Legal Commentary

A recent congressional proposal would retroactively raise the cap on economic damages under the Oil Pollution Act (the Big Oil Bailout Prevention Act).  The proposal bristles with an angry enthusiasm for punishing BP that seems designed to capitalize both on public outrage about the spill's environmental harms and a more general anti-corporate sentiment (the press release previously linked to announcing the legislation also lists oil company profits and notes that there is "no such thing as 'To Big to Spill'").  (As I posted about previously,BP as in Big Picture, there is an uncomfortable a pot, kettle, black aspect to this public outrage as it is ultimately our wildly unsustainable consumption and lifestyles that drive herculean efforts to maintain cheap energy.) 

However, the retroactive nature of the proposal and the transparency of the desire to punish BP (note the title of a recent article in The Hill's E2 Wire: Senate faces quick test vote on punishing BP over Gulf spill) raise doubts about its constitutionality.  Quick brainstorming suggests a few potential constitutional problems with retroactive lift-the-cap legislation aimed not-so-subtly at BP:

• Taking -- The economic impact on BP would likely be significant (perhaps as much as the delta between $75 million and $10 billion) and the fact that the legislation is retroactive supports a finding that the legislation interferes with reasonable investment-backed expectations.
• Substantive due process -- Both the transparent targeting of BP and retroactivity might support an argument that the legislation is arbitrary and violates due process (essentially the takings argument, but absent the property hook, see Justice Kennedy's concurrence in Eastern Enterprises v. Apfel, 544 U.S. 498 (1998)).
• Ex post facto, bill of attainder -- The law arguably "punishes" BP (perhaps by confiscating property?) and is shown by legislative history to have been intended to do so.

The retroactivity concerns that drive all of these objections may be somewhat blunted by provisions in the Act that allow for the liability caps to be adjusted, see 33 U.S.C. 2704(d)(3-4):

***

(3) Periodic reports

The President shall, within 6 months after August 18, 1990, and from time to time thereafter, report to the Congress on the desirability of adjusting the limits of liability specified in subsection (a) of this section.

(4) Adjustment to reflect consumer price index

The President, by regulations issued not later than 3 years after July 11, 2006, and not less than every 3 years thereafter, shall adjust the limits on liability specified in subsection (a) of this section to reflect significant increases in the Consumer Price Index.

At minimum, however, I think it is fair to say that if legislation is passed to lift the cap retroactively, BP's attorneys will have some interesting, and not implausible, constitutional arguments.  I would be interested to hear reactions (con law profs?) about the feasibility of the above-noted theories and other possible bases for a constitutional challenge.