedy is not 
available under the laws of--
          [(1) the country asserting jurisdiction over the area 
        in which the incident occurred; or
          [(2) the country in which the individual suffering 
        the injury or death maintained citizenship or residency 
        at the time of the incident.]

           *       *       *       *       *       *       *

                  CHAPTER 303--DEATH ON THE HIGH SEAS

Sec.
30301. Short title.
     * * * * * * *
[30307. Commercial aviation accidents.
[30308. Nonapplication.]
30307. Nonapplication.

Sec. 30301. Short title

  This chapter may be cited as the ``Death on the High Seas 
Act''.

Sec. 30302. Cause of action

  When the death of an individual is caused by wrongful act, 
neglect, or default occurring on the high seas beyond [3 
nautical miles] 12 nautical miles from the shore of the United 
States, the personal representative of the decedent may bring a 
civil action in admiralty or law against the person or vessel 
responsible. [The action shall be for the exclusive benefit of 
the decedent's spouse, parent, child, or dependent relative.]

Sec. 30303. Amount and apportionment of recovery

  The recovery in an action under this chapter shall be a fair 
compensation for the pecuniary loss and nonpecuniary loss 
sustained [by the individuals for whose benefit the action is 
brought. The court shall apportion the recovery among those 
individuals in proportion to the loss each has sustained.], 
plus a fair compensation for the decedent's pain and suffering. 
In this section, the term ``nonpecuniary loss'' means loss of 
care, comfort, and companionship.

           *       *       *       *       *       *       *

Sec. 30305. Death of plaintiff in pending action

  If a civil action in admiralty or law is pending in a court 
of the United States to recover for personal injury caused by 
wrongful act, neglect, or default described in section 30302 of 
this title, and the individual dies during the action as a 
result of the wrongful act, neglect, or default, the personal 
representative of the decedent may be substituted as the 
plaintiff and the action may proceed under this chapter for the 
recovery authorized by this chapter.

Sec. 30306. Foreign cause of action

  When a cause of action exists under the law of a foreign 
country for death by wrongful act, neglect, or default on the 
high seas, a civil action in admiralty or law may be brought in 
a court of the United States based on the foreign cause of 
action, without abatement of the amount for which recovery is 
authorized.

[Sec. 30307. Commercial aviation accidents

  [(a) Definition.--In this section, the term ``nonpecuniary 
damages'' means damages for loss of care, comfort, and 
companionship.
  [(b) Beyond 12 Nautical Miles.--In an action under this 
chapter, if the death resulted from a commercial aviation 
accident occurring on the high seas beyond 12 nautical miles 
from the shore of the United States, additional compensation is 
recoverable for nonpecuniary damages, but punitive damages are 
not recoverable.
  [(c) Within 12 Nautical Miles.--This chapter does not apply 
if the death resulted from a commercial aviation accident 
occurring on the high seas 12 nautical miles or less from the 
shore of the United States.]

Sec. [30308.] 30307. Nonapplication

  (a) * * *
  [(b) Internal Waters.--This chapter does not apply to the 
Great Lakes or waters within the territorial limits of a 
State.]
  (b) Internal and Territorial Waters.--This chapter does not 
apply to the waters of the Great Lakes or waters within the 
territorial limits of a State that do not exceed 12 nautical 
miles from the shore of the United States. In such waters, the 
rules applicable under Federal, State, maritime, and other 
appropriate law shall apply.

          CHAPTER 305--EXONERATION AND LIMITATION OF LIABILITY

Sec.
30501.  Definition.
     * * * * * * *
[30505.  General limit of liability.
[30506.  Limit of liability for personal injury or death.
[30507.  Apportionment of losses.]
     * * * * * * *
[30511.  Action by owner for limitation.
[30512.  Liability as master, officer, or seaman not affected.]

           *       *       *       *       *       *       *

[Sec. 30505. General limit of liability

  [(a) In General.--Except as provided in section 30506 of this 
title, the liability of the owner of a vessel for any claim, 
debt, or liability described in subsection (b) shall not exceed 
the value of the vessel and pending freight. If the vessel has 
more than one owner, the proportionate share of the liability 
of any one owner shall not exceed that owner's proportionate 
interest in the vessel and pending freight.
  [(b) Claims Subject to Limitation.--Unless otherwise excluded 
by law, claims, debts, and liabilities subject to limitation 
under subsection (a) are those arising from any embezzlement, 
loss, or destruction of any property, goods, or merchandise 
shipped or put on board the vessel, any loss, damage, or injury 
by collision, or any act, matter, or thing, loss, damage, or 
forfeiture, done, occasioned, or incurred, without the privity 
or knowledge of the owner.
  [(c) Wages.--Subsection (a) does not apply to a claim for 
wages.

[Sec. 30506. Limit of liability for personal injury or death

  [(a) Application.--This section applies only to seagoing 
vessels, but does not apply to pleasure yachts, tugs, towboats, 
towing vessels, tank vessels, fishing vessels, fish tender 
vessels, canal boats, scows, car floats, barges, lighters, or 
nondescript vessels.
  [(b) Minimum Liability.--If the amount of the vessel owner's 
liability determined under section 30505 of this title is 
insufficient to pay all losses in full, and the portion 
available to pay claims for personal injury or death is less 
than $420 times the tonnage of the vessel, that portion shall 
be increased to $420 times the tonnage of the vessel. That 
portion may be used only to pay claims for personal injury or 
death.
  [(c) Calculation of Tonnage.--Under subsection (b), the 
tonnage of a self-propelled vessel is the gross tonnage without 
deduction for engine room, and the tonnage of a sailing vessel 
is the tonnage for documentation. However, space for the use of 
seamen is excluded.
  [(d) Claims Arising on Distinct Occasions.--Separate limits 
of liability apply to claims for personal injury or death 
arising on distinct occasions.
  [(e) Privity or Knowledge.--In a claim for personal injury or 
death, the privity or knowledge of the master or the owner's 
superintendent or managing agent, at or before the beginning of 
each voyage, is imputed to the owner.

[Sec. 30507. Apportionment of losses

  [If the amounts determined under sections 30505 and 30506 of 
this title are insufficient to pay all claims--
          [(1) all claimants shall be paid in proportion to 
        their respective losses out of the amount determined 
        under section 30505 of this title; and
          [(2) personal injury and death claimants, if any, 
        shall be paid an additional amount in proportion to 
        their respective losses out of the additional amount 
        determined under section 30506(b) of this title.]

           *       *       *       *       *       *       *

[Sec. 30511. Action by owner for limitation

  [(a) In General.--The owner of a vessel may bring a civil 
action in a district court of the United States for limitation 
of liability under this chapter. The action must be brought 
within 6 months after a claimant gives the owner written notice 
of a claim.
  [(b) Creation of Fund.--When the action is brought, the owner 
(at the owner's option) shall--
          [(1) deposit with the court, for the benefit of 
        claimants--
                  [(A) an amount equal to the value of the 
                owner's interest in the vessel and pending 
                freight, or approved security; and
                  [(B) an amount, or approved security, that 
                the court may fix from time to time as 
                necessary to carry out this chapter; or
          [(2) transfer to a trustee appointed by the court, 
        for the benefit of claimants--
                  [(A) the owner's interest in the vessel and 
                pending freight; and
                  [(B) an amount, or approved security, that 
                the court may fix from time to time as 
                necessary to carry out this chapter.
  [(c) Cessation of Other Actions.--When an action has been 
brought under this section and the owner has complied with 
subsection (b), all claims and proceedings against the owner 
related to the matter in question shall cease.

[Sec. 30512. Liability as master, officer, or seaman not affected

  [This chapter does not affect the liability of an individual 
as a master, officer, or seaman, even though the individual is 
also an owner of the vessel.]

           *       *       *       *       *       *       *

                              ----------                              

                      TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *
PART IV--JURISDICTION AND VENUE

           *       *       *       *       *       *       *

CHAPTER 85--DISTRICT COURTS; JURISDICTION

           *       *       *       *       *       *       *

Sec. 1332. Diversity of citizenship; amount in controversy; costs

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) In this subsection--
          (A) * * *
          (B) the term ``class action'' means any civil action 
        filed under rule 23 of the Federal Rules of Civil 
        Procedure or similar State statute or rule of judicial 
        procedure authorizing an action to be brought by 1 or 
        more representative persons as a class action, but does 
        not include an action brought by a State or subdivision 
        of a State on behalf of its citizens;

           *       *       *       *       *       *       *

  (11)(A) * * *
  (B)(i) * * *
  (ii) As used in subparagraph (A), the term ``mass action'' 
shall not include any civil action in which--
          (I) * * *

           *       *       *       *       *       *       *

          (III) all of the claims in the action are asserted on 
        behalf of the general public (and not on behalf of 
        individual claimants or members of a purported class) 
        pursuant to a State statute specifically authorizing 
        such action; [or]
          (IV) the claims have been consolidated or coordinated 
        solely for pretrial proceedings[.]; or
          (V) the claims are made by a State or subdivision of 
        a State on behalf of its citizens.

           *       *       *       *       *       *       *

PART V--PROCEDURE

           *       *       *       *       *       *       *

CHAPTER 114--CLASS ACTIONS

           *       *       *       *       *       *       *

Sec. 1711. Definitions

  In this chapter:
          (1) * * *
          (2) Class action.--The term ``class action'' means 
        any civil action filed in a district court of the 
        United States under rule 23 of the Federal Rules of 
        Civil Procedure or any civil action that is removed to 
        a district court of the United States that was 
        originally filed under a State statute or rule of 
        judicial procedure authorizing an action to be brought 
        by 1 or more representatives as a class action, but 
        does not include an action brought by a State or 
        subdivision of a State on behalf of its citizens.

           *       *       *       *       *       *       *

                    PART VI--PARTICULAR PROCEEDINGS

Chap.                                                               Sec.
      Declaratory Judgments.........................................2201
     * * * * * * *
4101Unenforceability of Certain Secrecy Agreements....................

           *       *       *       *       *       *       *

      CHAPTER 181--UNENFORCEABILITY OF CERTAIN SECRECY AGREEMENTS

Sec.
4101. Unenforceability of certain secrecy agreements.

Sec. 4101. Unenforceability of certain secrecy agreements

  (a) In General.--Subject to subsection (b), an agreement, 
promise, or directive to restrict the dissemination of 
information regarding the cause of a discharge into waters off 
the shore of the United States of a substance that contaminates 
a marine or coastal environment or endangers public health, 
regarding the nature or extent of such a discharge, regarding 
the damage caused or threatened by such a discharge, or 
regarding the efforts to remediate the effects of such a 
discharge, shall be void as against public policy and 
unenforceable in any legal proceeding.
  (b) Exception.--
          (1) Generally.--Subsection (a) does not apply with 
        respect to a directive contained in a court order, or 
        issued by a Government agency with authority to enforce 
        such a directive in a court, restricting dissemination 
        of information as necessary to protect public health or 
        safety.
          (2) Procedure relating to exception.--
                  (A) A court shall not grant judicial 
                enforcement of a directive or order described 
                in paragraph (1) unless the proponent of the 
                directive or order proves by clear and 
                convincing evidence that such enforcement is 
                permitted under paragraph (1).
                  (B) If a court grants judicial enforcement of 
                any directive or order described in paragraph 
                (1), the court shall state the court's factual 
                findings and conclusions of law relating to 
                that enforcement on the record.

           *       *       *       *       *       *       *

                              ----------                              

                      TITLE 11, UNITED STATES CODE

           *       *       *       *       *       *       *
CHAPTER 3--CASE ADMINISTRATION

           *       *       *       *       *       *       *

SUBCHAPTER I--COMMENCEMENT OF A CASE

           *       *       *       *       *       *       *

Sec. 303. Involuntary cases

  (a) * * *

           *       *       *       *       *       *       *

  (f) Notwithstanding section 363 of this title, except to the 
extent that the court orders otherwise, and until an order for 
relief in the case, any business of the debtor may continue to 
operate, and the debtor may continue to use, acquire, or 
dispose of property as if an involuntary case concerning the 
debtor had not been commenced. If the debtor is liable under 
any law for a claim arising from an incident (as defined in 
section 1001 of the Oil Pollution Act of 1990, and that gives 
rise to liability under such Act), the debtor may not sell or 
lease all or substantially all property of the debtor (or, to 
the extent that the court has or can obtain jurisdiction over 
any affiliate of the debtor, property of such affiliate) unless 
the entity that acquires such property (including any affiliate 
of such entity) assumes the obligation to pay the amount of 
allowed unsecured claims arising from such incident that is not 
paid by the debtor, or creditors holding at least two-thirds in 
amount, and more than one-half in number, of such claims 
consent to different treatment.

           *       *       *       *       *       *       *

SUBCHAPTER IV--ADMINISTRATIVE POWERS

           *       *       *       *       *       *       *

Sec. 363. Use, sale, or lease of property

  (a) * * *

           *       *       *       *       *       *       *

  (q) Notwithstanding any other provision of this section, if 
the debtor is liable under any law for a claim arising from an 
incident (as defined in section 1001 of the Oil Pollution Act 
of 1990, and that gives rise to liability under such Act), the 
trustee may not sell or lease all or substantially all property 
of the estate of the debtor (or, to the extent that the court 
has or can obtain jurisdiction over any affiliate of the 
debtor, property of such affiliate) unless the entity that 
acquires such property (including any affiliate of such entity) 
assumes the obligation to pay the amount of allowed unsecured 
claims arising from such incident that is not paid by the 
debtor, or unless creditors holding at least two-thirds in 
amount, and more than one-half in number, of such claims 
consent to different treatment.

           *       *       *       *       *       *       *

CHAPTER 11--REORGANIZATION

           *       *       *       *       *       *       *

SUBCHAPTER II--THE PLAN

           *       *       *       *       *       *       *

Sec. 1129. Confirmation of plan

  (a) * * *
  (b)(1) * * *
  (2) For the purpose of this subsection, the condition that a 
plan be fair and equitable with respect to a class includes the 
following requirements:
          (A) * * *
          (B) With respect to a class of unsecured claims--
                  (i) the plan provides that each holder of a 
                claim of such class receive or retain on 
                account of such claim property of a value, as 
                of the effective date of the plan, equal to the 
                allowed amount of such claim; [or]
                  (ii) the holder of any claim or interest that 
                is junior to the claims of such class will not 
                receive or retain under the plan on account of 
                such junior claim or interest any property, 
                except that in a case in which the debtor is an 
                individual, the debtor may retain property 
                included in the estate under section 1115, 
                subject to the requirements of subsection 
                (a)(14) of this section[.]; or
                  (iii) that includes claims of the kind 
                described in section 363(q), if the plan 
                provides for a sale or lease of all or 
                substantially all of property of the estate, 
                the plan requires the entity that acquires such 
                property (including any affiliate of such 
                entity) to assume the obligation to pay the 
                amount of allowed unsecured claims arising from 
                an incident described in section 363(q) that is 
                not paid by the debtor, or creditors holding at 
                least two-thirds in amount, and more than one-
                half in number, of such claims consent to 
                different treatment.

                            Additional Views

    No one wants to see BP, Transocean, or any other party 
responsible for the Gulf coast oil disaster let off the hook 
for the tremendous amount of damage they have caused to the 
Gulf of Mexico and surrounding coastal states or for the lives 
lost in the fire and explosion aboard the Deepwater Horizon. 
Those responsible for this tragedy, and the economic damage, 
personal injury, and death it has caused, must be held fully 
accountable.
    H.R. 5503, the ``Securing Protections for the Injured from 
Limitations on Liability Act,'' was introduced in response to 
liability questions that have arisen in the wake of the Gulf 
oil spill. Certainly, the intent underlying this legislation is 
good. However, H.R. 5503 is a very broad bill with only two 
major provisions directed solely at oil-spill related issues. 
The bill will likely have unintended consequences that reach 
well beyond the Gulf oil spill. Despite the fact that the bill 
is not emergency legislation aimed directly at the ongoing 
spill and that the bill applies retroactively, obviating the 
need for immediate, expedited consideration, the Committee did 
not hold a single legislative hearing on any of the bill's 
provisions to help understand their full impact.
    Nonetheless, without the benefit of even a single 
legislative hearing, H.R. 5503 virtually re-writes U.S. 
maritime law, making portions of it out-of-step with the 
maritime-liability laws of nearly every other seagoing nation; 
eliminates important provisions of the Class Action Fairness 
Act, a statute passed just 5 years ago, with strong bi-partisan 
support, to ensure that class actions are decided in a neutral, 
fair forum--the Federal courts; and makes significant 
amendments to provisions of the Bankruptcy Code for debtors 
with oil-spill liability. Given the sweeping nature of the 
changes in this bill and the lack of committee process to 
create a record so members could understand its full effects, 
we were unable to support this legislation.

                               BACKGROUND

A. Death on the High Seas Act
    Before the enactment of the Death on the High Seas Act 
(DOHSA), general maritime law did not permit the survivors of a 
person killed on the high seas to bring an action for wrongful 
death.\1\ In 1920, Congress enacted DOHSA to remedy this harsh 
consequence of general maritime law and create a cause of 
action in admiralty for wrongful deaths occurring more than 
three miles from shore, outside the territorial waters of the 
states. DOHSA limits the class of beneficiaries to the 
decedent's ``spouse, parent, child, or dependent relative,''\2\ 
establishes a 3-year period of limitations,\3\ allows suits 
filed by the victim to continue as wrongful-death actions if 
the victim dies of his injuries while the action is pending,\4\ 
and provides that contributory negligence will not bar 
recovery.\5\ With respect to damages, the statute provides that 
the ``recovery . . . shall be a fair compensation for the 
pecuniary loss sustained by the individuals for whose benefit 
the action is brought.''\6\ Liability may be based on 
intentional acts, negligence, or unseaworthiness. DOHSA 
preempts all state wrongful death statutes\7\ and actions under 
general maritime law.\8\
---------------------------------------------------------------------------
    \1\The Harrisburg, 119 U.S. 199 (1886) (holding that admiralty 
afforded no remedy for wrongful death in the absence of an applicable 
state or Federal statute). In 1970, the Supreme Court reversed its 
decision in The Harrisburg and provided for a general maritime cause of 
action for wrongful death. Moragne v. States Marines Lines, 398 U.S. 
375 (1970). The general maritime cause of action is not applicable in 
cases in which other Federal statutory law (e.g., the Jones Act or 
DOHSA) applies.
    \2\46 U.S.C. Sec. 30302.
    \3\46 U.S.C. Sec. 30106.
    \4\46 U.S.C. Sec. 30305.
    \5\46 U.S.C. Sec. 30304.
    \6\46 U.S.C. Sec. 30303.
    \7\Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 209 
(1986).
    \8\Dooley v. Korean Air Lines Co., 524 U.S. 116, 118 (1998).
---------------------------------------------------------------------------
B. Jones Act
    In 1920, Congress enacted the Jones Act to remove the 
maritime law's bar to a seaman's suit for negligence. Under the 
Jones Act, which makes applicable to seamen injured in the 
course of their employment the provisions of the Federal 
Employers' Liability Act,\9\ employees have a right of recovery 
for injuries resulting from the negligence of the shipowner, 
the operator, the captain, or fellow members of the crew. The 
Jones Act does not allow for the recovery of non-pecuniary 
damages. An action under the Act may be brought either in 
Federal court or state court, and a seaman is entitled to a 
jury trial (a right which is not afforded by general maritime 
law). In order to be considered a ``Jones Act seaman,'' a 
worker must have (1) an employment-related connection, which is 
substantial in both nature and duration,\10\ (2) to a vessel in 
navigation.
---------------------------------------------------------------------------
    \9\45 U.S.C. Sec. Sec. 51-60.
    \10\To be considered a substantial connection with a vessel, the 
worker must spend at least 30 percent of his time in the service of a 
vessel on navigable waters. Chandris, Inc., v. Latsis, 515 U.S. 347 
(1995).
---------------------------------------------------------------------------
    The Jones Act is best thought of as an analog to land-based 
workers' compensation laws, which do not apply to seamen 
working on U.S.-flagged vessels. Proof of negligence under the 
Jones Act does not require as high a burden of proof as is 
required for the general common law tort of negligence. Under 
the Jones Act, an injured seaman only needs to prove that his 
employer's negligence is ``a'' cause of his injuries. Thus, an 
employer is liable under the Jones Act if the employer's 
actions ``played any part, no matter how small, in bringing 
about the injury or damage.''\11\ Courts have described the 
seaman's burden of proving Jones Act negligence as 
``featherweight.''\12\
---------------------------------------------------------------------------
    \11\See Ninth Circuit Model Civil Jury Instructions No. 9.4.
    \12\Comeaux v. T.L. James & Co., Inc., 702 F.2d 1023 (5th Cir. 
1983).
---------------------------------------------------------------------------
C. Limitation of Liability Act
    Congress enacted the Limitation of Liability Act (Liability 
Act) to encourage shipbuilding and to induce investment in the 
maritime industry by limiting the liability of vessel owners to 
the value of the vessel involved, together with its freight 
then pending. Claims for personal injury and death have higher 
limits of liability over and above the value of the vessel and 
its freight. Additionally, certain other claims, including 
those for breach of contract, wages and environmental damage, 
are not subject to any limitation. A shipowner may invoke the 
protection of the Liability Act in two ways: (1) by asserting 
limitation of liability as a defense to a lawsuit; and (2) by 
filing a petition in Federal court seeking either exoneration 
from or limitation of liability and requiring all parties to 
bring their claims into that court. For purposes of H.R. 5503 
and the Gulf oil spill, the two most important features of the 
Liability Act are the provisions concerning personal injury and 
death and the concursus provision that requires all claims to 
be filed before one Federal court.
    It is important to note that liability for oil spill and 
pollution related claims under the Oil Pollution Act are not 
covered by the Liability Act. The Oil Pollution Act has been 
interpreted to apply exclusively to such claims notwithstanding 
the Liability Act.
D. Class Action Fairness Act
    Prior to enactment of the Class Action Fairness Act, most 
class actions were adjudicated in state courts, where the 
governing rules were applied inconsistently and often in a way 
that violated basic fairness and due process, and where there 
was often inadequate supervision over litigation procedures and 
proposed settlements. The Act corrected those flaws in the 
diversity jurisdiction statute\13\ that prevented most 
interstate class actions from being adjudicated in Federal 
courts. Thus, it furthered one of the primary historical 
reasons for diversity jurisdiction, which ``is the reassurance 
of fairness and competence that a Federal court can supply to 
an out-of-state defendant facing suit in state court.''\14\
---------------------------------------------------------------------------
    \13\28 U.S.C. Sec. 1332.
    \14\Davis v. Carl Cannon Chevrolet-Olds, Inc. 182. F.3d 792, 797 
(11th Cir. 1999).
---------------------------------------------------------------------------
    As relevant to H.R. 5503, the Class Action Fairness Act 
(CAFA) amended 28 U.S.C. Sec. 1332 to provide Federal district 
courts with original jurisdiction of class actions if there are 
100 or more class members, the aggregate amount in controversy 
exceeds $5,000,000, and: (A) any class member is a citizen of a 
state different from any defendant; (B) any member of the 
plaintiff class is a foreign state, or a citizen or subject of 
a foreign state, and any defendant is a citizen of a state; or 
(C) any member of the plaintiff class is a citizen of a state 
and any defendant is a foreign state or a citizen or subject of 
a foreign state. This change was a stark contrast to prior law, 
which required diversity of citizenship between every class 
representative and also required that every plaintiff seek 
damages in excess of $75,000. The pre-CAFA system easily 
allowed plaintiffs to avoid removal to Federal court by 
including a single non-diverse class representative, or by 
limiting an individual plaintiff's claims to under $75,000.

                               DISCUSSION

    In general, we opposed H.R. 5503 in committee for two main 
reasons. First, although H.R. 5503 is being pushed as a 
response to liability issues that have arisen in the wake of 
the Gulf oil spill (indeed the acronym for the bill is the 
``SPILL Act''), the provisions in the bill are not limited to 
either the Gulf oil spill or oil spills generally. Rather, the 
bill's provisions make major changes to, among other things, 
U.S. maritime liability laws, the Class Action Fairness Act, 
and the Bankruptcy Code. In other words, the bill affects a 
wide range of interests that not only have no association with 
the Gulf oil spill, but are not even associated with the oil 
industry.
    Second, the bill is making these changes without even the 
benefit of one legislative hearing. Without a legislative 
hearing, we have no clear understanding of the full impact of 
the bill's provisions. Understandably, sometimes legislation 
must move on an expedited basis to respond to emergencies; 
however, by its own terms H.R. 5503 applies retroactively, 
providing the committee with a window of time in which to 
conduct the hearings required to ensure that the changes made 
by the bill are necessary and that the unintended consequences 
are limited.
    Beyond these two overarching concerns with H.R. 5503, we 
have several specific concerns with the bill's provisions:

Non-pecuniary damages. H.R. 5503 provides for non-pecuniary 
damages under both the Death on the High Seas Act and the Jones 
Act. While it is understandable that in the wake of this 
tragedy, and in the name of holding the responsible parties 
fully accountable, there would be a push to provide decedents 
with the ability to claim additional damages, the non-pecuniary 
damages provisions apply to all cases brought under both acts 
and thus will have broad impact. It is unclear how 
significantly this change will affect U.S. maritime interests. 
However, we do know that in general awards of non-pecuniary 
damages are unpredictable, resulting from the inherent 
difficulties in valuing such damages and the great disparity in 
the price tag which different juries place on such losses.
    Additionally, with regard to allowing such damages under 
the Jones Act in particular, the change made by H.R. 5503 may 
create inequities for other American workers versus Jones Act 
seamen. The Jones Act, like the Federal Employer Liability Act 
(FELA) and the Longshore and Harbor Workers Compensation Act 
(LHWCA), is best thought of as an analog to state workers' 
compensation statutes, not state tort law. But state workers' 
compensation schemes, FELA, and LWHCA do not generally provide 
for the award of non-economic damages. Combined with the fact 
that the negligence standard under the Jones Act has been 
characterized as ``featherweight,'' the provision of non-
pecuniary damages under the Jones Act may be highly 
problematic.
    Unfortunately, just as with the other provisions in this 
bill, we did not have a hearing on these non-pecuniary damages 
provisions to understand how they will affect the U.S. maritime 
industry, which by most accounts is already in significant 
decline. Overturning long-settled expectations and possibly 
adding significant new costs could weaken the industry even 
further and lead to domestic job losses. We should not run that 
risk without a legislative record.

Limitation of Liability Act. Section 4 of H.R. 5503 repeals the 
Liability Act without adopting any replacement legislation to 
fill the void in the United States for purposes of limitation 
of liability for vessel-related incidents. However, the 
Liability Act is an important feature of U.S. maritime law 
addressing the liability of a vessel owner in the aftermath of 
a marine casualty, usually involving numerous parties with 
competing damage claims, loss of life or personal injury, and 
several potential jurisdictions in which claims may be filed. 
Repeal of the Liability Act without a suitable replacement 
mechanism will introduce uncertainty and in many cases may 
result in inadequate funds to compensate non-Oil Pollution Act 
claimants for personal injury and property damage resulting 
from a vessel casualty.
    The Liability Act provides a procedure in admiralty to 
enjoin all pending suits, and requires a concursus to compel 
all claims to be filed in a special limitation proceeding so 
that liability may be determined in one Federal forum. This 
procedure promotes judicial efficiency because it requires all 
claims from one incident to be litigated before a single 
Federal judge instead of multiple different forums with 
potentially conflicting or competing judgments. While 
limitation of liability promotes consistency and reliability 
for commercial interests involved in the shipping industry, the 
Act also benefits claimants because it requires the vessel 
owner to create a compensation fund to pay claimants. The 
vessel owner is required to file a ``stipulation for value'' in 
the form of a bond or other acceptable security for payment of 
claims arising out of the incident. The Act also requires the 
owner to create a personal injury fund ($420 per gross ton of 
the vessel's weight) to compensate personal injury or death 
claimants apart from property damage or other claims. By 
repealing the Act, this compensation fund will not be available 
to secure the claims of parties.
    The principle of global limitation of liability is vital to 
the international shipping industry. In particular, a large 
number of jurisdictions worldwide (52 nations as of May 31, 
2010, including Canada, Mexico, United Kingdom, France, 
Germany, Spain, Italy, Japan, South Africa, and Korea) have 
adopted the 1976 Convention on Limitation of Liability for 
Maritime Claims (LLMC). The Protocol of 1996 amended the LLMC 
to provide for enhanced compensation and to provide a 
simplified procedure for updating the limitation amounts.
    If Congress wants to update or modernize the Liability Act, 
the answer is not simply to repeal the Act as is done in H.R. 
5503. The LLMC and the Protocol of 1996 provide a useful 
example of a consensus among the international shipping nations 
for a workable compensation scheme that addresses modern 
concepts of insurance and liability with respect to claims 
against an owner and also creates a larger compensation fund 
based on the gross tonnage of the vessel involved.

Class Action Fairness Act. The proposed amendments to the Class 
Action Fairness Act (CAFA) in H.R. 5503 are unnecessary and run 
counter to the very purpose of CAFA. CAFA was intended to 
ensure that actions involving minimal diversity (that is, cases 
brought by plaintiffs of one state against defendants of 
another state) are decided in a neutral, fair forum--the 
Federal courts. The alternative--permitting such actions to be 
tried in local courts, often with elected trial court judges, 
who favor local plaintiffs over out-of-state businesses--leads 
to unjust results.
    H.R. 5503 amends CAFA by providing that the CAFA minimal 
diversity provisions do not apply to ``an action brought by a 
State or a subdivision of a State on behalf of its citizens.'' 
However, this change is entirely unnecessary as courts appear 
uniformly to agree that CAFA does not provide Federal 
jurisdiction over enforcement actions brought by states on 
behalf of their citizens.\15\ Thus, the only real effect of the 
CAFA provisions in H.R. 5503 is to create a loophole that would 
keep legitimate class actions and mass actions from being 
removed to Federal court.
---------------------------------------------------------------------------
    \15\For instance, a state may bring an enforcement action for 
violation of the state's unfair and deceptive trade practices statute 
to enjoin a deceptive practice and/or seeking civil penalties and other 
remedies authorized by the state statute. See, e.g., Missouri ex rel. 
Koster v. Portfolio Recovery Assocs., Inc., 686 F. Supp. 2d 942, 946-47 
(E.D. Mo. 2010); Connecticut v. Moody's Corp., 664 F. Supp. 2d 196, 202 
(D. Conn. 2009).
---------------------------------------------------------------------------
    This loophole would encourage enterprising attorneys to 
avoid Federal jurisdiction by finding state attorneys general 
to join their class action lawsuits. Rather than promote 
justice, such a result would promote questionable 
collaborations between private attorneys and public officials, 
in which the attorneys seek the state attorney general's 
signature in order to avoid Federal jurisdiction. As Senator 
Hatch noted in floor debate on CAFA of an amendment with 
similar language to the language in H.R. 5503,

        this amendment is not only unnecessary, it actually 
        creates opportunities for gaming. If this legislation 
        enables State attorneys general to keep all class 
        actions in State court, it will not take long for 
        plaintiffs' lawyers to figure out that all they need to 
        do to avoid the impact of S. 5 is to persuade a State 
        attorney general to simply lend the name of his or her 
        office to a private class action. In other words, 
        plaintiffs' lawyers will try to keep interstate class 
        actions in State court by simply naming that State's 
        attorney general at the end of complaint as a co-
        counsel or of-counsel.\16\
---------------------------------------------------------------------------
    \16\151 Cong. Rec. S 1157 (Feb. 9, 2005).

    In effect, the amendments to CAFA contained in H.R. 5503 
circumvent the law by creating a situation in which state 
attorneys general could partner with personal injury lawyers 
and bring private class actions for tort or contract damages 
that must stay in state courts. In other words, including a 
state attorney general as a co-plaintiff on a private class 
action might be enough to nullify CAFA, raising serious 
---------------------------------------------------------------------------
conflict of interest, legal ethics, and constitutional issues.

Enforceability of Secrecy Agreements. Section 6 of H.R. 5503 
would make court orders restricting the dissemination of broad 
categories of information related to oil spills void and 
unenforceable in any legal proceeding, with very limited 
exception. The Judicial Conference of the United States has 
expressed serious concerns regarding this provision. According 
to the Conference, ``[n]ot only does Section 6 circumvent the 
process for amending the Federal Rules of Civil Procedure that 
Congress established in the Rules Enabling Act, it threatens 
litigants' rights and interests and creates an unworkable 
procedure for the cases covered by H.R. 5503.''\17\
---------------------------------------------------------------------------
    \17\Letter from the Judicial Conference of the United States, 
Committee on Rules of Practice and Procedure, to the Hon. Lamar Smith, 
Ranking Member, House Judiciary Committee (June 28, 2010) (internal 
citations omitted).
---------------------------------------------------------------------------
    The Judicial Conference explains that the ``provisions in 
Section 6 would prohibit a court from enforcing a protective or 
confidentiality order that is necessary to protect vital 
privacy rights.''\18\ Moreover, the Conference notes that 
section 6 ``is unnecessary to achieve the bill's purposes and 
has the potential to do great harm to those already struggling 
with the effects of the oil spill.''\19\ Furthermore, according 
to the Conference, section 6 ``provides an unworkable procedure 
that would delay and complicate discovery in the very cases 
that should be handled with expedition and efficiency to 
provide needed relief to those affected by the spill.''\20\ 
Ultimately, the Judicial Conference concludes that section 6 
should be removed from the legislation.
---------------------------------------------------------------------------
    \18\Id.
    \19\Id.
    \20\Id.

Bankruptcy Protections. The impact of the bankruptcy provisions 
in H.R. 5503 is particularly difficult to understand fully 
without a legislative hearing. Certainly, no one wants BP or 
any other company with oil spill liability to file an 
opportunistic chapter 11 bankruptcy to avoid its liability 
under the Oil Pollution Act and related laws. However, the 
bill's proposed changes to the Bankruptcy Code are 
substantively questionable.
    The bill effectively gives oil spill liability claimants a 
veto over any asset sale unless they are paid in full and does 
not allow for confirmation of a chapter 11 plan that provides 
for the sale of assets unless oil spill claimants are either 
paid in full or consent to the sale. But, property cannot be 
sold for more than its value. Thus, if there is insufficient 
unencumbered value left in any property proposed to be sold in 
bankruptcy to compensate fully oil spill claimants, the oil 
spill claimants will have to agree to the sale or the sale will 
be blocked.
    The bankruptcy provisions in this bill, therefore, appear 
designed to give oil spill claimants leverage over secured 
claimholders by blocking sales of their collateral unless 
someone pays them off even before the secured claim is paid 
off. Accordingly, the bankruptcy provisions raise 
constitutional questions under the Fifth Amendment because they 
undermine the value of the collateral of the secured 
claimholders. In addition to the constitutional concerns, if 
property needs to be sold, it creates a stalemate between the 
debtor's secured claimholders and other unsecured claimholders 
on the one hand, and the oil spill claimants on the other. 
Normally, if Congress wants to give claimants an advantage in 
bankruptcy, it gives some or all their claims (up to whatever 
amount Congress determines) priority status under 11 U.S.C. 
Sec. 507(a).
    Giving veto power, leverage, and quasi priorities to oil 
spill claimants may sound good, but the flipside is that it 
demotes all other secured and unsecured claims. Why are these 
oil pollution claims more entitled to payment than other 
claims? What about personal injury bankruptcy claimants, should 
their claims be given less bankruptcy protection? Or, secured 
claimants, which in many cases include pension funds that have 
invested people's retirement savings in what would otherwise be 
relatively safe investment vehicles, should their claims be put 
behind oil spill claimants?
    Perhaps oil spill claimants should be given additional 
bankruptcy protections. But the exact nature of these 
protections and their impact needs to be examined through the 
normal legislative process of conducting hearings. BP is not on 
the verge of bankruptcy, as is demonstrated by its willingness 
to set up a $20 billion escrow fund, backed by BP assets. 
Ironically, the impact of this reform may be to make it harder 
for smaller firms to obtain financing, ultimately benefiting BP 
(and other large oil companies) by driving out potential 
competitors from off-shore drilling. The committee has the time 
to conduct a legislative hearing to ascertain the correct level 
and form of any needed bankruptcy protection for oil spill 
claimants.

                         REPUBLICAN AMENDMENTS

Limit the bill's provisions to claims arising out of oil 
spills. Ranking Member Smith offered an amendment to limit H.R. 
5503 to claims arising out of oil spills. The amendment was 
rejected on a party-line vote.

Remove the Class Action Fairness Act provisions from the bill. 
Mr. Goodlatte offered an amendment to strike section 5 of the 
bill, which contains provisions amending the Class Action 
Fairness Act. The amendment was defeated on a voice vote.

Limit the bill's Class Action Fairness Act provisions to claims 
arising out of oil spills. Mr. Goodlatte also offered an 
amendment to limit the bill's Class Action Fairness Act 
provisions to cases arising out of oil spills. The amendment 
was withdrawn.

Waiver of the Jones Act restrictions on the operation of 
foreign vessels in U.S. waters. Mr. Lungren offered an 
amendment to waive the Jones Act provisions that restrict 
foreign vessels from aiding in the cleanup efforts in the Gulf 
of Mexico. The amendment was ruled non-germane.

                               CONCLUSION

    Those responsible for the Gulf coast oil disaster must be 
held fully liable, and Congress must ensure that U.S. liability 
laws are sufficient to ensure that result. However, without 
having held a legislative hearing to understand the full impact 
of H.R. 5503, we should not have moved this bill through 
committee on such an expedited basis. The extensive changes to 
U.S. maritime liability law in H.R. 5503, which apply well 
beyond oil spills, threaten to increase dramatically the cost 
of shipping goods--an increase that will be borne by all 
American consumers, and may put American jobs at risk. 
Additionally, the legislation unnecessarily amends the Class 
Action Fairness Act, opening up the very realistic possibility 
of enterprising trial attorneys gaming the system and 
circumventing Federal law to keep class actions out of Federal 
court. Finally, the bill essentially gives Oil Pollution Act 
claimants veto power over essential aspects of the bankruptcy 
process, seriously curtailing the rights of other bankruptcy 
claimants.
    Because this bill applies retroactively, there is no reason 
to rush this bill through committee, recommending that the full 
House adopt it, without having taken the time to conduct a 
single legislative hearing on its sweeping provisions. As 
Congress considers amending the law to ensure that BP is held 
accountable for the Gulf oil spill, it should avoid harming, 
rather than advancing, the national interest. Without proper 
consideration of these proposed changes to the law, however, 
Congress risks harming the nation in order to punish BP.

                                   Lamar Smith.
                                   F. James Sensenbrenner, Jr.
                                   Bob Goodlatte.
                                   Darrell E. Issa.
                                   Trent Franks.
                                   Jim Jordan.

                                  

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