United States v. Water Quality Insurance Syndicate

CourtDistrict Court, M.D. Florida
DecidedAugust 31, 2023
Docket8:22-cv-02158
StatusUnknown

This text of United States v. Water Quality Insurance Syndicate (United States v. Water Quality Insurance Syndicate) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Water Quality Insurance Syndicate, (M.D. Fla. 2023).

Opinion

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

IN ADMIRALTY

UNITED STATES OF AMERICA,

Plaintiff,

v.

WATER QUALITY INSURANCE Case No. 8:22-cv-2158-TPB-CPT SYNDICATE,

Defendant/Third-Party Plaintiff,

THE UNITED KINGDOM MUTUAL STEAM SHIP ASSURANCE

ASSOCIATION LIMITED,

Third-Party Defendant. ______________________________________/ ORDER GRANTING IN PART AND DENYING IN PART “THIRD-PARTY DEFENDANT’S MOTION TO DISMISS THE COMPLAINT, COMPEL ARBITRATION OR, IN THE ALTERNATIVE, BIFURCATE THE THIRD-PARTY CLAIMS”

This cause comes before the Court on “Third-Party Defendant’s Motion to Dismiss the Complaint, Compel Arbitration or, in the Alternative, Bifurcate the Third-Party Claims.” (Doc. 29). Defendant/Third-Party Plaintiff Water Quality Insurance Syndicate (“WQIS”) responded in opposition. (Doc. 33). After reviewing the motion, responses, relevant authorities, court file, and record, the Court finds as follows: This lawsuit involves a claim under the Oil Pollution Act of 1990 (“OPA”) brought by the United States of America against WQIS as guarantor of Bouchard Transportation Co., Inc., the operator of Barge 285.1 (Doc. 1). WQIS is an unincorporated association of marine insurers providing insurance of pollution risks that agreed to provide a financial responsibility guaranty for Bouchard as the owner of Barge 285. (Doc. 8, Ex. A). The OPA makes responsible parties and their guarantors liable for oil removal costs from vessels that pose a substantial threat of

discharge of oil. 33 U.S.C. §§ 2702(a), 2716(f). To operate a barge to transport oil in United States’ waters, Bouchard was required to provide evidence of financial responsibility to meet its potential liabilities under OPA. See 33 U.S.C. § 2716; 33 C.F.R. Part 138. The United Kingdom Mutual Steam Ship Assurance Association Limited (“UK Club”) is a mutual protection and indemnity association organized and

headquartered in the United Kingdom, that provides insurance coverage to shipowners with respect to certain maritime risks. The UK Club provides coverage to its members for oil pollution liabilities and, in this instance, provided marine protection and indemnity (“P&I”) insurance coverage to Bouchard and Barge 285. The UK Club provides its P&I insurance coverage to its members, including Bouchard, pursuant to a “Certificate of Entry.” (Doc. 29-2, Declaration of Thomas M. Rittweger (“Rittweger Decl.), Ex. 1). The UK Club’s Certificate of Entry

1 The OPA defines a “guarantor” as “any person, other than the responsible party, who provides evidence of financial responsibility for a responsible party under this Act.” 33 U.S.C. § 2701(13). coverage, and outlines the scope of P&I insurance coverage, which otherwise is subject to the UK Club’s Rules – a corresponding set of general terms and conditions that apply to all members. (Id., Ex. 2). Coverage under the UK Club’s Rules is subject to several defenses. During the period when WQIS acted as guarantor and the UK Club insured Barge 285, the United States Coast Guard Captain of the Port in Tampa, Florida declared Barge 285 a potential hazard, imposed several conditions before Barge 285

would be permitted to move, and barred Barge 285 from operating or carrying cargo or petroleum products due to several expired or lapsed certifications. After several denied requests to move, Coast Guard personnel visited Barge 285 over the course of two days, and, after inspection, the Coast Guard again denied the request to move. The Coast Guard then issued: (1) a Notice of Federal Interest to Bouchard, stating that a pollution incident occurred or threatened to occur in East Bay,

Tampa, Florida, and (2) Administrative Order 003-19, advising Bouchard that the Coast Guard determined that Barge 285 presented a substantial threat of discharge of crude oil, diesel, fuel, and hydrocarbons. Although Bouchard complied with some of the requirements of the order, it failed to comply with all the requirements and did not seek an extension. Given Bouchard’s unsatisfactory efforts to abate or mitigate the pollution threat, the Coast Guard issued a Notice of Federal Assumption and assumed

responsibility under the Federal Water Pollution Control Act on June 16, 2019, for the removal of more than 147,960 gallons of petroleum products from Barge 285. because a substantial threat of discharge into an environmentally sensitive area of Tampa Bay, Florida existed. Per the Government, the oil removal actions took approximately three months to complete at a cost of $6,202,516.27, and, as of the filing of the complaint, Bouchard had not reimbursed the Coast Guard for such costs. On September 28, 2020, Bouchard filed for bankruptcy under Chapter 11, which was converted to a Chapter 7 proceeding, with liquidation of Bouchard’s

assets occurring thereafter. The Coast Guard filed a proof of claim in Bouchard’s bankruptcy proceeding, but the claim has not been paid. Consequently, on September 16, 2022, the Government filed this lawsuit under OPA against WQIS, as the guarantor of Bouchard’s liabilities, seeking reimbursement for the oil pollution removal costs already paid by the federal Oil Spill Liability Trust Fund in the amount of $6,202,516.27.

WQIS subsequently filed its answer, denying liability and setting forth claims in a third-party complaint against the UK Club. (Doc. 8). WQIS’s third- party complaint asserts: (1) a claim for a declaratory judgment for indemnity for any amounts WQIS may be held liable to pay the Government, and (2) a claim for unjust enrichment. WQIS’s third-party complaint also tenders the Government’s claims to the UK Club for defense and indemnity pursuant to Rules 14(c)(1) and (2), Federal Rules of Civil Procedure.

In response, the UK Club filed a motion to dismiss any claims set forth against it in the Government’s complaint, to stay consideration of the third-party England, or to bifurcate the third-party claims and hold them in abeyance until WQIS’s liability has been determined as to the Government’s claims. (Doc. 29). WQIS responded in opposition.2 (Doc. 33). The UK Club then filed a reply. (Doc. 38). After WQIS and the UK Club fully briefed the issues, the Court held oral argument. Discussion In its motion, the UK Club argues that WQIS stands entirely in the shoes of

Bouchard in suing the UK Club and claiming the benefits of its P&I insurance coverage. Accordingly, the UK Club asserts that pursuant to Rule 40 of the UK Club’s rules, it is entitled to demand arbitration of WQIS’s claims, and any policy defenses the UK Club has to those claims, in England. If the Court declines to compel arbitration, the UK Club requests that the Court bifurcate WQIS’s claims and hold them in abeyance until the Court determines WQIS’s liability to the

Government. To the extent Rule 14(c)(1) requires the UK Club to also defend the claims made by the Government in the original complaint, the UK Club alleges the complaint should be dismissed because the Government has no direct right of recovery against the UK Club. Motion to Compel Arbitration The primary disagreement between the parties lies in whether to compel arbitration in England. According to the UK Club, both the Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Francisco v. Stolt Achievement MT
293 F.3d 270 (Fifth Circuit, 2002)
Bridas S.A.P.I.C. v. Government of Turkmenistan
345 F.3d 347 (Fifth Circuit, 2003)
Lambert v. Austin Ind.
544 F.3d 1192 (Eleventh Circuit, 2008)
Bell Atlantic Corp. v. Twombly
550 U.S. 544 (Supreme Court, 2007)
Ashcroft v. Iqbal
556 U.S. 662 (Supreme Court, 2009)
Arthur Andersen LLP v. Carlisle
556 U.S. 624 (Supreme Court, 2009)
Intergen N v. v. Grina
344 F.3d 134 (First Circuit, 2003)
Lindo v. NCL (Bahamas), Ltd.
652 F.3d 1257 (Eleventh Circuit, 2011)
Milton Escobal v. Celebration Cruise Operator, Inc.
482 F. App'x 475 (Eleventh Circuit, 2012)
Enora Perez v. Wdlls Fargo N.A.
774 F.3d 1329 (Eleventh Circuit, 2014)
Katz v. Cellco Partnership
794 F.3d 341 (Second Circuit, 2015)
Authenment v. Ingram Barge Co.
878 F. Supp. 2d 672 (E.D. Louisiana, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
United States v. Water Quality Insurance Syndicate, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-water-quality-insurance-syndicate-flmd-2023.