Rice v. Harken Exploration Co.

Decision Date30 September 1999
Docket NumberCiv.A.No. 2:97CV00402.
Citation89 F.Supp.2d 820
PartiesD.E. RICE and Karen Rice, as Trustees for the Rice Family Living Trust, Plaintiffs, v. HARKEN EXPLORATION COMPANY, Defendant.
CourtU.S. District Court — Northern District of Texas

James H. Wood, Law Offices of James H. Wood, Amarillo, TX, for Plaintiffs.

W. Wade Arnold, Peterson Farris Doores & Jones, Christopher L. Jensen, Morris Moore Moss & Douglas, Amarillo, TX, F. Michael Prince, Kelli Michelle Hinson, Carrington Coleman Sloman & Blumenthal, Dallas, TX, for Defendant.

ORDER GRANTING IN PART MOTION FOR SUMMARY JUDGMENT

MARY LOU ROBINSON, District Judge.

The question before the Court is whether the Oil Pollution Act of 1990, 33 U.S.C. §§ 2700 et seq., (OPA) creates a cause of action available to the Plaintiffs under the facts of this case. The Court concludes that it does not. Defendant's motion for summary judgment is therefore granted only as to Plaintiffs' federal cause of action under the OPA, the claimed basis for federal jurisdiction. The balance of Defendant's motion is denied.

Factual Background

Plaintiffs D.E. Rice and Karen Rice are Trustees for the Rice Family Living Trust. The Trust owns sections 37, 38, and part of 39, Block 47, H & TC Ry. Co. Survey, Hutchinson County, Texas (known as the Big Creek Ranch), except for the oil and gas under those Sections. Plaintiffs are citizens of the State of Texas.

Harken Exploration Company is a Delaware corporation with its principal place of business in Irving, Texas. Defendant is a citizen of the States of Texas and Delaware.

Harken operates oil-and-gas properties pursuant to leases on Big Creek Ranch. Under these leases, Harken owns and operates structures and equipment on Plaintiffs' land which are used in exploring, drilling, producing, storing, handling, transferring, processing, and transporting oil. Harken has the obligation to act as a reasonable and prudent oil-and-gas producer.

Big Creek, the tributaries of Big Creek, and the surface waters and groundwater on Big Creek Ranch flow into the Canadian River. The Canadian River is the southern boundary of the Ranch, and is downgradient from Harken's oil and gas flowlines, tank batteries, and other production equipment. The Canadian River flows into the Arkansas River, the Arkansas River flows into the Mississippi River, and the Mississippi River flows into the Gulf of Mexico.

Claims

Plaintiffs allege that Harken has discharged hydrocarbons and continues to discharge hydrocarbons, produced brine, and other pollutants onto the Big Creek Ranch and into a small seasonal creek on Plaintiffs' property known as "Big Creek," "unnamed tributaries of Big Creek," and other "independent ground and surface waters." Plaintiffs allege that through production operation discharges Harken has damaged and continues to damage the land, contaminated and continues to contaminate surface waters and groundwater, threatened and continues to threaten surface waters and groundwater, killed 10 head of their cattle, and damaged and continues to damage their surface vegetation.

Plaintiffs allege that before pollution became unmanageable, they conducted a cow-calf operation on the Ranch, the calves of which were sold into interstate commerce. They allege that Harken's pollution has forced them to re-locate their cattle operations.

Plaintiffs allege that Harken has contaminated or threatened 9,265.24 acre feet of groundwater and over 90 non-contiguous surface acres. They allege that the cost to repair and remediate the surface damages and groundwater is $38,537,500.00.

Plaintiffs contend that Harken's actions violate the Oil Production Act of 1990(OPA), and that Harken has offered no remediation plan.

The Plaintiffs ask the Court to enter a declaratory judgment that: (a) Harken is a responsible party under the Oil Pollution Act; (b) Harken is liable for the removal of the oil and oil-related pollutants on the property; (c) Harken is liable for the cleanup, restoration, and remediation of the property; (d) Plaintiffs' removal costs incurred through trial are consistent with the OPA's National Contingency Plan; (e) Plaintiffs' proposed removal actions and activities are consistent with the OPA's National Contingency Plan; and (f) they ask the Court to order Plaintiffs' removal and remediation plan be implemented as proposed by Plaintiffs' environmental consultant.

Defendant Harken contends that this Court does not have jurisdiction over Plaintiffs' OPA claims. Defendant contends that it is entitled to summary judgment on any claims brought under the OPA, as well as Plaintiffs' other claims.

Summary Judgment Standards

"The Court may terminate litigation by rendering a summary judgement where no genuine issue of material fact exists and the moving party is entitled to judgement as a matter of law." Honore v. Douglas, 833 F.2d 565, 567 (5th Cir.1987) (citations omitted). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548 2552, 91 L.Ed.2d 265 (1986) (initial burden is on movant to show entitlement to summary judgment with competent evidence); Fed.R.Civ.Pro. 56(c). "Summary judgement disposition is inappropriate if the evidence before the court, viewed as a whole, could lead to different factual findings and conclusions." Honore v. Douglas, 833 F.2d at 567. This Court must resolve all factual uncertainties and make all reasonable inferences in favor of the nonmoving party. Bienkowski v. American Airlines, 851 F.2d 1503, 1504 (5th Cir.1988). Such a finding may be supported by the absence of evidence necessary to establish an essential element of the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Discussion and Analysis

The OPA was enacted in 1990 in response to the Exxon Valdez oil spill in Prince William Sound, Alaska. It represents Congress's attempt to provide a comprehensive framework in the area of marine oil pollution. 136 Cong.Rec. H6933-02, H6944.1 The OPA focuses on oil discharges in the nation's oceanic fishing grounds, oceans, waterways, bays, and coastlines.2 General Electric Co. v. U.S. Department of Commerce, 128 F.3d 767, 770 (D.C.Cir.1997).

The principal purpose of the OPA is to compensate any party suffering damages from discharges of oil3 or hazardous substances. S.Rep. No. 94, 101st Cong., 1st Sess. (1989), reprinted in 1990 U.S.C.C.A.N. 722. Congress designed the OPA to provide protection for the environment and to aid the victims of oil spills. Id.

When Congress enacted the OPA, it recognized that existing federal and state laws provided inadequate cleanup and damage remedies, required large taxpayer subsidies for costly cleanup activities, allowed third-party damages to go uncompensated, and presented substantial barriers to victims' recoveries such as legal defenses, statutes of limitation, the corporate form, and burdens of proof unfairly favoring those responsible for the spills. See S.Rep. No. 94, 101st Cong., 1st Sess. (1989), reprinted in 1990 U.S.C.C.A.N. 722. Congress also recognized that, before the OPA, the costs of cleanup and damage from spills were not high enough to encourage greater industry efforts to prevent spills and develop effective techniques to contain them. Id. When it enacted the OPA, Congress intended to create a law that would compensate victims of oil spills; provide quick, efficient cleanup; minimize damage to fisheries, wildlife, and other natural resources; and internalize costs of oil spills within the oil industry. Id.

Liability under the OPA is strict. In pertinent part, Section 2702 of the OPA provides:

[E]ach responsible party for a ... facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters ... is liable for the removal costs and damages....

33 U.S.C. § 2702(a); see also 33 U.S.C. § 2701(17) ("liable" or "liability" shall be construed to be the standard of liability under the Clean Water Act).

Under the OPA, a person owning or operating a vessel, an onshore or offshore oil facility, a deepwater port, or a pipeline is liable for certain costs and damages if the facility or vessel has discharged oil, or poses a substantial threat of a discharge of oil or other waste pollutants into or upon this nation's navigable water or adjoining shorelines or the "exclusive economic zone."4 33 U.S.C. §§ 2701(32), 2702(a). The OPA thus provides that a responsible party for an onshore facility from which oil is discharged, or which poses a substantial threat of a discharge of oil, into or upon navigable waters is liable for removal costs and other damages resulting from such incident. 33 U.S.C. § 2702(a).

A pre-suit notice provision states: "all claims for removal costs or damages shall be presented first to the responsible party ... of the source designated under section 2714(a) of this title." 33 U.S.C. § 2713(a). If such a claim is presented and the responsible party denies all liability or if the claim is not settled within 90 days the claimant may elect to commence an action in court against the responsible party. 33 U.S.C. § 2713(c). Plaintiffs have timely made a proper pre-suit notice and offer in this case.

Under the OPA, a plaintiff must prove two elements: 1) that there is a discharge of oil or covered oil-related substances, and 2) that the discharge either went into navigable waters or poses a substantial threat to navigable waters of the United States. If plaintiff proves these elements, he recovers all damages that result from the discharge, see § 2702(2), including removal costs incurred, § 2701(31); the costs to prevent, minimize, or mitigate oil pollution, id.; any reasonable assessment costs, § 2701(5); the costs to replace personal property or the diminution in value to personal property, see § 2702(b)(2)(B); and the costs to repair, restore, and remediate real property or the diminution in value to the property. See id....

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