United States: Fifth Circuit: Responsible Party Has Right To Recover Contribution From Others At Fault In Oil Spills

Vincent Foley is a Partner for Holland & knight's New York office.

In a recent ruling dated June 9, 2017, In re: Complaint of Settoon Towing LLC, the U.S. Court of Appeals for the Fifth Circuit interpreted the statutory language of the Oil Pollution Act of 1990 (OPA) to grant the responsible party a statutory right of contribution against other entities who were partially at fault for discharge of oil, including amounts paid by the responsible party to claimants arising out of purely economic loss.

Background

The case involved a collision of two tug and barge flotillas on the lower Mississippi River. The two flotillas were heading downstream, and they had arranged for a passing situation. One flotilla was pushing two tank barges, while the other flotilla was pushing 21 loaded grain barges. As a result of the collision, one of the tank barges was punctured, causing the oil spill. The owner of the tank barge flotilla was designated the responsible party under OPA, and paid claims out to third parties damaged by the oil spill, including claims for purely economic loss (which are expressly permitted under Section 2702(b)(2)(E) of OPA.) The parties went to trial on liability for the collision, and the judge allocated 65 percent fault to the owner of the grain barge flotilla. The owner of the tank barge flotilla, and responsible party under OPA, then sought to recover contribution for the damages paid out to claimants.

Fifth Circuit's Decision

The Fifth Circuit interpreted Section 2709 "Contribution" of OPA to provide an independent statutory basis for the responsible party to recover contribution against "liable or potentially liable" third parties. It was argued that OPA Section 2709 did not create a separate right of contribution but instead only acknowledged the pre-existing right to recovery in contribution under the general maritime law. As such, it was argued that any recovery must be limited by the Robins Drydock rule, which precludes economic loss absent a physical injury (referred to by the Fifth Circuit as "a hoary bit of maritime law.")

Referring to the plain meaning of OPA's statutory language, as supported by its legislative history that recognized the "significance of contribution in the overall remedial scheme," the court found a separate statutory right was created by Section 2709. The court also held that the scope of contribution was controlled by the language and interpretation of OPA itself, and was not limited by pre-existing general maritime law of contribution.

Conclusion

This result is consistent with the overall scheme created by OPA, which expressly overruled the Robins Drydock limitation for damages claims resulting from an oil spill. Expect further developments in this area to define the scope and contours of OPA contribution claims, as well as whether federal courts will look to general maritime law, federal common law or state law to fill in the voids created by the very sparse language of Section 2709. 

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