Court Interprets “Public Vessel” under OPA 90

Vessel under contract to U.S. is a Public Vessel and exempt from OPA 90

By José I. Lavastida

Ironshore Specialty Ins. Co. v. U.S., No. 16-1589, LEXIS 17928 (1st Cir. September 15, 2017).

In a case of first impression, the First Circuit Court of Appeals in Boston upheld dismissal of a claim for reimbursement by an insurer which paid almost $3 million for clean-up costs due to an oil spill from a Roll On-Roll Off vessel owned by the U.S. but under contract to a private company for its operation and maintenance.

The case involved the Plaintiff’s claims (Ironshore Specialty Ins. Co.)  against American Overseas Marine Company, LLC (AMSEA) and the United States due to Ironshore involvement in paying the clean-up costs from a spill of The Fisher, a large military owned vessel (Military Sealift Command), which happened next to the Boston Harbor.  Over 11,000 gallons of fuel were spilled on July 9, 2010, due to the alleged negligence of AMSEA crewmembers, who had a contractual arrangement for repairs and maintenance of the ship.  BSR, a subcontractor of AMSEA, moved quickly to minimize the damage of the spill, costing it nearly $3,000,000.  Ironshore as its pollution insurer and as subrogee filed an action in the United States District Court for Massachusetts against the United States and AMSEA to recover the money under OPA 90 (Oil Pollution Act of 1990) and under general maritime law.  The First Circuit affirmed in part and reversed in part a district court order, thus dismissing Plaintiff’s claims against AMSEA and the United States.

Ironshore brought a declaratory judgment action against AMSEA and the U.S. to recover cleanup costs and damages paid as subrogee to its insured under the Oil Pollution Act of 1990 (OPA 90) and to recover damages under general maritime law which resulted from those two entities alleged negligence.  The District Court for Massachusetts dismissed all claims under OPA 90 and under general maritime law as against AMSEA.

The First Circuit affirmed the dismissal of the lower court of all the claims against AMSEA which had contracted with the Military Sea Lift Command, a department of the Navy, to crew, maintain and make repairs to the vessel.  It also affirmed the District Court’s dismissal of the Plaintiff’s OPA claims against the United States, but reversed the same court’s dismissal of the Plaintiff’s general admiralty and maritime negligence claims against the United States because the claims were not covered by the OPA.  OPA 90 excludes vessels which are public vessels.  The issue was whether the vessel was a public vessel and thus outside of the scope of the statute.  The court relied on the jurisprudence of the Public Vessels Act which had previously rejected the argument made by Ironshore in this case that only those vessels operated by public employees were public vessels.  Though the vessel was crewed and maintained by AMSEA, operational and administrative control remained with the military command.

With respect to the negligence claims against the U.S. under general maritime law, the Court of Appeal reversed. The trial court relied on a prior decision of the First Circuit, South Port Marine, LLC v. Gulf Oil Ltd. P’ship, 234 F.3d 58 (1st Cir. 2000) which the appellate court said was read too broadly. While that case held that OPA 90 supplants existing general maritime law, it does not supplant those claims which do not fall within the purview of the Act. As public vessels lie outside of the scope of OPA 90, the savings clause, 33 U.S.C. § 2751(e) retains any rights a party has under general maritime law. Hence, Ironshore could maintain a claim against the U.S. for negligence under general maritime law.