U.S. v. Viking Resources, Inc.

• Decision Date: 11 February 2009
• Docket Number: Civil Action No. H-08-1291.
• Citation: 607 F.Supp.2d 808
• Parties: UNITED STATES of America, Plaintiff, v. VIKING RESOURCES, INC. and Roger W. Chambers, Defendants.
• Court: U.S. District Court — Southern District of Texas

607 F.Supp.2d 808

UNITED STATES of America, Plaintiff, v. VIKING RESOURCES, INC. and Roger W. Chambers, Defendants.

Civil Action No. H-08-1291.

United States District Court, S.D. Texas, Houston Division.

February 11, 2009.

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Anita M. Scott, Robyn E. Hanson, Department of Justice, Washington, DC, Keith Edward Wyatt, Office of U.S. Attorney, Houston, TX, for Plaintiff.

Kembel Scott Brazil, Brazil and Dunn, J. James Luck, Luck Law Firm, PC, Houston, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

SIM LAKE, District Judge.

Pending before the court are Defendants', Viking Resources, Inc. ("Viking") and Roger W. Chambers, Joint Motion for Final Summary Judgment (Docket Entry No. 20), and Plaintiff United States' Motion for Summary Judgment (Docket Entry No. 22).¹ For the reasons stated below, the court will deny both motions. Also pending before the court are Plaintiff United States' Motion to Correct a Material Inaccuracy in Defendant Viking Resources, Inc.'s Response to Plaintiff's Motion for Summary Judgment (Docket Entry No. 28),² which will be denied as moot, and Plaintiff United States' Motion to Strike Jury Demand of Defendants (Docket Entry No. 33),³ which will be denied, and Defendants', Viking Resources, Inc. and Roger W. Chambers, Unopposed Motion to Bifurcate Trial (Docket Entry No. 35),⁴ which will also be denied.

I. Background

On December 18, 2004, an oil spill ("the Highland Bayou spill") was reported to the Texas General Land Office ("TGLO") which then notified the United States Coast Guard ("Coast Guard").⁵ The oil originated from a tank battery⁶ ("old tank battery") located on land overlying the Maco Stewart Lease⁷ near Hitchcock, Galveston County, Texas.⁸ The oil flowed into a wetland immediately adjacent to Highland Bayou, a navigable tributary to Galveston Bay.⁹

The Coast Guard, with the assistance of the TGLO and the National Oceanic and Atmospheric Administration ("NOAA"), conducted water cleanup operations.¹⁰ The United States Environmental Protection Agency ("EPA"), assisted by the Texas Railroad Commission ("TRRC"), carried out land-based removal operations.¹¹ All oil removal operations were completed by January 13, 2005.¹² According to the United States, removal crews recovered approximately 225 barrels (9,450 gallons) of oil from the land, water, and wetlands, combined.¹³

The government contends that the oil removal operations associated with the Highland Bayou spill cost $376,262.96.¹⁴ Additionally, after negotiation, TGLO and the Coast Guard agreed that the spill caused $271,179.82 in natural resource damages.¹⁵ The Coast Guard has paid or will pay all removal costs and natural resource damages from the Oil Spill Liability Trust Fund ("OSLTF"),¹⁶ a federal government fund created pursuant to 26 U.S.C. § 9509 for, among other things, the payment of removal costs and damages incurred as a result of certain oil discharges specified by the Oil Pollution Act ("OPA"). See 26 U.S.C. § 9509(c)(1) (A).

The OPA also provides that the United States may recover from "each responsible party ... removal costs and damages" associated with oil discharges "into or upon the navigable waters or adjoining shorelines...." 33 U.S.C. § 2702(a). Therefore, the Coast Guard conducted a record search to attempt to identify responsible parties for the Highland Bayou spill.¹⁷

Viking was the last known lessee and operator of a subdivided portion of the Maco Stewart Lease underlying the land where the old tank battery was located.¹⁸ Chambers is the president, sole officer, sole director, and sole owner of Viking.¹⁹ Viking became the registered operator of the relevant subdivided portion of the Maco Stewart Lease on October 1, 1995,²⁰ and obtained ownership of that portion of the lease by assignment from Seabrook Energy, Inc. ("Seabrook") on July 19, 1996.²¹ Viking last produced oil or gas from the lease sometime in 2001.²²

On April 28, 2008, the United States filed this action against Viking and Chambers under 33 U.S.C. § 2702.²³ The United States asserts that Viking and/or Chambers are strictly liable as "responsible part[ies]" for cleanup costs and damages incurred as a result of the Highland Bayou spill. 33 U.S.C. § 2702(a).

II. Cross-Motions for Summary Judgment

A. Summary Judgment Standard

Summary judgment is warranted if the movant establishes that there is no genuine dispute about any material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). An examination of substantive law determines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505 2510, 91 L.Ed.2d 202 (1986). Material facts are those facts that "might affect the outcome of the suit under the governing law." Id. A genuine issue as to a material fact exists if the evidence is such that a reasonable trier of fact could resolve the dispute in the nonmoving party's favor. Id. at 2511.

Where, as here, both parties have moved for summary judgment, both "motions must be considered separately, as each movant bears the burden of establishing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law." Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir.2004). The movant must inform the court of the basis for summary judgment and identify relevant excerpts from pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate there are no genuine fact issues. Celotex Corp., 106 S.Ct. at 2553, 106 S.Ct. 2548; see also Wallace v. Tex. Tech Univ., 80 F.3d 1042, 1046-47 (5th Cir.1996). If a defendant moves for summary judgment on the basis of an affirmative defense, "it must establish beyond dispute all of the defense's essential elements." Bank of Louisiana v. Aetna U.S. Healthcare Inc., 468 F.3d 237, 241 (5th Cir.2006). A defendant may also meet its initial burden by pointing out that the plaintiff has failed to make a showing adequate to establish the existence of an issue of material fact as to an essential element of his case. Celotex Corp., 106 S.Ct. at 2552, 106 S.Ct. 2548. If the movant satisfies its initial burden, the burden shifts to the nonmoving party to show by affidavits, depositions, answers to interrogatories, admissions on file, or other evidence that summary judgment is not warranted because genuine fact issues exist. Celotex Corp., 106 S.Ct. at 2552, 106 S.Ct. 2548.

In reviewing the evidence "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Products Inc., 530 U.S. 133, 120 S.Ct. 2097, 2110, 147 L.Ed.2d 105 (2000). But conclusory claims, unsubstantiated assertions, or insufficient evidence will not satisfy the nonmovant's burden. Wallace, 80 F.3d at 1047. If the nonmovant fails to present specific evidence showing there is a genuine issue for trial, summary judgment is appropriate. Topalian v. Ehrman, 954 F.2d 1125, 1132 (5th Cir.1992).

B. Elements for Strict Liability Under OPA

To ensure that oil spills are quickly and efficiently cleaned up, victims are compensated, and costs are internalized within the oil industry, "the OPA imposes strict liability on parties responsible for the discharge of oil ...." Rice v. Harken Exploration Co., 250 F.3d 264, 266 (5th Cir. 2001). To demonstrate that a party is strictly liable, the government must prove that (1) the defendant is a "responsible party" (2) for the "facility" or "vessel" (3) from which oil was discharged, or from which there was a substantial threat of discharge, (4) "into or upon the navigable waters or adjoining shorelines" and (5) that the discharge resulted in "removal costs and damages." 33 U.S.C. § 2702(a); see also United States v. Jones, 267 F.Supp.2d 1349, 1353 (M.D.Ga.2003) (listing elements for liability under § 2702).

The United States contends that it is entitled to summary-judgment because there are no genuine issues of material fact as to any of these elements. Viking and Chambers assert that they are entitled to summary judgment because the government has failed to produce enough evidence to even create a fact issue as to whether they are responsible parties. Although they do not contend that the discharge in question did not come from a facility, Viking and Chambers also take issue with the government's broad characterization of the facility in this case. With regard to removal costs and damages, Viking and Chambers challenge the affidavits upon which the government relies to prove the asserted amounts, and contend that the government has failed to show it is entitled to summary judgment on this issue. Viking and Chambers do not challenge the government's assertion that the Highland Bayou spill involved a discharge of oil into navigable waters.

The court will first consider whether the government's definition of the facility is appropriate under the OPA. Then it will decide whether either party has established that no genuine issue of material fact exists as to whether Viking and/or Chambers are responsible parties for the facility. Lastly, the court will address cleanup costs and damages.

1. Facility

The OPA defines "facility" as:

any structure, group of structures, equipment, or device (other than a vessel) which is used for one or more of the following purposes: exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil. This term includes any motor vehicle, rolling stock, or pipeline used for one or more of these purposes.²⁴

33 U.S.C. § 2701(9). The Highland Bayou spill originated from the old tank battery, which was located on the surface overlying Viking's oil and gas lease.²⁵ The parties and the court agree that the old tank battery meets the statutory definition of "facility." The government, however, asserts that the "facility"...