Aquatic Creatures and Underwater Combat

[PersonofJid]

Okay, so my group is currently running a Red Hand of Doom campaign, and we have been fighting an encounter for two full sessions (soon to be three). One of the reasons this particular encounter has gone on for so long is the fact that we decided to fight underwater. However, since fighting underwater is so rare for our group, none of us were all that familiar with the rules. After reading up on it, we found out that any physical attack that isn't considered piercing takes a penalty to attack and deals only half damage. So, to help us with our fight, we summoned some water elementals only to find out that they use slams for their melee attacks. Now according to our DM, natural weapons such as bites, claws, and slams are considered to be slashing/bludgeoning/piercing all at the same time, and he has ruled, for the time being, that they are subject to this attack and damage penalty.

Now this confuses me, since most creatures with the aquatic subtype, that I know of, use natural attacks and therefore would be subject to this penalty. It doesn't make sense to any of us (DM included) for this to be the case, but it appears to be the rule, so we are going along with it. One would assume that a creature who lives underwater, and is accustomed to fighting underwater (such as sharks or water elementals) that they would be an exception.

Is this the case, or does being underwater gimp even aquatic creatures? Any clarification of this would be greatly appreciated.

[Greenish]

Slam deals bludgeoning damage and is thus subject to the underwater penalties. I imagine water elementals would prefer to use their Vortex in such cases.

Bite deals slashing, piercing, and bludgeoning damage. Claws deal slashing and piercing damage. Neither suffers the penalties, since they deal piercing damage.

Tail attacks deal normal damage if the creature using them has a swim speed.