Maritime law is known for its “hoary” precedents from long ago. But in Settoon Towing v. Marquette Transportation Co., [1] the United States Court of Appeals for the Fifth Circuit rejected an aging principle of maritime law in favor of a more practical interpretation of the Oil Pollution Act of 1990 (OPA). Specifically, the Fifth Circuit held that the familiar rule of Robins Dry Dock & Repair Co. v. Flint [2] did not prevent a contribution claim under OPA’s section 2709.

Settoon Towing involved a collision in the Mississippi River between one towing vessel owned by Marquette Transportation and an oil barge under tow by the Hannah C. Settoon, which resulted in the spilling of 750 barrels of crude oil into the river. As owner of the Hannah C. Settoon, Settoon Towing was the “responsible party” with initial responsibility to clean up the spill. But it asserted liability on the part Marquette Transportation and sought contribution towards its spill-related expenditures.

Settoon Towing’s claim effectively pitted the language of the OPA’s contribution provision against established maritime law. Section 2709 of the OPA says that a party responsible for oil pollution “may bring a civil action for contribution against another party who is liable or potentially liable under this Act or another law.” Maritime law has long recognized a claim for contribution, but also limits the circumstances in which an injured party can recover any damages. Under the familiar Robins Dry Dock rule, maritime law does not generally allow recovery for purely economic damages. The plaintiff must have suffered a physical injury to its property. An example would be the shipper of goods forced to use a more circuitous route after a vessel strikes a critical bridge. Not having sustained an injury to its own property, the shipper has no claim for its additional costs while the bridge is out of commission. [3]

Marquette Transportation tried to invoke the Robins Dry Dock rule as a shield to liability for the economic loss incurred in cleaning up the oil spill. The gist of its argument was that it was not the source of the oil spill and therefore not liable under the OPA. While Settoon Towing might have a maritime law claim for contribution, that claim excluded purely economic loss under Robins Dry Dock. Spill response expenses were purely economic losses rather than damages resulting from an injury to Settoon Towing’s own property.

The Fifth Circuit disagreed. It read Section 2709 of OPA as creating a separate, statutory claim for contribution against anyone “liable or potentially liable” under the OPA. The court agreed that, strictly speaking, Marquette Transportation was not “liable” under the OPA because it was not shown to have been the party solely responsible for the spill (in which case Marquette Transportation would have been deemed the responsible party and Settoon Towing could have recovered 100% of its expenditures). But the court viewed Marquette Transportation as at least “potentially liable” until all the facts surrounding the spill were sorted out. If, as proved to be the case, Marquette Transportation was only partly to blame, it was still liable for contribution of its share of responsibility rather than for complete reimbursement of the party responding to the spill.

Although Congress could have made itself more clear in enacting Section 2709 of the OPA, the Fifth Circuit’s interpretation will likely be viewed as correct. As the Fifth Circuit noted, the OPA generally does away with Robins Dry Dock’s economic loss rule, at least in the context of oil spills. Fishermen, for example, can recover for lost income even though they do not own the natural resources damaged by an oil spill. [4] It seems fair that a responsible party required by the OPA to pay oil spill removal costs (and, potentially, economic loss claims from fishermen and the like) should be able to recover a share of its OPA liability from other parties whose fault contributed to the spill.

The decision in Settoon Towing is of interest to anyone involved in the movement of oil cargoes by water. Although traders themselves are not generally considered to be responsible parties, owners of tankers, tugs and barges are all potentially within the ambit of the OPA’s “responsible party” definition. Settoon Towing clarifies the rights of a responsible party to obtain contribution from others involved in an oil spill—and places others on better notice of when they might bear a share of oil spill remediation costs, even if they do not fall into the responsible party definition. The decision is binding in the Fifth Circuit, which includes Texas, Louisiana and Mississippi, but is likely to have persuasive value in other federal circuits.