United States v. American Commercial Lines ( 2014 )

Case: 13-30358 Document: 00512700643 Page: 1 Date Filed: 07/16/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 13-30358 July 16, 2014
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff-Counter Defendant –
Appellee
v.
AMERICAN COMMERCIAL LINES, L.L.C.,
Defendant-Counter Claimant –
Third Party Plaintiff – Appellant
v.
ENVIRONMENTAL SAFETY & HEALTH CONSULTING SERVICES,
INCORPORATED; UNITED STATES ENVIRONMENTAL SERVICES,
L.L.C.,
Third Party Defendants –
Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
Before JOLLY, GARZA, and HIGGINSON, Circuit Judges.
HIGGINSON, Circuit Judge:
Following an oil spill, responsible party American Commercial Lines
(“ACL”) contracted with Environmental Safety & Health Consulting Services
Inc. (“ES&H”) and United States Environmental Services, L.L.C. (“USES”) to
provide cleanup services. After ACL failed to pay the full outstanding amounts
owed to ES&H and USES within the 90-day period mandated by the Oil
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No. 13-30358
Pollution Act of 1990 (“OPA”), the United States paid the balance out of the Oil
Spill Liability Trust Fund (the “Fund”) and filed suit against ACL to recover
its payment. ACL sought to join ES&H and USES as third party defendants,
or alternatively hold ES&H and USES directly liable to ACL to the extent ACL
was found liable to the United States. The district court joined both parties but
dismissed ACL’s claims against ES&H and USES as displaced by OPA. 1 We
AFFIRM.
FACTUAL BACKGROUND
This case involves an oil spill in the Mississippi River near New Orleans,
Louisiana. On July 23, 2008, the M/V TINTOMARA, an ocean-going tanker,
collided with DM 932, an unmanned barge carrying slightly less than 10,000
barrels of fuel oil, which was towed by the tug M/V MEL OLIVER. The collision
substantially damaged the barge, and a large quantity of oil spilled into the
river. ACL owned the tug and barge. D.R.D. Towing, L.L.C. (“DRD”) provided
the crew for the tug towing the barge under a bareboat charter between ACL
and DRD. Gabarick v. Laurin Maritime (America) Inc. v. D.R.D. Towing
Company, L.L.C., 2014 WL 2118621, at *1 (5th Cir. May 21, 2014).
Under the Clean Water Act (“CWA”), also known as the Federal Water
Pollution Control Act (“FWPCA”), 33 U.S.C. §§ 1321, as amended by OPA, the
Coast Guard has primary overall responsibility for directing oil spill cleanup
1 The district court used the term “preemption” in its “Order and Reasons.”
“Preemption” and “displacement” are often used interchangeably. See, e.g., Conner v. Aerovox,
Inc., 730 F.2d 835, 841 (1st Cir. 1984) (using “preempt” and “displace” interchangeably in
concluding that the Federal Water Pollution Control Act displaced federal maritime law).
Technically, however, preemption refers to whether federal statutory law supersedes state
law, while “displacement” applies when, as here, a federal statute governs a question
previously governed by federal common law. Although in the preemption scenario, we assume
that “the historic police powers of the States were not to be superseded by [federal law] unless
that was the clear and manifest purpose of Congress,” displacement analysis assumes that
“it is for Congress, not the federal courts, to articulate the appropriate standards to be applied
as a matter of federal law.” City of Milwaukee v. Illinois, 451 U.S. 304, 316-17 (1981).
Accordingly, we use the term “displacement” throughout this opinion.
2
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in the coastal zone. See 33 U.S.C. § 1321(d)(2)(C); 40 C.F.R. § 300.145.
However, under OPA, the Coast Guard identifies “responsible part[ies]” who
must pay for oil spill cleanup in the first instance, 2 typically “any person
owning, operating, or demise chartering the vessel.” 33 U.S.C. § 2701(32).
Responsible parties may then contract with spill responders to execute the oil
spill cleanup.
The Coast Guard’s National Pollution Funds Center (“NPFC”)
administers the Fund. The Fund is authorized both (1) to pay outstanding
cleanup costs and damages when a responsible party can limit its liability or
establish a complete defense (or when no responsible party is ever identified),
see id. § 2712(a)(4); and (2) to guarantee that particular OPA claimants,
including spill responders, are paid quickly, see id. § 2713. Claimants must
first present their claims to the responsible party, see id. § 2713(a), but if the
responsible party has not paid the claim within 90 days, “the claimant may
elect to commence an action in court against the responsible party . . . or to
present the claim to the Fund.” Id. § 2713(c)(2); see also 33 C.F.R. §
136.103(c)(2). The Fund will reimburse only those removal costs that are
necessary and reasonable, and that adhere to the relevant statutory criteria
for Fund payments. See 33 C.F.R. §§ 136.105, 136.201, 136.203, 136.205.
When the Fund has made payments to cover the immediate costs of oil spill
cleanup, it can recoup those payments from other entities, including the
responsible party. “[P]ayment of any claim or obligation by the Fund” results
2 Responsible parties are strictly liable for cleanup costs and damages and first in line
to pay any claims for removal costs or damages that may arise under OPA. See 33 U.S.C. §
2702(a) (“Notwithstanding any other provision or rules of law. . . each responsible party. . .
is liable for the removal costs and damages.”); id. § 2713(a) (“[A]ll claims for removal costs or
damages shall be presented first to the responsible party. . . .”). Hence each responsible party
must establish and maintain evidence of its ability to make significant, immediate payments
to spill responders and other claimants. See id. § 2716(a).
3
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in “the United States Government acquiring by subrogation all rights of the
claimant . . . to recover from the responsible party.” 33 U.S.C. § 2712(f); see also
33 C.F.R. § 136.115(a) (compensation from the Fund includes an assignment
to the government of the claimant’s rights against third parties).
Following the spill, the Coast Guard investigated and determined that,
as the owner of the barge DM-932 and tug M/V OLIVER, ACL was a
responsible party under OPA and therefore liable for “removal costs and
damages” resulting from the incident. See 33 U.S.C. § 2702(a). ACL then
entered into a contract with spill responders and Third Party Defendants
ES&H and USES to provide cleanup services for the oil spill. The spill
responders invoiced ACL for their services, but ACL disputed some of the
claims and did not pay the full outstanding amounts owed to ES&H and USES
for removal and cleanup costs within the 90-day time frame mandated by
OPA. 3 See id. § 2713(c)(2). Instead, ACL paid ES&H approximately $10.6
million and withheld $3.9 million; it paid USES approximately $14 million and
withheld $4.4 million. At that point, OPA allowed ES&H and USES to “elect”
one of two options: (1) sue ACL for payment; or (2) submit a claim for
uncompensated removal costs to the Fund. Both spill responders filed claims
with the Fund. After requesting “documentation deemed necessary” to pay a
claim, see 33 C.F.R. § 136.105(a), the Fund paid $3,071,222.83 to ES&H and
$1,519,564.74 to USES. 4 See 33 U.S.C. § 2713(a)-(d).
3 Specifically, ACL claims that ES&H and USES (1) failed to produce the federally
required I-9s establishing legal entitlement to work; (2) failed to produce the Hazardous
Waste Operations and Emergency Response (“HAZWOPER”) certificates needed to establish
that its labor force had received the required training for oil spill cleanup; (3) requested
payment for phantom labor and equipment that was never supplied during the cleanup of
the oil spill; and (4) sought rates applicable for properly trained, legal workers for laborers
who were in fact either not properly trained or not legally entitled to work, or both.
4 Neither ES&H nor USES challenged the final amounts paid by the United States
out of the Fund in response to their claims under OPA, though the payments were less than
invoiced.
4
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The United States, in turn, sued ACL to recover the Fund’s payment to
ES&H and USES, as well as a penalty under the CWA and statutory damages
under OPA. In response, ACL contended, inter alia, that ES&H and USES
failed to provide adequate documentation for the amounts billed to and paid
out by the Fund. 5 Consequently, ACL sought to join ES&H and USES as third
party defendants to the United States’ claims in the proceedings below.
Alternatively, ACL sought to hold ES&H and USES directly liable to ACL to
the extent that ACL was found liable to the United States. The United States,
ES&H, and USES opposed the joinder of ES&H and USES, and each filed
motions to dismiss ES&H and USES as third party defendants to the United
States’ action against ACL. The district court held that ACL’s joinder of ES&H
and USES was proper under Fed. R. Civ. P. 14(c) and our decision in Luera v.
M/V Alberta, 635 F.3d 181, 188-189 (5th Cir. 2011). However, citing Exxon
Shipping Co. v. Baker, 554 U.S. 471 (2008), and In re Oil Spill by the Oil Rig
“Deepwater Horizon” in the Gulf of Mexico, 808 F. Supp. 2d 943 (E.D. La. 2011),
the district court granted the government’s Rule 12(b)(6) motion to dismiss
ACL’s claims against ES&H and USES because OPA displaces these claims.
The district court explained in its Order and Reasons that “[t]he proper
procedural vehicle to litigate defects in the claim payment process is as a
defense against the Fund under the ‘arbitrary and capricious’ standard of the
Administrative Procedure Act, as ACL acknowledges.”
ACL filed the instant appeal. On appeal, ACL concedes that when OPA
explicitly sets a rule of law it displaces federal common law and general
5As indicated in its brief, “ACL understands that the NPFC did not require ES&H or
USES to provide either training certificates or the federally required I-9 forms for the
laborers but rather relied upon questionable affidavits from ES&H and USES that all of the
laborers were properly trained, legal workers. . . If ES&H’s and USES’s affidavits were false
and ES&H and USES in fact had supplied untrained illegal laborers, then ES&H and USES
must reimburse either ACL or the United States directly.”
5
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maritime law, and that, as the designated responsible party, ACL was strictly
liable under OPA for costs of cleanup. ACL asserts, however, that the district
court erred in holding that OPA displaced its federal common law and general
maritime law claims against ES&H and USES because “OPA does not
‘explicitly’ do so.”
STANDARD OF REVIEW
A district court’s dismissal of a complaint under Rule 12(b)(6) is a
question of law that we review de novo. Torch Liquidating Trust ex rel. Bridge
Assoc. LLC v. Stockstill, 561 F.3d 377, 384 (5th Cir. 2009).
DISCUSSION
Our inquiry presents the question of whether OPA provides the exclusive
source of law for an action involving a responsible party’s liability for removal
costs governed by OPA. For the following reasons, we find that it does, and
accordingly we hold that ACL does not have a cause of action against the spill
responders who exercised their statutory right to file claims with the Fund
after ACL failed to timely pay their claims.
We have previously held that, in enacting OPA, Congress intended to
build upon the Clean Water Act to “‘create a single Federal law providing
cleanup authority, penalties, and liability for oil pollution.’ . . . OPA prescribes
a supplemental, comprehensive federal plan for handling oil spill responses,
allocating responsibility among participants, and prescribing reimbursement
for cleanup costs and injuries to third parties.” In re: Deepwater Horizon, 745
F.3d 157, 168 (5th Cir. 2014) (quoting S. Rep. No. 101-94, at 9 (1989), reprinted
in 1990 U.S.C.C.A.N. 722, 730).
More generally, when Congress enacts a carefully calibrated liability
scheme with respect to specific remedies, “the structure of the remedies
suggests that Congress intended for th[e] statutory remedies to be exclusive.”
United States v. M/V BIG SAM, 681 F.2d 432, 441 (5th Cir. 1982) (internal
6
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quotation marks and citation omitted) (construing the analogous FWPCA,
whose liability standard and limited recovery of removal costs OPA borrows).
Indeed, “we are to conclude that federal common law has been preempted as to
every question to which the legislative scheme spoke directly, and every
problem that Congress has addressed.” Id. at 442 (quoting In re Oswego Barge
Corp., 664 F.2d 327, 344 (2d Cir. 1981)). 6 Here, OPA provides that
“[n]otwithstanding any other provision or rule of law . . . each responsible party
. . . is liable for the removal costs and damages specified in subsection (b) of
this section that result from” an oil spill. 33 U.S.C. § 2702(a). Claimants must
first present their claims to the responsible party, see id. § 2713(a), but if the
responsible party has not paid the claim within 90 days, the claimant may elect
to bring suit against the responsible party or seek repayment from the Fund
for those removal expenses that are necessary and reasonable, and that adhere
to the relevant statutory criteria for United States payments. See id. §
2713(c)(2); see also 33 C.F.R. § 136.103(c)(2), 136.105, 136.201, 136.203,
136.205. The Fund may then seek recoupment from the responsible party,
having acquired by subrogation all rights of the claimant against the
responsible party. See 33 U.S.C. § 2712(f); 33 C.F.R. § 136.115(a). The
responsible party may then assert defenses to limit its liability for
reimbursement, including establishing that the Fund’s payments to the
claimants were “arbitrary and capricious.” See Buffalo Marine Servs, Inc. v.
United States, 663 F.3d 750, 753 (5th Cir. 2011) (“The Administrative
Procedure Act (‘APA’) allows a federal court to overturn an agency’s ruling only
if it is arbitrary, capricious, an abuse of discretion, not in accordance with law,
or unsupported by substantial evidence on the record taken as a whole.”
6 See supra note 1 (noting that “preemption” and “displacement” are often used
interchangeably).
7
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(internal quotation marks omitted)). As found by the district court, “OPA
directly speaks to the claims asserted by ACL.” Hence we hold that this
“balanced and comprehensive remedial scheme” provides the exclusive remedy
for a claimant to recover statutory removal costs from a responsible party and
forecloses a responsible party from bringing a third-party complaint against a
spill responder that has chosen to submit claims to the Fund after 90 days
without payment. See M/V BIG SAM, 681 F.2d at 441.
In the present case, ES&H and USES both presented their claims to the
Fund, rather than bringing suit against ACL. Nothing in OPA authorizes a
responsible party to bring a third-party complaint against a claimant that has
chosen, under § 2713(c)(2), to submit claims to the Fund after 90 days without
payment. As the district court noted, such a third-party complaint would risk
“avoid[ing] the strict liability that OPA places on responsible parties to pay the
cleanup and removal costs,” and frustrate the statutory scheme and its goal of
providing rapid cleanup and claim resolution.
Contrary to ACL’s assertion, OPA’s savings clause at 33 U.S.C. § 2751(e)
does not apply. OPA’s savings clause provides:
Except as otherwise provided in this Act, this Act does not affect—
(1) admiralty and maritime law; or
(2) the jurisdiction of the district courts of the United States with
respect to civil actions under admiralty and maritime jurisdiction,
saving to suitors in all cases all other remedies to which they are
otherwise entitled.
Id. § 2751(e). Statutory construction begins with the language of the statute,
and, in the absence of ambiguity, often ends there. Hardt v. Reliance Standard
Life Ins. Co., 560 U.S. 242, 251 (2010). We have previously held that “savings
clauses must be read with particularity” and should not be interpreted to
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“disrupt the ordinary operation of conflict preemption.” 7 In re Deepwater
Horizon, 745 F.3d at 171 (rejecting application of OPA savings clause codified
at § 2718(c)); see also Int’l Paper Co. v. Ouellette, 479 U.S. 481, 492-93 (1987)
(rejecting application of two savings provisions of the CWA). The savings
clause here begins “except as otherwise provided.” 33 U.S.C. § 2751(e). OPA
provides a procedure for submission, consideration, and payment of cleanup
expenses by the Fund when the responsible party fails to settle such claims
within 90 days—the situation presented here. As OPA did “otherwise
provide[],” ACL’s claims against ES&H and USES for return of payments made
by the Fund under OPA cannot be saved by this clause. To interpret § 2751(e)
as ACL proposes would be to supersede OPA, and courts cannot, without any
textual warrant, expand the operation of savings clauses to modify the scope
of displacement under OPA. 8 See In re Deepwater Horizon, 745 F.3d at 173.
While we find that OPA displaces ACL’s alternative causes of action
against ES&H and USES, we note that both ACL and the United States
contemplate that ACL may raise its contentions in the district court in defense
to the United States’ OPA recoupment action. Should ACL establish that the
7 While In re Deepwater Horizon addressed the preemption of state law claims, rather
than the displacement of federal common law claims, the showing required for displacement
is less than that for preemption as no evidence of “clear and manifest congressional purpose”
to displace need be found. See City of Milwaukee, 451 U.S. at 316-17. Hence our holding that
“a savings clause does not disrupt the ordinary operation of conflict preemption” is especially
true in the displacement context. In re Deepwater Horizon, 745 F.3d at 171.
8 Invoking 33 U.S.C. § 2710, ACL further asserts that OPA does not displace its
implied indemnity claims against ES&H and USES. See id. § 2710(a) (“Nothing in this Act
prohibits any agreement to insure, hold harmless, or indemnify a party to such agreement
for any liability under this Act.”). “Indemnification” is “[t]he action of compensating for loss
or damage sustained.” Black Law’s Dictionary 38 (9th ed. 2009). Holding aside the
government’s plausible contention that § 2710 concerns liability for the spill itself, rather
than liability for cleanup, ES&H and USES have caused no loss or damage to ACL that could
form the basis of an indemnity claim. ACL did not actually pay ES&H and USES for any of
the disputed material or labor expenses, nor has it yet been required to pay the government
such amounts.
9
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Fund’s payments to ES&H and USES were unnecessary, unreasonable, or not
in compliance with the relevant statutory criteria for Fund payments and
hence were “arbitrary and capricious,” it may pursue reduction of its liability
to the Fund for reimbursement. Regardless of the outcome of the United States’
action against ACL, however, ACL may not seek indemnification from ES&H
and USES as the United States “acquir[ed] by subrogation all rights of the
claimant” and hence stands in for ES&H and USES in any related action. See
33 U.S.C. § 2712(f); 33 C.F.R. § 136.115.
CONCLUSION
For the reasons set forth above, we AFFIRM the district court’s dismissal
of ACL’s claims against ES&H and USES as displaced under OPA.
10