Slaven v. BP America, Inc.

• Decision Date: 31 August 1992
• Docket Number: No. 92-55155,92-55155
• Parties: , 61 USLW 2154, 22 Envtl. L. Rep. 21,500 Donald SLAVEN; Salvatore Russo; Carl Gassaway; Yeriko Nitta, d/b/a The Seacliff Motel; Salvatore Manzella; Steven Panto and Donna Panto; Heinz Pet Products Company, a Division of Star-Kist Foods, Inc., a California Corporation, Plaintiffs-Appellees, v. BP AMERICA, INC.; BP Oil Shipping Co., U.S.A.; BP Oil Supply Company; American Trading Transportation Company, Inc.; American Trading and Production Corporation, Defendants-Appellees, and Trans-Alaska Pipeline Liability Fund, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1468

973 F.2d 1468

1993 A.M.C. 9, 61 USLW 2154, 22

Envtl. L. Rep. 21,500

Donald SLAVEN; Salvatore Russo; Carl Gassaway; Yeriko

Nitta, d/b/a The Seacliff Motel; Salvatore Manzella;

Steven Panto and Donna Panto; Heinz Pet Products Company, a Division of Star-Kist Foods, Inc., a California Corporation, Plaintiffs-Appellees, v. BP AMERICA, INC.; BP Oil Shipping Co., U.S.A.; BP Oil

Supply Company; American Trading Transportation

Company, Inc.; American Trading and

Production Corporation,

Defendants-Appellees,

and

Trans-Alaska Pipeline Liability Fund, Defendant-Appellant.

No. 92-55155.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 5, 1992.

Decided Aug. 31, 1992.

Randolph D. Moss, Wilmer, Cutler & Pickering, Washington, D.C., for defendant-appellant.

David E.R. Woolley, Williams Woolley Cogswell Nakazawa & Russell, Long Beach, Cal., for plaintiffs-appellees.

Linus Masouredis, Deputy Atty. Gen., Oakland, Cal., for defendant-appellee.

William P. Barry, Baker Hostetler McCutchen Black, Los Angeles, Cal., for defendant-appellee.

Philip A. Berns (argued), Atty., and Warren A. Schneider, Asst. Atty., U.S. Dept. of Justice, Civil Div., Torts Branch, West Coast Office, for Appellee, U.S.

Appeal from the United States District Court for the Central District of California.

Before TANG, SCHROEDER, and BEEZER, Circuit Judges.

TANG, Circuit Judge:

In February 1990, the oil tanker American Trader spilled approximately 400,000 gallons of Alaskan crude oil into the Pacific Ocean, off Huntington Beach, California. The oil had been transferred to the American Trader from the Keystone Canyon, which had loaded the oil in Alaska. Various parties filed suit against the owners of the ship and oil and against the Trans-Alaska Pipeline Liability Fund ("the Fund"). The Fund moved to dismiss the claims against it, arguing that its governing statute made it liable only for spills by ships that had loaded their oil in Alaska, and not for ships that had received Alaskan oil from another carrier. The district court denied the Fund's motion. The Fund appeals. We affirm.

BACKGROUND

The facts surrounding the February 1990 oil spill are, at least at this stage of the litigation, undisputed. In January 1990, the supertanker Keystone Canyon loaded a cargo of Alaskan oil at the Trans-Alaska pipeline terminal facility in Valdez, Alaska. The oil had travelled from Alaska's North Slope to Valdez through the Trans-Alaska pipeline. When the Keystone Canyon arrived offshore of Long Beach, California, it trans-loaded or "lightered" nearly 24 million gallons of its crude to the tanker American Trader. Lightering was necessary because the Keystone Canyon is too large to dock at the Los Angeles and San Francisco area port facilities.

After receiving the oil, the American Trader set course for the Golden West Refining Offshore Mooring Terminal at Huntington Beach, California. On February 7, 1990, while approaching the mooring at low tide, the American Trader ran over its own anchor, puncturing its hull and spilling approximately 400,000 gallons of crude oil into the ocean. The spill caused widespread damage to the beaches and waters off California.

The Fund promptly publicized the procedures for those injured by the spill to seek compensation under the Trans-Alaska Pipeline Authorization Act, - ("TAPAA"). The Fund also entered into agreements with the owners of the oil (British Petroleum) and of the American Trader (American Trading Transportation Company) to ensure the prompt payment of claims.

Individuals injured by the spill (collectively, "Slaven") filed suit in federal district court against the Fund, British Petroleum, American Trading Transportation Company, and others. The sole cause of action against the Fund arises under TAPAA's strict liability provision, (c).

The Fund moved to dismiss the claims against it on the ground that TAPAA does not apply to oil spills from vessels that were not loaded at an Alaskan pipeline terminal facility. Treating the motion as one for summary judgment, the district court refused to dismiss. The district court concluded that the plain language of the statute was inconsistent and inconclusive on the question of the extent of the Fund's liability. Turning to legislative history, the district court held that the Fund's reliance on the post-enactment observations of a single legislator could not override the consistent interpretation given the statute by the three agencies charged with its administration. Because the three agencies--the Department of the Interior, the Federal Maritime Commission, and the Coast Guard--had all promulgated regulations instructing that strict liability extended to trans-loaded oil, the district court ruled that TAPAA did cover the American Trader spill and denied the motion to dismiss.

After the district court certified its decision for interlocutory appeal, (b), the Fund timely sought permission from this court to take the appeal. Permission was granted on February 13, 1992, and this appeal ensued.

STANDARD OF REVIEW

We review de novo the district court's ruling on summary judgment. (9th Cir.1989), cert. denied, (1990). The applicability of TAPAA to the American Trader's trans-loaded oil is a question of statutory construction, which we also review de novo. See (9th Cir.1991).

DISCUSSION

I. TAPAA's Strict Liability Provision

A. Statutory Framework

TAPAA was enacted in 1973 against a backdrop of congressional concern about the nation's dependence on foreign oil. See (a) ("The early development and delivery of oil and gas from Alaska's North Slope to domestic markets is in the national interest because of growing domestic shortages and increasing dependence upon insecure foreign sources."). Previously, Congress had studied two options for delivering Alaska North Slope Oil to the lower 48 states. The trans-Canada pipeline plan envisioned a wholly land-based delivery system, routing the oil through a pipeline across Canada and Alaska to the Midwestern states. The alternative, the trans-Alaska pipeline, involved piping the oil from the North Slope to Alaskan ports, followed by shipping the oil on tankers to the West Coast of the United States. See generally S.Rep. No. 207, 93rd Cong., 1st Sess., reprinted in , 2424-31; Rights-of-Way Across Federal Lands: Transportation of Alaska's North Slope Oil: Hearings Before the Committee on Interior and Insular Affairs, 93rd Cong., 1st Sess., pt. IV (1973); Oil and Natural Gas Pipeline Rights-of-Way: Hearings before the Subcommittee on Public Lands of the Committee on Interior and Insular Affairs, 93rd Cong., 1st Sess., pt. I (1973). Through TAPAA, Congress elected the latter scheme for transportation of Alaskan crude oil.

We recently observed that, in conjunction with authorizing the construction and operation of the trans-Alaska pipeline, TAPAA established "a comprehensive liability scheme applicable to damages resulting from the transportation of trans-Alaska pipeline oil." Kee Leasing Co. v. McGahan While section 1653(a) speaks to liability for the land-based portion of the pipeline system, section 1653(c) governs liability during the marine leg of the transportation route. Section 1653(c) places a $100,000,000 cap on its strict liability provision. (c)(3). The owner and operator of a vessel that discharges oil is responsible for the first $14,000,000 in damages. Id. The Fund then pays any additional claims up to $86,000,000. Id. The Fund is financed by a five-cents-per-barrel tax paid by the owner of the oil at the time it is loaded on a vessel at the pipeline terminal. Id. Sec. 1653(c)(5). The statute expressly reserves the subrogation rights of the Fund, owners, and operators, permitting them to seek compensation for the negligence of others once the victims of an oil spill have been compensated. Id. Sec. 1653(c)(8).

(In re The Glacier Bay), 944 F.2d 577, 580-81 (9th Cir.1991). Section 1653 of 43 U.S.C. provides the blueprint for TAPAA's strict liability scheme. Section 1653(a) makes the holders of pipeline right-of-way permits strictly liable for "damages in connection with or resulting from activities along or in the vicinity of" the pipeline right-of-way.

At issue in this case are two subsections of section 1653(c). Subsection (c)(1) provides:

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 from such vessel.

Subsection (c)(7) reads:

The provisions of this subsection shall apply only to vessels engaged in transportation between the terminal facilities of the pipeline and ports under the jurisdiction of the United States. Strict liability under this subsection shall cease when the oil has first been brought ashore at a port under the jurisdiction of the United States.

The Fund contends that, under the plain language of section 1653(c)(1), strict liability only attaches to oil discharged from a vessel "loaded ... at the terminal facilities of the pipeline." Congress so limited strict liability, the Fund continues, because it was concerned primarily with the disastrous environmental consequences that would attend oil spills by supertankers loading in Alaska. Spills by smaller ships onto which the oil was later trans-loaded could be adequately regulated by existing pollution and maritime law, the Fund reasons.

Slaven counters that the Fund's theory circumvents the plain language of section 1653(c)(7), which provides that strict liability ends only when the oil is...