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House rewrites maritime liability law...and more

With little debate and on a voice vote, the House on Thursday passed H.R. 5503, the Securing Protections for the Injured from Limitations on Liability Act, i.e, the SPILL Act. Sponsored by Rep. John Conyers (D-MI) the bill expands liability for offshore accidents, retroactive to Deepwater Horizon accident of April 20, 2010.

In the floor debate (starting on Page H5330 of The Congressional Record), Rep. Conyers noted the presence in the House gallery of family members of those killed in the accident and argued: "We have found that the current state of law regarding these liability issues is outdated, unfair and operates against our national interests.The three key laws all date from the mid-1800s--the Death on High Seas Act, the Jones Act, and the Limitation on Liability Act." Speaker of the House Nancy Pelosi spoke on the floor to add to the emotional appeals.

The bill was considered on the suspension calendar, usually reserved for non-controversial items that require a vote of two-thirds of the House to pass. It looked the the Republicans were wary of being attacked as uncaring apologists for BP, but Rep. Lamar Smith (R-TX), the ranking member of Judiciary, and Rep. Ted Poe (R-TX), both criticized the legislation for unnecessarily rewriting other law. As we've reported previously, the bill undermines the Class Action Fairness Act, and Rep. Poe mentioned other examples of its far-reaching impact:

H.R. 5503 repeals the Limitation of Liability Act, which is a drastic fundamental change in American maritime law. This change would end the longstanding practice in the United States that all maritime claims be determined in one Federal forum.

It also ends the limitation on U.S.vessels owners' liability, a limitation which is in place in virtually every other country in the maritime industry. The loss of this limitation will handicap U.S. ship owners in the competitive world of shipping.

The minority's comments in the House report on the legislation, Rept. 111-521, summarized the objections, starting with the lack of any committee hearing on the legislation before the bill was marked up and sent to the floor for a vote:

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.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.