The 1989 grounding of the EXXON VALDEZ spurred Congress to enact the Oil Pollution Act of 1990 (OPA) to remedy what it believed to be a patch-work compensation scheme where liability and damages were subject to federal statutes, the general maritime law, state statutes and state common laws.  In addition to broadening the class of persons entitled to compensation, the OPA attempted to streamline the claims process by requiring all claimants present their claims to a responsible party under the statute prior to filing suit.  Twenty-five years later, this claims process still remains the focus of much litigation.

The OPA claims process begins with the President, through the U.S. Coast Guard, designating one or more entitles a “responsible party” for the oil spill. See 33 U.S.C. § 2714(a).   In exchange for generally submitting to strict liability, a responsible party is entitled to limit its liability to varying statutory amounts provided certain conditions are met.  See 33 U.S.C. § 2704.  The OPA requires that all claims first must be “presented” to the responsible party, which then has 90 days to pay or reject the claim.  See 33 U.S.C. § 2713(a).  After 90 days, the claimant may either present its claim to the Oil Spill Liability Trust Fund (OSLTF) administered by the government or file suit against the responsible party.  See 33 U.S.C. § 2713(c).  What might appear to be a simple process continues to be the source of much litigation as claimants and responsible parties alike attempt to use this process to their advantage.

The TINTOMARA/MEL OLIVER Collision

The Louisiana federal courts are frequently called upon to interpret and implement the OPA claims process due to the state’s close connection to the Mississippi River and exploration and production activities in the Gulf of Mexico.  In recent years, the U.S. District Court for the Eastern District of Louisiana has overseen two significant oil spills. While the DEEPWATER HORIZON tragedy and ensuing oil release may garner most of the attention,  an earlier vessel collision and oil spill in the Mississippi River continues to be litigated.

In 2008, the tanker TINTOMARA collided with a barge being pushed by the tug MEL OLIVER in the Mississippi River in New Orleans, Louisiana.  The barge was split in half discharging her cargo of approximately 6,700 barrels of heavy fuel oil No. 6 into the river.  The spill required the closure of the river for nearly weak and oiled vessels, terminals, and river banks before impacting the downriver  estuaries.  The tug and barge’s owner, American Commercial Lines (ACL), was designated the responsible party for the spill and charged with resolving spill claims, including those from property owners and commercial fishermen whose fishing grounds had been impacted by the spill.

In Nguyen v. American Commercial Lines, L.L.C., one of the many suits related to the principal action Gabarick v. Laurin Maritime (America) Inc., 551 Fed.Appx. 288 (5th Cir. 2014), the Fifth Circuit recently considered whether groups of claimants had satisfied the OPA claim presentment requirement by providing adequate claim information and by waiting the required 90 days after first presenting the claim to file suit.   805 F.3d 134 (5th Cir. 2015).

Fifth Circuit Sets Low Bar for Presentment of Claim to Responsible Parties

At issue in Nguyen was whether several commercial fishermen claimants satisfied the OPA claims presentment requirements and were, thus, entitled to bring suit against ACL for damages when their vessels and fishing grounds were oiled. The claimants’ attorney submitted claims presentment letters to ACL containing an evaluation of damages and a specific damage sum, applicable fishing licenses and selected copies of dock receipts to seafood wholesalers.  The letters were signed by the attorney, but not the individual claimants.  ACL requested additional information on how the damages were calculated and additional documentary support.  The attorney provided some information, including tax returns, but refused other requests.  When ACL failed to pay the claims, the claimants filed suit.  ACL sought to dismiss the fishermen’s claims arguing the claimants did not satisfy the claim presentment requirement because they did not provide all of the information that ACL required to properly evaluate the merits of the claims.  ACL further argued that the claimants, themselves, must sign their claims—not an attorney.

The OPA requires that “all claims for removal costs or damages shall be presented first to the responsible party.”  33 USC 2713(a).  The OPA further defines “claim” as “a request, made in writing for a sum certain, for compensation for damages or removal costs resulting from an incident.”  33 USC 2701(3).  The Fifth Circuit, relying on the plain meaning of the statutory words, held that a claimant need not provide anything more than what the claimants originally provided—as they had provided a written request seeking a specific sum of damages related to the spill.  Specifically, claimants were under no duty to provide additional information or documents requested by ACL that was not required by the statute. See Nguyen,  805 F.3d at 140. The Fifth Circuit rejected ACL’s arguments  that the more stringent OPA procedure regulations, promulgated by the Coast Guard and applicable to claims submitted to the OSLTF, require a claim to the responsible party to include “evidence to support the claims.”  The Fifth Circuit held these regulations apply “only to claims filed against the Fund and not to claims presented to responsible parties” and a responsible party could not require information not set forth in the applicable statutes. Id. at 141.  The Fifth Circuit also rejected ACL’s contention that the claimants sign their presentment claims, finding no such requirement in the statute.   Id. at 142.

The Fifth Circuit was careful, however, not to pronounce the bare minimum required for claimants, instead holding only that these claimants had satisfied the OPA presentment threshold.   Thus, it still remains unclear just how little information can be supplied by a claimant to satisfy this requirement.

The import of the Fifth Circuit’s holding is that form matters more than substance in complying with the OPA’s presentment requirement.  But without the ability to require additional claims information, it may be unrealistic for responsible parties to evaluate and promptly resolve claims if they cannot receive sufficient evidence of the claimants’ damages. And while the Fifth Circuit may have attempted to limit the breadth of this holding to the facts and documentation provided by these commercial fishermen, the result is likely an easier path for claimants to clear the presentment hurdle and file suit.

Fifth Circuit Requires Claimants Wait 90 Days after Presentment and File Suit within Three Years

The Nguyen Court also addressed whether a claimant could avoid the 90 day presentment requirement if doing so would cause the lawsuit to be untimely.  The OPA requires that a claimant wait at least 90 days after presenting its claim to the responsible party before it files suit.  The OPA also provides that a suit for damages is barred unless brought within 3 years after “the date on which the loss and the connection of the loss with the discharge in question are reasonably discoverable with the exercise of due care…” 33 USC 2717(f)(1).  The Nguyen claimants argued that they need only comply with the statute of limitations and that compliance with one could excuse non-compliance with another.

The Court, again, strictly interpreted the OPA.  “The statutory language of the OPA clearly requires that the claimants comply with both the 90-day waiting period and the three-year period of limitations.  Therefore, claimants may not ignore the 90-day waiting period simply because the period of limitations is about to expire.  Thus, a claimant must comply with both requirements.”  Id. at 144.

The practical effect is to shorten the period of time by which a claimant must initiate the claims process by first presenting its claim at least 90 days before the expiration of the three year statute of limitations.  While this clearly benefits the responsible party.  A responsible party should be careful not to arbitrarily deny or adjust a claim presented within three years, but which would be presented too late to later be pursued in court.  As courts of equity, an admiralty court may find sufficient reason to allow a potentially late filed claim and view responsible party’s conduct unfavorably.