Glacier Bay, In re, 90-35589

• Citation: 944 F.2d 577
• Decision Date: 13 September 1991
• Docket Number: No. 90-35589,90-35589
• Parties: , 60 USLW 2224, 22 Envtl. L. Rep. 20,129 In re The GLACIER BAY. KEE LEASING COMPANY; Mathiasen's Tanker Industries, Inc.; Glacier Bay Transportation Corp.; Trinidad Corporation, Appellants, v. Merrill McGAHAN, et al.; Trans-Alaska Liability Fund; Kenai Pipe Line Co.; S.P.C. Shipping, Inc.; Tesoro Alaska Petroleum Company; Cook Inlet Recourse Organization, et al.; United States of America, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 577

944 F.2d 577

1992 A.M.C. 448, 60 USLW 2224, 22

Envtl. L. Rep. 20,129

In re The GLACIER BAY KEE LEASING COMPANY; Mathiasen's Tanker Industries, Inc. Glacier Bay Transportation Corp.; Trinidad Corporation, Appellants, v. Merrill McGAHAN, et al.; Trans-Alaska Liability Fund Kenai Pipe Line Co.; S.P.C. Shipping, Inc.; Tesoro Alaska Petroleum Company; Cook Inlet Recourse Organization, et al.; United States of America, Appellees.

No. 90-35589.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 5, 1991.

Decided Sept. 13, 1991.

Michael H. Woodell and Jean E. Kizer, Bradbury, Bliss & Riordan, Anchorage, Alaska, for appellants.

Philip A. Berns, Asst. U.S. Atty., U.S. Dept. of Justice, San Francisco, Cal., A. Stephen Hut, Jr., Wilmer, Cutler & Pickering, Washington, D.C., and Brian B. O'Neill, Faegre & Benson, Minneapolis, Minn., Gary J. Strauss, Garvey, Schubert & Barer, Seattle, Wash., for appellees.

Linus Masouredis, Deputy Atty. Gen., Oakland, Cal., for amici curiae.

Appeal from the United States District Court for the District of Alaska.

Before WIGGINS, BRUNETTI and T.G. NELSON, Circuit Judges.

WIGGINS, Circuit Judge:

Kee Leasing Company, Mathiasen's Tanker Industries, Inc., Glacier Bay Transportation Corp., and Trinidad Corporation (collectively "Trinidad") appeal from an order of the district court dismissing their complaint. In the complaint, Trinidad petitioned for an exoneration from and limitation of its liability for claims arising out of the 1987 grounding of an oil tanker, the Glacier Bay, in Cook Inlet, Alaska. The district court ruled that the Trans-Alaska Pipeline Authorization Act, 43 U.S.C. §§ 1651-1655 ("TAPAA"), implicitly repealed the Limitation of Vessel Owner's Liability Act, 46 U.S.C.App. §§ 181-189 (the "Limitation Act"), upon which Trinidad relied in its complaint to limit liability. The

                court therefore concluded that Trinidad's complaint failed to state a claim upon which relief could be granted under Fed.R.Civ.P. 12(b)(6).   This court has jurisdiction of Trinidad's timely appeal pursuant to 28 U.S.C. § 1291 (1988).   We affirm
                

BACKGROUND

On July 1, 1987, the Glacier Bay, an American flag tanker, sailed from Valdez, Alaska, bound for Nikiski, Alaska, carrying a cargo of trans-Alaska pipeline crude oil. ¹ On July 2, the Glacier Bay attempted to anchor in Cook Inlet, below the port of Nikiski, to await a discharge berth. The vessel unexpectedly grounded at that position and, as a result of damage to its hull, the Glacier Bay discharged an estimated 150,000 gallons of crude oil.

Following the discharge of oil, suits were filed seeking compensation for damages allegedly caused by the spill. ² On September 7, 1989, Trinidad filed a complaint seeking an exoneration from and limitation of its liability for claims arising out of the grounding of the Glacier Bay. The complaint was based on the Limitation Act, which purports to limit the liability of vessel owners and charters to the post-accident value of the ship plus pending freight. The adverse parties filed motions to dismiss Trinidad's complaint pursuant to Fed.R.Civ.P. 12(b)(6). The motion to dismiss was based on two grounds: 1) that TAPAA implicitly repealed the Limitation Act with respect to the transportation and spills of trans-Alaska pipeline oil, and 2) that the limitation complaint was untimely filed. On April 12, 1990, the district court entered an order granting the Rule 12(b)(6) motion to dismiss based on its determination that TAPAA implicitly repealed the Limitation Act. In re Glacier Bay, 741 F.Supp. 800 (D. Alaska 1990). ³ Trinidad appeals.

DISCUSSION ⁴

A district court's dismissal for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) is a ruling on a question of law, and therefore, we review the dismissal de novo. Kruso v. Int'l. Tel. & Tel. Co., 872 F.2d 1416, 1421 (9th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990). This appeal involves only one issue. We must determine whether Congress, in enacting TAPAA, implicitly repealed the Limitation Act with regard to vessels transporting trans-Alaska pipeline oil. This too is an issue of law, and therefore, we review it de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). We will first discuss the Limitation Act and TAPAA generally. Then, we will analyze the implicit repeal doctrine and its application to these statutes.

I. The Limitation Act and TAPAA

The Limitation Act, enacted in 1851, permits vessel owners and charterers, who meet certain conditions, to limit their liability for damage caused by their vessel to the post-accident value of the vessel plus pending freight. 46 U.S.C.App. §§ 183, 186. ⁵

                The Act was intended to promote investment in the American shipping industry by making the American industry competitive with that of Great Britain.   See Just v. Chambers, 312 U.S. 383, 385, 61 S.Ct. 687, 690, 85 L.Ed. 903 (1941);  University of Tex. Medical Branch v. United States, 557 F.2d 438, 454 (5th Cir.1977), cert. denied, 439 U.S. 820, 99 S.Ct. 84, 58 L.Ed.2d 111 (1978).   While the Limitation Act has been criticized by some commentators in recent years as being outdated, 6 it has not been repealed by Congress, and courts therefore continue to apply it.   See, e.g., Matter of Hechinger, 890 F.2d 202, 206 (9th Cir.1989) (finding that Limitation Act is applicable to private, noncommercial boats), cert. denied, --- U.S. ----, 111 S.Ct. 136, 112 L.Ed.2d 103 (1990).   In fact, in 1984, Congress amended the Act by increasing the minimum limitation liability amount prescribed by § 183(b).   Pub.L. 98-498, 98 Stat. 2306 § 213(a) (1984).
                

TAPAA, enacted in 1973, is part of the legislation which authorized the construction of the trans-Alaska oil pipeline. 43 U.S.C. § 1653(c). ⁷ TAPAA establishes a comprehensive liability scheme applicable to damages resulting from the transportation

                of trans-Alaska pipeline oil.   It creates strict liability for damages resulting from spills of trans-Alaska oil up to $100,000,000 per spill.   The first $14,000,000 is to be paid by the vessel's owner and operator (collectively "owner").  43 U.S.C. § 1653(c)(3).   Any remaining claims, up to the additional $86,000,000, are paid by the Trans-Alaska Pipeline Fund (the "Fund"), which was created by TAPAA.   Id.  The Fund is an accumulation of money raised by taxing trans-Alaska oil.  43 U.S.C. §§ 1653(c)(4), (5).   If the total claims exceed the $100,000,000 of strict liability, they are reduced proportionately, and the claimants may pursue the unpaid portions under other applicable state and federal laws.  43 U.S.C. § 1653(c)(3).   Once payment is made to the oil spill victims, where either negligence or unseaworthiness of the vessel caused the spill, the various parties have subrogation rights and may pursue legally those responsible for the spill.  43 U.S.C. § 1653(c)(8). 8
                

II. TAPAA's Implicit Repeal of the Limitation Act

The sole issue in this appeal is whether, in enacting TAPAA, Congress implicitly repealed the Limitation Act with regard to the transportation of trans-Alaska oil. The Supreme Court has outlined the types of implicit repeal:

"[There are] two well-settled categories of repeals by implication--(1) where provisions in the two acts are in irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the earlier one; and (2) if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate similarly as a repeal of the earlier act."

Radzanower v. Touche Ross & Co., 426 U.S. 148, 154, 96 S.Ct. 1989, 1993, 48 L.Ed.2d 540 (1976) (quoting Posadas v. National City Bank, 296 U.S. 497, 503, 56 S.Ct. 349, 352, 80 L.Ed. 351 (1936)) (emphasis added). In each of the two categories "the intention of the legislature to repeal must be clear and manifest." Id. This court has indicated that, "[r]epeals by implication ... are not favored and will only be found when 'the new statute is clearly repugnant, in words or purpose, to the old statute....' " Grindstone Butte Project v. Kleppe, 638 F.2d 100, 102 (9th Cir.), (quoting United States v. Georgia-Pacific Co., 421 F.2d 92, 102 (9th Cir.1970)), cert. denied, 454 U.S. 965, 102 S.Ct. 505, 70 L.Ed.2d 380 (1981).

The second type of implicit repeal is inapplicable in the instant case because TAPAA does not cover the entire subject addressed by the Limitation Act. TAPAA establishes strict liability for damages caused by the transportation of trans-Alaska oil, while the Limitation Act operates generally to limit vessel owner liability. Therefore, resolution of the issue in this appeal rests on an analysis of the first category of repeals. We must determine whether TAPAA and the Limitation Act are in "irreconcilable conflict" with regard to the transportation of trans-Alaska oil. Radzanower, 426 U.S. at 154, 96 S.Ct. at 1993.

Trinidad does not argue that TAPAA and the Limitation Act are completely in harmony and capable of independent operation. Instead, Trinidad concedes that TAPAA irreconcilably conflicts with the Limitation Act to the extent of the owner's initial $14,000,000 of strict liability. Its position is that the $14,000,000 liability attaches regardless of the Limitation Act, but that thereafter the Limitation Act operates in full force. Under this theory, assuming that Trinidad qualifies for Limitation Act coverage, its liability in the instant case would be $14,000,000 plus the post-accident value of the Glacier Bay and any pending freight.

Trinidad's position that TAPAA only partially repeals the Limitation Act has general support, as it is clear that an implicit repeal need not be absolute. The Supreme Court has indicated that, " 'when two statutes are capable of coexistence, it is the duty of the courts ... to regard each as effective.' " Radzanower, 426 U.S. at 155, 96 S.Ct. at...