Jury Trial For Government Reimbursement Claims Under OPA90
United States v. ERR, LLC, 2022 U.S. App. LEXIS 14512 *; 2022 WL 1675475; __ F.4th __ (5th Cir. May 26, 2022)
ERR is a wastewater treatment facility on the Mississippi River and was designated as the Responsible Party for a discharge into the river of a pollutant from one of its barges. Oil Mop, LLC, a spill contractor of ERR, performed oil removal and remediation of soil and billed ERR $793.000+ for its services. When ERR failed to pay within 90 days under OPA 90, Oil Mop filed a claim for $651,000+ with the National Pollution Fund Center (NPFC) which paid the claim. The issue is res nova.
The NPFC then billed ERR for that amount, plus administrative costs, attorney's fees and interest. ERR refused to pay which resulted in the suit brought by the U.S. based on: (1) recoupment pursuant to 33 U.S.C. Sec. 2702(a) and (2) subrogation pursuant to 3 U.S.C. Sec. 2712(f) and 2715. ERR demanded a trial by jury on all claims. The U.S. moved to strike the jury demand which was granted by the trial judge. On appeal, the Fifth Circuit reversed.
Judge Oldham, as author of the technical and esoteric opinion, begins with a brief history of the right to a jury trial and the controversy between the Federalists and the Anti-Federalists during the formative years of the nation. This ultimately resulted in the adoption and ratification of the Seventh Amendment which guarantees a trial by jury in a suit "at common law" in disputes over Twenty dollars.
The issue in the case is whether the claims of the government, recoupment and subrogation, are claims at common law or equitable claims.
The court first analyzes the recoupment claim and concludes that the claim is fundamentally a tort claim. The action is quasi-contractual which "sounds in tort, not equity."1 Likewise, the remedy which is more important than the right is akin to a restitution claim at law with a right to a jury trial.
Next, the panel addressed the subrogation claim. "Subrogation is merely a procedural fiction created by courts of equity to allow suits involving underlying legal issues and legal relief to proceed."2 The real basis for the claim is an action at law for monetary damages for the cost of the cleanup.
The Fifth Circuit concluded that as these are fundamentally common law claims, the Seventh Amendment affords a right to a jury trial. A copy of the opinion is attached.
Counsel:
Anna T. Katselas, Jason Tyler Barbeau, U.S. Department of Justice, Environment & Natural Resources Division-Appellate Section, Washington, DC, for Plaintiff-Appellee.
Timothy William Hassinger, Esq., Patrick Joseph Schepens, Galloway, Johnson, Tompkins, Burr & Smith, Mandeville, LA, for Defendants-Appellants.
1 2022 U.S. App. LEXIS 14512 at *11
2 Id. at *19
