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Transportation firm can’t sue federal government for oil spill cleanup costs, 11th Circuit rules

A panel of the appeals court unanimously ruled that Savage Services Corp. cannot pursue legal action against the federal government to recoup cleanup costs after a government employee’s alleged error caused an oil spill in a Mississippi waterway.

ATLANTA (CN) — A transportation company cannot sue the federal government to recover $4 million in cleanup costs after an accident at a boat lift on the Tennessee-Tombigbee Waterway sent thousands of gallons of oil pouring into the river, a unanimous panel of the 11th Circuit ruled Tuesday.

A three-judge panel of the Atlanta-based appeals court upheld an Alabama federal judge’s dismissal of Savage Services Corporation’s lawsuit claiming that the federal government should be held financially liable for the cleanup. The company alleged that the spill was solely due to an Army Corps of Engineers lock master’s negligence.

The M/V Savage Voyager, which was owned and operated by Savage Services and Savage Inland Marine LLC, was pushing two tank barges containing oil through the waterway in September 2019 when a lock master allegedly dewatered a lock chamber without warning the vessel’s crew.

The barge rose out of the water, became caught on one of the lock’s walls and fell. The hull ruptured and spilled crude oil into the lock chamber.

Under the Oil Pollution Act of 1990, Savage Services was required to pay for oil removal and environmental cleanup costs — expenses which the company says totaled more than $4 million.

Enacted in the aftermath of the 1989 Exxon Valdez disaster, which sent more than 11 million gallons of oil into Alaskan waters, the Oil Pollution Act governs and apportions liability for oil removal costs, holding oil spillers liable for upfront oil removal expenses and allowing them to later seek contribution from other culpable parties.

The law ensured faster cleanup of spills and internalizes the costs associated with spill cleanup within the oil industry.

In a 50-page opinion issued Tuesday, the 11th Circuit upheld U.S. District Judge William Steele’s ruling that the Oil Pollution Act does not authorize claims against the federal government for oil removal damages. The panel ruled that the law does not create a legal cause of action for oil spillers to seek contribution from the federal government.

“In our view, the [Oil Pollution Act] text and structure squarely foreclose the kind of oil-removal claim Savage has advanced here,” U.S. District Judge Roy Altman, a Donald Trump appointee sitting by designation from the Southern District of Florida, wrote on behalf of the panel.

The panel shut down an assertion by Savage Services’ attorney during oral arguments last month that the lawsuit could be allowed under a portion of the Act, which permits parties who are responsible for an oil spill to file a contribution action against any “person” who might also be liable.

“The [Oil Pollution Act] defines ‘person’ to include an ‘individual, corporation, partnership, association, state, municipality, commission, or political subdivision of a state, or any interstate body.’ Id.  §  2701(27). As we’ve said, the United States is conspicuously absent from this list,” Altman wrote. “Because the United States is not a ‘person’ under the plain language of the statute — and since the contribution provision allows for contribution claims only against ‘any other person’ — the [Act] doesn’t authorize Savage to seek contribution from the Government.”

The panel was also unconvinced by Savage Services’ claim that the passage of the Oil Pollution Act does not block parties from choosing to sue the government for maritime torts committed by its agents under the Suits in Admiralty Act, a 1920 law which allowed individuals to sue the government for injuries arising out of maritime accidents.

Siding with the government, the panel found that the Oil Pollution Act provides the exclusive remedy for dealing with oil spill removal claims.

“Congress didn’t draw up this carefully balanced design — a veritable super-structure of oil-clean-up rights, duties, and obligations — for no reason,” Altman wrote. “It did it to strike the right incentives within the oil industry itself — incentives the previous regime had, in Congress’s estimation, failed to drive home. This detailed scheme thus preempts the general oil-removal remedies that might’ve been available under either the common law or the [Suits in Admiralty Act].”

Altman was joined on the panel by U.S. Circuit Judges Robin Rosenbaum and Jill Pryor, both Barack Obama appointees.

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