Savage Servs. Corp. v. United States

• Decision Date: 08 February 2022
• Docket Number: No. 21-10745,21-10745
• Citation: 25 F.4th 925
• Parties: SAVAGE SERVICES CORPORATION, Savage Inland Marine, LLC (UTAH), Plaintiffs - Counter-Defendants - Appellants, v. UNITED STATES of America, Defendant - Counter-Claimant - Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

25 F.4th 925

SAVAGE SERVICES CORPORATION, Savage Inland Marine, LLC (UTAH), Plaintiffs - Counter-Defendants - Appellants,

v.UNITED STATES of America, Defendant - Counter-Claimant - Appellee.

No. 21-10745

United States Court of Appeals, Eleventh Circuit.

Filed: February 8, 2022

Todd Gregory Crawford, Lugenbuhl Wheaton Peck Rankin & Hubbard, Gulfport, MS, Jay P. Farmer, Lugenbuhl Wheaton Peck Rankin & Hubbard, New Orleans, LA, for Plaintiffs-Appellants.

Joshua Koppel, U.S. Attorney General's Office, Washington, DC, Orla Margaret Brady, Michael A. DiLauro, U.S. Department of Justice, Washington, DC, for Defendant-Appellee.

Before Rosenbaum and Jill Pryor, Circuit Judges, and Altman,^* District Judge.

Altman, District Judge:

In the wake of the Exxon Valdez oil spill, which saw millions of gallons of oil pour into the waters off Alaska's coast, Congress passed the Oil Pollution Act of 1990 (the "OPA"). The OPA creates a comprehensive remedial scheme that governs—and apportions liability for—oil-removal costs. The statute holds oil spillers strictly liable upfront for oil-removal expenses and then carefully incentivizes their good behavior by allowing them, if they meet certain requirements, (1) to avail themselves of one of three liability defenses and (2) to seek contribution on the back end from other culpable parties.

In our case, the M/V SAVAGE VOYAGER was transporting oil through a Mississippi waterway when an accident at a boat lift—operated by the U.S. Army Corps of Engineers—caused a rupture in the SAVAGE VOYAGER's hull, through which thousands of gallons of oil poured into the river. Blaming the Government, the owners of the vessel sued the United States. Critically, though, they sued, not under the OPA, but under the common-law admiralty regime that has persisted for centuries. And, hoping to pierce the Government's sovereign immunity, they relied on the Suits in Admiralty Act (the "SAA"), a 1920 law by which Congress generally waived sovereign immunity for most admiralty claims.

This case—hinging on the interplay between the OPA and the SAA—presents an issue of first impression in the federal courts. The district court dismissed the vessel owner's claims for removal costs in two steps. First , the court held that the OPA authorizes no claim against the Government for oil-removal damages. Second , it concluded that the OPA's comprehensive remedial scheme displaced the SAA's more general sovereign-immunity waiver. We agree and now affirm.

BACKGROUND

I. The Spill

We start at the beginning—with an oil spill in the Tennessee-Tombigbee Waterway, a manmade system of canals, locks, and dams linking the Tennessee River in Mississippi with the Tombigbee River in Alabama. Here's a map of the Waterway:

On September 8, 2019, the M/V SAVAGE VOYAGER was pushing two tank barges along the Tennessee-Tombigbee Waterway.¹ Our Plaintiffs—Savage Services Corp. and Savage Inland Marine LLC—owned the vessel.² Along its journey, the vessel approached the Jamie Whitten Lock, a boat lift operated by the U.S. Army Corps of Engineers (the "Army Corps").

Things quickly devolved from there. On Savage's account, when the barge entered the lock, the lock master "began de-watering the lock chamber without notice or warning to the crew" and without "confirm[ing] the tug and tow were within the miter walls." At that point, the vessel's crew noticed that the "rake end" of one of the barges was caught on the north miter wall. The crew immediately relayed this information to the lock master. But, by then, it was too late. The lock chamber descended nearly sixty feet—and, as the water in the chamber fell, the barge rose out of the water until the angle became so steep that the barge fell off the miter wall. The weight of the barge caused the rake end of the barge to bend upward. According to Savage, the distorted rake "punctured a cargo tank ..., resulting in a release of crude oil into the lock chamber." In the end, the barge looked like this:

Savage alleges that the Army Corps was "solely responsible" for the accident and that "[t]here was nothing the SAVAGE VOYAGER could have done to avoid the accident." Savage also says that, as a result of the Army Corps's sole negligence, Savage suffered $4 million in damages—mostly due to the time-consuming process of removing oil from the Waterway. Hoping to recover these costs, Savage sued the United States in admiralty, relying in large measure on the Suits in Admiralty Act of 1920. In the SAA, the United States waived its sovereign immunity for most admiralty claims. See 46 U.S.C. § 30903(a) ("In a case in which, ... if a private person or property were involved, a civil action in admiralty could be maintained, a civil action in admiralty in personam may be brought against the United States or a federally-owned corporation.").

II. The Federal Water Pollution Control Act

Before the Oil Pollution Act of 1990—the law that now governs oil-removal liability—there was the Clean Water Act, more formally known as the Federal Water Pollution Control Act Amendments of 1972 (the "FWPCA"). The FWPCA was the cornerstone of a fractured liability scheme. See J.B. Ruhl & Michael J. Jewell, Oil Pollution Act of 1990: Opening a New Era in Federal and Texas Regulation of Oil Spill Prevention, Containment and Cleanup, and Liability , 32 S. TEX. L. REV. 475, 481 (1991) ("The cornerstone of pre-OPA federal oil spill liability law was found in the Federal Water Pollution Control Act[.] Supplementing that central provision in specified, limited contexts were the Trans-Alaska Pipeline Authorization Act, the Deepwater Port Act of 1974, and the Outer Continental Shelf Lands Act[.]").

The default under the FWPCA was for the federal government to take the lead on oil-spill removal. In the event of an oil spill, the law authorized the President of the United States "to act to remove or arrange for the removal of such oil or substance at any time, unless he determines such removal will be done properly by the owner or operator of the vessel ... from which the discharge occurs." 33 U.S.C. § 1321(c)(1) (1988).

As to liability, the FWPCA provided that the "owner or operator of any vessel from which oil ... is discharged ... shall ... be liable to the United States Government for the actual costs ... for the removal of such oil or substance by the United States Government." Id. § 1321(f)(1). The vessel owner was strictly liable for those costs, subject to certain complete defenses. Those defenses allowed the owner to avoid liability by "prov[ing] that a discharge was caused solely by (A) an act of God, (B) an act of war, (C) negligence on the part of the United States Government , or (D) an act or omission of a third party without regard to whether any such act or omission was or was not negligent, or any combination of the foregoing clauses." Id. (emphasis added). Remember the emphasized portion of this last sentence because it will become very important to our overall story. The United States could seek the "full amount" of its oil-removal costs if it could "show that such discharge was the result of willful negligence or willful misconduct within the privity and knowledge of the owner." Id. Otherwise, the owner's liability was capped by the vessel's typology and its size. Id.

On top of allowing complete defenses, the FWPCA left the door open for responsible parties to bring contribution claims against third parties: "The liabilities established by this section shall in no way affect any rights which ... the owner or operator of a vessel ... may have against any third party whose acts may in any way have caused or contributed to such discharge." Id. § 1321(h). The FWPCA also created a "revolving fund" to finance government-cleanup efforts: "[t]here is hereby authorized to be appropriated to a revolving fund to be established in the Treasury such sums as may be necessary to maintain such fund at a level of $35,000,000." Id. § 1321(k).

III. The Oil Pollution Act of 1990

Congress passed the Oil Pollution Act of 1990 in the aftermath of the Exxon Valdez oil spill, which had resulted in more than 11 million gallons of crude oil spilling into Alaska's waters. S. REP. NO. 101-99, at 1 (1989). After Exxon Valdez, Congress concluded that "the costs of spilling [oil] and paying for its clean-up and damage is not high enough to encourage greater industry efforts to prevent spills and develop effective techniques to contain them." S. REP. NO. 101-94, at 3 (1989). Congress also found fault in the "fragmented collection of Federal and State laws providing inadequate cleanup and damage remedies"—along with the "taxpayer subsidies to cover cleanup costs." Id. at 1. The FWPCA, Congress felt, "set[ ] inappropriately low limits of liability." Id. And its revolving fund was entirely inadequate: "Between 1971 and 1982 the United States Government obligated $124 million from the ... revolving fund, but recovered only $49 million from spillers, for a total expenditure of $75 million in national funds. ... [S]ince the fund is appropriated from the Treasury, it undercuts budget reduction goals and runs counter to cost internalization policies." Id. at 3. The "purpose" of the OPA was "to establish a comprehensive system of liability and compensation for damages caused by oil pollution," H.R. REP. NO. 101-242, pt. 2, at 31 (1989), and to "internalize those costs [associated with oil-spill cleanup] within the oil industry and its transportation sector," S. REP. NO. 101-94, at 2.

To effectuate those ends, the OPA—which amends the FWPCA³ —sets out a comprehensive scheme that apportions liability for oil-cleanup costs and damages. For starters, the OPA defines the "responsible party" in any oil spill as the "person owning, operating, or demise chartering the vessel." 33 U.S.C. § 2701(32)(A). In the event of an oil spill, the OPA requires the executive branch to identify the responsible party. Id. § 2714(a) ("When the President receives information of an incident, the President...