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'Act of God' Defense? State Bar of Texas Volume 30, Number 2 December 2005 OFFIC ERS: Brian R. Sullivan, Chairman 1201 Spy glass Road, Suite 200 OIL, GAS AND Austin, Texas 78746 (512) 32 7-8111 Arnold J . Johnson, Chairman-Elect 350 Glenborough Drive, Suite 100 ENERGY Houston , Texas 77067 (281) 87 2-3352 Richard D. Watt, Vice Chairman 1010 Lam ar, Suite 1600 RESOURCES Houston , Texas 77002 (713) 650-8100 Michael P. Pearson, Secretary 1401 McKinney Street, Suite 1900 Houston, Texas 77010 (713) 752-4311 Norma Rosner Iacovo, Treasurer 1701 E. Lamar Blvd., Suite 100 Arlington, Texas 76006 (817) 462-1507 Laura H. Burney, Immediate Past Chairman 7801 Broadway, Suite 200 San Antonio, Texas 78209 (210) 821-3377 COUNCIL: TERM EXPIRES 2006 Rod Wetsel, Sweetwater Jay G. Martin, Houston Fabene Welch, Houston TERM EXPIRES 2007 William B. Burford, Midland Tim George, Austin David Roth, San Antonio TERM EXPIRES 2008 Timothy Brown, Houston Michael E. Curry, Midland Jolisa M elton Dobbs, Dallas NEWSLETTER EDITOR: SECTION REPORT Jay G. M artin 3900 Essex Lane Houston, Texas 77027 (713) 439-8439 OFFICIAL PUBLICATION OF THE OIL, GAS AND ENERGY RESOURCES LAW SECTION OF THE STATE BAR OF TEXAS COVER PHOTO PROVIDED BY WILL HURRICANE KATRINA FURTHER counter-clockwise winds pushed Lake DEFINE THE “ACT OF GOD” DEFENSE? Pontchartrain's waters southward toward New Orleans. By: Michael Chernekoff and Amy Cowley 1 The levees surrounding New Orleans Jones Walker breached or failed, flooding approximately eighty percent of the city with flood waters I. Introduction up to twenty feet deep.3 Southeast Louisiana and southern Mississippi suffered Hurricane Katrina was perhaps the widespread catastrophic damage. worst natural disaster in American history. Less than three days before Katrina Hurricane Katrina made landfall at 6:10 made landfall, the National Hurricane am on Monday August 29, 2005, in lower Center had projected landfall in the eastern Plaquemines parish near the town of Buras, portion of the Florida panhandle, several as a Category Four hurricane, with hundred miles to the east of the actual sustained winds of over 140 miles per hour. landfall. It was not until late evening on Only hours earlier, the National Hurricane Friday August 26th that forecasters revised Center reported that Katrina had been their projections to target the New Orleans recorded as Category Five storm, then the area as the center of probable landfall. third strongest Atlantic storm in recorded Thus, emergency preparedness officials in history, with 175 miles per hour sustained Southeast Louisiana had to stage the winds. Exodus of over one million people in a period of less than 48 hours. Virtually all of The National Oceanic and Atmospheric Southeast Louisiana was ultimately subject Administration (NOAA) later reported that to mandatory evacuation orders, leaving Katrina-related storm surges topped 25 homeowners and businesses precious little feet.2 time to batten down, secure and leave. In the end, the overwhelming force of Katrina Katrina's tidal surge and winds made nearly useless many of the destroyed nearly everything in its path as it precautions taken. moved from Buras northward. It passed just east of New Orleans and then made a Nearly four weeks later, another major second landfall on the southwest coast of storm, Hurricane Rita, tore through the Gulf Mississippi, unleashing another massive on a track two hundred miles east of tidal wave and destroying nearly everything Katrina's, this time pounding ashore along there for miles inland. As Katrina passed the coast lines of Southwest Louisiana and New Orleans and into Mississippi, its Southeast Texas. 1 Michael Chernekoff and Amy Cowley are with The Mineral Management Service the law firm of Jones Walker. Mr. Chernekoff is (MMS) later reported that 3050 of the 4000 a partner and chair of the firm's Environmental & platforms it administers in the Gulf were in Toxic Tort Practice Group. He normally resides either Katrina's or Rita's path. More than at the firm's New Orleans Office, but, due to one hundred offshore facilities were Hurricane Katrina, he is temporarily at the firm's destroyed and another fifty platforms Houston Office. Mrs. Cowley is an associate in suffered serious damage. Also, MMS the firm's New Orleans office. reported on October 4, 2005, a week after 2 See, Technical Report 2005-01, NOAA's Rita, that 90% of Gulf oil production and National Climatic Data Center, Hurricane Katrina, A Climatological Perspective, Preliminary Report, October 2005. 3 Id. 38 72% of Gulf gas production was still shut under federal legislation, state law, and in.4 maritime law and questions, in light of the unique circumstances of Hurricane Katrina, Inland, Katrina knocked out of whether courts may reconsider their commission refineries in the New Orleans reluctance to apply the defense to Katrina- area; Rita did the same in the Lake Charles, related spills. Louisiana, and Beaumont, Texas areas. Near New Orleans, oil storage tanks were II. THE “ACT OF GOD” DEFENSE pushed — or floated off — from their bases, or washed away or totally crushed or Federal courts have for years narrowly otherwise destroyed, some not to be found. construed the “Act of God” defense Tank contents were spilled out and washed established in federal environmental by Katrina’s surges hundreds of feet and, in statutes. Although Congress has provided some cases, even a mile away. for the defense, courts have routinely refused to apply it to spills and releases The U.S. Coast Guard reported that resulting from extraordinary events by along the Mississippi River there were six finding some act of human agency as a major spills of over one hundred thousand contributory cause of the event at issue. gallons (one of over one million gallons), Maritime and Louisiana state law, however, three medium spills of over ten thousand have given a somewhat more liberal gallons and 127 minor spills; all totaled — application of the defense. Katrina accounted for more than eight million gallons spilled and eight miles of A. Common Law Application shoreline impacted.5 Following the disaster, landowners and fisherman filed class action The “Act of God” Defense has been lawsuits against the facilities who suffered accepted by courts in negligence and strict the releases. liability cases for more than three centuries. English common law addressed the “Act of God” defense in the case of Coggs v. Who is responsible for these spills? 6 Could facility operators have prevented Bernard, wherein Justice Powell reasoned these spills? Could they have taken that a bailee is liable for damage resulting additional precautions? And, would those from his neglect, “but not such accidents additional steps have protected those tanks and casualties as happen by the act of such that the tanks – and the resulting spills God….” Nevertheless, the distinction – would have been spared Katrina’s wrath? between acts of God and negligent acts of Was there anything anyone could have man has been the subject of much debate done to prevent oil spills in the face of for centuries. Early common law Katrina? Or, were the spills a result of an jurisprudence wrestled with this distinction act of God? in cases ranging from strict liability of common carriers to cases involving This article reviews the judiciary’s narrow reservoir failures. In general, British jurists interpretation of the “Act of God” defense and American counterparts have attempted to limit acts of God to those events truly 7 without human fault. 4 See, Mineral Management Service Press Release, “Interior Secretary Gale Norton Reports on Gulf of Mexico Energy Status,” 6 October 4, 2005. Coggs v. Bernard, 92 Eng. Rep. 107, 108 (1703). 5 See, US Coast Guard Press Release, 7 Nugent v. Smith, 1 C.P.D. 423, 444 (1876) (an “Southeast Louisiana Post-Hurricane Pollution accident must be caused exclusively and directly Recovery Continues,” October 21, 2005. by natural causes, and it “could not have been 39 As early as 1868, American courts have property committed to its custody.”13 construed the “Act of God” defense as Maritime law, however, limits the application excluding the idea of human agency.8 The of the “Act of God” defense to “events in court stated it is not an act of God, “if it nature so extraordinary that the history of appears that a given loss has happened in climatic variations and other conditions in any way through the intervention of man.”9 the particular locality affords no reasonable Overall, the “Act of God” defense has warning of them.”14 generally failed in American jurisprudence when the event reasonably should have Maritime cases have recognized hurricanes been anticipated in light of past knowledge, as acts of God.15 The “Act of God” defense or if antecedent negligence on the part of under federal admiralty law as applied to the defendant worsens the situation.10 hurricanes was explained in Skandia Insurance Co. v. Star Shipping AS:16 B. Maritime Law Notably, hurricanes, such as Maritime law recognizes the “Act of God” Hurricane Georges, are considered defense in the absence of human fault. The in law to be an "Act of God." Even “Act of God” defense applies only when: (1) though storms that are usual for the accident is due directly and exclusively waters and the time of year are not to natural causes without human "Acts of God," a hurricane that intervention, and (2) no negligent behavior causes unexpected and by the defendants contributed to the unforeseeable devastation with accident.11 In The Majestic,12 the United unprecedented wind velocity,
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