Alyeska Pipeline Service Co. v. Bay Ridge

• Decision Date: 16 March 1981
• Docket Number: Civ. No. A 80-147.
• Citation: 509 F. Supp. 1115
• Parties: ALYESKA PIPELINE SERVICE COMPANY, a Delaware Corporation, Individually and as Agent for Amerada Hess Pipeline Corp., ARCO Pipeline, Co., BP Pipelines, Inc., Exxon Pipeline Company, Phillips Alaska Pipeline Company, Sohio Pipeline Company and Union Alaska Pipeline Company, Plaintiff, v. The Vessel BAY RIDGE, her engines, masts, bowsprit, boats, anchors, chains, cable, rigging, tackle, apparel, furniture, and all other necessaries thereunto appertaining, Defendant, and United States Trust Company, Richmond Tankers, Inc., Seatrain Lines, Inc., and Pierce Tankers, Inc., Claimants.
• Court: U.S. District Court — District of Alaska

509 F. Supp. 1115

ALYESKA PIPELINE SERVICE COMPANY, a Delaware Corporation, Individually and as Agent for Amerada Hess Pipeline Corp., ARCO Pipeline, Co., BP Pipelines, Inc., Exxon Pipeline Company, Phillips Alaska Pipeline Company, Sohio Pipeline Company and Union Alaska Pipeline Company, Plaintiff, v. The Vessel BAY RIDGE, her engines, masts, bowsprit, boats, anchors, chains, cable, rigging, tackle, apparel, furniture, and all other necessaries thereunto appertaining, Defendant and United States Trust Company, Richmond Tankers, Inc., Seatrain Lines, Inc., and Pierce Tankers, Inc., Claimants.

Civ. No. A 80-147.

United States District Court, D. Alaska.

March 16, 1981.

Arden Page, Burr, Pease & Kurtz, Anchorage, Alaska, for plaintiffs.

Michael H. Woodell and Ann Stokes, Bradbury, Bliss & Riordan, Anchorage, Alaska, for defendant and claimants.

OPINION

FITZGERALD, District Judge.

In this admiralty action Alyeska Pipeline Service Company undertakes to recover cleanup costs resulting from an accidental oil discharge at the Alyeska Valdez Terminal on April 14, 1980. Alyeska maintains the discharge was due to the negligence of the T/T BAY RIDGE and claims a maritime lien against the vessel. On May 19, 1980 the BAY RIDGE was arrested pursuant to Supplemental Rule C of the Federal Rules of Civil Procedure.¹ Claimants now move to vacate the arrest and dismiss the complaint against the vessel on grounds that Rule C violates fundamental due process standards guaranteed by the Fifth Amendment to the United States Constitution and is, therefore, unconstitutional. Claimants further contend that under the circumstances, Alyeska has no in rem claim.

The BAY RIDGE is a 225,000 deadweight ton tanker of United States registry built in 1978-1979 at Brooklyn Naval Shipyard, Brooklyn, N.Y. The vessel is owned by U. S. Trust Company, New York, and is bare-boat chartered to Richmond Tankers, time chartered to Seatrain Lines, Inc., sub-time chartered to Pierce Tankers, Inc.,² and operated by Bay, Tankers, Inc. The vessel entered service on February 22, 1980 and arrived at Valdez on April 13, 1980 on her maiden voyage docking at Berth # 5, Alyeska Terminal.

Because the vessel's tanks were oil free, Alyeska requested and received permission from the Alaska Department of Environmental Conservation to discharge ballast into the sea rather than into the terminal's ballast treatment plant. After approximately five and one-half hours of pumping, the chief officer of the BAY RIDGE noted muddy water coming from the area near the sea valve opening located on the bottom of the vessel. He transferred suction to another cargo tank and later, by agreement with Alyeska personnel, made arrangements to pump into the ballast treatment plant.

At approximately 0938 on April 14, 1980, the terminal reported to the vessel that it had opened all appropriate valves in its dirty ballast lines and was ready to receive ballast ashore. Shortly thereafter oil was observed in the seawater between the vessel and the dock and transfer operations were immediately halted. The Department of Environmental Conservation estimated that approximately 1,000 gallons (24 barrels) of crude oil spilled into the harbor.

It is undisputed that the spilled oil escaped from Alyeska's own dirty ballast line. It now appears that as the BAY RIDGE attempted to begin pumping its clean ballast ashore, the head pressure in the dirty ballast line caused the oily ballast contained in the line — ballast which had been discharged by prior vessels — to be discharged into the vessel's piping system through the vessel's sea valve into Valdez Harbor. Each side alleges the spill occurred due to the negligence of the other.

Alyeska in compliance with the Trans-Alaska Pipeline Authorization Act,³ promptly initiated cleanup efforts. After considerable delay, the BAY RIDGE completed loading and on April 19, 1980, departed Valdez for Panama. When she returned to Valdez on May 19, on her next scheduled call, she was arrested by the U. S. Marshal.⁴

Claimants' initial contention is that the complaint fails to state a claim giving rise to an in rem action against the vessel. In order to bring such an action the plaintiff's claim must create a maritime lien.⁵ Claimants suggest that costs of removing oil from navigable waters do not establish a maritime lien enforceable by a private party. But in California Department of Fish and Game v. S. S. BOURNEMOUTH,⁶ a suit for cleanup costs incurred by the State of California due to an oil spill, it was held that oil pollution of navigable waters amounted to a maritime tort giving rise to a maritime lien sufficient to support an in rem proceedings. There the court stated:

Oil pollution of the nation's navigable waters by seagoing vessels both foreign and domestic is a serious and growing problem. The cost to the public, both directly in terms of damage to the water and indirectly of abatement is considerable. In cases where it can be proven that such damage to property does in fact occur, the governmental agencies charged with protecting the public interest have a right of recourse in rem against the offending vessel for damages to compensate for the loss.⁷

Although claimants argue that the holding in BOURNEMOUTH ought to be limited to those cases where governmental agencies incur the cleanup costs, I can see little justification for such a rule. Where private parties such as Alyeska are, by statute, made responsible for protecting the public interest recourse should be available through in rem proceedings against the offending vessel. Accordingly, I conclude the complaint of Alyeska states a claim sufficient to support an action in rem against the BAY RIDGE.

Claimants also challenge the procedure by which the BAY RIDGE was arrested. They contend that Rule C violates the principles of procedural due process as enunciated in the United States Supreme Court's decisions in Sniadach v. Family Finance Corp.,⁸ Fuentes v. Shevin,⁹ Mitchell v. W. T. Grant Co.,¹⁰ and North Georgia Finishing v. Di-Chem.¹¹

In Sniadach v. Family Finance Corp. the Supreme Court struck down Wisconsin's prejudgment wage garnishment procedure as a deprivation of property without due process of law, noting that "the wage earner is deprived of his enjoyment of earned wages without any opportunity to be heard and to tender any defense he may have...."¹²

Although some thought that the Sniadach holding was limited to the narrow issue of garnishment of wages,¹³ the Court's subsequent decision in Fuentes v. Shevin made it clear that an opportunity for a hearing prior to a taking was a constitutional requirement regardless of the characteristics of the property involved. In Fuentes the Court struck down Florida and Pennsylvania laws authorizing the summary seizure of personal property under a writ of replevin. Both statutes provided for writs ordering state agents to seize such possessions, simply upon an ex parte application accompanied by a security bond. Neither statute provided for notice to one in possession of the property, or provided an opportunity to challenge the seizure at a prior hearing. However, the property might be recovered within three days after seizure if a recovery bond was substituted for the property.

The Court began its analysis of the challenged statutes by explaining:

For more than a century the central meaning of procedural due process has been clear: "Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified." Baldwin v. Hale, 1 Wall. 223, 233, 68 U.S. 223, 17 L.Ed. 531. See Windsor v. McVeigh, 93 U.S. 274, 23 L.Ed. 914; Hovey v. Elliott, 167 U.S. 409, 17 S.Ct. 841, 42 L.Ed. 215; Grannis v. Ordean, 234 U.S. 385, 34 S.Ct. 779, 58 L.Ed. 1363. It is equally fundamental that the right to notice and an opportunity to be heard "must be granted at a meaningful time and in a meaningful manner." Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62.¹⁴

The Court recognized that notice and a hearing are ordinarily required before property can be taken, although it explained:

There are "extraordinary situations" that justify postponing notice and opportunity for a hearing. Boddie v. Connecticut, 401 U.S., at 379, 91 S.Ct., at 786. These situations, however, must be truly unusual. Only in a few limited situations has this Court allowed outright seizure without opportunity for a prior hearing. First, in each case, the seizure has been directly necessary to secure an important governmental or general public interest. Second, there has been a special need for very prompt action. Third, the State has kept strict control over its monopoly of legitimate force: the person initiating the seizure has been a government official responsible for determining, under the standards of a narrowly drawn statute, that it was necessary and justified in the particular instance.¹⁵

Seizure by self-interested private parties is not an "extraordinary situation."¹⁶

The Fuentes court concluded "that the Florida and Pennsylvania prejudgment replevin provisions work a deprivation of property without due process of law insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their possessor."¹⁷

Some commentators have suggested that, in Mitchell v. W. T. Grant Co., the Court may have retreated from its holdings in Fuentes and Sniadach. In Mitchell, the Court upheld Louisiana sequestration procedures allowing prejudgment seizure without prior notice or opportunity to be heard. The Court focused on the joint interest of both the seller and the buyer in the property seized, and explained "resolution of the due process question must take account not only of the interests of the buyer of the property but those of the seller as well."¹⁸ After examining the Louisiana statute, the Court found three provisions dispositive: (1) the statute provided for judicial...