Complaint of Metlife Capital Corp.
| Decision Date | 12 September 1997 |
| Docket Number | 97-1322,Nos. 97-1321,s. 97-1321 |
| Citation | 132 F.3d 818 |
| Parties | , 28 Envtl. L. Rep. 20,431 In the Matter of: The Complaint of METLIFE CAPITAL CORP., Etc., Plaintiff-Appellant, COMMONWEALTH OF PUERTO RICO, et al., Plaintiffs-Appellees, v. M/V EMILY S., Etc., et al., Defendants-Appellees. In The Matter of: BUNKER GROUP, INC., et al., Plaintiffs-Appellants, COMMONWEALTH OF PUERTO RICO, et al., Plaintiffs-Appellees, v. M/V EMILY S., Etc., et al., Defendants-Appellees. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Michael Mirande, with whom Robert F. Bakemeier, Bogle & Gates P.L.L.C., Jose E. Alfaro-Delgado and Calvesbert, Alfaro & Lpez-Conway-- "Conway were on brief for appellant Metlife Capital Corporation.
John M. Woods, with whom Andrew J. Garger, Thacher Proffitt & Wood, William A. Graffam, Patricia A. Garrity and Jimenez Graffam & Lausell were on brief for appellant Bunker Group, Inc.
Mee Lon Lam, Trial Attorney, Torts Branch, Civil Division, U.S. Department of Justice, with whom Frank W. Hunger, Assistant Attorney General, Civil Division, and Guillermo Gil, United States Attorney, were on brief for appellee United States of America.
Antonio J. Rodrguez, with whom Rice Fowler, Jose A. Fuentes-Agostini, Attorney General, Commonwealth of Puerto Rico, John F. Nevares and Smith & Nevares were on brief for appellee Commonwealth of Puerto Rico.
Before Torruella, Chief Judge, Lynch, Circuit Judge, and Keeton, * District Judge.
These two actions, consolidated for appeal, challenge the district court's ruling that the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. §§ 2701-61, repealed the Limitation of Shipowner's Liability Act of 1851 ("Limitation Act"), 46 U.S.C.App. §§ 181-96, as to oil spill claims for removal costs and damages arising under the OPA. We hold that claims arising under the OPA (for pollution removal costs and damages) are not subject to the substantive or procedural law of the Limitation Act or to the concursus of claims under Rule F of the Supplemental Rules for Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure ("Rule F").
On January 7, 1994, the towing wire between the tug M/V EMILY S and the barge MORRIS J. BERMAN parted, grounding the barge off of Punta Escambrn, San Juan, Puerto Rico. The grounding caused much of the MORRIS J. BERMAN's cargo of fuel oil to spill into the waters of the Commonwealth of Puerto Rico (the "Commonwealth"). Soon after the spill, the Commonwealth filed a damages action in the United States District Court for the District of Puerto Rico naming numerous defendants including: (i) the demise charterer of the EMILY S Bunker Group, Inc. ("BGI"); (ii) the operator of the EMILY S Bunker Group Puerto Rico, Inc. ("BGPR"); (iii) the owner and operator of the MORRIS J. BERMAN and the co-demise charterer of the EMILY S New England Marine Services ("NEMS"); (iv) the owner of the EMILY S MetLife Capital Corporation ("MetLife"); and (v) the EMILY S in rem. The Commonwealth arrested the EMILY S and sought damages under the OPA, general federal maritime law, and Puerto Rico law. Subsequently, several other civil actions were filed in the District of Puerto Rico by private parties seeking recovery under a variety of theories for damages. Each of these actions was either consolidated with the Commonwealth's action or dismissed.
Within six months of the oil spill, the appellants NEMS, BGI, and BGPR (collectively, the "Bunker Group") filed a complaint under the Limitation Act and Rule F, seeking exoneration from or limitation of liability. At the same time, the appellant MetLife, as owner of the EMILY S, filed a separate action under the Limitation Act. On August 25, 1994, the district court issued a notice to claimants of the limitation actions and an order of injunction, or monition, enjoining the commencement of any actions against the limitation plaintiffs for claims arising out of the grounding of the barge except for actions filed in the limitation proceeding. The monition created a concursus of all claims in a single consolidated proceeding. NEMS, BGI, BGPR, and MetLife (the "Limitation Plaintiffs") provided notice to actual claimants as well as to potential claimants in a Notice of Monition in the newspaper El Nuevo Da on August 26, 1994, directing them to file their claims on or before October 15, 1994.
At the conclusion of the monition period, the Limitation Plaintiffs filed motions for entry of default against all persons who failed to file. Subsequently, numerous claimants, including the Commonwealth and the United States (the "Government"), filed actions in the limitation proceedings, seeking recovery of damages under the OPA, general maritime law, and other law. In their claims, both the Commonwealth and the Government asserted that their OPA claims should not be subject to concursus.
Three other claimants, Hilton International of Puerto Rico, Inc., Puerto Rico Tourism Company, and Hotel Development Corporation (collectively, the "Hilton claimants"), filed claims under seal in the limitation proceedings while their administrative claims, which had already been filed with the National Pollution Funds Center ("NPFC"), were pending. The Hilton claimants simultaneously moved the district court for relief in order to preserve their OPA claims if they withdrew them from the concursus.
On June 28, 1996, the district court issued an order suspending the August 25, 1994 order of injunction issued in the limitation proceedings. This order allows "any claims for oil spill removal costs or damages resulting from or in any way connected with the grounding of the barge MORRIS J. BERMAN on January 7, 1994 to be asserted independently of the limitation of liability proceedings." Subsequent to the issuance of the order, the Hilton claimants withdrew their limitation claims in order to proceed with their administrative claims before the NPFC. However, their motions served as the vehicle for all parties to brief the question now presented to this court. On August 7, 1996, the appellants NEMS, BGI, BGPR, and MetLife timely filed this appeal of the June 28, 1996 order.
Interpretations of federal statutes and rules are subject to de novo review. See Strickland v. Commissioner, Me. Dept. of Human Servs., 96 F.3d 542, 545 (1st Cir.1996).
The Limitation Act was enacted in 1851 to promote shipbuilding and to induce investment in the growing American shipping industry. See Hartford Accident & Indem. Co. v. Southern Pac. Co., 273 U.S. 207, 47 S.Ct. 357, 71 L.Ed. 612 (1927). The law permits the shipowner to limit his or her liability as to certain claims for damages arising out of the voyage of his or her vessel to the post-accident value of the vessel plus pending freight. See 46 U.S.C.App. §§ 183, 186.
Rule F governs the filing and adjudication of a limitation action. The vessel owner must file a complaint no later than six months after receipt of a claim as well as depositing the amount of the limitation fund with the court. See Rule F(1). Rule F concursus, once referred to as the "heart" of a limitation action, Maryland Cas. Co. v. Cushing, 347 U.S. 409, 417, 74 S.Ct. 608, 612-13, 98 L.Ed. 806 (1954), requires multiple claimants to pursue relief in a single forum and marshals the assets of a limited fund. See Rule F(3), F(7). Concursus is intended to provide a "prompt and economical disposition to controversies." Cushing, 347 U.S. at 415, 74 S.Ct. at 611. Today, many question the continued usefulness and vitality of the Limitation Act. See, e.g., 2 Thomas J. Schoenbaum, Admiralty and Maritime Law (2d ed.1994) (the Limitation Act's "original purpose ... seems to have lost much of its force with the availability of insurance, bills of lading statutes that put substantial limits on liability for cargo loss, and the ability to limit claims by contract"). However, Congress has never repealed the act, and therefore, courts continue to apply it. See, e.g., Keller v. Jennette, 940 F.Supp. 35 (D.Mass.1996).
The Oil Pollution Act was passed in the wake of the 1989 Exxon Valdez tanker disaster and created a more comprehensive compensation and liability scheme for oil spill pollution than had existed under earlier legislation. Prior to the OPA, the Federal Water Pollution Control Act ("FWPCA") (), 33 U.S.C. §§ 1251-1387, provided liability limitations for federal pollution removal costs associated with oil spills. See id. § 1321(c). The OPA imposes strict liability for pollution removal costs and damages on the "responsible party" for a vessel or a facility from which oil is discharged. See 33 U.S.C. § 2702(a). Responsible parties include owners, operators, or demise charterers of a vessel. See id. § 2701(32).
The OPA limits the liability of responsible parties based upon the type of vessel and its tonnage. For tank vessels, the limit can be as high as $10 million. Id. § 2704(a)(1). For all other vessels, the limit is the greater of $600 per gross ton or $500,000. Id. § 2704(a)(2). Responsible parties may face unlimited liability for, inter alia, acts of gross negligence or willful misconduct. In addition, state law applies free of these liability limits. See id. §§ 2718(a), 2718(b). Finally, the OPA consolidated previously established oil pollution funds into the Oil Spill Liability Trust Fund (the "Fund"), which pays claims brought under the OPA after they have first been presented to the responsible party, if the responsible party is entitled to a defense, or the liability limit under the statute has been reached. See 33 U.S.C. §§ 2708(a), 2713(b)(1)(B). See generally Schoenbaum, supra, at 384.
The OPA specifically addresses its relationship with the Limitation Act and other legislation when it states:
Notwithstanding any other provision or rule of...
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