United States of America v. Nature's Way Marine, LLC, Environmental Pollution Group, LLC, Fifth Circuit No. 17-60698, decided September 21, 2018
In January 2013, a tugboat was moving two oil barges down the Mississippi River. The barges alone lacked self-propulsion or navigation capabilities and therefore relied on the control provided by the tugboat. The barges collided with a bridge, resulting in the discharge over 7,000 gallons of oil into the Mississippi River from one of the barges. The Coast Guard designated the tug owner and insurer as "responsible parties" under the Oil Pollution Act of 1990 and they spent over $2.99 million on the cleanup. The OPA limits potential liability of a "responsible party" based on the tonnage of the vessels it was "operating" at the time of the incident.
The owners of the tug and barges settled the lawsuit between them and the tug owner then submitted a claim to the National Pollution Funds Center (NPFC) seeking reimbursement of over $2.13 million it spent on cleanup, along with an additional $792,000 spent by various government entities, on grounds that its liability should be limited by the tonnage of the tug, rather than the tonnage of the oil-discharging barge.
The NPFC denied claims for reimbursement on the basis that the tug owner was an "operator" of the oil-discharging barge. The United States then filed suit (the instant litigation) seeking recovery of more than $792,000 spent by government agencies in clean-up. The tug owner counterclaimed that the NPFC violated the Administrative Procedure Act (APA) by finding it was an "operator" of the barge. The district court found for the government on summary judgment, concluding that a "common sense" understanding of the term "operator" as used in the OPA meant that the tug owner of a tugboat moving a barge, was an "operator" of the barge.
The tug owner appealed. The Fifth Circuit initially dismissed the argument that it must give special deference to the NPFC's administrative interpretation, as announced in Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 37 (1984). It was reviewing the underlying ruling de novo, and therefore such analysis was not necessary.
The Fifth Circuit then examined the text of the statute, observing that the OPA states each "responsible party" shall be liable for removal costs and damages. Section 2701(32)(A) defines a "responsible party" as "any person owning, operating, or demise chartering the vessel." The statute does not define "operating" but defining "operating" in the context of an oil discharge was not new territory for the courts. Citing to U.S. Supreme Court cases involving CERCLA, the Fifth Circuit found that "operator" of a vessel referred to someone who directs, manages, or conducts the affairs of the vessel, and that would necessarily include the act of piloting or moving the vessel. Since the tug owner had exclusive navigational control over the barge, its operation caused the barge to collide with the bridge.
The tug owner argued in contrast that "operator" meant something more than mechanical activation of pumps and values and must contemplate the exercise of direction over the facility's activities. Since the tug owner's operation of the barge was more akin to the mere activation of pumps, it could not have been "operating" the barge itself; it was moving the barge according to the barge owners directions. In support, they pointed to a court order in another case where the vice-president with only general management responsibilities over a facility was not found to be an "operator' of the facility under CERCLA because there was no showing that he actively managed or directed any of the facility's environmental operations.
The Fifth Circuit disagreed and upheld the District Court's ruling on summary judgment that the tug owner was an "operator" of the barge. The Fifth Circuit found, giving "operator" its ordinary meaning, navigation of a barge through a river required a degree of discretion and judgment significantly different than that required for "mere mechanical activation of pumps" and the tug therefore was operating the barges when they collided with the bridge.
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.