National Shipping Co v. Moran Trade Corp ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NATIONAL SHIPPING COMPANY OF
SAUDI ARABIA,
Plaintiff-Appellant,
v.
MORAN TRADE CORPORATION OF
No. 96-1741
DELAWARE, in personam; MORAN
TOWING OF VIRGINIA, INCORPORATED,
a division of Moran Mid-Atlantic
Corporation,
Defendants-Appellees.
NATIONAL SHIPPING COMPANY OF
SAUDI ARABIA,
Plaintiff-Appellee,
v.
MORAN TRADE CORPORATION OF
No. 96-1824
DELAWARE, in personam; MORAN
TOWING OF VIRGINIA, INCORPORATED,
a division of Moran Mid-Atlantic
Corporation,
Defendants-Appellants.
Appeals from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Rebecca B. Smith, District Judge; J. Calvitt Clarke, Jr.,
Senior District Judge; Tommy E. Miller, Magistrate Judge.
(CA-95-258-2)
Argued: June 3, 1997
Decided: September 9, 1997
Before HALL and MICHAEL, Circuit Judges, and
TILLEY, United States District Judge for the
Middle District of North Carolina, sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: John R. Crumpler, Jr., KAUFMAN & CANOLES, P.C.,
Norfolk, Virginia, for Appellant. Mark Travis Coberly, VANDE-
VENTER, BLACK, MEREDITH & MARTIN, L.L.P., Norfolk, Vir-
ginia, for Appellees. ON BRIEF: Megan A. Burns, KAUFMAN &
CANOLES, P.C., Norfolk, Virginia, for Appellant. Patrick A. Gen-
zler, VANDEVENTER, BLACK, MEREDITH & MARTIN, L.L.P.,
Norfolk, Virginia, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Plaintiff National Shipping Co. of Saudi Arabia (NSCSA) brought
an action against defendants Moran Trade Corporation of Delaware,
Moran Towing of Virginia, Moran Mid-Atlantic Corporation, and the
M/V HARRIET MORAN (collectively "Moran") in an effort to
recoup its expenses in the cleanup of an oil spill on the Elizabeth
River outside Norfolk, Virginia. The district court determined that
Moran was negligent and that this negligence was the sole cause of
the spill. The court therefore found Moran liable for the costs of the
cleanup under the Oil Pollution Act of 1990 (OPA), 33 U.S.C. § 2701et seq. However, the court limited Moran's liability under OPA to
2
$500,000 (roughly half the cost of the cleanup). Finally, the court held
that NSCSA could not recoup the excess costs through exceptions to
the liability cap or through state law claims. NSCSA appeals from this
limitation on Moran's liability, and Moran cross-appeals from the
court's determination that it was negligent. Finding no error, we
affirm.
I.
This case involves an accident between a tugboat and a cargo ves-
sel. The cargo vessel SAUDI DIRIYAH, owned by NSCSA, was
docked at Norfolk International Terminals on the Elizabeth River. On
the night of December 1, 1993, the vessel was to undock and move
upstream to different docks. NSCSA contracted with Moran to pro-
vide two tugboats to assist in the move; it also contracted with dock-
ing pilot John Morey to oversee the move.
After breasting away from the pier, the SAUDI DIRIYAH made a
series of turns to maneuver up the river. To make these turns, the ves-
sel used bow and stern thrusters that were mounted on the side. At
some point during the turn, William Lusk, the captain of the tugboat
HARRIET MORAN, brought the tug in on the SAUDI DIRIYAH's
port quarter to assist with the turn into the channel. However, when
the boats made contact, one of the tug's quarter bitts struck the
SAUDI DIRIYAH's hull and opened a gash in the vessel's fuel oil
tank. Oil began spilling into the river and continued to flow for the
next two hours as the vessel moved upstream and docked.
Approximately 9,000 gallons of oil leaked into the river from the
spill. The cleanup was directed by the United States Coast Guard,
which designated NSCSA as the "responsible party" under the OPA.
NSCSA thus arranged and paid for all of the cleanup. NSCSA paid
roughly $870,000 to those engaged to remove the oil, and it also paid
$106,806.12 to settle claims of those whose property was damaged by
the spill. In addition, the Coast Guard and the United States Navy
incurred about $300,000 in costs, which these agencies are seeking to
recover from NSCSA.
NSCSA brought an action in the United States District Court for
the Eastern District of Virginia, claiming that Moran's negligence was
3
the cause of the spill. NSCSA brought claims under OPA, the Vir-
ginia Water Control Law, and state common law. The Water Control
Law claim was dismissed before trial. After a bench trial the district
court found that Moran was negligent and that this negligence was the
sole cause of the accident. The court therefore granted relief under
OPA, but it determined that OPA § 1004(a)(2) capped Moran's dam-
ages at $500,000. The court also concluded that none of the excep-
tions to this cap applied and that NSCSA could not circumvent the
cap through its state law claims. However, under general maritime
law the court awarded NSCSA $3,250 for the lost fuel and $16,050
for the damage to the hull. The court also awarded prejudgment inter-
est. See National Shipping Co. of Saudi Arabia (NSCSA) v. Moran
Mid-Atlantic Corp., 924 F. Supp. 1436 (E.D. Va. 1996).
NSCSA appeals from the district court's denial of its claims for
relief under state law and from the finding that none of the exceptions
to OPA's damages cap applies. Moran appeals from the district
court's conclusion that Moran's negligence caused the spill.
II.
We turn first to Moran's cross-appeal. Moran contends that the dis-
trict court erred in holding it liable under OPA§ 1002 for the cleanup
of the oil spill. Section 1002(a) establishes that the "responsible party"
will be liable for the removal costs and damages of a spill. See 33
U.S.C. § 2702(a). Under § 1001(32)(A) the responsible party is
defined as the owner or operator of the vessel which actually dis-
charges the oil. Since NSCSA is the "responsible party" with regard
to the SAUDI DIRIYAH, NSCSA was liable for the cleanup. Under
§ 1002(d)(1), however, the responsible party can reassign liability to
a third party if the responsible party "establishes that [the] discharge
. . . and the resulting removal costs and damages were caused solely
by an act or omission of one or more third parties." 33 U.S.C.
§ 2702(d)(1). The district court found that Lusk, who as captain of the
tug was serving as Moran's agent, acted negligently during the
maneuver; the court further found that this negligence was the sole
cause of the accident. Therefore, the court concluded that Moran was
liable for the costs of the cleanup under § 1002(d)(1). We review the
district court's factual findings only for clear error. See Waters v.
Gaston County, 57 F.3d 422, 425 (4th Cir. 1995).
4
Moran contends that the accident was caused not by its negligence
but rather by the negligence of Morey, the docking pilot hired by
NSCSA. According to Moran, Morey failed to alert Lusk that the
SAUDI DIRIYAH was changing the direction of its turn, and this
failure to alert misdirected Lusk, causing him to approach the SAUDI
DIRIYAH at the wrong spot. The district court, however, found that
Lusk had failed to exercise proper control over his vessel during the
course of the maneuver. See NSCSA, 924 F. Supp. at 1452. Having
reviewed the evidence and the district court's findings, we do not
believe that the district court clearly erred in finding that Moran was
negligent.
III.
We next examine NSCSA's contentions that the district court erred
in limiting Moran's liability under OPA's damage cap. Section
1002(d)(2)(A) of OPA states that "[i]f the act or omission of a third
party that causes an incident occurs in connection with a vessel or
facility owned or operated by the third party, the liability of the third
party shall be subject to the limits provided in section 2704 of the title
as applied with respect to the vessel or facility." 33 U.S.C.
§ 2702(d)(2)(A). Section 1004(a)(2) puts the damages cap for any
vessel other than a tank vessel at "$600 per gross ton or $500,000,
whichever is greater." 33 U.S.C. § 2704(a)(2). Since the tugboat
weighed only 252 gross tons, the district court limited Moran's liabil-
ity under OPA to $500,000. See NSCSA, 924 F. Supp. at 1447.
NSCSA attempts to get around this cap in two ways: it argues (a) that
OPA's exceptions to the cap apply and (b) that it can recover the
excess amount through state law claims under the Virginia Water
Control Law and state common law. We take these arguments in turn.
A.
A party's liability may exceed the damages cap in OPA § 1004(a)
if it falls into one of the exceptions in § 1004(c). The cap does not
apply if the party committed "gross negligence or willful misconduct"
or "violat[ed] . . . an applicable Federal Safety, construction, or oper-
ating regulation." 33 U.S.C. § 2704(c)(1). NSCSA contends that
Moran, through its agent Lusk, violated one of the applicable federal
5
safety regulations, namely, the Inland Navigational Rule. That rule
provides:
Every vessel shall at all times maintain a proper look-out by
sight and hearing as well as by all available means appropri-
ate in the prevailing circumstances and conditions so as to
make a full appraisal of the situation and of the risk of colli-
sion.
33 U.S.C. § 2005. On the night of the accident, Lusk was acting as
his own lookout. NSCSA contends that the absence of an additional
designated lookout violated § 2005. Whether a special lookout was
necessary is a question of fact which we review for clear error. See
C.G. Willis, Inc. v. The Spica, 6 F.3d 193, 196, 197-98 (4th Cir.
1993).
The district court made the following findings of fact in determin-
ing the lack of need for a separate lookout:
On the night of December 1, 1993, the sky was clear and
calm. . . . [Captain Lusk] testified that he had an almost
complete view of his surroundings through the windows of
his wheelhouse. The HARRIET MORAN was laying a short
distance off the port quarter of M/V SAUDI DIRIYAH.
Captain Lusk testified that he had the best possible view of
the ship from the wheelhouse. It does not appear that a sepa-
rate lookout would have been of much assistance to the Cap-
tain.
NSCSA, 924 F. Supp. at 1451. These findings of fact are not clearly
erroneous.1
_________________________________________________________________
1 NSCSA argues that Lusk admitted the need for a lookout during his
deposition. When asked "Did you have a lookout posted?", Lusk
responded that "[t]he engineer at the time of the undocking would have
been my lookout." J.A. 115. During his trial testimony, however, Lusk
explained that the engineer "would have been[the lookout], if I inquired
of him, requested him to be a lookout." J.A. 90. We do not interpret
Lusk's deposition testimony as an admission of the need for a separate
lookout.
6
B.
NSCSA also claims that it can avoid OPA's damages cap by bring-
ing claims under the Virginia Water Control Act and state common
law. The Water Control Act provides that "[a]ny person discharging
or causing or permitting a discharge of oil into or upon state water . . .
shall be liable to [a]ny person for injury or damage to person or prop-
erty, real or personal, loss of income, loss of the means of producing
income, or loss of the use of the damaged property for recreational,
commercial, industrial, agricultural or other reasonable uses, cause by
such discharge." Va. Code. Ann. § 62.1-44.34:18(C)(4). NSCSA
claims that this section enables it to recover its response costs under
OPA as property damage or economic losses. NSCSA also seeks to
bring Virginia common law indemnity and subrogation claims in
order to collect its OPA expenses. In essence, NSCSA wants to use
state law to collect the costs that it incurred as the OPA "responsible
party" in excess of the $500,000 liability cap.
We conclude, however, that OPA prevents NSCSA from using
state law to collect damages under OPA that exceed OPA's liability
cap. OPA § 1004(a) specifically provides:
Except as otherwise provided in this section, the total of the
liability of a responsible party under section 2702 of this
title and any removal costs incurred by, or on behalf of, the
responsible party, with respect to each incident shall not
exceed [the limitations set forth therein].
33 U.S.C. § 2704(a) (emphasis added). NSCSA is liable for the costs
of the spill solely under OPA § 1002, and Moran is liable for those
costs solely under § 1002. Thus, the total of Moran's exposure under
OPA cannot exceed $500,000.2 The only exceptions to this cap are
those set forth in § 1004 itself.
_________________________________________________________________
NSCSA also contends that even if Lusk could have served as an ade-
quate lookout on his own, he failed to do so on the night of the accident.
However, NSCSA fails to present any evidence that would warrant such
a conclusion.
2 As we noted above, under § 1002(d)(2) Moran is treated as a "respon-
sible party" for purpose of the liability cap.
7
NSCSA claims that OPA does not limit NSCSA's ability to collect
its excess liability under OPA through state law claims. It cites OPA
§ 1018(a)(2), which states that "[n]othing in this chapter . . . shall . . .
affect, or be construed or interpreted to affect or modify in any way
the obligations or liabilities of any person under .. . State law, includ-
ing common law." 33 U.S.C. § 2718(a)(2). NSCSA argues that this
section allows it to bring state law claims to recoup its expenses. We
disagree. NSCSA reads § 1018(a)(2) too broadly; that section only
protects the rights of parties to bring additional claims based on liabil-
ity that accrues under state law. If NSCSA had itself been damaged
by the oil, or if it had been successfully sued by others under state law
for damages relating to the spill, then the OPA liability restrictions
would not apply.3 And in this case, NSCSA was not precluded by
OPA from bringing a general maritime claim for the loss of fuel and
the damage to the SAUDI DIRIYAH's hull. As the district court
pointed out, however, "[s]tate law was never imposed to force
NSCSA to cleanup the spill or to compensate its victims." NSCSA,
924 F. Supp. at 1449. Instead, "NSCSA's liability derived exclusively
from OPA." Id.
If a responsible party could recoup its OPA liability costs through
state law claims as well as through OPA, the cap imposed by OPA
_________________________________________________________________
3 The district court provided an example of such a case:
Consider, for example, a case where an oil spill causes one mil-
lion dollars of damage, but the responsible party's liability under
OPA is limited to $500,000. If the spill occurred in Virginia, the
responsible party may have to pay for the full cost of the spill
despite the liability limitation contained in OPA because a per-
son's liability under Virginia's State Water Control Law may be
higher than its liability under OPA. . . . If the spill was caused
by the negligence of a third party, as it was in this case, it is rea-
sonable to assume that the responsible party may: (1) sue the
third party for contribution under section 2709 of OPA; and (2)
be subrogated to the rights of the state and of other claimants
under the State Water Control Law. In this way, the responsible
party, whose ultimate liability was not restrained by OPA, could
recover the full cost of the spill from the third party despite any
liability limitation the third party might enjoy under OPA.
NSCSA, 924 F. Supp. at 1449.
8
§ 1004(a) would be rendered meaningless. Congress clearly intended
for the cap to apply in situations like this one, since it established that
"the liability of the third party shall be subject to the limits provided
in section 2704 of the title." 33 U.S.C. § 2702(d)(2)(A). Under OPA's
limitations on liability, smaller vessels are subject to lesser liability.
Even if we disagreed with this policy judgement, we are constrained
by the text of the statute.
Because NSCSA seeks to recover costs imposed solely because of
its liability under OPA, "the total of the liability [imposed on Moran]
under section 2702 of this title and any removal costs incurred by, or
on behalf of, the responsible party, with respect to each incident shall
not exceed" OPA limits -- for Moran, $500,000. 4
IV.
Based on the foregoing reasons, we affirm the judgment of the dis-
trict court.
AFFIRMED
_________________________________________________________________
4 Because we affirm the limitation of Moran's OPA liabilities to
$500,000, we need not discuss NSCSA's argument that the district court
should have included the expenses incurred by Turnaboat Services Ltd.
as part of NSCSA's expenses under OPA.
9