Responsible spiller can get contribution for economic damages from 3rd party under the Oil Pollution Act

by Matthew H. Ammerman on June 25th, 2017

On February 22, 2014, the M/V HANNAH C. SETTOON was pushing two oil tank barges downstream on the Mississippi River near Convent, Lousiana. The HANNAH called ahead to Marquette’s M/V LINDSAY ANN ERICKSON, which was pushing 21 loaded grain barges, and worked out an arrangement to pass the LINDSAY on her stern while she held steady against the east bank.

While the HANNAH was pushing her two tank barges downstream past the LINDSAY, the HANNAH seemingly released LINDSAY from the arrangement. The LINDSAY reversed and collided with the HANNAH’s tow. Seven hundred and fifty barrels of crude oil from a tank barge spilled into the river.

Settoon Towing owned the HANNAH and was strictly liable for cleanup costs as the “Responsible Party” under the Oil Pollution Act (OPA), 33 U.S.C.S. § 2701, et seq. Settoon filed a vessel owner’s Limitation of Liability action in the Eastern District of Louisiana, 46 U.S.C. §§ 30501-30512, and Marquette filed a claim. Settoon filed a counterclaim against Marquette seeking contribution to the extent of Marquette’s fault. The district court determined both parties were at fault and apportioned 65% of the fault for the collision to the owner of the LINDSAY, Marquette, and 35% to the owner of the HANNAH, Settoon.

The district court held that Settoon had a statutory claim for contribution under OPA against Marquette. Consequently, the general maritime law’s prohibition against purely economic damages did not limit Settoon’s recovery. Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019, 1022 (5th Cir. 1985) (en banc). Marquette appealed.

The 5th Circuit based its decision on statutory construction. After the Responsible Party pays compensation, it may seek partial or complete repayment under OPA from others by means of contribution or subrogation. 33 U.S.C.S. § 2709 (contribution); § 2715 (subrogation). Section 2709 specifically provides that a contribution claim may be brought “under this Act….” Therefore, a statutory claim for contribution exists under OPA, unencumbered by the general maritime law’s preclusion against economic damages without physical injury from the TESTBANK case.

Marquette argued that allowing contribution would turn on its head Congress’s intent in OPA to hold the vessel owner liable unless a third party was “solely liable.” The court disagreed, reasoning that is a defense to overall OPA liability. There would be no purpose for OPA to contain § 2709 devoted to contribution if it was limited to recovery only from a "solely liable" third party.

The 5th Circuit brushed back Marquette’s reliance on a case from the Northern District of Illinois that did not delve into the details of OPA’s contribution provision, and the panel disagreed with that court’s reasoning in any event. A second district court case from the Eastern District of Virginia presented by Marquette was also rejected because the Responsible Party in that case was forced to rely on general maritime law because it was precluded from OPA-based recovery due to a contract with the alleged third-party tortfeasor.

As vessel owner and Responsible Party, Settoon must immediately turn to the cleanup without concerning itself with ultimate financial responsibility. But once that is done, the 5th Circuit holds that a Responsible Party may through contribution or subrogation seek payment from all others who were partially or completely at fault. And a claim for contribution under OPA’s contribution provision may be brought under the statute, independent from general maritime law and its prohibition against recovery of purely economic damages.
 
Settoon may recover from Marquette 65% of damages it paid to claimants, including those arising out of purely economic losses.

Settoon Towing, L.L.C. v. Marquette Transp. Co., L.L.C. (in re Complaint of Settoon Towing, L.L.C.), No. 16-30459, 2017 U.S. App. LEXIS 10388 (5th Cir. 2017).

 



Posted in not categorized    Tagged with Oil Pollution Act, OPA, Contribution, Testbank

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