American Commercial Lines’ Third Party Complaint Displaced by OPA

American Commercial Lines’ Third Party Complaint Displaced by OPA

By: Daniel Berger

Edited by: Molly MacKenzie

US v. Am. Commercial Lines, L.L.C., 759 F.3d 420 (5th Cir. 2014).

On July 23, 2008 American Commercial Lines (herein “ACL”) was designated as the Responsible Party (RP) in an incident involving a collision between a tugboat and a barge resulting in a large quantity of oil spilling into the Mississippi River. As the RP, ACL contracted with third party defendants Environmental Safety & Health Consulting Services, Inc. (herein “ES & H”) and United States Environmental Services, LLC (herein “USES”) to provide cleanup services for the spill. ES & H and USES invoiced ACL for their services, but ACL disputed some of the claims and did not fully compensate either company for their services.Under OPA, each responsible party is liable for the removal costs and damages that result from an oil spill. 33 U.S.C. § 2702(a). Claimants must present their claims to the RP, who must in turn deny, pay, or settle the claim within 90 days. Thereafter, claimants may either bring suit against the RP or file a claim with the Oil Spill Liability Trust Fund. 33 U.S.C. § 2712(c)(2). The Fund is then subrogated to the claims (33 U.S.C. § 2712(f)) and may seek recoupment from the RP. When the United States sued ACL as subrogee, ACL sought to file a third party complaint against its subcontractors. The district court then granted the government’s Rule 12(b)(6) Motion to Dismiss.

ACL then appealed. The Fifth Circuit affirmed the district court’s dismissal of ACL’s claims, holding that nothing in OPA provided for procedures that would allow ACL to seek to join third party defendants. Under OPA, ACL may challenge the government’s suit for recoupment of costs paid to ES & H and USES by showing that the payments were unnecessary, unreasonable, or not in compliance with statutory requirements, and hence were arbitrary and capricious. However, ACL may not join the parties as third party defendants because such a joinder is not provided for in OPA. Because the third party joinder is displaced under OPA, ACL’s only remedy lies in successfully proving that the claims paid by the Fund were arbitrary and capricious. The district court’s dismissal of ACL’s third party complaint was affirmed.