OPA-90: Serious Business

A recent OPA-90 decision* further establishes a trend: the government tends to win. The DRD/ACL/Tintomara collision, where a DRD vessel under contract with ACL, pushing an ACL barge, which barge leaked 300,000 gallons on the Mississippi River, of course spawned litigation, including that about OPA-90. 

DRD declared bankruptcy, so the Coast Guard decided to pursue ACL. Under OPA-90, the "responsible party" is responsible for the entire cost of cleanup, regardless of fault, except with certain statutory maxima (which maxima only apply in the absence of gross or statutory fault). 

ACL argued it was not responsible: ACL was the contractor, and DRD was actually operating the vessel pursuant to contract. The Fifth Circuit disagreed, concluding the spill arose "in connection with" the ACL/DRD contract: 

“Connection” is therefore a capacious term, encompassing things that are logically or causally related or simply “bound up” with one another. It is, however, not so capacious as to be rendered meaningless. Conduct does not automatically occur “in connection with” a contractual relationship by the mere fact that such a relationship exists. See Westwood Pharm., Inc. v. Nat’l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992) (interpreting virtually identical language in the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and holding that “[t]he mere existence of a contractual relationship . . . does not foreclose the owner of and from escaping liability”). Rather, the conduct must be causally or logically related to the contractual relationship. Accordingly, the third party’s acts or omissions that cause a spill occur “in connection with any contractual relationship” between the responsible party and the third party whenever the acts or omissions relate to the contractual relationship in the sense that the third party’s acts and omissions would not have occurred but for that contractual relationship. (emphasis mine.)

I dunno. That sounds like a broad reading of "in connection with" to me.

But wait, there's more. The Fifth Circuit next determines DRD was acting "pursuant to" its contractual relationship with ACL at the time of the accident because it was operating under the contract. 

Finally, the vessel captain was criminally culpable, so it was sort of a tap-in for gross negligence. Hard to see otherwise. However, it's worth pointing out that the Court immediately dispenses with the notion that ACL might not be responsible for this because there's ordinarily no respondeat superior for gross negligence: under OPA-90, the Court decides, there is. 

The upshot is that ACL didn't do anything wrong. Under common law, a charterer like ACL isn't responsible for the negligence of the chartered vessel. But under OPA-90, ACL is responsible for all $70m of its response costs and all $20m of the government's response costs. Ouch. 

What is interesting here is the Fifth Circuit does not mention Chevron deference, which is itself a little bit of a suspect doctrine right now pending review by the Supreme Court. 

*Your faithful reporter has an OPA-90 issue pending but will delay reporting on it until the result is known.