United States v. E.R.R. LLC

• Decision Date: 02 October 2019
• Docket Number: CIVIL ACTION NO. 19-2340
• Citation: 417 F.Supp.3d 789
• Parties: UNITED STATES of America v. E.R.R. LLC, et al.
• Court: U.S. District Court — Eastern District of Louisiana

417 F.Supp.3d 789

UNITED STATES of America

v.E.R.R. LLC, et al.

CIVIL ACTION NO. 19-2340

United States District Court, E.D. Louisiana.

Signed October 2, 2019

Jason T Barbeau, U. S. Department of Justice (Box 7611), Washington, DC, Brock Darren Dupre, U. S. Attorney's Office (New Orleans), New Orleans, LA, for Plaintiff.

Timothy William Hassinger, Patrick Joseph Schepens, Galloway, Johnson, Tompkins, Burr & Smith (Mandeville), Mandeville, LA, for Defendant.

SECTION "L" (5)

ORDER AND REASONS

ELDON E. FALLON, U.S. DISTRICT COURT JUDGE

Before the Court is the United States' Motion to Strike Defendants' Demand for Trial by Jury. R. Doc. 13. Defendants oppose the motion. R. Doc. 14. The United States filed a reply to Defendants' opposition. R. Doc. 18. Because the United States raised a new argument in its reply, R. Doc. 18, Defendants filed a sur-reply, R. Doc. 22. Having considered the parties' briefs and applicable law, the Court now rules as follows.

I. BACKGROUND

This case arises out of an alleged May 2015 oil spill on the Mississippi River. R. Doc. 1 at ¶ 1. Plaintiff United States filed suit against Defendants E.R.R. LLC, Evergreen Resource Recovery LLC, and Hugh Nungesser, Jr., seeking the recovery of cleanup and removal costs of $632,262.49 under the Oil Pollution Act ("OPA"). R. Doc. 1. The United States contends the oil spill originated from a wastewater storage and treatment facility in Belle Chasse, Louisiana owned by Defendants. R. Doc. 1 at ¶ 29.

The United States alleges Defendants did not report oil discharge in the Mississippi River as required under the Clean Water Act. R. Doc. 1 at ¶ 27. Further, the United States alleges once the Coast Guard was made aware of the oil, "hours later," the Coast Guard found approximately one mile of oil contamination in the river and along the shoreline. R. Doc. 1 at ¶ 28. The United States contends the "Coast Guard investigated potential sources of the oil spill and determined that the spill originated at Defendants' Facility." R. Doc. 1 at ¶ 29.

The United States allege Defendants then engaged Oil Mop, LLC—a Coast Guard-certified Oil Spill Removal Organization ("ORSO")—to conduct removal operations pursuant to a prior contractual agreement, with cleanup operations beginning on May 13, 2015. R. Doc. 1 at ¶ 30. Following completion of the cleanup operations, the United States alleges "Oil Mop submitted its bill to Defendants on July 22, 2015 ... [and] Defendants did not pay the bill." R. Doc. 1 at ¶ 33. The United States avers that, as a result of Defendants' refusal to make payment, Oil Mop's claim was presented to and adjudicated by the National Pollution Funds Center ("NPFC" or "the Fund"). R. Doc. 1 at ¶¶ 34–35. The United States further alleges the NPFC accepted the claim and paid Oil Mop $631,228.74. R. Doc. 1 at ¶ 35. Moreover, pursuant to the terms of the alleged agreement, "Oil Mop assigned, transferred, and subrogated all, [sic] rights, claims, interests and rights of action to the United States." R. Doc. 1 at ¶ 35.

The United States thus seeks repayment from Defendants under § 1002(a) of the OPA, which provides:

[E]ach responsible party for ... a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines ... is liable for the removal costs and damages specified in subsection (b) of [ 33 U.S.C. § 2702(b) ] that result from such incident."

R. Doc. 1 at ¶ 9 (citing 33 U.S.C. § 2702(b) ). The OPA defines "removal costs" as "the costs of removal that are incurred after a discharge of oil has occurred or, in any case in which there is a substantial threat of discharge of oil, the costs to prevent, minimize, or mitigate oil pollution from such an incident." 33 U.S.C. § 2701(30).

Alternatively, the United States seeks repayment pursuant to its subrogation rights under OPA §§ 1012 and 1015. R. Doc. 1 at 1. After the NPFC has paid a claim, § 1012(f) of the OPA states the U.S. government "acquir[es] by subrogation all rights of the claimant ... to recover from the responsible party." See 33 U.S.C. § 2712(f). Moreover, pursuant to § 1015(c) of the OPA, the United States is entitled to bring an action seeking "any compensation paid by the Fund to any claimant pursuant to this Act, and all costs incurred by the Fund by reason of the claim, including interest (including prejudgment interest), administrative and adjudicative costs, and attorney's fees." 33 U.S.C. § 2715(c). Accordingly, in addition to a judgment against Defendants for removal costs of $632,262.49, the government seeks all additional costs incurred by the Fund, including interest, administrative and adjudicative costs, attorney's fees, and any other appropriate relief. R. Doc. 1 at ¶ 2.

Defendants deny all liability, deny its designation as a "responsible party" under the OPA, and deny the government's bringing suit under the OPA, alleging the government failed to comply with the statute's notice requirement. R. Doc. 8. Further, Defendants contend the Coast Guard failed to properly investigate other potential sources of the oil and did not properly identify the source or pathway from Defendants' facility to the oil spill. R. Doc. 8 at 12. In their Answer, Defendants also "pray for trial by jury on all issues so triable." R. Doc. 8 at 12.

II. PRESENT MOTION

Before the Court is the United States' Motion to Strike Defendants' Demand for Trial by Jury. R. Doc. 13. In support of its motion, the United States asserts two reasons Defendants' are not entitled to a jury trial in the instant removal cost recovery claim under the OPA: "(1) Congress did not provide a right to a jury trial in OPA cases, and (2) the Seventh Amendment does not provide a right to a jury trial here because an OPA cost recovery action seeks equitable, not legal, relief." R. Doc. 13-1 at 2. Additionally, the United States contends "ample case law demonstrates that the nature of the United States' recovery claims in this case forecloses any constitutional [jury] question." R. Doc. 13-1 at 2.

Defendants oppose the motion. R. Doc. 14. Although Defendants do not dispute the OPA "does not statutorily include a right to a jury trial," Defendants nonetheless assert they are entitled to a jury trial under the Seventh Amendment to the United States Constitution. R. Doc. 14 at 2–3. Specifically, Defendants contend "the relief sought by the United States—monetary damages—is a classic example of a legal remedy." R. Doc. 14 at 1. Defendants maintain that, because "the government seeks legal—not equitable—relief," Defendants have a constitutional right to a jury trial. R. Doc. 14 1, 3.

The United States filed a reply to Defendants' opposition. R. Doc. 18. Because the United States raised a new argument in its reply, R. Doc. 18, Defendants filed a sur-reply, R. Doc. 22. The new argument the United States raised is that "the Coast Guard's final agency action that adjudicated the amount of removal costs incurred in this case is subject to the Court's highly deferential record review under the Administrative Procedures Act." R. Doc. 18 at 1. Defendants contend the United States' position is not supported by existing case law and argue the United States is seeking an award of monetary damages and not the review of any agency decision. R. Doc. 22 at 1.

Accordingly, the issue before this Court is whether a cost recovery claim brought under the OPA is afforded a right to jury trial under the Seventh Amendment to the United States Constitution.

III. LAW AND ANALYSIS

When a party demands a jury trial, a trial on all issues so demanded must be by jury unless "the court, on motion or on its own, finds that on some or all of those issues there is no federal right to a jury trial." Fed. R. Civ. P. 39(a)(2). When no such federal right to a jury trial exists, the Court may strike a jury demand. See id. A federal right to a jury trial must be provided by either the Constitution or by statute. See Fed. R. Civ. P. 38 ; see also City of Monterey v. Del Monte Dunes at Monterey, Ltd. , 526 U.S. 687, 707, 119 S.Ct. 1624, 143 L.Ed.2d 882 (1999). "Courts look to the statute before engaging in a constitutional analysis." In re Oil Spill by the Oil Rig Deepwater Horizon , 98 F. Supp. 3d 872, 878 (E.D. La. 2015) (citing City of Monterey , 526 U.S. at 707, 119 S.Ct. 1624 ). Undisputedly, the OPA "does not statutorily include a right to a jury trial." R. Doc. 14 at 2; see also In re Deepwater Horizon , 98 F. Supp. 3d at 878 ("OPA does not expressly provide for a jury."). Accordingly, the Court turns to the Constitution—specifically the Seventh Amendment—in its analysis.

"In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." U.S. Const., amend. VII. The Seventh Amendment provides a trial by jury not only in common-law forms of action, but also in new statutory causes of action where "the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law." Curtis v. Loether , 415 U.S. 189, 194, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974). Indeed,

when Congress provides for enforcement of [new] statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.

Id. Therefore, the Court must determine whether the instant cause of action "was tried at law at the time of the founding or is at least analogous to one that was." City of Monterey , 526 U.S. at 708, 119 S.Ct. 1624 (quoting Markman v. Westview Instruments, Inc. , 517 U.S. 370, 376, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996) ); see also Tull v. United States , 481 U.S. 412, 417, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987). In Tull , the Supreme Court highlighted two important factors for courts to consider in this determination: (1)...