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Oil in the Sea III: Inputs, Fates, and Effects
of a discharge…”, and section 1001(31), i.e., …, the costs to prevent, minimize, or mitigate oil pollution…). Responsible parties may be exempt from the limits to liability, as defined in 33 U.S.C. § 2704(c), for such things as gross negligence, violation of Federal safety, failure of the responsible party to report the incident, or failure to provide reasonable cooperation with the removal activities.
The Act established the Oil Spill Liability Trust Fund (33 U.S.C. § 2712)
Affected parties may seek relief from this fund if full compensation is not first available from the responsible party.
Non-preemption (Savings clause)
The OPA makes clear that the Act will not preempt any state from imposing any additional liability or requirements with respect to the discharge of oil or the removal activities (33 U.S.C. § 2717)(OPA section 1018(a)). As such, OPA claims may be brought in state or federal court.
While many numerous damage claims can be compensated under the OPA, punitive damages are not. However, due to the non-preemption of the OPA, these claims may be sought under applicable state laws.
There have been several court cases which address the OPA’s savings clause. In Ray v. Atlantic Richfield Co (435 U.S. 151, 1978 AMC 527 (1978)) the U.S. Supreme Court held that the OPA’s savings provisions only applied to those state laws which involve Title I issues (liability rules and financial requirements) to recover damages from vessels “from which oil is discharged, or which pose the substantial threat of a discharge of oil” (120 S. Ct. 1146). Therefore, states were free to set forth additional requirements that related to the discharge of oil or the threat of discharge. However, state laws will be preempted in areas that do not relate specifically to the state’s or local concerns and responsibilities. For example, while a state may impose additional or stricter regulations to protect their waterways from oil discharges, a state is not within its jurisdiction to regulate tanker design or vessel personnel qualification. These matters will be regulated by federal statutes that seek to maintain uniformity throughout the states.
Economic losses are recoverable under the OPA
Due to the limitations of admiralty tort law, which provides no compensation to parties who suffer economic losses in the absence of physical harm, the OPA specifically address this deficiency through section 1002 of the OPA. This section states that “…economic losses resulting from destruction of, real or personal property… shall be recoverable…” (OPA section 1002(B)). OPA also allows for recovery of lost profits or loss of earning capacity as a result of the damage to real or personal property (OPA section 1002(E)). However, the Act does not make clear when these damages are recoverable.
The case law on this subject has been somewhat inconsistent. In a Petition of Cleveland Tankers, Inc (791 F. Supp. 669, 1992 AMC 1727 (E.D. Mich. 1992)) the courts dismissed because Cleveland Tankers did not allege any injury, destruction, or loss to their real or personal property. Most other courts have interpreted section 1002 more broadly and have regularly awarded damages to parties who have suffered some economic loss due to a spill (Sekco Energy, Inc. v. M/V Margaret Chousest (820 F. Supp. 1008, 1994 AMC 1515 (E.D. La. 1993), Ballard Shipping Co. v. Beach Shellfish (32 F.3d 623, 1994 AMC 2705 (1st Cir. 1994)). This seems to be more in line with the intent of the OPA.
OPA preempts the Limitation of Liability Act.
For vessels, the Limitation of Liability Act limits the recoverable damages to the vessel’s value plus freight owing at the end of a voyage. The case law has demonstrated that the purpose of the OPA was to encourage rapid cleanup by responsible parties, and that any limitation of liability is at cross purposes to this goal. Therefore, the OPA preempts the Limitation of Liability Act under federal or state law.
Natural resources losses may be assessed by active-use and passive-use.
This is possibly the most debated of the OPA’s provisions due to the lack of specific guidelines directing the assessment of natural resource losses. Active-use resources are those that are used; passive-use describe those resources which may not be used, or even plan to be used by anyone, but are nevertheless valued as available.
Trustees may use any manner of valuation techniques to assess natural resource loss including contingent evaluation. This process requires that a valuation measure be determined by surveying members of a hypothetical market and asking them how much they would pay to preserve that resource. While this technique seems subjective, the courts have given trustees great deference as long as the study is performed properly. It is likely that in the future such vague valuation processes will give rise to further litigation.
Definition of reasonable recovery costs
While the Act does define cleanup costs under sections 1012(a) and 1001(31), it was left to the courts to further define and uphold the clear language of those sections. Much of the controversy surrounding this section has centered on the inclusion of mitigation and monitoring costs associated with a spill, and whether those costs may be recovered from the Oil Spill Liability Trust Fund. In general, the courts have pointed to the language of section 1001(31) which states that removal costs means “the costs of removal that are in