December 14, 2015
The Importance of Strict Construction of Statutes and Regulations in the Context of Oil Pollution
By: Michael A. Orlando, Meyer Orlando LLC
originally published at: http://www.irmi.com/articles/expert-commentary/oil-pollution-case-requires-strict-statute-construction
The U.S. 5th Circuit Court of Appeals has made clear under the Oil Pollution Act of 1990 the importance of the plain meaning of the statute and it regulations in Chuck Nguyen v. American Commercial Barge Lines (decided Nov. 13, 2015). The case involves an oil spill from a collision of a ship and a barge on the Mississippi River in July 2008.
The U.S. Coast Guard named ACL as responsible party under OPA. ACL hired Worley as its third-party claims administrator to handle claims.
In June 2009, an attorney representing 224 fishermen and others affected by the spill submitted claim letters to Worley signed only by the attorney. Each letter attached individual fisherman’s licenses where applicable, some dock receipts for seafood sold to wholesalers, alleged that oil contaminated the fishing grounds of the fisherman disrupting operations for 25 days, stated as a result of the pollution there were losses in earning capacity and in the subsistence use of the harvested sea life and included a specific evaluation of damages under OPA calculated by gross loss of earning per day times number of lost fishing days reduced by 5% overhead costs. About a month after receipt of the claim letters, Worley sent a letter to the attorney requesting additional documentation for each claimant, seeking tax returns, record of daily catches, an explanation, with support, for the number of lost fishing days, a calculation of how the lost income per day was determined, among other things. The claimants’ attorney then sent tax returns for each claimant. Shortly before limitations ran, claimants’ attorney filed new and amended individual claims. Suit was filed a few days later. ACL had never denied the claims prior to the suit being filed.
The Suit and Issues concerning Presentment
On denial of ACL’s motion for summary judgment, the district court certified two questions for interlocutory appeal that were accepted for decision. The questions concern the presentment requirements under OPA and its regulations.
OPA is a strict liability statute. A claimant has the option to make a claim against the responsible party or against the Oil Liability Trust Fund under procedures specified in 33 U.S.C. § 2713. Under OPA’s presentment requirement, a claimant must first present its claim to the responsible party and wait until that party denies all liability or until 90 days firm the time of presentment have passed before bringing a suit against the RP. If the RP has not paid in 90 days, the claimant may elect to bring suit against the RP. As an alternative, though, a party may instead elect to file a claim against the Spill Fund. In this case, no one elected to file a claim against the Spill Fund. The law requires proper presentment of the claim. Here, the parties disagreed whether presentment was proper.
ACL contended insufficient information was supplied because not all of what was requested was received. The Court began it analysis by looking to the plain language of OPA. “All claims for removal costs or damage shall be presented first to the responsible party.” 33 U.S.C. § 2713(a). Claim is defined in the statute as “a request, made in writing for a sum certain, for compensation for damages or removal costs resulting from an incident.” 33 U.S.C. § 2701(3). The term ‘damages” is defined to include loss of subsistence use of natural resources, loss of revenues, loss of profits, among other things. 33 U.S.C. § 2701(5). The Court noted nothing in the plain language suggests the claimants must submit anything more than what they already did submit. After considering what was presented, the Court concluded it was.
The Court concluded ACL’s argument that more was needed is based on a misreading of OPA. ACL made a leap in logic that the regulation applying to the procedure for presenting a claim to the Spill Fund (33 C.F.R. § 136.105) was justification for requiring the same type of support for a claim against a RP. That regulation requires that a claimant provide ‘evidence to support the claim’ when the claim is made on the Spill Fund. ACL improperly conflated the requirements of filing claims against the Spill Fund with those of presenting claims against the RP. They are two different things. The plain language of 33 U.S.C. § 2713(e) makes clear that he subject regulation only applies to claims against the Spill fund. If ACL wanted more information, it could deny the claim, proceed to litigation and access the discovery process in court.
Worley demanded that the individual claimants sign the claim letters. The Court held that would be true if the subject regulation were applicable as with a claim made to the Spill Fund, but there is no such requirement for a claim made on the RP under the statute.
The final issue addressed was whether new claims that were first presented within 90 days of expiration of the statute of limitations could be considered as timely presented. The Court found that the OPA provisions on presentment and on the period of limitations do not refer to one another and therefore operate independently of each other. The Court reasoned that because these two provisions operate independently, the claimants cannot, as a general rule, rely on compliance with one to excuse non-compliance with the other. The Court did not find any of the excuses offered by the claims to be availing. There were no extenuating circumstances; claimants could not simply cite the purpose of OPA when the 90 day presentment language was clear; the one court that had allowed unpresented claims to proceed involved over 100,000 claims related to the Deepwater Horizon spill; and tacit denial by non-response to the earlier filed claims did not satisfy compliance with the presentment requirement. Plain language of the law and of the regulations trumped all.
Nothing is more important in statutory and regulatory interpretation cases than a plain reading of the provisions. Federal courts are loathed to go around or outside of plain meaning of the words. When a word is a defined term, then the definition controls. It seems so simple, yet creative lawyers are always seeking ways to argue to the contrary. Doing so it always an uphill battle.