United States of America v. Third Coast Towing, LLC et al
ORDER denying 49 Motion in Limine; denying 55 Motion for Summary Judgment; granting 57 Motion for Summary Judgment. Signed by District Judge Carlton W. Reeves on 9/12/2017. (AC)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
UNITED STATES OF AMERICA
CAUSE NO. 3:16-CV-34-CWR-FKB
THIRD COAST TOWING, LLC, ET AL.
Before the Court are the following motions: (1) a motion in limine filed by Nature’s Way
Marine, LLC and Environmental Pollution Group, LLC; (2) a motion for summary judgment
filed by the same parties; and (3) a motion for partial summary judgment filed by the United
States. The matters are fully briefed and ready for adjudication.
Factual and Procedural History
On January 27, 2013, a tug operated by Nature’s Way Marine was pushing two barges of
sweet crude oil down the Mississippi River. As the tug maneuvered near Vicksburg, Mississippi,
one of the barges struck a bridge and discharged more than 7,100 gallons of oil. Nature’s Way
spent $2.99 million on the ensuing cleanup, while various governmental entities spent at least
$792,868.98 on the same.
In September 2013, barge owner Third Coast Towing sued Nature’s Way for breach of
maritime contract and maritime tort. The case settled in late 2014.
In January 2016, the United States filed the present action. It claimed that Nature’s Way,
Third Coast, and Great American Insurance Company were liable under the Clean Water Act and
the Oil Pollution Act of 1990 (“OPA”) for oil spill removal costs and civil penalties.
Nature’s Way and insurer Environmental Pollution Group (collectively, “Nature’s Way”)
counterclaimed against the United States under the Administrative Procedure Act (“APA”). They
asserted that the federal government—via the U.S. Coast Guard’s National Pollution Funds
Center—should have reimbursed most of Nature’s Way cleanup expenses using money from the
federal government’s oil spill trust fund.
The United States now seeks confirmation that Nature’s Way is not entitled to any
reimbursement from the oil spill trust fund.1 Nature’s Way, meanwhile, wants to set aside the
Coast Guard’s determination and be awarded reimbursement of all but $854,000 of its cleanup
costs. Nature’s Way has also moved to strike parts of the administrative record.
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).
Under the ordinary summary judgment standard, a party seeking to avoid judgment must
identify admissible evidence in the record showing a fact dispute. Id. at 56(c)(1). “Once a
summary judgment motion is made and properly supported, the nonmovant must go beyond the
pleadings and designate specific facts in the record showing that there is a genuine issue for trial.
Neither ‘conclusory allegations’ nor ‘unsubstantiated assertions’ will satisfy the nonmovant’s
burden.” Wallace v. Tex. Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996) (quotation marks and
citations omitted). The Court views the evidence and draws reasonable inferences in the light
most favorable to the nonmovant. Maddox v. Townsend and Sons, Inc., 639 F.3d 214, 216 (5th
Cir. 2011). But the Court will not, “in the absence of any proof, assume that the nonmoving party
could or would prove the necessary facts.” McCallum Highlands, Ltd. v. Wash. Capital Dus,
Inc., 66 F.3d 89, 92 (5th Cir. 1995), as revised on denial of reh’g, 70 F.3d 26 (5th Cir. 1995).
The federal government has not yet sought summary judgment on its other claims.
The APA standard of review is somewhat different:
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. The court starts from a presumption that the agency’s decision is valid,
and the plaintiff has the burden to overcome that presumption by showing that the
decision was erroneous. The agency’s factual findings are reviewed to determine
only whether they are supported by substantial evidence. The agency’s legal
conclusions are reviewed de novo, except for questions of statutory interpretation,
where the court owes substantial deference to an agency’s construction of a statute
that it administers. Review is highly deferential to the administrative agency whose
final decision is being reviewed.
Buffalo Marine Servs. Inc. v. United States, 663 F.3d 750, 753-54 (5th Cir. 2011) (quotation
marks and footnotes omitted).
In Buffalo Marine, the Fifth Circuit succinctly summarized the substantive law and
administrative procedure at the heart of today’s motions.
The Oil Pollution Act of 1990 (“OPA”) creates a strict-liability scheme for the costs
of cleaning up oil spills: “each responsible party for a vessel . . . from which oil is
discharged . . . is liable for the removal costs and damages . . . that result from such
incident.” The “responsible party” for a vessel is “any person owning, operating, or
demise chartering the vessel.” The liability of the responsible party is capped at a
dollar limit that is set by statute; the limit is based on the gross tonnage of the
responsible party’s vessel. If the cleanup costs exceed the statutory limit, the
responsible party can seek to have those excess costs reimbursed by the Oil Spill
Liability Trust Fund.
Id. at 752 (footnotes omitted).
Did Nature’s Way “Operate” the Barge?
The first question is whether the Coast Guard correctly determined that Nature’s Way
was “operating” the barge that discharged the oil. The answer matters a great deal. If Nature’s
Way was operating only the tug, it has the tug’s (lower) limitation of liability, and becomes
entitled to a substantial payment from the oil spill trust fund. If, however, Nature’s Way was
operating the tug and the barge that discharged the oil, it has the barge’s (higher) limitation of
liability, and will receive no payment from the oil spill trust fund.
The OPA was of little help in answering this question. It defines “owner or operator” as
“any person owning, operating, or chartering by demise, the vessel.” 33 U.S.C. § 2701(26). The
definition is circular, “which leaves us to do the best we can to give the term its ‘ordinary or
natural meaning.’” United States v. Bestfoods, 524 U.S. 51, 66 (1998) (citation omitted). And
that is exactly what the Coast Guard did here.
“In a mechanical sense, to ‘operate’ ordinarily means ‘to control the functioning of; run:
operate a sewing machine.’” Id. (citation and brackets omitted). In accordance with this ordinary
meaning, the Coast Guard determined that Nature’s Way was operating both the tug and the
barge which discharged the oil. It reasoned as follows:
By towing it, Nature’s Way was operating the [barge] because it had no other means
of propulsion to safely navigate up or down the Mississippi River. The speed,
direction, and minute by minute navigational decisions governing the physical
movement of the [barge] were controlled by Mr. Guidry, the trip pilot hired by
Nature’s Way, to move the [barge] down river. The Tug and barges acted as a
“single unit” . . . .
[Nature’s Way] argued that Third Coast had operational control over the [barge]
because Third Coast was responsible for instructing when the barge would be
leaded, unloaded, and moved. However, this incident was proximately caused by
the navigational errors committed by Nature’s Way. There is no evidence
suggesting that any of Third Coast’s instructions had any causative effect on this
oil spill. . . . Nature’s Way satisfies operator liability under the OPA because it had
exclusive and absolute control over the barge when it struck the bridge pier and
Docket No. 55-1, at 8-9.
Nature’s Way cries foul. It argues that under “analogous federal environmental statutes,”
“operator” means the person or company with managerial and financial control over the barge.
Its definition would shift responsibility onto barge owner Third Coast Towing.
The Court finds no error in the Coast Guard’s conclusion. Common sense tells us that any
definition of vessel “operator” must include the person steering the vessel through the water. In
this case that was Nature’s Way, since Nature’s Way’s tug pushed the Third Coast barge into the
Nature’s Way presses that CERCLA defines operator more broadly, to include
management activities. But that is not a persuasive reason to disregard the ordinary meaning of
the word “operating” here. And on the merits, it makes sense that Congress would expect a party
to exercise control over a superfund site differently than it might control a vessel going down a
river. See Bestfoods, 524 U.S. at 71 (“In our enquiry into the meaning Congress presumably had
in mind when it used the verb ‘to operate,’ we recognized that the statute [CERCLA] obviously
meant something more than mere mechanical activation of pumps and valves, and must be read
to contemplate ‘operation’ as including the exercise of direction over the facility’s activities.”).
Nature’s Way makes other, similar arguments about the definition of “operator.” None
have merit. They will not be addressed further, particularly since none of them overcomes the
presumption we must give the agency’s decision under the APA or shows that the determination
is arbitrary or capricious.
For these reasons, the Coast Guard’s determination is affirmed.
Did Nature’s Way Waive Reimbursement?
The next issue is whether Nature’s Way’s 2014 settlement with Third Coast bars any
reimbursement from the oil spill trust fund. The government says a subrogation-related defect in
the settlement is independently sufficient to uphold the Coast Guard’s determination. See 33
U.S.C. § 2712(f). Having ruled in the government’s favor on the “operator” issue, however, the
Court need not take up the alternative basis for affirmance.
Should Portions of the Administrative Record Be Stricken?
Finally, Nature’s Way contends that portions of the administrative record should be
stricken. Its strongest argument is that the Coast Guard was not entitled to adjudicate its
reimbursement claim after the claim had been pending for six months.
Nature’s Way is correct that the Coast Guard’s determination was late under 33 C.F.R.
§ 136.115(c), but its supporting authorities do not support striking the document from the record.
See Water Quality Ins. Syndicate v. United States, 225 F. Supp. 3d 41, 66 (D.D.C. 2016)
(accepting untimely first agency determination, while striking untimely second agency decision).
And it makes little sense to strike the determination and remand, since the Coast Guard has
already “fulfilled its statutory duty to provide a brief statement of the grounds for denial under 5
U.S.C. § 555(e).” SecurityPoint Holdings, Inc. v. Transportation Sec. Admin., 769 F.3d 1184,
1188 (D.C. Cir. 2014) (quotation marks and citation omitted).
Nature’s Way also endeavors mightily to strike portions of the administrative record it
claims are factually biased or statutorily barred. Assuming the validity of those arguments for
present purposes, Nature’s Way has failed to show how any of the disputed portions are material
to the outcome of these cross-motions for summary judgment. The salient fact right now is that
Nature’s Way’s tug pushed the discharging barge into the bridge, and that fact is undisputed.
None of Nature’s Way’s remaining arguments hold water. Its motion in limine is denied.
The government’s motion is granted. Nature’s Way’s motions are denied.
SO ORDERED, this the 12th day of September, 2017.
s/ Carlton W. Reeves
UNITED STATES DISTRICT JUDGE
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