USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 97-1321
IN THE MATTER OF: THE COMPLAINT OF
METLIFE CAPITAL CORP., ETC.,
Plaintiff - Appellant,
____________________
COMMONWEALTH OF PUERTO RICO, ET AL.,
Plaintiffs - Appellees,
v.
M/V EMILY S., ETC., ET AL.,
Defendants - Appellees.
____________________
No. 97-1322
IN THE MATTER OF: BUNKER GROUP, INC., ET AL.,
Plaintiffs - Appellants,
____________________
COMMONWEALTH OF PUERTO RICO, ET AL.,
Plaintiffs - Appellees,
v.
M/V EMILY S., ETC., ET AL.,
Defendants - Appellees.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge]
___________________
____________________
Before
Torruella, Chief Judge,
___________
Lynch, Circuit Judge,
_____________
and Keeton,* District Judge.
______________
_____________________
Michael Mirande, with whom Robert F. Bakemeier, Bogle &
________________ _____________________ ________
Gates P.L.L.C., Jos E. Alfaro-Delgado and Calvesbert, Alfaro &
______________ _______________________ _____________________
L pez-Conway were on brief for appellant Metlife Capital
____________
Corporation.
John M. Woods, with whom Andrew J. Garger, Thacher Proffitt
_____________ ________________ ________________
& Wood, William A. Graffam, Patricia A. Garrity and Jim nez
______ ___________________ ____________________ _______
Graffam & Lausell were on brief for appellant Bunker Group, Inc.
_________________
Mee Lon Lam, Trial Attorney, Torts Branch, Civil Division,
___________
U.S. Department of Justice, with whom Frank W. Hunger, Assistant
_______________
Attorney General, Civil Division, and Guillermo Gil, United
______________
States Attorney, were on brief for appellee United States of
America.
Antonio J. Rodr guez, with whom Rice Fowler, Jos A.
______________________ ____________ ________
Fuentes-Agostini, Attorney General, Commonwealth of Puerto Rico,
________________
John F. Nevares and Smith & Nevares were on brief for appellee
________________ ________________
Commonwealth of Puerto Rico.
____________________
December 24, 1997
____________________
____________________
* Of the District of Massachusetts, sitting by designation.
-2-
TORRUELLA, Chief Judge. These two actions,
TORRUELLA, Chief Judge.
_____________
consolidated for appeal, challenge the district court's ruling
that the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. 2701-61,
repealed the Limitation of Shipowner's Liability Act of 1851
("Limitation Act"), 46 U.S.C. app. 181-96, as to oil spill
claims for removal costs and damages arising under the OPA. We
hold that claims arising under the OPA (for pollution removal
costs and damages) are not subject to the substantive or
procedural law of the Limitation Act or to the concursus of
claims under Rule F of the Supplemental Rules for Certain
Admiralty and Maritime Claims of the Federal Rules of Civil
Procedure ("Rule F").
I. BACKGROUND
I. BACKGROUND
On January 7, 1994, the towing wire between the tug M/V
EMILY S and the barge MORRIS J. BERMAN parted, grounding the
barge off of Punta Escambr n, San Juan, Puerto Rico. The
grounding caused much of the MORRIS J. BERMAN's cargo of fuel oil
to spill into the waters of the Commonwealth of Puerto Rico (the
"Commonwealth"). Soon after the spill, the Commonwealth filed a
damages action in the United States District Court for the
District of Puerto Rico naming numerous defendants including: (i)
the demise charterer of the EMILY S Bunker Group, Inc. ("BGI");
(ii) the operator of the EMILY S Bunker Group Puerto Rico, Inc.
("BGPR"); (iii) the owner and operator of the MORRIS J. BERMAN
and the co-demise charterer of the EMILY S New England Marine
-3-
Services ("NEMS"); (iv) the owner of the EMILY S MetLife Capital
Corporation ("MetLife"); and (v) the EMILY S in rem. The
__ ___
Commonwealth arrested the EMILY S and sought damages under the
OPA, general federal maritime law, and Puerto Rico law.
Subsequently, several other civil actions were filed in the
District of Puerto Rico by private parties seeking recovery under
a variety of theories for damages. Each of these actions was
either consolidated with the Commonwealth's action or dismissed.
Within six months of the oil spill, the appellants
NEMS, BGI, and BGPR (collectively, the "Bunker Group") filed a
complaint under the Limitation Act and Rule F, seeking
exoneration from or limitation of liability. At the same time,
the appellant MetLife, as owner of the EMILY S, filed a separate
action under the Limitation Act. On August 25, 1994, the
district court issued a notice to claimants of the limitation
actions and an order of injunction, or monition, enjoining the
commencement of any actions against the limitation plaintiffs for
claims arising out of the grounding of the barge except for
actions filed in the limitation proceeding. The monition created
a concursus of all claims in a single consolidated proceeding.
NEMS, BGI, BGPR, and MetLife (the "Limitation Plaintiffs")
provided notice to actual claimants as well as to potential
claimants in a Notice of Monition in the newspaper El Nuevo D a
_____________
on August 26, 1994, directing them to file their claims on or
before October 15, 1994.
At the conclusion of the monition period, the
-4-
Limitation Plaintiffs filed motions for entry of default against
all persons who failed to file. Subsequently, numerous
claimants, including the Commonwealth and the United States (the
"Government"), filed actions in the limitation proceedings,
seeking recovery of damages under the OPA, general maritime law,
and other law. In their claims, both the Commonwealth and the
Government asserted that their OPA claims should not be subject
to concursus.
Three other claimants, Hilton International of Puerto
Rico, Inc., Puerto Rico Tourism Company, and Hotel Development
Corporation (collectively, the "Hilton claimants"), filed claims
under seal in the limitation proceedings while their
administrative claims, which had already been filed with the
National Pollution Funds Center ("NPFC"), were pending. The
Hilton claimants simultaneously moved the district court for
relief in order to preserve their OPA claims if they withdrew
them from the concursus. On June 28, 1996, the district court
issued an order suspending the August 25, 1994 order of
injunction issued in the limitation proceedings. This order
allows "any claims for oil spill removal costs or damages
resulting from or in any way connected with the grounding of the
barge MORRIS J. BERMAN on January 7, 1994 to be asserted
independently of the limitation of liability proceedings."
Subsequent to the issuance of the order, the Hilton claimants
withdrew their limitation claims in order to proceed with their
administrative claims before the NPFC. However, their motions
-5-
served as the vehicle for all parties to brief the question now
presented to this court. On August 7, 1996, the appellants NEMS,
BGI, BGPR, and MetLife timely filed this appeal of the June 28,
1996 order.
-6-
II. DISCUSSION
II. DISCUSSION
Interpretations of federal statutes and rules are
subject to de novo review. See Strickland v. Commissioner, Me.
__ ____ ___ __________ _________________
Dept. of Human Servs., 96 F.3d 542, 545 (1st Cir. 1996).
_____________________
A. The Limitation Act and the OPA
A. The Limitation Act and the OPA
The Limitation Act was enacted in 1851 to promote
shipbuilding and to induce investment in the growing American
shipping industry. See Hartford Accident & Indem. Co. v.
___ _________________________________
Southern Pac. Co., 273 U.S. 207 (1927). The law permits the
__________________
shipowner to limit his or her liability as to certain claims for
damages arising out of the voyage of his or her vessel to the
post-accident value of the vessel plus pending freight. See 46
___
U.S.C. 183, 186.
Rule F governs the filing and adjudication of a
limitation action. The vessel owner must file a complaint no
later than six months after receipt of a claim as well as
depositing the amount of the limitation fund with the court. See
___
Rule F(1). Rule F concursus, once referred to as the "heart" of
a limitation action, Maryland Cas. Co. v. Cushing, 347 U.S. 409,
__________________ _______
417 (1954), requires multiple claimants to pursue relief in a
single forum and marshals the assets of a limited fund. See Rule
___
F(3), F(7). Concursus is intended to provide a "prompt and
economical disposition to controversies." Cushing, 347 U.S. at
_______
415. Today, many question the continued usefulness and vitality
of the Limitation Act. See, e.g., 2 Thomas J. Schoenbaum,
___ ____
Admiralty and Maritime Law (2d ed. 1994) (the Limitation Act's
___________________________
-7-
"original purpose . . . seems to have lost much of its force with
the availability of insurance, bills of lading statutes that put
substantial limits on liability for cargo loss, and the ability
to limit claims by contract"). However, Congress has never
repealed the act, and therefore, courts continue to apply it.
See, e.g., Keller v. Jennette, 940 F. Supp. 35 (D. Mass. 1996).
___ ____ ______ ________
The Oil Pollution Act was passed in the wake of the
1989 Exxon Valdez tanker disaster and created a more
comprehensive compensation and liability scheme for oil spill
pollution than had existed under earlier legislation. Prior to
the OPA, the Federal Water Pollution Control Act ("FWPCA")
(commonly known as the Clean Water Act), 33 U.S.C. 1251-1387,
provided liability limitations for federal pollution removal
costs associated with oil spills. See id. 1321(c). The OPA
___ __
imposes strict liability for pollution removal costs and damages
on the "responsible party" for a vessel or a facility from which
oil is discharged. See 33 U.S.C. 2702(a). Responsible parties
___
include owners, operators, or demise charterers of a vessel. See
___
id. 2701(32).
__
The OPA limits the liability of responsible parties
based upon the type of vessel and its tonnage. For tank vessels,
the limit can be as high as $10 million. Id. 2704(a)(1). For
__
all other vessels, the limit is the greater of $600 per gross ton
or $500,000. Id. 2704(a)(2). Responsible parties may face
__
unlimited liability for, inter alia, acts of gross negligence or
_____ ____
willful misconduct. In addition, state law applies free of these
-8-
liability limits. See id. 2718(a), 2718(b). Finally, the OPA
___ __
consolidated previously established oil pollution funds into the
Oil Spill Liability Trust Fund (the "Fund"), which pays claims
brought under the OPA after they have first been presented to the
responsible party, if the responsible party is entitled to a
defense, or the liability limit under the statute has been
reached. See 33 U.S.C. 2708(a), 2713(b)(1)(B). See generally
___ ___ _________
Schoenbaum, supra, at 384.
_____
B. The OPA's Impact on the Limitation Act
B. The OPA's Impact on the Limitation Act
The OPA specifically addresses its relationship with
the Limitation Act and other legislation when it states:
Notwithstanding any other provision or
_________________________________________
rule of law, and subject to the
______________
provisions of this chapter, each
responsible party for a vessel or a
facility from which oil is discharged, or
which poses the substantial threat of a
discharge of oil, . . . is liable for the
removal costs and damages specified in
subsection (b) that result from such
incident.
33 U.S.C. 2702(a) (emphasis added). Appellant MetLife asserts
that this provision imposes the OPA's increased liability limits
notwithstanding any previously applicable limitations under the
___________
Limitation Act, but does not eviscerate preexisting limitation
procedure under the Limitation Act. Thus, the appellant argues,
_________
Limitation Act concursus remains available to responsible
parties.
However, a plain reading of the subsection suggests
that the OPA repealed the Limitation Act with respect to removal
cost and damages claims against responsible parties. See In re
___ _____
-9-
JAHRE SPRAY II K/S, 1996 WL 451315, *4 (D.N.J. 1996); accord In
__________________ ______ __
re Odin Marine Corp., No. 96-5438, slip op. at 6 (S.D.N.Y. Aug.
_____________________
7, 1997); Tug Capt. Fred Bouchard Corp. v. M/V BALSA 37, No. 93-
_____________________________ ____________
1321, slip op. at 2 (M.D. Fla. Oct. 22, 1996). Accordingly, the
procedural rules incorporated into the Limitation Act are
inapplicable as well to such claims. In interpreting similar
language in the FWPCA, courts have held that the statute's
"notwithstanding" phrase precludes application of the Limitation
Act to claims by the United States for FWPCA pollution removal
costs. See In re Oswego Barge Corp., 664 F.2d 327, 340 (2d Cir.
___ ________________________
1981); In re Hokkaido Fisheries Co., Ltd., 506 F. Supp. 631, 643
__________________________________
(D. Alaska 1981). See also Schoenbaum, supra, at 376 ("OPA
_________ __________ _____
broadly supersedes the Limitation of Liability Act with respect
to damages and removal costs under both federal and state law,
including common law"). We find these cases to be persuasive
because "[n]either the language of OPA nor its legislative
history suggests that OPA's provisions should be construed
contrary to the settled law applicable to FWPCA when OPA was
enacted." William M. Duncan, The Oil Pollution Act of 1990's
Effect on the Shipowner's Limitation of Liability Act, 5 U.S.F.
L. Rev. 303, 316 (1993).
In addition to the "notwithstanding" clause, at least
four other provisions in the statute explicitly repeal the
Limitation Act with respect to certain types of claims. See 33
___
U.S.C. 2702(d)(1)(A) (repealing the Limitation Act as to third
parties solely responsible for a spill); 2718(a) (repealing the
-10-
Limitation Act as to state and local statutory remedies);
2718(c)(1) (repealing the Limitation Act as to additional
liability imposed by the United States, any state, or political
subdivision); 2718(c)(2) (repealing the Limitation Act as to
fines or penalties). The appellants contend that, outside of
these specific instances, the Limitation Act continues to apply
to the OPA. The Bunker Group, citing one commentator, notes that
"[i]f Congress' intent in enacting OPA had been to completely
repeal the Limitation Act, it would not have painstakingly
repealed it only with respect to certain types of actions."
Duncan, supra, at 319.
_____
When we consider these five OPA provisions which
explicitly repeal the Limitation Act as well as others that are
irreconcilably in conflict, see infra, we find that the OPA has
___ _____
repealed the Limitation Act as to oil spill pollution claims
arising under the OPA in the instant case. "'[W]here provisions
in the two acts are in irreconcilable conflict, the later act to
the extent of the conflict constitutes an implied repeal of the
earlier one . . . .'" See Radzanower v. Touche Ross & Co., 426
___ __________ __________________
U.S. 148, 154 (1976) (quoting Posadas v. National City Bank, 296
_______ __________________
U.S. 497, 503 (1936) (noting standard for repeal by
implication)).
While the repeal of statutes by implication is
disfavored, see Tennessee Valley Auth. v. Hill, 437 U.S. 153, 189
___ ______________________ ____
(1978), several key provisions of the two statutes are plainly
inconsistent. First, the Limitation Act limits the shipowner's
-11-
liability to the post-accident value of the vessel plus pending
freight, 46 U.S.C. 183, while the OPA contemplates a strict
liability regime with statutory limits of at least $2 million for
tanks vessels and $.5 million for all other vessels. 33 U.S.C.
2702, 2704. Moreover, in certain instances, the OPA imposes
virtually unlimited liability on the responsible party. See 33
___
U.S.C. 2704(c). Second, the provisions on jurisdiction are in
obvious tension. Only federal courts have jurisdiction over
limitation proceedings. See, e.g., Complaint of Dammers &
___ ____ _________________________
Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750, 755
______________________________________________
(2d Cir. 1988). In contrast, the OPA grants federal and state
_________
courts jurisdiction to decide oil pollution cases. 33 U.S.C.
2717(b), 2717(c). Finally, the provisions of Rule F, the
procedural rule that implements and which is incorporated into
the Limitation Act, cannot be reconciled with sections of the
OPA. See Part C, infra.
___ _____
Even assuming arguendo that the language is ambiguous,
________
the legislative history is consistent with our interpretation.
As this court has noted, the "chief objective of statutory
interpretation is to give effect to legislative will."
Passamaquoddy Tribe v. State of Me., 75 F.3d 784 (1st Cir. 1996).
___________________ ____________
In considering the OPA's liability provision, Congress stated:
Liability under this Act is established
notwithstanding any other provision or
rule of the law. This means that the
liability provisions of this Act would
govern limitations compensation for
removal costs and damages notwithstanding
any limitations under existing statutes
such as the act of March 3, 1851 . . . .
-12-
H.R. Conf. Rep. No. 101-653, at 103 (1990), reprinted in 1990
_____________
U.S.C.C.A.N. 779, 781 (Joint Explanatory Statement of the
Conference Committee explaining 2702(a)). Furthermore, the
Senate Report on the OPA bill asserts that the OPA "completely
supersedes the 1851 statute with respect to oil pollution."
S. Rep. No. 101-94,at 14, reprinted in 1990U.S.C.C.A.N. 722, 736.
____________
More generally, as the Ninth Circuit reasoned in
finding an implicit repeal of the Limitation Act by the liability
provisions of the Trans-Alaska Pipeline Authorization Act, 43
U.S.C. 1651-1655, "[a]pplication of the Limitation Act to [the
OPA] would frustrate completely [the OPA]'s comprehensive
remedial nature." See In re Glacier Bay, 944 F.2d 577, 583 (9th
___ __________________
Cir. 1991). "The purpose of OPA, as well as other remedial
legislation passed by Congress and the states to address
environmental disasters such as oil spills, was to encourage
rapid private party responses." JAHRE SPRAY, 1996 WL 451315, at
___________
*4. However, the Limitation Act "allows vessel owners virtually
to eliminate liability for catastrophic damages." Glacier Bay,
___________
944 F.2d at 583. Hence, the OPA's scheme is in irreconcilable
conflict with the Limitation Act.
Some claims arising from an incident in which oil
pollution occurs do not escape the Limitation Act. For example,
that Act remains in force for general maritime claims such as
maritime tort actions for harms to persons or vessels. See 33
___
U.S.C. 2751(e) ("[e]xcept as otherwise provided in this
chapter, this chapter does not affect . . . admiralty and
-13-
maritime law"). The district court below, in keeping with the
OPA's savings provision in 2751(e), reserved the Limitation
Plaintiffs' right "to seek limitation of liability for those
claims subject to reduction under the Limitation Act."
Therefore, the Bunker Group's contention that the district
court's order exempts from Rule F concursus all claims arising
from the grounding, whether or not they arise under the OPA, is
without merit. The appellants remain free to avail themselves of
the Limitation Act and Rule F concursus for their non-OPA claims.
C. The Independent Application of Rule F Concursus
C. The Independent Application of Rule F Concursus
The appellants claim that even if the OPA supersedes
the Limitation Act, because the OPA fails to provide any guidance
on the procedure necessary to implement it, Rule F concursus
applies to actions under the OPA independently of the Limitation
Act. To support their contention, the appellants note that Rule
F is framed generally to address "limitation of liability
pursuant to statute." Rule F(1). Rule F was originally written
_______
by the Supreme Court to implement the 1851 Limitation Act. In
redrafting the rules, the Supreme Court substituted a direct
reference to the 1851 statute in Rule F with the "pursuant to
statute" language, which we find reveals a more general purpose
for Rule F.
We conclude, however, that Rule F's requirements on
venue and limitation of liability cannot be reconciled with the
OPA's provisions regarding oil spill damages. Under Rule F, a
limitation of liability proceeding may be commenced only in the
-14-
district where the vessel has been seized, or if the vessel has
not been seized, in any district in which the owner has been
sued. See Rule F(9). If neither the vessel has been seized nor
___
action commenced against the owner, the limitation action may be
filed in the district where the vessel may be. See id. Venue is
___ __
proper in any district only if there is no pending litigation and
the vessel is not within any district. See id. Under the OPA,
___ __
in contrast, venue is proper in any district in which the
discharge of oil or injury or damages occurred, or in which the
defendant resides, may be found, has its principal office, or has
appointed an agent for service of process. 33 U.S.C. 2717(b).
Thus, the OPA offers claimants a much broader choice of forums
while Rule F's venue requirements are significantly more
restrictive.
Rule F's deadline for claims is also inconsistent with
the OPA's statute of limitation. Once a limitation action is
commenced, the court issues a notice to claimants requiring them
to file their claims by the date fixed in the notice. See Rule
___
F(4). The court may fix a date that requires claims to be filed
in as little as 30 days after issuance of the notice. Id. In
__
the instant case, the monition period terminated approximately
ten months after the date of the MORRIS J. BERMAN's grounding.
The OPA, however, allows claimants three years to commence an
action to recover removal costs and damages. See 33 U.S.C.
___
2717(f)(1), 2717(f)(2). In addition, if the claimant decides to
seek recovery from the Fund, the claimant has six years to
-15-
present removal costs claims, see 33 U.S.C. 2712(h)(1), and
___
three years to present damage claims. See id. 2712(h)(2).
___ __
Finally, section 2717(f)(4) extends the limitation period for
subrogation actions by three years from the date the Fund pays a
subrogated claim. See 33 U.S.C. 2717(f)(4).
___
One concern we have with the shortened claims period
under Rule F is that it would interfere with the United States'
subrogation rights under the OPA. If oil spill claims are
subject to Rule F concursus, claimants who are barred by the
court imposed deadline from recovering against the responsible
party, are likely to present their claims to the Fund. Once the
Fund pays a claim, the United States acquires all rights of
subrogation. See 33 U.S.C. 2712(f), 2713, 2715(a). However,
___
at that point, the United States may then be denied access to the
proceedings against the responsible party, and consequently, the
Fund will bear the financial burden of these late claims.
The appellants respond that, under Rule F, the
government's subrogation rights do not necessarily lapse because
"[f]or cause shown, the court may enlarge the time within which
claims may be filed." Rule F(4). We believe though that
subjecting the government's subrogation rights to the discretion
of the trial court in every oil spill action fails to adequately
secure those rights. Congress specifically examined this issue
in creating the OPA's statute of limitation and giving the courts
discretion over this matter is contrary to legislative intent.
Moreover, even if the courts consistently enlarge the monition
-16-
period for subrogation claims, in many instances, the limited
fund established by the concursus procedure will already have
been exhausted.
Finally, contrary to the appellants' contention that
the OPA fails to provide any procedural guidance, the OPA does
___
establish a claims procedure. The OPA requires all claims for
removal costs or damages to be presented first to the responsible
party or guarantor. See 33 U.S.C. 2713(a). If the responsible
___
party denies liability or the claim is not settled within 90
days, the claimant may proceed against the responsible party in
court or present the claim to the Fund. See id. 2713(c). In
___ __
some enumerated instances, claims may be presented directly to
the Fund without first presenting them to the responsible party.
See id. 2713(b). "The purpose of the claim presentation
___ __
procedure is to promote settlement and avoid litigation."
Johnson v. Colonial Pipeline Co., 830 F. Supp. 309, 310 (E.D. Va.
_______ _____________________
1993). In contrast to the OPA's claims procedure, Rule F forces
all claimants into litigation against the vessel owner. If a
claimant fails to appear in the limitation action within the
monition period, he or she is enjoined from raising any claims.
See Rule F(3). In view of these inconsistencies, we conclude
___
that Rule F concursus even if independent of the Limitation Act
is inapplicable to OPA claims.
III. CONCLUSION
III. CONCLUSION
For the reasons stated in this opinion, the district
-17-
court's order is affirmed.
affirmed.
________
Costs to be assessed against appellants.
-18-
