Taylor Energy Co. v. United States
| Decision Date | 14 October 2020 |
| Docket Number | Civil Action No. 20-1086 (JDB) |
| Parties | TAYLOR ENERGY COMPANY LLC, Plaintiff, v. UNITED STATES OF AMERICA, acting by and through the UNITED STATES COAST GUARD NATIONAL POLLUTION FUNDS CENTER, Defendant. |
| Court | U.S. District Court — District of Columbia |
As of 2004, plaintiff Taylor Energy Company LLC ("Taylor Energy") owned and operated an offshore oil and gas production platform on a leased tract in the Gulf of Mexico. Hurricane Ivan passed through the Gulf in September 2004 and, along its way, caused significant damage to Taylor Energy's oil platform, ultimately leading to the platform's collapse into the Gulf and the discharge of oil into the water and surrounding seafloor sediments.
In November 2018, Taylor Energy sought reimbursement from the U.S. Coast Guard National Pollution Funds Center ("NPFC") for money spent to clean up oil after the destruction of its platform, but the NPFC denied its claim. In April 2020, Taylor Energy brought this lawsuit under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701, to challenge that denial. See Compl. to Vacate & Set Aside Final Agency Action & for Other Relief [ECF No. 1] ¶¶ 3, 5-18. Specifically, Taylor Energy seeks judicial review of the NPFC's final decision rejecting Taylor Energy's Act of God ("AOG") defense to liability under the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. § 2701, which would, if accepted, entitle Taylor Energy to recoup its cleanup costs. Id. ¶ 7-9. In response, the United States, on behalf of the Coast Guard, has filed various counterclaims seeking reimbursement for $43 million paid by the Oil Spill Liability Trust Fund ("OSLTF") to third parties to clean up the oil spill, as well as civil penalties and a declaratory judgment concerning past and future removal costs and natural resource damages. See Answer & Countercls. of Def./Countercl.-Pl. United States of America ("Gov't's Answer") [ECF No. 19] ¶¶ 78-95.
Now before the Court are four preliminary motions filed by Taylor Energy and the United States: (1) Taylor Energy's motion to compel the government to file an amended answer and to strike its first affirmative defense, (2) the government's motion for leave to file an amended answer, (3) Taylor Energy's motion to strike various technical reports from the administrative record, and (4) Taylor Energy's motion to dismiss the government's counterclaims. For the reasons explained below, the Court will grant the government's motion for leave to file its amended answer, deny Taylor Energy's motions to compel an amended answer and to strike technical reports, and grant Taylor Energy's motion to dismiss the government's counterclaims.1
In 2004, Taylor Energy was the lessee of an offshore oil and gas lease tract, known as the"Mississippi Canyon 20" ("MC20"), in the Gulf of Mexico. See Compl. ¶ 6.2 Taylor Energy owned and operated "an offshore, fixed steel frame oil and gas production platform situated within MC20." Id. That platform sustained significant damage from Hurricane Ivan in September 2004; Ivan generated "extraordinarily powerful waves" that "caused a massive progressive seafloor failure upslope of the [MC20 platform]," which in turn "destroy[ed] the platform's foundation deep beneath the seafloor." Id. As a result, the platform "topple[d]," and several of the oil wells that fed into the platform "rupture[d]," leading to the "discharge of oil into the Gulf of Mexico and the seafloor sediments." Id.
Taylor Energy discovered the damage to the MC20 platform on September 16, 2004, and the next day, observed "a light sheen . . . in the area where the platform had been installed." Id. ¶¶ 64-66. Taylor Energy notified the Coast Guard of the missing platform and reported the apparent oil discharge to the National Response Center. Id. The Coast Guard thereafter designated Taylor Energy the "Responsible Party" for the MC20 oil spill, meaning that Taylor Energy would be strictly liable under the OPA for removal costs and damages resulting from that spill, unless specific statutory defenses to liability applied, see 33 U.S.C. § 2702. See Compl. ¶¶ 67. Since then, Taylor Energy has worked alongside the Coast Guard and other federal agencies to contain the spill, capture any oil released into the Gulf, and plug the MC20 wells to prevent further discharge of oil. See id. ¶¶ 68-81. As of August 2017, Taylor Energy had spent almost $486 million on cleanup efforts, of which only about $132 million had been reimbursed through insurance. Id. ¶¶ 82-84.
On November 15, 2018, Taylor Energy presented a reimbursement claim for its removal costs to the NPFC, invoking the AOG defense to liability under the OPA. Id. ¶ 85. Taylor submitted evidence that the waves generated by Hurricane Ivan qualified as an "act of God," and that these waves caused the platform's collapse. See id. ¶¶ 85-87. On May 14, 2019, the NPFC denied Taylor Energy's claim, concluding that the MC20 platform's destruction "was not solely caused by an act of God." Id. ¶¶ 88-89. Taylor Energy filed a request for reconsideration with the NPFC on July 12, 2019, but on October 10, 2019, the NPFC once again denied the claim. Id. ¶¶ 105, 111.
Based on this final agency action, Taylor Energy brought the present lawsuit on April 27, 2020, challenging the NPFC's denial of its claim for reimbursement based on an AOG defense. Id. at 1. Specifically, Taylor Energy avers that the NPFC violated the APA and the Due Process Clause by committing substantive and procedural errors in rejecting both the initial claim and the reconsideration claim. See id. ¶¶ 123-80. The government has denied the bulk of Taylor Energy's allegations, see Gov't's Answer at 13-14, and, as of July 10, 2020, filed counterclaims (hereafter, the "Counterclaims") of its own, "seek[ing] repayment from Taylor Energy as a responsible party . . . of over $43 million in removal costs and interest paid by the [OSLTF] in response to this incident," id. at 16. The government also seeks civil penalties and a declaratory judgment establishing Taylor Energy's liability for costs and damages arising from the MC20 incident. See id. at 16-17. The Counterclaims are the "mirror image" of a set of claims brought about a month earlier by Taylor Energy against the government in the Eastern District of Louisiana ("EDLA") (hereafter, the "Louisiana Action"). See Compl. for Decl. J. ("Louisiana Compl.") [ECF No. 27-2]. Whereas Taylor Energy seeks a declaratory judgment in the Louisiana Action that it is not liable for the costs, penalties, and damages at issue in the Counterclaims, the Counterclaims seeka declaratory judgment on Taylor Energy's liability, as well as the asserted costs and penalties themselves. Compare Gov't's Answer ¶¶ 78-95, with Louisiana Compl. at 13-16.
Now before the Court are four preliminary motions. First, Taylor Energy moves to compel the government to file an amended answer, arguing that the original answer lacked sufficient responses to various allegations in the complaint and failed to properly plead the first affirmative defense under Rule 8. See Taylor Energy's Mot. to Compel the Gov't to Amend Its Answer [ECF No. 24] at 1. Second, the United States moves for leave to file an amended answer, which seeks to address some of Taylor Energy's concerns, see Gov't's Mot. for Leave to File Am. Answer [ECF No. 30] at 1-2, but Taylor opposes the motion, contending that the proposed amended answer is still deficient, see Combined Reply Mem. in Further Supp. of Taylor Energy's Mot. to Compel & Mem. of P.&A. in Opp'n to Gov't's Mot. for Leave to File Am. Answer ("Mot. to Compel Reply") [ECF No. 33] at 2. Third, Taylor Energy moves to strike six technical reports from the administrative record, which the company posits were improperly considered by the NPFC during the reconsideration process. See Mot. to Strike Select Technical Reports from the Admin. R. [ECF No. 25] at 1-3. Finally, Taylor Energy moves to dismiss the government's Counterclaims on a number of grounds, including the first-filed rule, improper venue, forum non conveniens, lack of maturity and ripeness, and failure to state a claim. See Taylor Energy's Mot. to Dismiss Countercls. [ECF No. 27] at 1-2. All four motions have been fully briefed and are now ripe for consideration.
To begin, the Court turns to Taylor Energy's motion to compel the government to amend its answer and to strike its first affirmative defense. See Mem. of P.&A. in Supp. Of TaylorEnergy's Mot. to Compel the Gov't to Amend Its Answer ("Mot. to Compel") [ECF No. 24-1] at 1-3. Taylor Energy argues that "many of the United States' responses are nonresponsive and not properly pleaded" under Federal Rule of Civil Procedure 8(b). Id. at 2. Likewise, Taylor Energy contends that the first affirmative defense stating that "Taylor Energy fails to state a claim upon which relief can be granted," does not satisfy Rule 8(c). Id. at 3 (quoting Gov't's Answer ¶ 183).
The government, in turn, moves for leave to amend its answer, arguing both that the motion to compel is meritless and that "all or nearly all" of Taylor Energy's criticisms of the original answer "are mooted" by the amended answer. See Gov't's Combined Mem. of P.&A. in Opp'n to Pls.' Mot. to Compel and to Strike ("Mot. to Amend.") [ECF No. 30-1] at 1-2. Taylor Energy replies that the amended answer still does not adequately respond to various allegations in the complaint or plead the first affirmative defense with sufficient specificity under Rule 8(c). See Mot. to Compel Reply at 2-3.
Under Rule 15(a), a party may amend its pleading after twenty-one days have passed from service "only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). Courts "should freely give leave when justice so requires." Id. And while "[t]he decision whether to grant or deny leave to amend is within the district...
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