Attorney and Expert Witness Fees Awarded in New Carissa Litigation

Clausen v. M/V New Carissa, 339 F.3d 1049 (9th Cir. 2003).

Joseph Long, 3L

Litigation stemming from the 1999 New Carissa oil spill is slowly making its way through the courts. The Ninth Circuit Court of Appeals recently addressed two separate issues in a single appeal. The first issue involved an evidentiary question for admission of expert testimony. The second issue was whether attorney fees and expert witness fees are appropriate awards for successful plaintiffs in a civil suit brought under the Federal Oil Pollution Act and the Oregon Spill Act. The Court found the plaintiff’s expert testimony was admissible. Further, concluding that the oil statutes contain specific provisions providing for fee awards, the Ninth Circuit upheld the district court’s award of attorney fees and expert witness fees.

Background
On February 3, 1999, the M/V New Carissa, an oil cargo vessel, anchored two miles off Coos Bay North Spit, Oregon after determining that the weather was too rough to enter Coos Bay. The New Carissa carried 400,000 gallons of bunker and diesel fuel. Unfortunately, the vessel’s anchor did not hold and rough weather pushed the ship shoreward. The New Carissa ran aground and began to leak oil. To contain the spilling oil, the Navy and the Coast Guard used napalm and explosives to burn the leaking fuel and sink the ship. This was the first time such methods were employed upon the United States’ mainland. Even with those efforts, an estimated 70,000 gallons of fuel escaped into the surrounding coastal areas, including Coos Bay.

Mr. and Mrs. Max Clausen, the plaintiffs, owned and operated Clausen Oysters, an oyster farm located in Coos Bay. The Clausens and other oyster farmers were forced to shut down operations after the Oregon Department of Agriculture detected oil in the Coos Bay oyster beds. The oil infiltration caused an estimated 3.5 million oyster deaths during the week following the spill.

The Clausens brought suit in federal district court against the New Carissa and its corporate owners and operator under the Federal Oil Pollution Act and the Oregon Spill Act, which hold a party strictly responsible for damages caused by a spill of oil under its control. At trial the defendants sought to exclude the Clausens’ expert witness testimony concerning causation of the oyster deaths based on the Supreme Court ruling in Daubert v. Merrill Dow Pharmaceuticals, Inc.1 The trial court allowed the testimony and the jury returned a verdict in favor of the Clausens for $1.4 million. Upon the Clausens’ request, the district court awarded the plaintiffs attorney fees totaling $651,382.30 and expenses, including expert witness fees, totaling $149,170.05.2 The ship owners appealed.

Admissibility of Expert Testimony
The defendants argued that the Clausens’ expert witness’ testimony should not have been allowed based upon the Supreme Court holding in Daubert and subsequent court interpretation. Under Daubert, “scientific evidence is deemed reliable [and admissible] if the principles and methodology used by an expert are grounded in the methods of science.”3 Dr. Elston, the Clausens’ expert witness, testified that the toxicity levels in the dead oysters were caused by the oil spill from the New Carissa. Dr. Elston used a process called differential diagnosis, which is a “scientific method of identifying a medical problem by eliminating the likely causes until the most probable one is isolated.”4 If shown to be reliable, differential diagnosis properly conducted is admissible under Daubert. To be reliable, an expert’s chosen cause must be “capable of causing the injury”5 and other alternative causes must have been rejected “using scientific methods and procedures.”6 Dr. Elston testified that low-level toxic effects of oil were the likely cause of the oyster deaths. The defendants argued that this testimony was unreliable because the quantity of oil that causes harm to shellfish has not been scientifically determined.

The Ninth Circuit concluded that precise evidence is not needed to show the toxicity of a substance. The court found that, due to the rarity of oil spills, scholarly study is infrequent and incomplete. The lack of published research, however, does not bar Dr. Elston’s testimony. The Ninth Circuit held that a conclusion as to the cause of the oyster mortalities is admissible “without supporting peer-reviewed literature specific to that subject, so long as the expert witness relied upon a variety of objective, verifiable evidence.”7

Attorney Fees
The ship owners put forth three arguments in support of their claim that the Oregon Spill Act does not provide for an award of attorney fees, no matter the factual outcome. First, the ship owners claimed that Oregon adheres to the general contractual rule that attorney fees are not awarded as damages “when sought in the same action in which the services were rendered.”8 Second, the ship owners argued that “the district court’s interpretation of the damages provision fails to give effect to all of the words of the statute.”9 Third, they argued that where the legislature intended shifting attorney fees to exist, it specifically provided for such fees by statute. The owners claimed the legislature did not do so in the Oregon Spill Act, and therefore the attorney fees award to the plaintiffs was inappropriate.

The Ninth Circuit addressed the first argument quickly by first acknowledging the general contractual rule, but pointed out that the standard exists only in breach of contract actions, not in claims of this kind. The court also noted that the Oregon Spill Act has its own damages provision, which is extremely broad and more inclusive than damage provisions in other Oregon statutes.

The court dispensed with the second argument by pointing to the ship owners’ failure to include all of the language of the Oregon Spill Act in its argument. The entire section cited by the defendants states that damages “include attorneys fees of any kind for which liability may exist under the laws of this state resulting from, arising out of or related to the discharge or threatened discharge of oil.”10 The defendants interpreted this provision to mean that an award for fees cannot be received in the same action in which damages are awarded. The court disagreed and stated that fees can be awarded upon a finding of liability under the Act itself or under another law. Since the Act includes a provision for attorney fees, the award of attorney fees was appropriate.
Finally, the ship owners argued that when the Oregon legislature means to allow fee shifting it does so explicitly, unlike in this case where a damages provision was interpreted to provide for the shift. The Ninth Circuit explained that the legislature is not limited in its means of providing for fee shifting. The court acknowledged that attorney fees are not normally included in damage awards, but, again, emphasized the specific definition of damages set forth in the Oregon Spill Act. Recuperation of attorney fees for a successful plaintiff is explicitly included in the Spill Act’s statutory definition of damages.

Expert Witness Fees
The ship owners further argue that expert witness fees are inappropriate in federal court where state law governs the distribution of such fees. The defense cites Aceves v. Allstate Ins. Co. to argue that “federal courts should control the reimbursement of expert witnesses in federal courts sitting in diversity jurisdiction.”11 The court distinguishes between cases of state and federal cost provision conflicts and the present case, where the conflict is between a federal cost provision and a state damages provision. The court concludes that where plaintiffs have shown they are entitled to recovery under the state statute, they are also entitled to recover under that statute’s damages provision and are not governed by federal expert cost provisions.

Conclusion
Regarding expert testimony, the court held that Dr. Elston’s conclusion that low–level toxicity of oil within the bay was the cause of the oysters’ deaths was admissible, because his conclusion was supported by verifiable and objective facts.

As to the attorney fees and expert witness fees, the court concluded that both fees were appropriately awarded to the Clausens because the controlling statutes, the Oregon Spill Act and the Federal Oil Pollution Act, contain explicit provisions allowing for such awards.

ENDNOTES
1. 509 U.S. 579 (1993).
2. Attorney fees and costs (or expenses) may be awarded as a part of damages pursuant to the Oregon Spill Act (Or. Rev. Stat. §§ 468B.310(1) and 300(6) (2002)). Section 486B.300(6) defines “damages” as “damages, costs, losses, penalties, or attorney fees of any kind for which liability may exist under the laws of this state resulting from, arising out of or related to the discharge or threatened discharge of oil.”
3. Clausen v. M/V New Carissa, 339 F.3d 1049, 1056 (9th Cir. 2003).
4. Westberry v. Gislaved Gummi AB, 178 F.3d 257, 262 (4th Cir. 1999).
5. Hall v. Baxter Healthcare Corp., 947 F.Supp. 1387, 1413 (D.Or. 1996).
6. Claar v. Burlington N. R.R. Co., 29 F.3d 499, 502 (9th Cir. 1994).
7. Clausen, 339 F.3d at 1060-61.
8. Id. at 1062.
9. Id.
10. Or. Rev. Stat. § 468B.300(6) (2002).
11. Aceves v. Allstate Ins. Co., 68 F.3d 1160, 1168 (9th Cir. 1995)