Opinion ID: 2798172
Heading Depth: 1
Heading Rank: 3

Heading: Applicability of Robins Dry Dock

Text: A threshold question is whether Plaintiffs’ claims are even subject to the Robins Dry Dock rule precluding recovery “for economic loss if that loss resulted from physical damage to property in which [the plaintiff has] no proprietary interest.” In re Bertucci Contracting Co., 712 F.3d 245, 246 (5th Cir. 2013) (internal quotation marks and citation omitted). This hard-edged, longstanding common law principle has been reaffirmed by an en banc panel of this court. See State of La. ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th Cir. 1985) (en banc) (denying recovery to a wide variety of plaintiffs—including operators of marinas, cargo terminal operators, wholesale and retail seafood enterprises, among others—who sought damages from shipowners responsible for spilling chemicals into a Mississippi River gulf outlet). The rule’s purpose is to limit the “consequences of negligence and exclude indirect economic repercussions, which can be widespread and open-ended.” Catalyst Old River Hydroelectric Ltd. v. Ingram Barge Co., 639 F.3d 207, 210 (5th Cir. 2011). The Mexican States contend that the Robins Dry Dock rule is cabined to civil negligence and other unintentional conduct. They argue that Robins Dry Dock is inapplicable because both BP and Transocean pled guilty to criminal conduct arising from the Deepwater Horizon disaster. The only intentional conduct at issue here, however, is BP’s guilty plea to intentionally obstructing a congressional investigation, which the Mexican States contend “exacerbated their damages by lulling regulatory authorities and others into deferring the taking of appropriate and mitigating action.” 5 The balance of the guilty pleas involves only criminally negligent conduct. 5 Transocean’s guilty plea specifically admitted only “negligent conduct.” 6 Case: 13-31070 Document: 00513028113 Page: 7 Date Filed: 05/01/2015 No. 13-31070 The Mexican States locate the purported exception in some of our case law. See Amoco Transp. Co. v. S/S Mason Lykes, 768 F.2d 659, 666 (5th Cir. 1985) (“This circuit and others have interpreted Robins Dry Dock to mean that there can be no recovery for economic losses caused by an unintentional maritime tort absent physical damage to property in which the victim has a proprietary interest.” (emphasis added)); Dick Meyers Towing Serv., Inc. v. United States, 577 F.2d 1023, 1025 (5th Cir. 1978) (recognizing that a plaintiff may “not recover for interference with his contractual relations unless he shows that the interference was intentional or knowing”); Kaiser Aluminum & Chem. Corp. v. Marshland Dredging Co., 455 F.2d 957, 958 (5th Cir. 1972) (“We agree that recovery by Kaiser is precluded as a matter of law because there is . . . no contention that the interference with Kaiser’s contract rights was intentional.”). These pronouncements are arguably dicta, as Defendants note. 6 But even assuming the existence of a criminal or intentional conduct exception, the Fifth Circuit has not addressed the interplay between such conduct and Robins Dry Dock. With one exception, the criminal conduct at issue here was exclusively negligent in nature, so we first address application of Robins Dry Dock in the context of criminal negligence. The First Circuit has confronted this issue. See Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 624 (1st Cir. 1994). In Ballard Shipping, an oil tanker ran aground in Rhode Island, spilling hundreds of thousands of gallons of oil into a bay. Id. The captain and the 6 At least one circuit has recognized a Robins Dry Dock exception for “economic losses that are intentionally caused.” See Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 625 n.1 (1st Cir. 1994) (citing Dick Myers, 577 F.2d at 1025). But see Nautilus Marine Inc. v. Niemela, 170 F.3d 1195, 1196–1197 (9th Cir. 1999) (holding that “nothing in Robins Dry Dock or its progeny . . . support[s] [an] exception” for intentional or reckless tortious conduct, though suggesting that intentional interference with contractual relations may be such an exception). 7 Case: 13-31070 Document: 00513028113 Page: 8 Date Filed: 05/01/2015 No. 13-31070 shipping company pled guilty to criminally negligent violations of the Clean Water Act and paid out a total of over $10 million in fines and cleanup costs. Id. Shellfish dealers alleging severe economic losses brought a lawsuit alleging violations of, inter alia, general maritime law. Id. The First Circuit affirmed the dismissal of the general maritime law claims based on Robins Dry Dock, holding that the claims did not fit into the “recognized exception[]” for claims based on “economic losses that are intentionally caused.” Id. at 625 & n.1 (internal quotation marks and citation omitted). Effectively, the court held that criminal negligence did not bar application of Robins Dry Dock. 7 We are persuaded by the First Circuit’s analysis. To the extent that the Robins Dry Dock rule is concerned with the prospect of runaway recovery stemming from a negligent act, see Amoco Transp., 768 F.2d at 668 (“The spectre of runaway recovery lies at the heart of the Robins Dry Dock rubric.”), there is no principled reason to distinguish between civil and criminal negligence. This is especially so here because federal law has criminalized much negligence in the context of oil spills in navigable waters. See In re Ballard Shipping Co., 810 F. Supp. 359, 364 (D.R.I. 1993); cf. David M. Uhlmann, Environmental Crime Comes of Age: The Evolution of Criminal Enforcement in the Environmental Regulatory Scheme, 2009 Utah L. Rev. 1223, 1246 (2009) (“As a matter of prosecutorial discretion, the government 7 The lower court in Ballard provided a more focused discussion of the criminal negligence issue. See In re Ballard Shipping Co., 810 F. Supp. 359, 364 (D.R.I. 1993). The court stated that the “Robins Dry Dock rule . . . should [not] be distorted or cease to operate because the criminal law imposes penalties on particular negligent behavior. As the federal law now deems criminal virtually all negligence resulting in an oil spill in navigable waters, . . . adopting the claimants’ position would transform the Robins Dry Dock rule into a meaningless assertion. This Court does not believe that Congress intended that Robins Dry Dock be relegated to the scrap heap in this manner.” Id. (citations omitted). Although the district court was ultimately reversed by the First Circuit on a different issue, its analysis on criminal negligence went unquestioned in that court. 8 Case: 13-31070 Document: 00513028113 Page: 9 Date Filed: 05/01/2015 No. 13-31070 considers criminal prosecution in most cases that involve significant harm or risk of harm to the environment.”). We next address the effect of BP’s intentional criminal obstruction of a congressional investigation. The plea agreement states that BP did “corruptly, that is, with an improper purpose, endeavor to influence, obstruct, and impede” a congressional investigation. The Mexican States argue that the company’s misrepresentations “lull[ed] regulatory authorities and others into deferring the taking of appropriate and mitigating action.” The district court held that the misrepresentations were not “causally related to the blowout, the oil spill, or the alleged harm to the Mexican states.” In re Oil Spill, 970 F. Supp. 2d at 528. We agree. The intent to obstruct a congressional investigation does not directly speak to the intent to cause damage to the Mexican States. See Dan B. Dobbs et al., The Law of Torts § 29 (2d ed. 2011) (“Intent is not a general state of mind. One has a purpose to accomplish, or a substantial certainty of accomplishing one or more specific objectives. The defendant might intend to touch and also intend his touching to have harmful effects. These are two different intents.”). 8