Amicus Curiae Brief — Bouchard Transportation Co. v. United States

4

S

we v No. 98-682

In The

Supreme Court of the United States

October Term, 1998

+

BOUCHARD TRANSPORTATION COMPANY, INC.;

TSACABA SHIPPING COMPANY, INC.;

MARITRANS OPERATING PARTNERS L.P., et al.,

Petitioners,

UNITED STATES OF AMERICA, et al.,

Respondents.

¢

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

¢

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURAE OF THE

MARITIME LAW ASSOCIATION OF THE

UNITED STATES IN SUPPORT OF THE

PETITION FOR WRIT OF CERTIORARI

¢

Howarp M. McCorMack

Counsel of Record

Hearty & Baiture LLP

29 Broadway

New York, NY 10006-3293

(212) 943-3980

(212) 425-0131 (Fax)

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

RAY

MOTION FOR LEAVé TO FILE BRIEF AMICUS

CURIAE IN SUPPORT OF THE PETITION FOR

WRIT OF CERTIORARI

The ‘aritime Law Association of the United States

(MLA) re vectfully moves for leave to file the attached

Brief Amicus Curiae in Support of Bouchard Transporta-

tion Company, Inc.; Tsacaba Shipping Company, Inc.;

Maritrans Operating Partners L.P., Petition for Writ of

Certiorari (the “Brief”).

The MLA has obtained the consent of counsel for the

Petitioners to file its Brief. The MLA has also received the

consent of the following parties: The United States, The

State of Florida, Marshall Ancar, Evangelisto Anaya, Jr.,

Robert Hopkins, Michael L. Panagakos, Harry P. Scholer,

Continental Insurance Company, Excel Hotels, Inc.,

Edward P. Rush.

Consent has been denied by counsel for Boca Ciega

Hotel, et al. and Ramona M. Updegraff, et al.

NATURE OF MOVANT’S INTEREST

The MLA is a nationwide bar association founded in

1899, with a membership of about 3,600 attorneys, law

professors, and others interested in maritime law. Its

attorney members, most of whom are specialists in admi-

ralty law, represent all maritime interests — shipowners,

charterers, cargo interests, port authorities, seamen, long-

shoremen, passengers, underwriters, and other maritime

claimants and defendants. The MLA has filed amicus

briefs in a number of cases in this Court involving ques-

tions of maritime law and practice.!

The MLA is seeking to file an amicus brief because

this case has serious implications for the maritime trans-

portation and maritime insurance industries. The deci-

sions of the courts below, despite the unequivocal grant

of the right to limitation of liability contained in § 2704 of

the Oil Pollution Act of 1990, have made it almost impos-

sible for shipowners to invoke the right granted by the

statute. The MLA has adopted the position that a con-

cursus procedure, that is, a marshaling of all claims

against a shipowner arising from a single incident, is an

essential feature of a limitation of liability regime and

that a concursus is indispensable in implementing limita-

tion of liability under the Oil Pollution Act of 1990. The

long-standing and wide-spread experience of the MLA in

matters regarding limitation of liability, a process vir-

tually unique to maritime law, should enable it to present

important insights in the resolution of the issues raised in

the Petition for Certiorari.

1 E.g., Vimar Seguros y Reaseguros, S.4. v. M/V SKY

REEFER, 515 U.S.528, 115 S. Ct. 2322 (1995); Jerome B. Grubart,

Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 115 S. Ct.

1043 (1995); McDermott, Inc. v. AmClyde and River Don

Castings Ltd., 511 U.S. 202, 114S. Ct. 1461 (1994). For a listing of

other cases, see The MLA Report, Doc. No. 671 at 8862-63 (1987).

The MLA, therefore, respectfully moves for leave to

file its brief herein.

November 23, 1998

Howarp M. McCormack

Counsel of Record

Hearty & Baru LLP

29 Broadway

New York, NY 10006-3293

(212) 943-3980

(212) 425-0131 (Fax)

Counsel for the Maritime

Law Association of the

United States as Amicus

Curiae

TABLE OF CONTENTS

Page

MOTION FOR LEAVE TO FILE BRIEF AMICUS

822 RS te ence ae a en one e ane Cae mere ee 1

SP AIR PANS REPAIR as Es os ca cenncsdoskvucss ii

Sites OOF AMICUS CURIA cia ics vacdet pene 1

SUMMARY OF ARGUMENT... ......0.-..0-.0c00s- 3

PRIA IMERIN TE SEVER cn cas eae eee He ean ne oo Sea baw en 4

I. The issues presented to this Court implicate

important national and international interests

which require a definitive resolution by this

ME an 0 eee EN Fah eC ise Os Und wee eR eeS +

II. The decision of the Court of Appeals is directly

contrary to the provisions of OPA 90, speci-

fically 33 U.S.C. § 2704 whereby Congress con-

ferred on shipowners the right to limited

liability. The right to limited liability is unenfor-

ceable without a concursus procedure.......... 6

Ill. The decisions of the courts below undermine the

goal of uniformity in maritime law and dilute or

eviscerate the right of shipowners to limit their

Siarety SUC SIP eens a en ce ee hs 16

CRE A 5 ob le PES Cad Ee wk ek 18

ii

TABLE OF AUTHORITIES

Page

Cases

Bouchard Transp. Co., Inc. v. Updegraff, 147 F.3d

1344 (11th Cir. 1998), petition for cert. filed, __

US.L.W. _ CUS. IO. SEGRE, TOPS) ciccs vescses 9, 10

In re Metlife Capital Corp., 132 F.3d 818, 1998

A.M.C. 635 (1st Cir. 1997) (The Emily S), cert.

denied by Bunker Group, Inc. v. U.S., 118 S.Ct.

2367, 141 LB Fae CSG a cake sewer nedas i eeuss 14

Miles v. Apex Marine Corp., 498 U.S. 19 (1990)....... 16

Norwich & N.Y. Transp. Co. v. Wright, 80 U.S. 104

(TSF 1) Sonos cangcavnduen cacieenneeveres wees oeeean 9

The Scotland, 105 US. 26 (EGGS) 0000/65 ves stnadeesnns 10

Yamaha Motor Corp. v. Calhoun, 516 U.S. 199 (1996) .... 16

STATUTES

SS US.C. SB SPB a aie once ecanvens passim

33 USS. © SFSU iis ivvhc eas ts Vi eee 16

46 USC. Ape. § TGD a asiies inascccevvancuapsebacenuen 3

46 US... App. § BGG osc densecisivancenvacinesasesaas 9

Rule F of the Supplemental Rules for Certain

Admiralty and Maritime Claims of Rules of

Civil. Preemie. cs 6a. es Pio bk tee 9, 12, 14, 15, 18

OTHER AUTHORITIES

ENERGY INFORMATION ADMINISTRATION,

DEPARTMENT OF ENERGY, ANNUAL

ENERGY OUTLOOK (IO0G) « oo ici iccnvesucsessssae 5

Pinna ame

iii

TABLE OF AUTHORITIES —- Continued

R. Force & J. Gutoff, Limitation of Liability in Oil

Pollution Cases: In Search of Concursus or Pro-

cedural Alternatives to Concursus, 22 Tut. Mar.

ede eds. SE. We GP REDE hsanbaey ev edeserersens

FOREIGN TRADE DIVISION, BUREAU OF THE

CENSUS, REPORT FT 900 (97) (CB-98-104), (1997)

<http://www.census.gov /foreign-trade /Press-

Release /97-press___releases/Final___Revis___

pO TERED Wile ON Re shiny 8 ae

Michael S. Lelyveld, America Ignores Oil Dependency

as Reliance on Imports Grows, JouRNAL OF Com-

MERCE, Aug. 14, 1998, <http://www.joc.com/

archive /980814/JC00055.html>...................

Matter of U.S. Coast Guard - Oil Spill Liability

Trust Fund, 1995 WL 632510 (C.G.) (Oct. 30,

SDA Mn cuwnddn basedh phn eke back eh <x3e otha eh hme

Payments Authorized Under Section 1012 of the

Oi! Pollution Act of 1990, 21 Op. Off. Legal

CG CRO, Ae BUMED a aes ch ns ceddeschoxi'es

REPORT OF THE NATIONAL RESEARCH

COUNCIL, DOUBLE-HULL TANKER LEGIS-

LATION: AN ASSESSMENT OF THE OIL POL-

LUTION ACT OF 1990, at v (1997) ..........5.

“see

Page

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mene

BRIEF OF THE MARITIME LAW ASSOCIATION

OF THE UNITED STATES, AMICUS CURIAE,

IN SUPPORT OF PETITIONERS

The Maritime Law Association of the United States

(hereinafter “MLA”) respectfully submits this Brief! as

amicus curiae in support of the Petition for Writ of Cer-

tiorari filed by Bouchard Transportation Company, Inc.;

Tsacaba Shipping Company, Inc.; Maritrans Operating

Partners L.P., et al. (“Petitioners”).

+

INTEREST OF AMICUS CURIAE

The MLA is a nationwide bar association founded in

1899, with a membership of about 3,600 attorneys, judges,

law professors, and others interested in maritime law. Its

attorney members, most of whom are specialists in admi-

ralty law, represent all maritime interests, including ship-

owners, charterers, cargo interests, port authorities,

seamen, longshoremen, passengers, underwriters, and

other maritime claimants and defendants.

The purposes of the MLA are stated in its Articles of

Association:

The objectives of the Association shall be to

advance reforms in the Maritime Law of the

United States, to facilitate justice in its adminis-

tration, to promote uniformity in its enactment

1 In conformity with Supreme Court Rule 37.6, amicus curiae

states that no part of this Brief was authored by counsel for a

party nor did any person or entity other than amicus curiae make

any monetary contribution to the preparation or submission of

this Brief.

2

and interpretation, to furnish a forum for the

discussion and consideration of problems affect-

ing the Maritime Law and its administration, to

participate as a constituent member of the Com-

ite Maritime International and as an affiliated

organization of the American Bar Association,

and to act with other associations in efforts to

bring about a greater harmony in the shipping

laws, regulations and practices in different

nations.

In furtherance of these objectives, the MLA has spon-

sored a wide-range of legislation dealing with maritime

matters during its 99 years of existence, including the

Carriage of Goods by Sea Act,? the Federal Arbitration

Act,? and the Foreign Sovereign Immunities Act.+ The

MLA has also cooperated with congressional committees

in the formulation o/ other maritime legislation.5

Specifically, with regard to the issues presented in the

Petition for Certiorari, the MLA has adopted the position

that concursus is an essential feature of a limitation

of liability regime and that concursus is necessary in

2 46 U.S.C. App. §§ 1300-1315.

3.9 U.S.C. §§ 1-5.

4 28 U.S.C. §§ 1330, 1602-1611.

> E.g., Water Pollution Control Act Amendments of 1972, 33

U.S.C. §§ 1251-1376; Convention on the International

Regulations for Prevent Collisions at Sea, 28 U.S.T. 3459, as

amended, T.I.A.S. 10672, Oct. 20, 1972, reprinted in 6 BENEDICT ON

ApmirALty, Doc. No. 3-4 (Frank L. Wiswall, Jr. Ed., 7th ed. rev.

1998); see 33 C.F.R Ch. 1, Subch. D. Special Note, at 176 (1995);

United States Inland Navigation Rules, 33 U.S.C: §§ 2001-2073.

|

K

implementing limitation of liability under the Oil Pollu-

tion Act of 1990.

SUMMARY OF ARGUMENT

The holding of the lower courts has seriously under-

mined, if not defeated, the right of shipowners to limit

their liability under the Oil Pollution Act of 1990 (OPA

90). The lower courts held that shipowners have no right

to compel a concursus of claims when invoking their right

to limited liability under OPA 90. Concursus of claims;

that is, the marshalling of all claims against a shipowner

who has petitioned for limitation, is at the very heart of

the right to limitation of liability. In effect, the lower

courts have held that there is no procedure for invoking

the right to limited liability, notwithstanding that OPA

(33 U.S.C. § 2704) specifically confers on shipowners the

right to limit their liability.

The decisions of the courts below will have far reach-

ing implications on the oil, maritime shipping and marine

insurance industries, because, in the absence of pro-

cedures for invoking the right to limit, including the

indispensable concursus procedure, shipowners face the

prospect of unlimited liability. The current situation is

similar to that which existed after the enactment of the

general Limitation of Liability Act of 1851 (now codified

in 46 U.S.C. App. § 183) which gave shipowners the right

to limited liability but provided no procedures for imple-

menting the right. This Court, rather than see congres-

sional policy frustrated, formulated procedures,

including the right to concursus, which made limitation of

liability possible. To effectuate the right to limited lia-

bility which Congress conferred in OPA 90, Amicus urges

the Court to establish uniform rules of procedure which

include a concursus proceeding. The absence of uniform

procedures will result in the negation of the right to limit,

unfairness to shipowners and, in some cases unfairness to

claimants, and procedural chaos in the aftermath of oil

spills.

ARGUMENT

I. The issues presented to this Court implicate impor-

tant national and international interests which

require a definitive resolution by this Court.

The issues presented in the Petition have far reaching

national and international ramifications that implicate the

interests of the oil industry, the oil transportation indus-

try, the maritime shipping industry and the marine insur-

ance industry. The foregoing statement is not rhetoric.

Petroleum is this country’s largest import.® In 1997 alone,

3.8 billion barrels of energy related petroleum products

were imported, at a value of 69.2 billion dollars.” Net oil

imports are projected to increase to 11.4 million barrels

6 Michael S. Leylveld, America Ignores Oil Dependency as

Reliance on Imports Grows, JouRNAL OF Commerce, Aug. 14, 1998,

<http:/ /www.joc.com /archive/980814/JC00055.htm).

7 FOREIGN TRADE DIVISION, BUREAU OF THE

CENSUS, REPORT FT 900 (97) (CB-98-104), (1997) <http://

www.census.gov/foreign-trade/Press-Release/97-

press_releases/Final_Revis ... Jexhl6.tx>.

per day by the year 2005.8 In addition, more than 3,300

tankers, each with a capacity of greater than 10,000 dead-

weight tons, now serve the world maritime oil trade.

Approximately 40 percent of these vessels call each year

at U.S. ports.?

The Oil Pollution Act of 1990 (hereinafter “OPA 90”)

applies not only to tankers but also to non-tank vessels

that carry oil as fuel. Therefore, virtually every commer-

cial vessel entering U.S. ports or plying U.S. waters is

subject to OPA 90, including the OPA 90 liability provi-

sions. OPA 90 requires all vessels with oil on board, either

as cargo or fuel, to guarantee that they have the financial

wherewithal to pay for removal costs and damages in

case of a discharge. Many shipping companies satisfy this

requirement by purchasing insurance.

Shipping companies and their insurers have

expressed legitimate concern about limitation of liability

under OPA 90 and the procedures whereby limitation is

to be effected.!° For them the issue is a simple one: Is

there limitation of liability under OPA 90 or not? In

reality, this is the issue presented to this Court by the

Petition for Certiorari. Amicus agrees with Petitioners’

8 ENERGY INFORMATION ADMINISTRATION,

DEPARTMENT OF ENERGY, ANNUAL ENERGY OUTLOOK

(1996).

9 REPORT OF THE NATIONAL RESEARCH COUNCIL,

DOUBLE-HULL TANKER LEGISLATION: AN ASSESSMENT

OF THE OIL POLLUTION ACT OF 1990, at v (1997).

10 R. Force & J. Gutoff, Limitation of Liability in Oil Pollution

Cases: In Search of Concursus or Procedural Alternatives to

Concursus, 22 Tur. Mar. L.J. 331, 344 n. 36 (1998).

contention that concurs.'s lies at the heart of the right to

limited liavility and tk t without concursus the right to

limit may be i:'usory. The resolution of this issue will

have ramifications that extend far beyond this spill.

Because the United States imports such gargantuan quan-

tities of oil, the extent of liability of the vessels that bring

oil to this country may have a significant impact on the

international industries that supply oil to the United

States. The issues clearly are not only capable of repeti-

tion, they are bound to reoccur. The holding of the courts

below establish a rule that applies to all discharges of oil

from the smallest to the largest, including incidents such

as the Exxon Valdez spill (a pre-OPA 90 spill), which

involved expenditures by Exxon said to exceed three

billion dollars.

II. The decision of the Court of Appeals is directly

contrary to the provisions of OPA 90, specifically 33

U.S.C. § 2704, whereby Congress conferred on ship-

owners the right to limited liability. The right to

limited liability is unenforceable without a con-

cursus procedure.

Unless this Court reverses the decision of the Court

of Appeals that there is no right to concursus in limitation

proceedings under OPA 90, the decision by Congress to

give vessel owners the right to limit their liability will be

thwarted. Section 2704 of OPA 90 (33 U.S.C. § 2704)

unequivocally provides for the right to limited liability.!!

However, OPA 90 is silent with regard to the procedural

11 § 2704. Limits on liability

(a) General rule

Except as otherwise provided in this section, the

total of the liability of a responsible party under

section 2702 of this title and any removal costs

incurred by, or on behalf of, the responsible party,

with respect to each incident shall not exceed -

(1) for a tank vessel, the greater of —

(A) $1,200 per gross ton; or

(B)(i) in the case of a vessel greater than 3,000

gross tons, $10,000,000; or

(ii) in the case of a vessel of 3,000 gross tons or

less, $2,000,000;

(2) for any other vessel, $600 per gross ton or

$500,010, whichever is greater;

(3) for an offshore facility except a deepwater

port, the total of all removal costs plus $75,000,000;

and

(4) for any onshore facility and a deepwater

port, $350,000,000.

* * *

‘c) Exceptions

(1) Acts of responsible party

Subsection (a) of this section does not apply if the

incident was proximately caused by -

(A) gross negligence or willful misconduct of,

or

(B) the violation of an applicable Federal safety,

construction, or operating regulation by, the

responsible party, an agent or employee of the

responsible party, or a person acting pursuant to a

contractual relationship with the responsible party

implementation of this right. It is the position of Amicus

that tne right of limitation provided for in OPA 90 is

illusory without a concursus procedure that allows for the

assertion and enforcement of the right of limitation.

(except where the sole contractual arrangement arises

in connection with carriage by a common carrier by

rail).

(2) Failure or refusal of responsible party

Subsection (a) of this section does not apply if the

responsible party fails or refuses —

(A) to report the incident as required by law

and the responsible party knows or has reason to

know of the incident;

(B) to provide all reasonable cooperation and

assistance requested by a responsible official in

connection with removal activities; or

(C) without sufficient cause, to comply with an

order issued under subsection (c) or (e) of section

1321 of this title, as amended by this Act, or the

Intervention on the High Seas Act (33 U.S.C. 1471 et

seq.).

(3) OCS facility or vessel

Notwithstanding the limitations established

under subsection (a) of this section and the defenses

of section 2703 of this title, all removal costs incurred

by the United States Government or any State or local

official or agency in connection with a discharge or

substantial threat of a discharge of oil from any Outer

Continental Shelf facility or a vessel carrying oil as

cargo from such a facility shall be borne by the owner

or operator of such facility or vessel.

+ * *

In Norwich Co. v. Wright,!? this Court created pro-

cedures to implement the Limitation of Liability Act of

1851! rather than have the Congressional policy underly-

ing that Act frustrated by a lack of procedures. That Act

conferred on vessel owners the right to seek “limited

liability” in maritime cases. This Court should follow that

precedent either by applying Rule F of the Supplemental

Rules for Certain Admiralty and Maritime Claims of

Rules of Civil Procedure (hereinafter “Supplemental

Rules”) or by creating analogous procedures compatible

with 33 U.S.C. § 2704, the limitation section of OPA 90.

The courts below'* were unwilling to recognize that

legislation providing for limitation of shipowners’ lia-

bility, both in the Limitation of Liability Act of 1851 and

in § 2704 of OPA 90, was intended to benefit shipowners

and not those who have claims against shipowners. As

this Court stated in The Scotland:

But it is objected that the appellants [Ship-

owners] did not properly, and in due time, claim

the benefit of the law. Under this head it is

strenuously contended that the appellants did

not comply with the rules of this court adopted

in December Term, 1871. Without adverting to

the fact that these rules were not in existence

until long after this litigation had been pending,

we may say, once for all, that they were not

intended to restrict parties claiming the benefit

12 Norwich & N.Y. Transp. Co. v. Wright, 80 U.S. 104 (1871).

13 Now codified at 46 U.S.C. App. § 185.

14 Bouchard Transp. Co., Inc. v. Updegraff, 147 F.3d 1344,

1350 (11th Cir. 1998), petition for cert. filed, __ U.S.L.W. __

(U.S. No. 98-682, 1998).

10

of the law, but to aid them. Some form of proceed-

ing was necessary to enable ship-owners to bring

into concourse the various parties claiming damages

against them for injuries sustained by mishaps to the

ship or cargo, where they were entitled, or conceived

themselves entitled, to the law of limited respon-

sibility, and where they were subjected or liable to

actions for damages at the suit of the parties thus

injured. The rules referred to were adopted for the

purpose of formulating a proceeding that would give

full protection to the ship-owners in such a case.}5

[emphasis added]

Although a concursus procedure may afford claimants a

more equitable opportunity to share in a limitation fund

that is inadequate to satisfy all claims, the concursus pro-

cedure is intended primarily to assure that a shipowner’s

liability does not exceed the legislatively mandated limit.

In other words, concursus prevent: limited liability from

being defeated through multiple law suits, which might

be brought in a number of different courts.

The courts below further undermined § 2704 of OPA

90 by concluding that limitation of liability in OPA 90 was

not really a limitation of liability provision because all

claimants could recover their full damages from the Oil

Spill Liability Trust Fund.!© However, it can also be said

that limited liability under the Limitation Act of 1851

does not truly provide for limited liability because claim-

ants may recover their full damages from third parties

15 The Scotland, 105 U.S. 24, 33 (1881).

16 Bouchard, 147 F.3d at 1350.

ET ee eT eM Per ene ey eer eae

11

who are not protected by the limitation statute. Limita-

tion of liability must be looked at not from the perspec-

tive of claimants, but from the perspective of shipowners

who are the intended beneficiaries of the limitation legis-

lation. It is of no concern that claimants may have other

avenues of redress. The crucial issue is whether ship-

owners’ liability, in reality, is limited to the amounts

specified in § 2704, not whether claimants may recover in

full from third parties, such as the Fund. Furthermore,

the conclusion reached by the lower courts may not

reflect the realities of some situations. For example, often

the largest claimant in an oil spill case is the United

States. While it is true that agencies of the United States

may present claims to the Fund, as a practical matter,

recovery from the Fund is nothing more than taking

money out of one Governmental pocket and putting it

into another Governmental pocket. In other words, the

Government is simply collecting removal costs or dam-

ages from itself. With respect to the public fisc, if the

United States does not recover from the responsible party

or its guarantor, in actuality, it will not be reimbursed for

its removal expenditures or compensated for its damages.

Likewise, there is some question as to whether state

trustees may recover from the Fund for natural resource

damage. !7

17 Compare Payrents Authorized Under Section 1012 of the

Oil Pollution Act of .990, 21 Op. Off. Legal Counsel - (Sept. 25.

1997) with Matter of U.S. Coast Guard — Oil Spill Liability Trust

Fund, 1995 WL 632510 (C.G.) (Oct. 30, 1995). Although the

matter may have been resolved within the Executive Branch,

neither Congress nor the courts have weighed in on this issue.

12

Additionally, as the Court of Appeals acknowledged,

recovery against the Fund is limited to one billion dollars

per incident, and, therefore, the liability of the Fund is

not unlimited. The fact that recovery against the Fund is

limited was dismissed by the Court of Appeals because

there had been no suggestion that costs and damages in

the incident in question would exceed that amount. This

is not the issue the Court of Appeals should have

addressed. The more cogent issue to be addressed is

whether or not all of the claims that have been or might

be filed against Petitioners in this case may, in the

absence of some procedure such as concursus, result in

liability in excess of the limits established in § 2704.

Either OPA 90 provides true limitation of liability for

shipowners or it does not. Either concursus is a necessary

ingredient of limitation of liability or it is not. As sug-

gested below, there must be uniform procedures to assure

that shipowners’ right to limit can be effectuated. The

holding of the Court of Appeals is not fact specific. It

does not hold simply that there is no need for concursus in

this case, but that there is no needa for concursus in any

case under OPA 90 in which the right of limitation is

implicated.'* The decision also overlooks the fact that

‘8 Admittedly, under the Limitation Act of 1851 and

Supplemental Rule F, the courts have recognized some

exceptions to the concursus requirement in situations where it is

clear that the shipowner’s liability cannot exceed the limitation

amount. There may also be exceptions under OPA 90. That

issue, however, is not before this Court.

vem es menens.

13

removal costs and damages which emanate from the dis-

charge of oil in some cases may exceed one billion dol-

lars. This is not idle speculation. The Exxon Valdez spill

cost Exxon in excess of three billion dollars.

The opinion of the Court of Appeals has to some

extent deleted § 2704 from OPA 90 because OPA 90 con-

tains absolutely no procedures for effecting limitation of

liability. OPA 90 creates substantive rights to recover

removal costs and damages and provides some pro-

cedures for claimants to implement those rights. OPA 90

creates a Fund and provides procedures whereby claim-

ants may submit claims to the Fund. OPA 90 also creates

the right of shipowners to limited liability. The creation of

the right to limited liability represents a Congressional

determination that shipowners shall not be exposed to

unlimited liability except as specifically provided in the

Act. But OPA 90, in contrast to providing procedures for

asserting claims against responsible parties and the Fund,

contains no procedure whereby shipowners may invoke

the right to limited liability as specified in the Act. How

do shipowners claim the right to limited liability? What

procedures in OPA 90 protect vessel owners from being

held liable in amounts that exceed the limitation amount

provided in the Act? There are none. If a shipowner is

subjected to two lawsuits in different courts arising from

the same incident, and in each it is held liable up the

limitation amount provided in § 2704, the shipowner will

have been subjected to liability that is twice the amount

established by Congress in § 2704 of OPA 90. Ultimately, a

single court must be empowered to implement the limita-

tion rights provided by OPA 90.

14

The Court of Appeals supported its conclusion by

adopting the approach followed in In re Metlife Capital

Corp.,9 which found fundamental “conflicts” between the

provisions of OPA 90 and the procedures in Supplemental

Rule F. As Professors Force & Gutoff have demonstrated

in discussing the In re Metlife Capital Corp. case, those

“conflicts” are no different than those that presently exist

under the Limitation Act of 1851 and the various claims

subject to limitation thereunder.?° They state:

Many of the justifications for the court's

conclusion simply do not bear scrutiny. Con-

trary to the suggestion of the court, Rule F

requires that the person filing a limitation peti-

tion must do so within six months of having

received notice of a claim. The Rule then leaves

it to the discretion of the limitation court to set

the time in which claims may be made against

the limitation fund. There is absolutely no rea-

son why a court would not take into account the

time needed to complete removal activities or to

formulate and implement a plan for restoration

of natural resources. Likewise, the Oi! Spill Lia-

bility Trust Fund could file a contingent claim in

any situation where it appears that it may have

a right to do so. The importance of the only time

limit specified in Rule F is that it would require

a responsible party to act promptly to invoke

the right of limitation. It in no way impinges on

19 132 F.3d 818, 1998 A.M.C. 635 (1st Cir. 1997) (The Emily

S), cert. denied by Bunker Group, Inc. v. U.S., 118 S. Ct. 2367, 141

L.Ed.2d 736 (1998).

20 Force & Gutoff, supra note 9, at 363-64.

15

the discretion of the trial judge to allow claim-

ants a fair and realistic opportunity to present

and prove their claims.

The limitation period analysis would, if car-

ried to its logical conclusion, completely evisce-

rate both Supplemental Rule F and the

Limitation Act in non-OPA 90 cases. If the posi-

tion of the court were valid, the Act of 1851,

itself, would conflict with later legislation. Con-

gress by statute has provided for a three year

statute of limitations for personal injury claims.

But personal injury claims are subject to limita-

tion. Thus, there very well may be situations

where a personal injury plaintiff may have to

file a claim in a limitation proceeding prior to

the expiration of the three years in order to

assure a share in the distribution of the limita-

tion fund. The same may be said as to COGSA

claims where there is a one year limitation

period. In the event of a collision that results in

cargo damage and personal injury there is noth-

ing to prevent a vessel owner from filing for

limitation of liability two weeks after the inci-

dent. ...

More significantly, virtually every claim for

damages that may be brought as an admiralty

claim in federal court may also be brought in a

state court under the “saving to suitors” provi-

sion of 28 U.S.C § 1333. These claims are no

different than OPA 90 claims where a party who

has incurred removal costs or sustained dam-

ages may sue in federal or state court. But just

as ordinary “admiralty” claims brought in state

court are subject to the exclusive jurisdiction of

a federal limitation court so could OPA 90 claims

brought in state court be made subject to the

| |

16

exclusive jurisdiction of a federal limitation

court. [Footnotes omitted]

The same analysis disposes of other So-called conflicts

between OPA 90 and Supplemental Rule F. Whenever a

ship owner invokes its right to limit, the limitation pro-

ceeding may have some effect on the usual procedural

rules applicable to the underlying claims. This would be

the case with respect to venue, etc. Furthermore, in the

case at bar, the injunctions and motions entered in the

district court accommodated the claims presentment pro-

visions of OPA 90. The Appendix to the Petition for

Certiorari reveals that district courts can easily tailor

Supplemental Rule F to the provisions of OPA 90.

Ill. The decisions of the courts below undermine the

goal of uniformity in maritime law and dilute or

eviscerate the right of shipowners to limit their

liability under OPA 90.

Uniformity in maritime law requires that a uniform

procedure be applied in oil pollution cases, including

concursus as the linchpin of limited liability. Congress

made it clear that it was not removing oil pollution cases

from the realm of maritime jurisdiction and maritime

law.2! This Court has consistently opted for uniformity in

maritime law, particularly where congressional legisla-

tion is applicable.22 Congress has determined that ship-

owners have the right to limited liability under OPA 90,

21 OPA § 2751(e). See 33 U.S.C. § 2751(e).

22 See, e.g., Miles v. Apex Marine Corp., 498 U.S. 19, 32

(1990); cf., Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 210-11

(1996).

Nett Met ATO be rie Re nha ae -

17

and it is urged upon this Court that the right should be

enforced according to a uniform procedure. The holding

of the Court of Appeals that there is no right to concursus

under OPA 90 is premised on the assumption that Con-

gress, by specifying the procedures for bringing “claims,”

omitted any reference to concursus. Although OPA 90

does not expressly provide for concursus, it is fair to

assum.2 that Congress w-3 aware that concursus had

become an indispensable ingredient for making limitation

statutes work. If Congress had wanted to eliminate con-

cursus in limitation proceedings under the Act, it could

have said so.

As was the case in the Limitation Act of 1851, OPA 90

specifies no procedures for effecting limitation under the

Act. Just as it was necessary for this Court to promulgate

rules for uniform procedures to be applied in limitation

proceedings under the Limitation Act of 1851, it is now

necessary for this Court to establish uniform procedures

to be applied to limitation proceedings under OPA 90.

This could be done readily by the application of Supple-

mental Rule F. Failure to establish a uniform procedure

whereby shipowners can invoke their right to limit their

liability means not only that chaos will reign in the litiga-

tion that inevitably follows major spills, but that this free-

for-all approach to litigation will undermine the right of

limitation of liability. In cases where multiple claims are

filed in multiple courts, the right to limitation created in

§ 2704 of OPA 90 may be compromised or even lost.

This Court has again and again taken the lead in

establishing procedures to be used in admiralty cases,

first in the promulgation of the Admiralty Rules and later

through the promulgation of the Supplemental Rules. The

18

creation of these various uniform rules has had the effect

not only of making the enforcement of rights viable, but

also the creation of these uniform procedures has resulted

in procedural reliability, predictability and stability. Fur-

thermore, the application of a uniform rule, such as Sup-

plemental Rule F, is essential to achieve fundamental

fairness. Without such a procedure, shipowners may be

treated unfairly by being subjected to liability in excess of

the statutorily established limitation amount. Conversely,

claimants who win the race to the courthouse may pre-

clude subsequent claimants from recovery. A concursus

procedure which provides notice to all claimants and

gives all claimants an opportunity to present their claims

in a single proceeding assures not only that shipowners

will not be liable in excess of the limitation amount, but

that all claimants will have a fair opportunity to share in

the limitation fund.

CONCLUSION

This case has serious implications for all industries

that are directly and indirectly involved in bringing oil to

United States or otherwise involved in the transportation

of oil in United States waters. Despite the unequivocal

grant of the right to limited liability in OPA 90, the

decisions of the lower courts have made it almost impos-

sible for shipowners to invoke that right. The right to

limited liability is dependent on the availability of pro-

cedures whereby the right can be effectuated. A key

procedural component of the right to limitation of lia-

bility is a concursus of claims where the party seeking to

limit its liability establishes a limitation fund according to

ee Ceara es

6 A eth At lat Bee

19

the formula specified by Congress which then is available

to satisfy all claims arising from the incident in question.

The lower courts have concluded that there are no such

procedures available for limitation of liability under OPA

90. The absence of such procedures seriously damages the

right to limitation of liability expressly created by the

Act. This case provides this Court with a critical and

unique opportunity to establish uniform procedures

implementing the limitation of liability provisions of OPA

90, and therefore Petitioners’ writ should be granted.

Respectfully submitted,

Howarp M. McCorMack

Counsel of Record

Hearty & Batu LLP

29 Broadway

New York, NY 10006-3293

(212) 943-3980

(212) 425-0131 (Fax)

Counsel for The Maritime

Law Association of the

United States as Amicus

Curtae*

November 23, 1998

*Counsel wishes to acknowledge the assistance of Pro-

fessor Robert Force in the preparation of this Brief.