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Appeals court upholds ruling against ACL in 2008 oil spill

Nov 9, 2017 11:51 AM

The company must pay $20 million for cleanup costs resulting from a collision between a barge and tanker

A fuel barge partially sank and spilled nearly 300,000 gallons of oil after a collision with the tanker Tintomara in New Orleans on July 23, 2008.

Courtesy U.S. Coast Guard

A fuel barge partially sank and spilled nearly 300,000 gallons of oil after a collision with the tanker Tintomara in New Orleans on July 23, 2008.

The following is text from a ruling issued Tuesday by the 5th U.S. Circuit Court of Appeals:

(NEW ORLEANS) — On July 23, 2008, nearly 300,000 gallons of oil spilled into the Mississippi River when a tugboat veered across the river, putting the oil-filled barge it towed into the path of an oceangoing tanker. The tugboat, M/V Mel Oliver, was owned by American Commercial Lines (ACL) but operated by DRD Towing Co. pursuant to a contractual agreement between the companies. As the statutorily-defined responsible party under the Oil Pollution Act (OPA), ACL incurred approximately $70 million in removal costs and damages. The United States also incurred approximately $20 million in removal costs and damages.

The United States initiated (a lawsuit) in 2014, seeking a declaration that ACL is liable for all removal costs and damages resulting from the spill and to recover the costs that it incurred. The United States moved for partial summary judgment on its claims that ACL was not entitled to any defenses to liability under OPA. The district court granted that motion, and later entered final judgment ordering ACL to pay the United States $20 million. ACL appealed. We affirm.

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Following the spill, the government prosecuted DRD, the captain and steersman for criminal violations of federal environmental law. DRD and the steersman each pleaded guilty to one count of violating the Ports and Waterways Safety Act, and one count of violating the Clean Water Act. The captain pleaded guilty to one count of violating the Ports and Waterways Safety Act.

In the course of the criminal investigation, DRD admitted that it knowingly allowed its crewmembers to work without appropriate licenses or qualifications and to work more hours than were permitted under Coast Guard safety regulations, and that it failed to report those “manning deficiencies” to the Coast Guard, also in violation of Coast Guard regulations. The captain and steersman admitted to knowing that the steersman was not licensed to act as captain in his absence.

In addition to the criminal prosecution, the government sued ACL and DRD under OPA to recover cleanup costs resulting from the spill. DRD promptly declared bankruptcy and later dissolved its LLC. The government moved for summary judgment against ACL on the issue of liability under OPA. The district court granted summary judgment in favor of the government, and later issued a final judgment ordering ACL to pay the government $20 million. This appeal followed.

Click here to read the complete ruling.

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