Gatlin Oil Company, Incorporated, a North Carolina Corporation v. United States of America Department of Transportation

169 F.3d 207, 29 Envtl. L. Rep. (Envtl. Law Inst.) 20605, 48 ERC (BNA) 1208, 1999 U.S. App. LEXIS 3195, 1999 WL 104890
CourtCourt of Appeals for the Fourth Circuit
DecidedMarch 2, 1999
Docket97-2079
StatusPublished
Cited by12 cases

This text of 169 F.3d 207 (Gatlin Oil Company, Incorporated, a North Carolina Corporation v. United States of America Department of Transportation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gatlin Oil Company, Incorporated, a North Carolina Corporation v. United States of America Department of Transportation, 169 F.3d 207, 29 Envtl. L. Rep. (Envtl. Law Inst.) 20605, 48 ERC (BNA) 1208, 1999 U.S. App. LEXIS 3195, 1999 WL 104890 (4th Cir. 1999).

Opinions

Vacated and remanded by published opinion. Senior Judge BUTZNER wrote the majority opinion, in which Judge DIANA GRIBBON MOTZ joined. Judge NIEMEYER wrote an opinion concurring in part and dissenting in part.

OPINION

BUTZNER, Senior Circuit Judge:

The United States Coast Guard National Pollution Funds Center (NPFC or Fund Director) determined that some claims made by Gatlin Oil Company, Inc., for an oil spill were not compensable under the Oil Pollution Act (OPA), 33 U.S.C.A. § 2701 et seq. (West [209]*209Supp.1998). Gatlin Oil filed suit in the district court, which reversed the agency action, finding that the Fund Director had acted in an arbitrary and capricious manner and that Gatlin Oil was entitled to compensation for all its recovery costs and damages with interest. The district court remanded the case with directions for further fact finding and for reconsideration of Gatlin’s claim in accordance with the court’s opinion. The United States appealed. We vacate the district court’s judgment and remand the ease for further proceedings.

I

The district court’s jurisdiction rests on 28 U.S.C.A. § 1331 (federal question) and 33 U.S.C.A. § 2717(b) (Oil Pollution Act).

Appellate jurisdiction rests on 28 U.S.C.A. § 1291 which authorizes appeals of final decisions. Although a district court’s remand to an agency is not usually within the purview of section 1291, the Supreme Court has noted an exception that is applicable to this appeal. The Court explained that an order reversing an agency’s denial of benefits and remanding for proceedings consistent with the district court’s opinion was a final appealable order within the meaning of section 1291. Sullivan v. Finkelstein, 496 U.S. 617, 625, 110 S.Ct. 2658, 110 L.Ed.2d 563 (1990); accord Hanauer v. Reich, 82 F.3d 1304, 1306-07 (4th Cir.1996).

Congress enacted the Oil Pollution Act (OPA or the Act) in the wake of the Exxon Valdez oil spill to provide a prompt, federally-coordinated response to oil spills in navigable waters of the United States and to compensate innocent victims. The Coast Guard administers the Act. The owner of an onshore facility is the party responsible for removal costs of a spill that discharges oil into navigable waters, or poses a substantial threat to do so, and for damages. §§ 2701(32)(B), 2702. If, however, the owner of the facility proves that a third party caused the spill, the owner is afforded a complete defense. §§ 2702(d)(1)(A), 2703(a)(3). The Act also created the Oil Spill Liability Trust Fund (Fund) for the payment of uncompensated removal costs that are consistent with the National Contingency Plan (Plan) and for the payment of uncompensated damages. §§ 2712(a)(3),(4), 2713(b)(1)(B). A responsible party that has been exonerated may claim compensation from the Fund for removal costs and damages. § 2708(a)(1). It is the amount of compensation that is at issue in this case.

II

On March 13, 1994, near midnight, a vandal jammed open seven of Gatlin’s above-ground fuel storage tanks causing an oil spill estimated to be in the range of 20,000-30,000 gallons. Vapors from the discharged oil ignited a fire that burned for several hours before firemen were able to stop the flow of fuel and extinguish it. The fire destroyed a warehouse, the bulk plant, inventory, other property, loading dock, and several vehicles. The fire consumed a large part of the discharged fuel.

The local emergency response team initiated measures designed to prevent and mitigate the spread of discharged oil. State officials reported the spill to the National Response Center, and the Coast Guard dispatched the Marine Safety Response Team. The federal on-scene coordinator (FOSC or federal coordinator) conducted a complete survey of the facility. He estimated that there were approximately 5,500 gallons of oil in the surrounding ditches. He also reported that 10 gallons of oil had seeped through dikes in the ditches to a creek that flowed to the North Prong of the Bay River.

The federal coordinator directed Gatlin Oil to perform several tasks in order to prevent further discharge of oil into navigable waters. He instructed Gatlin Oil to remove oil from the storm ditches and surface waters, construct under-flow dams in the storm ditches, and remove oil and oil-contaminated gravel from beneath two of the tanks. Gatlin immediately began some of these clean-up efforts. Compliance with the directives of the federal coordinator was confirmed on July 29,1994.

Prior to his departure, the FOSC made arrangements with the North Carolina Department of Environmental Management (NCDEM or North Carolina authorities) to monitor the completion of clean-up efforts [210]*210initiated by the federal coordinator. The North Carolina authorities added additional directives regarding the cleanup of soil and ground water contamination to comply with North Carolina law.

Gatlin Oil was entitled to a complete defense because an unknown vandal caused the oil spill, and it was also entitled to present a claim to the Fund for uncompensated removal costs and damages. It contends that it is entitled to all damages resulting from the discharge of oil and the ensuing fire. Gatlin Oil claimed $850,000 plus interest. The Coast Guard contends that Gatlin Oil is entitled to only $6,959 from the Fund.

The Coast Guard determined that Gatlin’s damages were limited to those caused by the 10-gallon discharge into navigable waters, the 5,500 gallons of oil in the ditches, and the oil in the gravel under two tanks that threatened to discharge into navigable waters.

The district court reviewed the agency’s decision under the arbitrary and capricious standard of the Administrative Procedure Act. See 5 U.S.C.A. § 706(2)(A). Agreeing with Gatlin Oil’s position, the district court set aside the agency decision and remanded the ease “for further fact finding and a determination of appropriate compensation in accordance with [the district court’s] decision.” The government’s appeal followed.

Ill

Because, at this stage of the proceedings, this case turns on the proper interpretation of the Act, we review the district court’s judgment de novo. The two-step process explained in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), governs review of an agency’s statutory interpretation. First, we must determine “whether Congress has directly spoken to the precise question at issue.” Id. at 842, 104 S.Ct. 2778. When Congress’s intent is clear, both the court and the agency must apply the statute as Congress intended. If, however, “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. 2778.

The principal dispute between Gatlin and the Coast Guard pertains to the damages that are compensable within the meaning of section 2702. This controversy is fueled by an ambiguity that exists within the Act concerning the correct interpretation of the term “incident.”The Act defines “incident” as

any occurrence or

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169 F.3d 207, 29 Envtl. L. Rep. (Envtl. Law Inst.) 20605, 48 ERC (BNA) 1208, 1999 U.S. App. LEXIS 3195, 1999 WL 104890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gatlin-oil-company-incorporated-a-north-carolina-corporation-v-united-ca4-1999.