Benefiel v. Exxon Corp., 90-56055

• Citation: 959 F.2d 805
• Decision Date: 24 March 1992
• Docket Number: No. 90-56055,90-56055
• Parties: , 60 USLW 2629 James R. BENEFIEL; Edward D. Taylor, individually, on behalf of themselves, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. EXXON CORPORATION; Exxon Shipping Co.; Alyeska Pipeline Service Company; Trans-Alaska Pipeline Liability Fund, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 805

959 F.2d 805

1992 A.M.C. 1720, 60 USLW 2629

James R. BENEFIEL; Edward D. Taylor, individually, on behalf of themselves, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. EXXON CORPORATION; Exxon Shipping Co.; Alyeska Pipeline Service Company; Trans-Alaska Pipeline Liability Fund, Defendants-Appellees.

No. 90-56055.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 10, 1991.

Decided March 24, 1992.

Francis O. Scarpulla, San Francisco, Cal., Edwin C. Schreiber, Encino, Cal., for plaintiffs-appellants.

John F. Daum, O'Melveny & Myers, and Robert S. Warren, Gibson, Dunn & Crutcher, Los Angeles, Cal., A. Stephen Hut, Washington, D.C., for defendants-appellees.

Robert B. Mitchell, of Preston Thorgrimson Shidler Gates & Ellis, Anchorage, Alaska, appeared and argued on behalf of the States of Alaska and Cal., amici curiae.

Appeal from the United States District Court for the Central District of California.

Before: SCHROEDER, LEAVY and FERNANDEZ, Circuit Judges.

SCHROEDER, Circuit Judge:

This is a case arising out of the multi-million gallon crude oil spill which occurred when the Exxon Valdez ran aground in Prince William Sound in 1989. The plaintiffs in this case seek to represent a class of those who purchased gasoline in California during a specified period following the spill. They seek to recover damages representing what they claim was the increased price they were required to pay as a result of the spill. They brought this action originally in state court against Exxon, Exxon Shipping (the owner of the Exxon Valdez), Alyeska (which operates the pipeline and is responsible for clean-up procedures following spills), and the Trans-Alaska Pipeline Liability Fund (the "TAPAA Fund"), established pursuant to section 204(c)(4) of the Trans-Alaska Pipeline Authorization Act (TAPAA), 43 U.S.C. § 1653(c)(4). The defendants removed to federal district court. The district court dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). Because the case arose out of a disaster at sea, the district court applied the maritime rule set forth in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), which requires physical injury for recovery of economic damages. Since the plaintiffs' losses are wholly economic, the district court held that plaintiffs had failed to state a claim upon which relief could be granted.

The plaintiffs appeal claiming, first, that the case should never have been removed to district court because the plaintiffs do not intend to pursue a federal claim. Alternatively, they contend that the district court erred in applying the rule of Robins Dry Dock.

We deal first with the contention that the case was improperly removed. Defendants may remove a case over which the district court would have original jurisdiction "founded on a claim or right arising under the Constitution, treaties or laws of the United States." 28 U.S.C. § 1441(b). For purposes of this case, it is enough to observe that the basis for federal question jurisdiction was pleaded on the face of the plaintiffs' complaint, which alleged, among other things, that "[s]trict liability, without regard to fault, is imposed by TAPAA" and that defendants are liable "[i]n accordance with the TAPAA provisions." Although plaintiffs now deny any intention to pursue a claim pursuant to TAPAA, the complaint itself, reasonably read, sets forth such a claim and the defendants were entitled to remove.

A more interesting issue is whether the physical damage limitation applicable in admiralty applies in this case after passage of TAPAA. TAPAA provides for the abrogation of certain limits on the liability of transporters of Trans-Alaska Pipeline oil:

Notwithstanding the provisions of any other law, if oil that has been transported through the trans-Alaska pipeline is loaded on a vessel at the terminal facilities of the pipeline, the owner and operator of the vessel (jointly and severally) and the [TAPAA] ... shall be strictly liable without regard to fault in accordance with the provisions of this subsection for all damages, including clean-up costs, sustained by any person or entity, public or private, including residents of Canada, as the result of discharges of oil from such vessel.

43 U.S.C. § 1653(c)(1). The plaintiffs now maintain that this subsection, while not itself establishing a federal cause of action, does repeal all "provisions of any other law," including limitations on liability such as the Robins Dry Dock rule.

We do...