In re Glacier Bay

• Decision Date: 28 September 1990
• Docket Number: No. A88-115 Civil.,A88-115 Civil.
• Citation: 746 F. Supp. 1379
• Parties: In re the GLACIER BAY.
• Court: U.S. District Court — District of Alaska

746 F. Supp. 1379

In re the GLACIER BAY.

No. A88-115 Civil.

United States District Court, D. Alaska.

September 28, 1990.

COPYRIGHT MATERIAL OMITTED

Brian B. O'Neill, Faegre & Benson, Minneapolis, Minn., Liaison Counsel, for plaintiffs.

Michael H. Woodell, Bradbury, Bliss & Riordan, Anchorage, Alaska, Liaison Counsel, for defendants.

R. Michael Underhill, Torts Branch, Civ. Div., U.S. Dept. of Justice, San Francisco, Cal., for the Government.

ORDER

HOLLAND, Chief Judge.

Phase I Motions and Motions to Dismiss

On August 23, 1990, the court heard oral argument on several related motions. Those motions were: plaintiffs' Phase I motions regarding the scope of compensatory damage recovery; the Fund's motion to dismiss claims of fish tenders and processors; Trinidad, West, Hawker, Kee, Mathiasen's, and GBTC's Rule 12(b)(6) motion to dismiss claims of tenders, fish buyers, fish spotters, fish processors, and other shoreside businesses; and the Fund's motion to dismiss plaintiffs' prayer for attorney's fees.

Plaintiffs' combined Phase I motions request declaratory rulings on the following four issues:

(1) Whether the business losses of drift net and set net fishermen are compensable damages under the Trans-Alaska Pipeline Authorization Act (TAPAA), 43 U.S.C. §§ 1651-1655, and under the Alaska Environmental Conservation Act ("Alaska Act"), AS 46.03.822.

(2) Whether the business losses of non-fishermen are compensable damages under TAPAA and the Alaska Act.

(3) Whether the claims filed by all plaintiffs are timely filed.

(4) Whether, under TAPAA and the Alaska Act, plaintiffs can recover costs and disbursements, attorney's fees, pre-judgment interest at 10.5%, and post-judgment interest at 10.5%.

Plaintiffs raise these issues at this time pursuant to Section 15.4 of the Case Management Plan which specifically permits Phase I motions for the determination of questions of law relating to the scope of recovery under TAPAA and for the definition of categories of plaintiffs entitled to recovery under TAPAA or the Alaska Act.

In response to plaintiffs' Phase I motions, Trinidad filed two opposition briefs: one on the issue of attorney's fees and the other on the issue of claims for economic loss. Trinidad filed supplemental authority regarding attorney's fees. CIRO, SPC Shipping, and Tesoro joined in Trinidad's opposition brief on attorney's fees. SPC Shipping filed a separate opposition brief as to economic loss. The Fund and the United States each filed opposition briefs. Plaintiffs filed a reply.

The Fund and Trinidad filed separate motions to dismiss the economic loss claims of certain non-fishermen plaintiffs. SPC Shipping filed a brief in support of both motions to dismiss. Plaintiffs objected to the motions to dismiss. SPC Shipping, Trinidad, and the Fund each filed replies.

The Fund also filed a motion to dismiss the claims for attorney's fees. Plaintiffs filed an opposition brief to which the Fund replied.

I. APPLICATION OF MARITIME LAW

The applicability of maritime law is the underlying issue for most of the pending motions, particularly for those addressing economic loss claims. The issues raised are whether TAPAA preempted maritime law and whether damages under the Alaska Act are controlled by maritime law or by state law as a result of the non-preemption of state law subsection in TAPAA.

TAPAA

This court has already ruled that Section 1653(c) preempted the Limitation of Vessel Owner's Liability Act ("Limitation Act"), 46 U.S.C.App. §§ 181-189, for spills of oil transported through the Trans-Alaska Pipeline System ("TAPS oil").¹ In view of that prior ruling, the issue more specifically becomes whether TAPAA Section 1653(c) preempts only the Limitation Act or all applicable maritime law.

The defendants argue that the oil spill from the Glacier Bay is a maritime tort. Defendants contend that, as a maritime tort, this matter is subject to substantive maritime law. Defendants cite to other oil spill cases not involving TAPS oil where similar conclusions were reached. See, e.g., Louisiana ex rel. Guste v. M/V Testbank, 752 F.2d 1019, 1031-1032 (5th Cir. 1985); In re Oil Spill by Amoco Cadiz, 699 F.2d 909, 913 (7th Cir.1983); Union Oil Company v. Oppen, 501 F.2d 558, 561-562 (9th Cir.1974).

The particular substantive maritime law which defendants insist must be applied is the ruling in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927). In essence, Robins Dry Dock established that in those situations where negligence does not result in any physical harm, thereby providing no basis for an independent tort, and only pecuniary loss is suffered, a plaintiff may not recover for the loss of the financial benefits of a contract or prospective trade. Getty Refining & Marketing Co. v. MT FADI B, 766 F.2d 829, 833 (3d Cir.1985). If the Robins Dry Dock rule is applied to the Glacier Bay oil spill, the claims of fish tenders, fish buyers, fish spotters, fish processors and shoreside businesses would largely be dismissed.

Defendants take the position that the Robins Dry Dock rule has withstood the test of time and continues to be viable law. See M/V Testbank, 752 F.2d at 1032; Getty Refining, 766 F.2d at 833; see also, Owen, Recovery for Economic Loss Under U.S. Maritime Law: Sixty Years Under Robins Dry Dock, 18 J.Mar.L. & Com. 157 (1987). Defendants contend that Section 1653(c) is silent as to the well-established Robins Dry Dock rule and, consequently, does not preempt it. Defendants further argue that the administrative regulations implementing TAPAA are not entitled to any deference.

Plaintiffs, on the other hand, argue that maritime law does not apply because they originally brought their claims in state court pursuant to the "saving to suitors" clause in 28 U.S.C. § 1333(1). Plaintiffs note that it was defendants who removed the case to this court on the grounds that TAPAA claims raised federal question jurisdiction. Plaintiffs further note that they did not invoke admiralty jurisdiction as required by Rule 9(h), Federal Rules of Civil Procedure, and have requested a jury, which is not available in admiralty.

Plaintiffs argue that maritime law does not apply to TAPAA claims because of the plain language of Section 1653(c)(1) that strict liability was imposed "notwithstanding the provisions of any other law." Plaintiffs contend that the legislative history and implementing regulations support preemption of maritime law.

Finally, plaintiffs argue that they would be able to recover their economic loss claims even if general maritime law did apply because the Ninth Circuit has eroded the "bright-line" rule of Robins Dry Dock. See Carbone v. Ursich, 209 F.2d 178, 181-182 (9th Cir.1953) (held that crew members of fishing vessel could recover lost profits from owners of another vessel that negligently fouled their nets); Union Oil Co. v. Oppen, 501 F.2d 558, 570 (9th Cir.1974) (held that commercial fishermen whose harvests were depleted by an oil spill could recover lost profits from defendant oil company in negligence action); Emerson G.M. Diesel, Inc. v. Alaskan Enterprise, 732 F.2d 1468, 1475 (9th Cir.1984) (held that economic losses such as lost profits and repair expenses are recoverable in manufacturers strict liability admiralty action).

Plaintiffs' position that maritime law does not apply because admiralty jurisdiction was not invoked is not supported in the law. The oil spill involved here constitutes a maritime tort because it occurred on navigable waters and bears a significant relationship to traditional maritime activity. Sisson v. Ruby, ___ U.S. ___, 110 S.Ct. 2892, 2897, 111 L.Ed.2d 292 (1990); Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 268, 93 S.Ct. 493, 504, 34 L.Ed.2d 454 (1972); In re Paradise Holdings, Inc., 795 F.2d 756, 759 (9th Cir. 1986). The substantive law applicable to a maritime tort is the general maritime law. Keefe v. Bahama Cruise Line, Inc., 867 F.2d 1318, 1320 (11th Cir.1989). The same principles would govern the outcome had this case remained in state court where it was originally filed or had this court's admiralty jurisdiction been invoked. Id. at 1321.

Unless it is determined that TAPAA preempts the application of substantive maritime law, maritime law applies regardless of the fact that plaintiffs did not invoke the procedural benefits of admiralty jurisdiction. Rule 9(h) is a purely procedural provision which permits a plaintiff whose claim is cognizable under either law or admiralty jurisdiction to identify his claim as an admiralty claim in order to obtain the procedural benefits traditionally available under admiralty jurisdiction, such as insuring a bench trial. Carey v. Bahama Cruise Lines, 864 F.2d 201, 206 (1st Cir. 1988). Rule 9(h) does not authorize a plaintiff to choose the substantive law that applies to that claim. Id. Likewise, the "saving to suitors" clause of 28 U.S.C. § 1333(1) does not give a plaintiff an election to determine whether the defendant's liability is measured by common law standards or by those of the maritime law. Chelentis v. Luckenbach Steamship Co., 247 U.S. 372, 384, 38 S.Ct. 501, 504, 62 L.Ed. 1171 (1918).

Plaintiffs' second argument, that the clear language of Section 1653 preempts maritime law, does have merit. The applicable portion of TAPAA is Section 1653(c)(1), which reads as follows:

(1) 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 Trans-Alaska Pipeline Liability Fund established by this subsection, 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

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