Water Quality Insurance Syndicate v. United States

225 F. Supp. 3d 41, 2016 U.S. Dist. LEXIS 177056, 2016 WL 7410549
CourtDistrict Court, District of Columbia
DecidedDecember 22, 2016
DocketCivil Action No. 2015-0789
StatusPublished
Cited by11 cases

This text of 225 F. Supp. 3d 41 (Water Quality Insurance Syndicate v. United States) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Water Quality Insurance Syndicate v. United States, 225 F. Supp. 3d 41, 2016 U.S. Dist. LEXIS 177056, 2016 WL 7410549 (D.D.C. 2016).

Opinion

MEMORANDUM OPINION

BERYL A. HOWELL, Chief Judge

The plaintiff Water Quality Insurance Syndicate (‘WQIS”) brings this action against the defendant United States of America challenging a decision by the National Pollution Funds Center (“NPFC”) of the United States Coast Guard (“USCG”), under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551, et seq. The challenged NPFC decision, issued on June 30, 2014, pursuant to the Oil Pollution Act of 1990 (“OPA”), 33 U.S.C. § 2701, et seq., denied plaintiffs claim for reimbursement of the costs for cleaning up an oil spill in Cook Inlet, Aaska, that resulted from a supply vessel, the MONARCH, colliding with an offshore oil and gas production platform. See Administrative Record (“AR”) US003494 (Letter from NPFC Claims Manager to plaintiff (June 30, 2014) (“First Denial Decision”)). 1 The NPFC’s denial decision turned on a finding that the oil discharge was proximately caused by the MONARCH Captain’s gross negligence, which is a statutory ground for denial of reimbursement. 2 Id.

*48 Pending before the Court are the parties’ cross-motions for summary judgment. See Pl.’s Mot. Summ. J. (“Pl.’s Mot.”), EOF No. 19; Def.’s Cross-Mot. Summ. J. & Opp’n PL’s Mot. Summ. J. Cross-Mot. (“Def.’s Opp’n”), ECF No. 20. For the reasons set out below, the plaintiffs motion is granted in part and denied in part, and the defendant’s cross-motion is denied. 3

I. BACKGROUND

Following review of the applicable statutory framework under the OPA, the relevant factual and procedural background is summarized below.

A. STATUTORY FRAMEWORK

The policy of the United States, as expressly articulated by the Congress, is “that there should be no discharges of oil ... into or upon the navigable waters of the United States” or other waters under federal jurisdiction. 33 U.S.C. § 1321(b)(1). In the wake of the massive spill in 1989 of eleven million gallons of oil from supertanker EXXON VALDEZ into the Prince William Sound in Alaska, Congress determined that then-existing laws provided inadequate remedies for addressing the damage caused by oil spills and therefore enacted, in 1990, the OPA. See Hornbeck Offshore Transp., LLC v. United States, 569 F.3d 506, 511 (D.C. Cir. 2009); Water Quality Ins. Syndicate v. United States, 522 F.Supp.2d 220, 226 (D.D.C. 2007); United States v. Bodenger, 2003 WL 22228517, at *2 (E.D. La. Sept. 25, 2003); Apex Oil Co. v. United States, 208 F.Supp.2d 642, 651-652 (E.D. La. 2002). The “OPA was designed ‘to streamline federal law so as to provide quick and efficient cleanup of oil spills, compensate victims of such spills, and internalize the costs of spills within the petroleum industry.’ ” Hornbeck Offshore Transp., 569 F.3d at 511 (quoting Rice v. Harken Expl. Co., 250 F.3d 264, 266 (5th Cir. 2001)).

To meet these goals, the OPA established a comprehensive system of strict liability for the removal of oil discharges, subject to liability caps and funding support paid for by the oil industry. Specifically, under the OPA, a “responsible party” for a vessel or a facility that discharges oil into the navigable waters of the United States is strictly “liable for the removal costs and damages ... that result from such incident.” 33 U.S.C. § 2702(a). The OPA defines a “responsible party” to include vessel owners, operators, and demise charterers. See 33 U.S.C. § 2701(32)(A).

At the same time, the OPA limits liability and removal costs based on vessel type and tonnage. 4 See 33 U.S.C. § 2704(a). Responsible parties for vessels “from which oil is discharged” are authorized to submit a claim with supporting documentation to the NPFC to recover costs beyond the prescribed limits by demonstrating that *49 the party “is entitled to a limitation of liability under section [33 U.S.C. § 2704].” 33 U.S.C. § 2708(a)(2); see United States v. Locke, 529 U.S. 89, 101-02, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000) (noting that OPA “imposes liability (for both removal costs and damages) on parties responsible for an oil spill” and “[o]ther provisions provide defenses to, and limitations on, this liability”).

The OPA created the Oil Spill Liability Trust Fund (“the Fund”) to pay such claims “for uncompensated removal costs determined by the President to be consistent with the National Contingency Plan [(“NCP”)] or uncompensated damages.” 33 U.S.C. § 2712(a)(4). The Fund is financed through a tax on the oil industry, see 33 U.S.C. § 2701(11); 26 U.S.C. § 9509, thereby “internalizing] the cost of oil spills within the petroleum industry,” Great Am. Ins. Co. v. United States, 55 F.Supp.3d 1053, 1064 (N.D. Ill. 2014). The NPFC is responsible for adjudicating claims to the Fund and determining whether the uncompensated removal costs are consistent with the NCP. A claimant “seeking recovery [from the fund] bears the burden of providing all evidence, information, and documentation deemed necessary by the Director[ ] [of the] NPFC, to support the claim.’” Smith Prop. Holdings, 4411 Conn. L.L.C. v. United States, 311 F.Supp.2d 69, 71 (D.D.C. 2004) (quoting 33 C.F.R. § 136.105) (alterations in original).

The limitation on liability for removal costs is subject to statutory exceptions that remove the liability cap and the concomitant authority for the responsible party to obtain reimbursement from the Fund. The liability limitation does not apply, for example, when the responsible party fails to report the incident as required or to provide all reasonable cooperation and assistance with removal activities. See 33 U.S.C.

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Bluebook (online)
225 F. Supp. 3d 41, 2016 U.S. Dist. LEXIS 177056, 2016 WL 7410549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/water-quality-insurance-syndicate-v-united-states-dcd-2016.