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Published byVictoria Hollis Modified over 11 years ago
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Andrew J. Garger Vice President, Legal & General Counsel Water Quality Insurance Syndicate
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Do You Remember?
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OPAs Predecessors Water Quality Improvement Act Water Quality Improvement Act Federal Water Pollution Control Act Federal Water Pollution Control Act Clean Water Act Clean Water Act Outer Continental Shelf Lands Act Amendments Outer Continental Shelf Lands Act Amendments Trans-Alaska Pipeline Authorization Act Trans-Alaska Pipeline Authorization Act Deep Water Ports Act Deep Water Ports Act
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THE OIL POLLUTION ACT OF 1990 (OPA) P.L. 101-380 Responsible Party: Owner, Operator or Charterer by demise Nature of Liability: Strict, joint and several
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Pollutant: Oil of any kind, except if classified as an hazardous substance under CERCLA THE OIL POLLUTION ACT OF 1990 (OPA) P.L. 101-380 Jurisdiction: Navigable waters, adjoining shorelines, or the Exclusive Economic Zone
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OPA LIABILITY LIMITS Higher for Single Hulled Vessels than for Double Hulled Vessels. Higher for Single Hulled Vessels than for Double Hulled Vessels. Example: 3000 gross ton double hulled vessel has limit of the greater of $2000 per gross ton or $17,800,000 Example: 3000 gross ton double hulled vessel has limit of the greater of $2000 per gross ton or $17,800,000 Single hulled tank vessel same size the greater of $3200 per gross ton or $23,496,000 Single hulled tank vessel same size the greater of $3200 per gross ton or $23,496,000
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Other Pollution Statutes OPA 90 is not the last word OPA 90 is not the last word – National Marine Sanctuaries Act – Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Includes Superfund – Over 63 Bills introduced in Congress as a result of the Gulf Spill. – State law not preempted – Different standards than Federal.
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WHAT IS RECOVERABLE ? Removal Costs Removal Costs Natural Resource Damages Natural Resource Damages Damage to Property Damage to Property Loss of Subsistence Use Loss of Subsistence Use Lost Revenue Lost Revenue Lost Profits Lost Profits Increased Costs of Public Services Increased Costs of Public Services
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Spill Response Overview Types of Incidents Types of Incidents Types of Spilled Products Types of Spilled Products Responsible Partys (RP) Initial Response Responsible Partys (RP) Initial Response MPRG MPRG
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Spill Response Overview Continued USCG Involvement USCG Involvement Other Government Agency Involvement Other Government Agency Involvement Response Resource Availability Response Resource Availability Security Issues Under the MTSA Security Issues Under the MTSA
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Spill Response Overview Continued Third Party Issues and Concerns Third Party Issues and Concerns Things that can Drive the Cost of the Spill Response Things that can Drive the Cost of the Spill Response Natural Resource Damage Assessment (NRDA) Considerations Natural Resource Damage Assessment (NRDA) Considerations
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Mississippi River Spill Collision July 23 rd – Barge DM-932, TUG MEL OLIVER, M/V TINTOMARA Mile 99 near entrance to Harvey Canal Mile 99 near entrance to Harvey Canal Approximately 9000 bbls of #6 oil (heavy). Approx. half spilled Approximately 9000 bbls of #6 oil (heavy). Approx. half spilled ACL, owner of the DM-932 (double skinned barge) is responsible party ACL, owner of the DM-932 (double skinned barge) is responsible party
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Mississippi River Spill CASUALTY RESPONSE On scene- spill response managers, spill response contractors, environmental experts, Coast Guard, state officials, 3 rd party claims handlers. On scene- spill response managers, spill response contractors, environmental experts, Coast Guard, state officials, 3 rd party claims handlers. Over 1000 responders at height of cleanup. Over 1000 responders at height of cleanup.
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Mississippi River Spill SPILL RESPONSE Coast Guard closed 58 miles of the Mississippi River (at least 3 days). Coast Guard closed 58 miles of the Mississippi River (at least 3 days). Down-river water intakes boomed off. Down-river water intakes boomed off.
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Mississippi River Spill
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Aggressive Cleanup Measures
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Mississippi River Spill Public Commentary (NOLA.COM) Was Joseph Hazlewood piloting the tanker? Was Joseph Hazlewood piloting the tanker? Sounds like someone had too much to drink. Sounds like someone had too much to drink. How in the hell do you not see a 600 foot tanker? Can you say DUI.? How in the hell do you not see a 600 foot tanker? Can you say DUI.? Sounds like Al Qaeda. Sounds like Al Qaeda. I might just call it a day and get on out of work and throw and oil spill party. I might just call it a day and get on out of work and throw and oil spill party. If they were only using Cosmo Kramers bladder system that he invented this could have all been avoided. If they were only using Cosmo Kramers bladder system that he invented this could have all been avoided.
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Mississippi River Spill Coast Guard Investigation Many hearings held. Many hearings held. Barge Pilot took the 5 th Barge Pilot took the 5 th Preliminary Statement by Coast Guard indicated improper licensure. Preliminary Statement by Coast Guard indicated improper licensure. Ultimately criminal charges were brought against the tug. Ultimately criminal charges were brought against the tug.
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Natural Resource Damage Assessment Huge potential damages Huge potential damages Passive-Use (loss of enjoyment) Passive-Use (loss of enjoyment) Wildlife habitats Wildlife habitats Bird kills Bird kills
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Mississippi River Spill Class Action Lawsuits At least six filed naming ACL, DRD, and others. At least six filed naming ACL, DRD, and others. Includes loss of revenue claims. Includes loss of revenue claims. Classes have not been certified. Classes have not been certified.
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CERCLA AND OPA 90 DEFINE NATURAL RESOURCES AS LAND, FISH,WILDLIFE, BIOTA, AIR, WATER, GROUNDWATER, DRINKING WATER SUPPLIES, AND OTHER SUCH RESOURCES. CERCLA AND OPA 90 DEFINE NATURAL RESOURCES AS LAND, FISH,WILDLIFE, BIOTA, AIR, WATER, GROUNDWATER, DRINKING WATER SUPPLIES, AND OTHER SUCH RESOURCES. INJURY REFERS TO THE ACTUAL ADVERSE IMPACTOR LOSS OF THE NATURAL RESOURSE RESULTING DIRECTLY OR INDIRECTLY FROM EXPOSURE TO A RELEASE OR THREAT OF RELEASE OF OIL OR A DISCHARGE OR RELEASE OF A HAZARDOUS SUBSTANCE. INJURY REFERS TO THE ACTUAL ADVERSE IMPACTOR LOSS OF THE NATURAL RESOURSE RESULTING DIRECTLY OR INDIRECTLY FROM EXPOSURE TO A RELEASE OR THREAT OF RELEASE OF OIL OR A DISCHARGE OR RELEASE OF A HAZARDOUS SUBSTANCE. DAMAGE IS THE AMOUNT OF MONEY SOUGHT BY THE TRUSTEES TO COMPENSATE FOR THE INJURY THROUGH RESTORATION OR REPLACEMENT PROJECTS. DAMAGE IS THE AMOUNT OF MONEY SOUGHT BY THE TRUSTEES TO COMPENSATE FOR THE INJURY THROUGH RESTORATION OR REPLACEMENT PROJECTS. WHAT IS A NATURAL RESOURCE ?
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H.E.A.- HABITAT EQUIVALENCY ANALYSIS H.E.A.- HABITAT EQUIVALENCY ANALYSIS R.E.A. – RESOURCE EQUIVALENCY ANALYSIS R.E.A. – RESOURCE EQUIVALENCY ANALYSIS COMPLEX FORMULAE USED TO FIGURE OUT WHAT NEEDS TO BE DONE TO CREATE, RESTORE OR PROTECT THE INJURED RESOURCE. COMPLEX FORMULAE USED TO FIGURE OUT WHAT NEEDS TO BE DONE TO CREATE, RESTORE OR PROTECT THE INJURED RESOURCE. ALPHABET SOUP
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THE GULF SPILL LARGEST SPILL IN HISTORY ?? LARGEST SPILL IN HISTORY ?? MASSIVE SPILL RESPONSE MASSIVE SPILL RESPONSE EVERY TYPE OF CLEANUP TECHNOLOGY BEING USED EVERY TYPE OF CLEANUP TECHNOLOGY BEING USED EFFECTS WILL BE FELT FOR YEARS IF NOT DECADES. EFFECTS WILL BE FELT FOR YEARS IF NOT DECADES.
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LARGEST SPILLS Lakeview Gusher, CA. 9 Mill. Bbls. Lakeview Gusher, CA. 9 Mill. Bbls. Deepwater Horizon 3-8.7 Mill. Bbls. Deepwater Horizon 3-8.7 Mill. Bbls. Gulf War 2-6 Mill BBLS. Gulf War 2-6 Mill BBLS. Ixtoc I - Gulf of Mexico 3.5 Mill Bbls. Ixtoc I - Gulf of Mexico 3.5 Mill Bbls. Exxon Valdez – 257,000 Bbls. Exxon Valdez – 257,000 Bbls. Yet, only 8% of oil in water every year is from tanker /pipeline/well spills. Yet, only 8% of oil in water every year is from tanker /pipeline/well spills.
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EXAMPLE OF MODU
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COAST GUARD SEARCH AND RESCUE
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COAST GUARD RESPONSE
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SURVEILLANCE FLIGHTS
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OVERFLIGHT PHOTO
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OVERFLIGHT – GULF OF MEXICO
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OVERFLIGHT PHOTO
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OVERFLIGHT MAP
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BP COMMAND CENTER
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SPILL TRAJECTORY MAP
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RESPONSE STATUS
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LOCAL GOVERNMENT INVOLVEMENT
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VARIOUS RESPONSE ACTIVITIES
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STAGING AREA - BOOM
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SHORELINE PROTECTION - SANDBAGS
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USE OF MILITARY CRAFT
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OIL IN WATER
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OIL SKIMMING
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100716-G-5030M-007-- GULF OF MEXICO -- Crewmembers monitor the oil skimming set-up aboard CGC Walnut, a 225-foot sea-going buoy tender based in Honolulu while CGC Resolute stands by in the background. The Walnut is skimming oil near the BP oil spill site after transiting the Panama Canal. Coast Guard photo by Petty Officer 1st Class John Masson.
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MODIFIED FISHING VESSEL
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OIL SKIMMER
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SKIMMING OPERATIONS
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BOOM IN FLORIDA
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EMULSIFIED OIL GULF OF MEXICO - Vessels of Opportunity participants chase and corral oil near Dauphin Island, Ala. More than 38,000 people are participating in the nation's largest oil spill response in history. U.S. Coast Guard photo.
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LARGEST OIL SKIMMER EVER
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BEACH CLEANUP - SCAT TEAM
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BEACH CLEANUP
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MARSH GRASS CLEANUP
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SNARE BOOM
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CONTAINMENT BOOM
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CONTAINMENT BOOM AND SORBENT BOOM
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SORBENT AND PROTECTIVE BOOM
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PROTECTIVE BOOM
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PROTECTIVE BOOMING
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IN-SITU BURNING
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IN SITU BURNING
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IN – SITU BURNING
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CHEMICAL DISPERSANTS
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DIVER – SEARCHING FOR UNDERWATER POLLUTION
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SUBSEA DISPERSANTS
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BRETON NATIONAL WILDLIFE REFUGE
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BROWN PELICAN AGAIN
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WILDLIFE
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SEA TURLE NEST
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SEA TURTLE NEST
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SEA TURTLE
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TOP KILL PROCEDURE
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TOP HAT
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ATTEMPT TO CAP THE WELL
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LOOP CURRENT RESEARCH
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DECONTAMINATION AT PORTS
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DECONTAMINATION SITE
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DECONTAMINATION
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DECONTAMINATION
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POLITICAL VISITS
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MEDIA RESPONSE
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What Now?
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Current Situation 94 and 180 million gallons have spilled (2.2- 4.4 million barrels)???? 94 and 180 million gallons have spilled (2.2- 4.4 million barrels)???? Successful Capping of Well (for now) Successful Capping of Well (for now) Need to be removed if leaking Need to be removed if leaking Oil would flow freely again Oil would flow freely again Would then try to use subsea containment systems to capture escaping oil and divert to surface vessels. Would then try to use subsea containment systems to capture escaping oil and divert to surface vessels.
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RELIEF WELL
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Aftermath of Gulf Spill MOST EXPENSIVE SPILL IN HISTORY: 3.5 million in cleanup expenses MOST EXPENSIVE SPILL IN HISTORY: 3.5 million in cleanup expenses DRIVING MASSIVE POLITICAL RESPONSE DRIVING MASSIVE POLITICAL RESPONSE CONGRESSIONAL HEARINGS AND LEGISLATIVE PROPOSALS CONGRESSIONAL HEARINGS AND LEGISLATIVE PROPOSALS ECOLOGICAL FALLOUT ECOLOGICAL FALLOUT CRIMINAL PROBE CRIMINAL PROBE ECONOMIC EFFECTS ECONOMIC EFFECTS CVIL LAWSUITS CVIL LAWSUITS
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Political Action Congressional Hearings Congressional Hearings Legislative Proposals Legislative Proposals Independent Presidential Commission Independent Presidential Commission Extralegal Pressure Extralegal Pressure Who should be in charge, Dept. of Interior or Coast Guard Who should be in charge, Dept. of Interior or Coast Guard
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ECOLOGICAL FALLOUT As of July 17, 2010 2,200 dead birds found 2,200 dead birds found 500 dead sea turtles 500 dead sea turtles 590 miles of Gulf shoreline oiled 590 miles of Gulf shoreline oiled 1/3 to ½ fisheries are closed 1/3 to ½ fisheries are closed Fisheries imperiled, including shrimp/crabs Fisheries imperiled, including shrimp/crabs Underwater plumes of oil found Underwater plumes of oil found Oil getting into food chain - crabs Oil getting into food chain - crabs
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NRDA as a result of Ecological Fallout Assessment of environmental effects to determine what BP must pay to restore the Gulf Environment. Assessment of environmental effects to determine what BP must pay to restore the Gulf Environment. Inexact Science Inexact Science
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Drilling Moratorium First one overruled in Court, reissued by Administration First one overruled in Court, reissued by Administration 8000 drilling workers and 24,000 people who service the 33 rigs effected have future employment jeopardized 8000 drilling workers and 24,000 people who service the 33 rigs effected have future employment jeopardized $750 million in annual wages $750 million in annual wages
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Other Economic Effects Tourism down Tourism down Fishing: The fisherman, companies that build and maintain boats, people who process and resell catch, and the restaurants. Fishing: The fisherman, companies that build and maintain boats, people who process and resell catch, and the restaurants. 20 billion compensation fund set up 20 billion compensation fund set up Factors for payment: Proximity to Coast, dependence on resources, industry. Factors for payment: Proximity to Coast, dependence on resources, industry.
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SEE YOU IN COURT Government Criminal Probe – Low burden of proof, Migratory Bird Treaty Act, Refuse Act, Criminal Negligence. Government Criminal Probe – Low burden of proof, Migratory Bird Treaty Act, Refuse Act, Criminal Negligence. Settlement s to injured and killed Settlement s to injured and killed Hundreds of Economic Claims but mitigated by BP Settlment Fund. Hundreds of Economic Claims but mitigated by BP Settlment Fund.
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Oil in New York ?? Supercomputer simulations suggest it is likely oil will move up the East Coast Supercomputer simulations suggest it is likely oil will move up the East Coast Within next six months. Within next six months. Factors: wind speed, current patterns, temperatures and past weather patterns. Factors: wind speed, current patterns, temperatures and past weather patterns.
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Long Term Outlook Move more oil by tanker?? Move more oil by tanker?? Natural gas/ nuclear/Wind Farms Natural gas/ nuclear/Wind Farms Green energy Green energy Resources will bounce back – Exxon Valdez Resources will bounce back – Exxon Valdez – www.evostc.state.ak.us/facts/qanda.cfm
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Thanks!
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BREAKING LIABILITY LIMITS Gross negligence, willful misconduct (no privity or knowledge of owner required). Gross negligence, willful misconduct (no privity or knowledge of owner required). Violation of federal safety, construction or operating standard. Violation of federal safety, construction or operating standard. Failure to report spill or cooperate with clean-up. Failure to report spill or cooperate with clean-up.
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BP Spill Issue BREAKING LIABILITY LIMITS Gross negligence, willful misconduct. (no privity or knowledge of owner required) Gross negligence, willful misconduct. (no privity or knowledge of owner required) Violation of federal safety, construction or operating standard. Violation of federal safety, construction or operating standard. Failure to report spill or cooperate with clean-up. Failure to report spill or cooperate with clean-up.
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