United States: U.S. Coast Guard Issues Final Rule Raising OPA 90 Liability Limits

Last Updated: December 15 2015
Article by Jeanne Grasso, Jonathan K. Waldron and Dana S. Merkel

Action Item: The U.S. Coast Guard published a Final Rule increasing limits of liability for vessels, deepwater ports, and onshore facilities under the Oil Pollution Act of 1990 ("OPA 90"). The raise in liability limits also increases the amount of financial responsibility that vessels owners/operators are required to maintain and provide evidence of to operate in the United States. Owners/operators of vessels, deepwater ports, and onshore facilities should be aware of the new liability limits applicable to their operations and vessel owners/operators should begin the process of increasing evidence of financial responsibility amounts.

New Development

On November 19, 2015, the U.S. Coast Guard published a Final Rule that increases limits of liability for vessels, deepwater ports, and onshore facilities under OPA 90. For vessels, the Final Rule increases limits of liability by about ten percent. The raise in liability limits reflects significant increases in the Consumer Price Index ("CPI"), as required by OPA 90. Owners/operators will need to demonstrate a commensurate increase in financial responsibility by March 21, 2016. The Final Rule also creates a streamlined procedure for future CPI increases to limits of liability and clarifies OPA 90 liability limit applicability to vessels carrying edible oil and oil spill response vessels. The Final Rule is available here.

Background

Under OPA 90, each responsible party for vessels, onshore facilities, deepwater ports, and other offshore facilities is strictly liable, jointly and severally, for removal costs and damages resulting from pollution incidents up to their limits to liability, with certain exceptions. To prevent depreciation of the liability limits due to inflation, OPA 90 mandates increases of the limits of liability to reflect significant increases in the CPI every three years. The limits of liability, however, have not been increased since 2009.

New Limits of Liability

The table below summarizes the previous and increased limits of liability. The new limits of liability will take effect on December 21, 2015. We note that single hull tankers were phased out per OPA 90 on January 1, 2015, so the liability limits published by the Coast Guard are likely a vestige of a rulemaking that began before the phase out date.

Source Category Previous Limit New Limit
Single hull tank vessel greater than 3,000 gross tons (not including edible oil tank vessels and oil spill response vessels) The greater of $3,200 per gross ton or $23,486,000 The greater of $3,500 per gross ton or $25,845,600
Tank vessel greater than 3,000 gross tons, other than single hull tank vessels (not including edible oil tank vessels and oil spill response vessels) The greater of $2,000 per gross ton or $17,088,000 The greater of $2,200 per gross ton or $18,796,800
Single hull tank vessel less than or equal to 3,000 gross tons (not including edible oil tank vessels and oil spill response vessels) The greater of $3,200 per gross ton or $6,408,000 The greater of $3,500 per gross ton or $7,048,800
Tank vessel less than or equal to 3,000 gross tons, other than single hull tank vessels (not including edible oil tank vessels and oil spill response vessels) The greater of $2,000 per gross ton or $4,272,000 The greater of $2,200 per gross ton or $4,699,200
All other vessels, including edible oil tank vessels and oil spill response vessels The greater of $1,000 per gross ton or $854,400 The greater of $1,100 per gross ton or $939,800
Any deepwater port, including for any component pipelines, other than a deepwater port with a liability limit established by regulation under OPA 90 $373,800,000 $633,850,000
Louisiana Offshore Oil Port ("LOOP") $87,606,000 $96,366,600
Onshore facilities, including, but not limited to, any motor vehicle, rolling stock, or onshore pipeline $350,000,000 $633,850,000

Streamlined Procedure for Future CPI Adjustments

The U.S. Coast Guard adopted a simplified procedure for future CPI adjustments that will ensure timely and efficient increases. The new procedure is based on the Federal Energy Regulatory Commission's fee adjustment procedures and calls for an evaluation every three years to determine whether the cumulative percent change in the Annual CPI for all urban consumers published by the U.S. Department of Labor has reached a significance threshold of three percent or greater. If less than three percent over the three-year period, a notice of no inflation adjustment will be published. Once a three-percent change is reached cumulatively since the last inflation adjustment, the limits of liability will be increased in accordance with current procedures.

Edible Oil Tank Vessel and Oil Spill Response Vessel Limits of Liability

Due to confusion about the applicability of tank vessel limits of liability to edible oil tank vessels and oil spill response vessels, the Final Rule alters the language of the regulations to clarify that these vessels are not treated as tank vessels for the purpose of vessel limits of liability as well as for evidence of financial responsibility requirements because these two vessel categories are as a matter of law not "tank vessels" under OPA 90.

Conclusion and Recommendations

Owners and operators of vessels, deepwater ports, and onshore facilities are advised to review the new limits of liability applicable to their operations and make insurance adjustments as necessary. The new limits of liability take effect on December 21, 2015. Vessel owners and operators are required to submit new evidence of financial responsibility by March 21, 2016.)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Jeanne Grasso
Dana S. Merkel
Similar Articles
Relevancy Powered by MondaqAI
Venable LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Venable LLP
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions