United States v. ERR, LLC

• Decision Date: 26 May 2022
• Docket Number: 21-30028
• Citation: 35 F.4th 405
• Parties: UNITED STATES of America, Plaintiff—Appellee, v. ERR, LLC; Evergreen Resource Recovery, LLC ; Hugh Nungesser, Jr., Defendants—Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

35 F.4th 405

UNITED STATES of America, Plaintiff—Appellee,

v.ERR, LLC; Evergreen Resource Recovery, LLC ; Hugh Nungesser, Jr., Defendants—Appellants.

No. 21-30028

United States Court of Appeals, Fifth Circuit.

FILED May 26, 2022

Anna T. Katselas, Jason Tyler Barbeau, U.S. Department of Justice, Environment & Natural Resources Division-Appellate Section, Washington, DC, for Plaintiff-Appellee.

Timothy William Hassinger, Esq., Patrick Joseph Schepens, Galloway, Johnson, Tompkins, Burr & Smith, Mandeville, LA, for Defendants-Appellants.

Before Davis, Willett, and Oldham, Circuit Judges.

Andrew S. Oldham, Circuit Judge:

The question presented is whether the Seventh Amendment guarantees the right to a jury trial of the Government's claims under the Oil Pollution Act of 1990. The district court said it was a close call but ultimately answered no. We say yes. We therefore reverse in part, vacate in part, and remand.

I.

A.

First, some background on the legislative scheme. In 1990, Congress enacted the Oil Pollution Act ("OPA"), which amended the Clean Water Act ("CWA"). See 33 U.S.C. § 2701 et seq. The OPA was Congress's "response to the Exxon Valdez oil spill in Prince William Sound, Alaska, and 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 Expl. Co. , 250 F.3d 264, 266 (5th Cir. 2001). The OPA generally imposes strict liability on parties responsible for oil spills, subject to certain complete defenses. See 33 U.S.C. §§ 2702, 2703 ; see also Rice , 250 F.3d at 266 ; In re Needham , 354 F.3d 340, 344 (5th Cir. 2003) ; United States v. Am. Com. Lines, LLC , 875 F.3d 170, 174 (5th Cir. 2017).

Congress also created a way for those who clean up an oil spill to get paid quickly. In general, cleaners must first present their claims to the party putatively responsible for the spill. See 33 U.S.C. § 2713(a), (b). But if the party denies liability or has not paid the claim within 90 days, the claimant may elect to sue that party or seek repayment from the National Pollution Funds Center ("NPFC"), which administers the Oil Spill Liability Trust Fund ("Fund"). See generally id. §§ 2712, 2713 ; Exec. Order No. 12,777, § 7, 56 Fed. Reg. 54,757, 54,766 –68 (Oct. 18, 1991).¹ If the claimant elects repayment from the NPFC, then it will get all removal expenses that are necessary, reasonable, and consistent with the relevant statutory criteria for such payments. See 33 U.S.C. § 2713(c) ; see also 33 C.F.R. §§ 136.105, 136.203, 136.205. And if the Fund pays the removal expenses, then the Government receives by subrogation "all rights, claims and causes of action that the claimant has." 33 U.S.C. § 2715(a) ; see also id. § 2712(f). The NPFC may then seek recoupment from the responsible party, including by filing a lawsuit. See id. § 2715(c). The recoupment includes "interest ... , administrative and adjudicative costs, and attorney's fees." Ibid.

B.

Now, the facts and procedural history. ERR owns and operates a wastewater treatment facility on the west bank of the Mississippi River in Louisiana.² Throughout May 12, 2015, ERR's facility received a transfer of oily water from a slop-oil barge. While still at the facility, at about 11:45 p.m., the barge tankerman noticed a discoloration in the water near the barge. Just after midnight, the barge left ERR's facility and traveled upstream via a tugboat. The National Response Center that same morning received two reports of oil in the Mississippi River—downstream from ERR's facility.

The Coast Guard and the State of Louisiana sent people to investigate. Their investigation included taking samples of the oil from the river, the barge, and ERR's facility. And they concluded ERR was responsible for the spill.

Meanwhile, from May 13, 2015, to June 26, 2015, Oil Mop, LLC—one of ERR's designated spill contractors—performed oil removal and soil remediation. On July 22, 2015, Oil Mop submitted its bill of $793,228.74 to ERR. ERR refused to pay. After 90 days passed, Oil Mop submitted a claim of $651,767.26 to the NPFC for reimbursement of removal costs. The NPFC reimbursed Oil Mop $631,228.74.

On October 20, 2017, the NPFC billed ERR for what it paid Oil Mop. ERR again refused to pay. The Government then sued ERR for what it paid Oil Mop, its administrative-adjudication costs, attorney's fees, and interest.

ERR demanded a jury trial. The Government moved to strike the demand. And the district court agreed with the Government. In general, the Seventh Amendment guarantees a jury "[i]n Suits at common law." U.S. CONST. amend. VII. The district court held, however, that the Government's OPA claims sound not in law but in equity, because the Government sought the equitable remedy of restitution.

In October 2020, the district court held a four-day bench trial. Two months later, the court ruled for the Government and awarded removal costs, administrative-adjudication costs, and attorney's fees. ERR timely appealed, challenging the court's denial of the jury-trial demand, its application of the OPA, and its monetary-compensation determination. We have jurisdiction under 28 U.S.C. § 1291. We address only ERR's Seventh Amendment challenge. Our review is de novo. U.S. Bank Nat'l Ass'n v. Verizon Commc'ns, Inc. , 761 F.3d 409, 416 (5th Cir. 2014).

II.

We begin with (A) some history on the civil jury right. We then discuss (B) Supreme Court precedent interpreting the Seventh Amendment. Finally, we hold (C) the Seventh Amendment guarantees ERR's right to a jury trial here.

A.

First, history. The Constitution, as ratified in 1788, did not contain a right to a jury trial in civil cases. See U.S. CONST. art. III, § 2, cl. 3 (guaranteeing jury in criminal cases). The omission generated fierce criticism from the Anti-Federalists. As one protested, "jury trials[,] which have so long been considered the surest barrier against arbitrary power, and the palladium of liberty[,] with the loss of which the loss of our freedom may be dated, are taken away by the proposed form of government." Luther Martin's Information to the General Assembly of the State of Maryland, in 2 THE COMPLETE ANTI-FEDERALIST 27, 70 (Herbert J. Storing ed., 1981). As another explained: "Judges, unincumbered by juries, have been ever found much better friends to government than to the people. Such judges will always be more desirable than juries to [would-be tyrants], upon the same principle that a large standing army ... is ever desirable to those who wish to enslave the people." Old Whig No. 8, in 3 THE COMPLETE ANTI-FEDERALIST, supra , at 49. And another emphasized that the civil jury was essential to preserving "democratical balance in the Judiciary power." Hampden No. 2, in 4 THE COMPLETE ANTI-FEDERALIST, supra , at 200. Many other Anti-Federalists expressed similar concerns.³

The Federalists recognized this criticism as one of the Anti-Federalists' most trenchant. See THE FEDERALIST No. 83, at 495 (Alexander Hamilton) (Clinton Rossiter ed., 1961) ("The objection to the plan of the convention, which has met with most success in this State , and perhaps in several of the other States, is that relative to the want of a constitutional provision for the trial by jury in civil cases." (emphasis added)); Parsons v. Bedford , 28 U.S. (3 Pet.) 433, 446, 7 L.Ed. 732 (1830) (Story, J.) ("One of the strongest objections originally taken against the constitution of the United States, was the want of an express provision securing the right of trial by jury in civil cases."). Still, Hamilton tried to defend the omission. He expressed doubts that there was an "inseparable connection between the existence of liberty and the trial by jury in civil cases" and downplayed how much the civil jury trial would be "a security against corruption." THE FEDERALIST No. 83, supra , at 499–500. But his main defense for the omission was practical. Hamilton argued that it'd be too difficult to draft a provision that protected the civil jury right. This is because the States provided radically different rights, so it'd be dangerous to draft a provision that covered one. Instead, Hamilton thought it best for Congress to provide the right to a civil jury trial on a case-by-case basis. In Hamilton's own words:

From this sketch it appears that there is a material diversity, as well in the modification as in the extent of the institution of trial by jury in civil cases, in the several States; and from this fact these obvious reflections flow: first, that no general rule could have been fixed upon by the convention which would have corresponded with the circumstances of all the States; and secondly, that more or at least as much might have been hazarded by taking the system of any one State for a standard, as by omitting a provision altogether and leaving the matter, as has been done, to legislative regulation.

Id. at 503.

Hamilton lost, however. The American people recognized the power of the Anti-Federalists' criticisms and ratified the Seventh Amendment in 1791. That Amendment provides:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

U.S. CONST . amend. VII.

B.

Next, precedent. The Supreme Court has long understood "Suits at common law" to refer "not merely [to] suits, which the common law recognized among its old and settled proceedings, but [to] suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered." Parsons , 28 U.S. at 447. So the Seventh Amendment "applies not only to common-law causes of action, but also to actions brought to enforce statutory rights that are analogous to...