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Transportation firm takes fight to recoup oil spill cleanup costs to 11th Circuit

Savage Services Corp. asked a three-judge panel to revive its lawsuit seeking to make the federal government share the financial burden for oil spill cleanup costs based on claims that the spill was caused by a government employee’s error.

(CN) — A transportation company stuck footing a $4 million dollar cleanup bill after an oil spill in the Tennessee-Tombigbee Waterway asked an 11th Circuit panel Wednesday to overturn a federal judge’s dismissal of its claims to recover cleanup costs from the government.

Savage Services Corporation claims that the spill would not have happened if not for a mistake allegedly made by an Army Corps of Engineers lock master.

The M/V Savage Voyager, which was owned and operated by Savage Services, was pushing two tank barges into a lock on the waterway in September 2019 when the lock master allegedly began de-watering the lock chamber without warning the crew in charge of managing the towing vessel.

The end of a barge became caught on one of the lock’s walls and fell, causing a breach in the barge’s cargo tank which released crude oil into the lock chamber.

On Wednesday, an attorney for Savage Services told a three-judge panel of the Atlanta-based appeals court that the company should be allowed to pursue legal action against the government for recovery of the spill cleanup costs.

An Alabama federal judge ruled against the company last year on its lawsuit alleging that the government should be held financially liable since the spill and clean-up were solely attributable to the lock master’s negligence. U.S. District Judge William Steele granted the government’s partial motion to dismiss the case and ruled that it cannot be held liable under the Oil Pollution Act of 1990.

Under the law, the company was required to pay for damages and oil removal and environmental cleanup costs – a bill which Savage Services claims amounted to more than $4 million.

Enacted in the aftermath of the Exxon Valdez disaster that polluted Alaskan waters in 1989, the Oil Pollution Act is designed to ensure quick cleanup of oil spills, compensate the victims of spills and internalize the costs of spills within the oil industry.

The law requires the person or company who owns the vessel to be liable for cleanup costs and damages. However, it allows parties deemed responsible for an oil spill to file a contribution action against any other “person” who might also be liable under the statute or under another law.

Attorney Jay Farmer of Lugenbuhl Wheaton Peck Rankin & Hubbard, who represents Savage Services, urged the 11th Circuit panel to overturn Steele’s finding that the government does not qualify as a “person” under the parameters of the contribution provision.

But U.S. District Judge Roy Altman, a Donald Trump appointee sitting by designation from the U.S. District Court for the Southern District of Florida, pointed out that the wording of the Oil Pollution Act appears to explicitly remove the government from the list of parties who can be sued as a “person” under the contribution claim provision.

Farmer disagreed, telling the judge, “Nothing in [the Act] says no matter how negligent the government is, it’s going to be free from any liability whatsoever."

The attorney also argued that the passage of the Oil Pollution Act did not represent an attempt by Congress to revoke the right to sue the government for maritime torts committed by its agents under the Suits in Admiralty Act.

He told the panel that Congress would not have made such a significant change to the law while only signaling its intention “by dropping hidden puzzle pieces for courts to find and assemble.”

“Why would [Congress] have made this enormous change to 100 years of precedent and public policy without explicitly saying so? To me that just doesn’t make sense and I can’t get over that,” Farmer said.

Department of Justice attorney Joshua Koppel encouraged the panel to uphold Steele’s ruling, arguing that the Oil Pollution Act “establishes a detailed, comprehensive and exclusive regime for allocating liability for removal costs and damages resulting from an oil spill.”

In his ruling dismissing the company’s claims, Steele found that wording used in the Oil Pollution Act demonstrates Congress’ intention to make it more difficult for responsible parties to recover cleanup costs from the government.

Koppel also told the panel that the statute “defines ‘person’ to include private entities, corporate entities, states and municipalities – but not the United States.”

“There’s no warrant for the court to disturb that balance that Congress struck by permitting a contribution action against the government that’s clearly not contemplated by the statute,” he said.

Koppel urged the panel to find that the company’s claims are ultimately barred by the doctrine of sovereign immunity, which generally shields the government from lawsuits by private parties.

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

Follow @KaylaGoggin_CNS
Categories / Appeals, Business, Environment, Government

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