The M/V GOLDEN RAY capsized and grounded in St. Simons Sound on September 8, 2019 in an environmentally sensitive area. “It is the largest cargo shipwreck in U.S. coastal waters since Exxon Valdez.” The incident triggered the Oil Pollution Act of 1990 (“OPA 90”), 33 U.S.C. § 2701-2762, which was enacted in response to the Exxon Valdez oil spill. At issue in the case of DONJON-SMIT, LLC v. ADMIRAL KARL L. SCHULTZ, CAPTAIN JOHN W. REED, COMMANDER MATTHEW J. BAER, & COMMANDER NORM C. WITT, in their individual capacity, & in their official capacity as Officers of the UNITED STATES COAST GUARD, Case No. 20 Civ. 011, 2020 WL 1488561 (S.D. Ga. Mar. 24, 2020) was whether the United States Coast Guard erred when it approved the M/V GOLDEN RAY owner’s deviation from certain sections of OPA 90 requiring “owners to pre-contract with prevention and clean-up providers so that discharge responders react quickly and without the need for contract negotiations during an actual emergency.” 33 U.S.C. § 1321(j)(5)(D). This is the first published court decision concerning a deviation from a vessel response plan for a salvage contract.
OPA 90 is intended to provide efficient response and cleanup of oil spills or the substantial threat of oil spills. Among its many provisions, OPA 90 requires “each owner of a non-tank vessel carrying oil to have a Non-Tank Vessel Response Plan” or “NTVRP”, which identifies a “salvage and marine firefighting” or “SMFF” resource provider who is pre-contracted to provide response services. Once an OPA 90 incident has occurred, an owner cannot deviate from those plans unless authorized by the President of the United States or the United States Coast Guard’s Federal On-Scene Coordinator (“FOSC”), who directs cleanup and removal efforts. Deviation is generally authorized when it would lead to more efficient and effective cleanup and removal efforts.
The M/V GOLDEN RAY’s owner had a NTVRP which identified Donjon-SMIT, LLC’s (“DJ-S”) as its SMFF. DJ-S was on-scene within two hours of the incident and succeeded in rescuing the vessel’s crew including some crew members who were trapped within the vessel. DJ-S also succeeded in removing some environmentally hazardous materials, like fuel, from the vessel. DJ-S and the vessel’s owner then began to negotiate terms for the demolition and removal of the vessel. The vessel’s owner, however, rejected DJ-S’s preferred plan to demolish and remove the vessel, including its fuel tanks, in small sections. Apparently, DJ-S’s plan did not contemplate building an environmental protective barrier prior to the start of demolition and removal would have taken too long. Instead, the vessel’s owner engaged in negotiations for the demolition and removal of the vessel with third parties not identified in the NTVRP. T&T Salvage, LLC (“T&T”) submitted a plan to first build an environmental protective barrier and then to demolish and remove the vessel in large sections.
The FOSC, in a series of administrative orders, instructed the M/V GOLDEN RAY’s owner to explain why it rejected DJ-S’s plan to demolish and remove the vessel and to request authorization to deviate from its NTVRP if it intended to use a third-party contractor. In response, the vessel’s owner explained that T&T’s plan to first build an environmental protective barrier and then to demolish and remove the vessel in large sections would lead to more efficient and effective cleanup and removal efforts. The FOSC agreed and approved the owner’s request to deviate from its NTVRP.
DJ-S filed a motion seeking a declaratory judgment enjoining the FOSC’s approval of T&T. The court held a hearing and reviewed evidence including witness testimony. It first questioned whether it had jurisdiction to review some of DJ-S’s claims like that for writ of mandamus because the FOSC was not mandated to act and instead exercised its discretion. It then continued and considered DJ-S’s other claims, including its constitutional claims, by analyzing whether DJ-S was likely to succeed on the merits of its overall case, whether irreparable injury might occur absent an injunction, and whether an injunction would promote public interest. The court found that under present circumstances it could not determine whether DJ-S’s constitutional claim was likely to succeed.
DJ-S also asserted claims under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706, arguing the FOSC’s authorization to deviate from the vessel’s NTVRP was arbitrary and capricious and the FOSC erred because T&T’s plan would not lead to more efficient and effective cleanup and removal efforts. When reviewing an agency’s determination, like the FOSC’s approval of T&T, a court “must ensure that the agency came to a rational conclusion”, but must not “substitute its own judgment.” Generally, a court defers to agency determination when that determination is supported by the administrative record. Here, the court found that the DJ-S would be irreparably harmed if the FOSC’s approval of T&T was affirmed. However, the court also found the FOSC’s approval of a deviation from the vessel’s NTVRP was justified by the incident’s exceptional circumstances and the public had an interest in avoiding any delay, like an injunction might cause, to cleanup and removal efforts. Accordingly, the court denied DJ-S’s preliminary motion or injunctive relief.