United States v. Am. Commercial Lines, L.L.C., 16-31150

• Decision Date: 07 November 2017
• Docket Number: No. 16-31150,16-31150
• Parties: UNITED STATES of America, Plaintiff-Appellee v. AMERICAN COMMERCIAL LINES, L.L.C., Defendant-Appellant
• Court: U.S. Court of Appeals — Fifth Circuit

875 F.3d 170

UNITED STATES of America, Plaintiff-Appellee

v.AMERICAN COMMERCIAL LINES, L.L.C., Defendant-Appellant

No. 16-31150

United States Court of Appeals, Fifth Circuit.

Filed November 7, 2017

Sarah Susan Keast, Esq., Benjamin Ryan Sweeney, Trial Attorneys, Jill Dahlmann Rosa, U.S. Department of Justice, Michael Anthony DiLauro, Esq., Trial Attorney, U.S. Department of Justice, Civil Division Torts Branch, for Plaintiff-Appellee.

John A. V. Nicoletti, Esq., Terry L. Stoltz, Nicoletti, Hornig & Sweeney, New York, NY, Richard David Bertram, Esq., Glenn G. Goodier, Jones Walker, L.L.P., for Defendant-Appellant.

Before SMITH, OWEN, and HIGGINSON, Circuit Judges.

STEPHEN A. HIGGINSON, Circuit Judge:

On July 23, 2008, nearly 300,000 gallons of oil spilled into the Mississippi River when a tugboat veered across the river, putting the oil-filled barge it towed into the path of an ocean-going tanker. The tugboat, the M/V MEL OLIVER, was owned by American Commercial Lines ("ACL") but operated by DRD Towing Company pursuant to a contractual agreement between the companies. As the statutorily-defined responsible party under the Oil Pollution Act ("OPA"), ACL incurred approximately $70 million in removal costs and damages. The United States also incurred approximately $20 million in removal costs and damages.

The United States initiated this action in 2014, seeking a declaration that ACL is liable for all removal costs and damages resulting from the spill and to recover the costs that it incurred. The United States moved for partial summary judgment on its claims that ACL was not entitled to any defenses to liability under OPA. The district court granted that motion, and later entered final judgment ordering ACL to pay the United States $20 million. ACL appealed. We AFFIRM.

I

In 2007, ACL, a marine-transportation company that operates a fleet of barges and tugboats, contracted with DRD Towing, another marine-transportation company, to operate some of its tugboats. ACL and DRD entered into two charter agreements. Under the "Master Bareboat Charter," ACL chartered several tugboats, including the M/V MEL OLIVER, to DRD for one dollar per day.¹ Under the "Master Fully Found Charter," DRD agreed to crew the tugboats and charter its services back to ACL. Both agreements required compliance with "all applicable laws and regulations [with] respect to the registration, licensing, use, manning, maintenance, and operation of the Vessel(s)."

The MEL OLIVER's crew consisted of Captain Terry Carver, Steersman John Bavaret, and two deckhands. Captain Carver was the only crewmember with a valid United States Coast Guard Master of Towing Vessels license, which authorized him to lawfully operate tugboats on the lower Mississippi River. Steersman Bavaret held only an Apprentice Mate (Steersman) license, which authorized him to serve as an apprentice mate under the direct supervision of a properly licensed master. He was not authorized to operate the vessel without continuous supervision. See 46 C.F.R. § 10.107(b) (requiring that Steersman "be under the direct supervision and in the continuous presence of a master"); 46 C.F.R. § 15.401 (prohibiting mariners from serving in any positions that exceed the limits of their credentials).

On July 20, 2008, Captain Carver left the MEL OLIVER to go on shore, leaving Steersman Bavaret in control of the vessel. Two days later, while—unbeknownst to ACL—Captain Carver was still on shore, ACL directed the MEL OLIVER to tow an ACL barge, the DM-932, to pick up fuel from a facility in Gretna, Louisiana. At that time, Steersman Bavaret had worked for 36 hours with only short naps, in violation of Coast Guard regulations. See 46 U.S.C. § 8104(h) ("[A]n individual licensed to operate a towing vessel may not work for more than 12 hours in a consecutive 24-hour period except in an emergency."); 46 C.F.R. § 15.705(d) (stating that "a master or mate (pilot)" may not work "more than 12 hours in a consecutive 24-hour period except in an emergency"). Still under Steersman Bavaret's control, the MEL OLIVER arrived at the Gretna facility around 2:00 p.m. on July 22, 2008. The DM-932 was loaded with fuel, and the MEL OLIVER departed for its return trip, with the fuel-filled barge in tow, at about 12:30 a.m. on July 23, 2008.

As the MEL OLIVER pushed the DM-932 along the Mississippi River, it began travelling erratically. At about 1:30 a.m., it turned to cross the path of an ocean-going tanker, the TINTOMARA, owned by a third party. The TINTOMARA's pilot and the Coast Guard's New Orleans Vessel Traffic Service staff attempted to hail the MEL OLIVER by radio, but no one answered. The TINTOMARA also sounded its alarm whistle. Unable to change course, the TINTOMARA collided with the DM-932. The DM-932 broke away from the MEL OLIVER and sank downriver, spilling approximately 300,000 gallons of oil into the Mississippi River. Immediately after the collision, a crewmember on the MEL OLIVER found Steersman Bavaret slumped over the steering sticks and non-responsive.

Following the spill, the government prosecuted DRD, Captain Carver, and Steersman Bavaret for criminal violations of federal environmental law. DRD and Steersman Bavaret each pleaded guilty to one count of violating the Ports and Waterways Safety Act, 33 U.S.C. § 1232(b)(1), and one count of violating the Clean Water Act ("CWA"), 33 U.S.C. § 1319(c)(1)(A). Captain Carver pleaded guilty to one count of violating the Ports and Waterways Safety Act.

In the course of the criminal investigation, DRD admitted that it knowingly allowed its crewmembers to work without appropriate licenses or qualifications and to work more hours than were permitted under Coast Guard safety regulations and that it failed to report those "manning deficiencies" to the Coast Guard, also in violation of Coast Guard regulations. Captain Carver and Steersman Bavaret admitted to knowing that Bavaret was not licensed to act as captain in Carver's absence.

In addition to the criminal prosecution, the government sued ACL and DRD under OPA to recover clean-up costs resulting from the spill.² DRD promptly declared bankruptcy and later dissolved its LLC. The government moved for summary judgment against ACL on the issue of liability under OPA. The district court granted summary judgment in favor of the government, and later issued a final judgment ordering ACL to pay the government $20 million. This appeal followed.

II

We review a district court's grant of summary judgment de novo, applying the same legal standards as the district court. Robinson v. Orient Marine Co. , 505 F.3d 364, 365 (5th Cir. 2007). Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Any reasonable inferences are to be drawn in favor of the non-moving party. Robinson , 505 F.3d at 366.

III

A

OPA was enacted in 1990 in response to the Exxon Valdez oil spill. It "was intended to streamline federal law so as to provide quick and efficient cleanup of oil spills, compensate victims of such spills, and internalize the costs of spills within the petroleum industry." Rice v. Harken Exploration Co. , 250 F.3d 264, 266 (5th Cir. 2001) (citing S. REP. NO. 101-94, reprinted in 1990 U.S.C.C.A.N. 722, 723). OPA's cost-internalization measures, which increased the financial consequences of oil spills, were intended to "encourage greater industry efforts to prevent spills and develop effective techniques to contain them." S. REP. NO. 101-94 at 3. To that end, OPA redresses "gross inadequacies ... in the CWA's provisions dealing with spiller responsibility for cleanup costs" by extending the CWA's regime of strict, joint, and several liability; limiting the available defenses to liability; increasing the applicable limits to liability; and eliminating the liability limits altogether under certain circumstances. Id. at 4–5, 12–14.

OPA holds statutorily-defined "responsible parties" strictly liable for pollution-removal costs and damages associated with oil spills. See Buffalo Marine Servs. Inc. v. United States , 663 F.3d 750, 752 (5th Cir. 2011) (stating that OPA "creates a strict-liability scheme for the costs of cleaning up oil spills"). It provides that "each responsible party for a vessel or a facility from which oil is discharged ... is liable for the removal costs and damages ... that result from such incident." 33 U.S.C. § 2702(a). With respect to vessels, the "responsible party" is "any person owning, operating, or demise chartering the vessel." 33 U.S.C. § 2701(32)(A).

OPA generally limits the liability of a responsible party to a specified dollar amount based on the tonnage of the vessel from which oil was discharged. 33 U.S.C. § 2704(a). However, the limits on liability do not apply if:

the incident was proximately caused by—(A) gross negligence or willful misconduct of, or (B) the violation of an applicable Federal safety, construction, or operating regulation by, the responsible party, an agent or employee of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party....

33 U.S.C. § 2704(c)(1). Accordingly, under those circumstances, there is no limit to the liability of the responsible party.

In addition to the general limits on liability, OPA provides for a complete defense to liability under four enumerated circumstances. It provides that:

[a] responsible party is not liable for removal costs or damages ... if [that] party establishes, by a preponderance of the evidence, that the discharge ... of oil and the resulting damages or removal costs were caused solely by—(1) an act of God; (2) an act of war; (3) an act or omission of a third party, other than an employee or agent of the responsible party or a third party whose act or omission occurs in connection with any contractual relationship with the responsible party ... or (4) any combination of paragraphs

...