United States of America et al v. The Shipowners' Insurance & Guaranty Company Ltd. et al

Memorandum in Opposition re MOTION to Dismiss or in the Alternative, Stay Proceedings

N.D. Cal.April 18, 2008

1 JEFFREY S. BUCHOLTZ Acting Assistant Attorney General R. MICHAEL UNDERHILL Attorney in Charge, West Coast Office Torts Branch, Civil Division United States D~IJartment of Justice 7-5395 Federal Bldg., Box 36028 450 Golden Gate Avenue San Francisco, California 94102-3463 Telephone: (415) 436-6648 mike.underhil($usdoi .gov RONALD J. TENPAS Assistant Attorney General Environment and Natural Resources Division United States Department of Justice Washington, DC 20530 BRADCEY R. O'BRIEN Senior Attornex Environmental Enforcement Section United States Department of Justice 301 Howard Street, Suite 1050 San Francisco, California 94105 Telephone: (415) 744-6484; Facsimile: (415) 744-6476 brad.o brien(ßusdoi. gov Attorneys for Plaintiff United States of America 2 3 4 5 6 7 8 9 10 11 12 13 14 15 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 16 UNITED STATES OF AMERICA, Plaintiff,17 18 v. 19 MN COSCO BUSAN, LR/MO Ship No. 9231743, her engines, apparel, electronics, tackle, boats, appurenances, etc. , in rem, REGAL STONE LlMITED, FLEET MANAGEMENT LTD., and JOHN COT A, in personam, Defendants. 20 21 22 23 24 25 26 27 28 Civil No. C07-6045 SC (AND RELATED CASES: C07-5800 SC; C07-5926 SC) IN ADMIRALTY MEMORANDUM OF UNITED STATES IN OPPOSITION TO DEFENDANTS REGAL STONE'S AND FLEET MANAGEMENT'S MOTION TO DISMISS OR IN THE ALTERNATIVE STAY PROCEEDINGS Date: Max 9,2008 Time: 10:00 a.m. Courtroom: Honorable Samuel Conti UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 1 of 34 1 TABLE OF AUTHORITIES 2 3 FEDERAL CASES 4 A-I Ambulance Servo V. California. 202 F.3d 1238 (9th Cir. 2000) . . . . . . . . . . . . . . . . . . . . .. 19 5 6 Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 7 8 Boca Ciega HoteL. Inc. V. Bouchard Transp. Co.. Inc.. 51 F.3d 235 (11 th Cir. 1995) . . . . . . . .. 15 9 10 Brown v. MCI WorldCom Network Services. Inc. 277 F.3d 1166 (9th Cir. 2002) ........... 24 11 12 Burgess v. MN Tamano. 564 F.2d 964 (1st Cir. 1977), cert. denied, 435 U.S. 941 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11 13 14 Caterpilar Inc. V. Wiliams. 482 U.S. 386 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13 15 Cerit v. Cerit. 188 F.Supp.2d 1239 (D. Hawaii 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21 16 17 Connolly v. United States. 149 F.2d 666 (9th Cir. 1945) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20 18 i 9 Davel Communications. Inc. V. Owest Corp., 460 F.3d 1075 (9th Cir. 2006) ............... 24 20 21 Davisv. Mich. Dep't of Treasury. 489 U.S. 803 (1989) ............................... 15 22 23 Dias V. Ban of Hawaii. 764 F.2d 1292 (9th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21 24 Environmental Defense Center. Inc. V. U.S. E.P.A.. 344 F.3d 832 (9th Cir. 2003) ........... 16 25 26 Erickson V. Pardus. 127 S.Ct. 2197 (2007) ......................................... 19 27 28 Gilespie V. United States Steel Corp.. 379 U.S. 148 (1964) . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se II Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 2 of 34 1 Healy v. Sea Gull Specialty Co.. 237 U.S. 479 (1915) ................................ 13 2 3 In re Arizona Appetito's Stores. Inc. 893 F.2d 216 (9th Cir. 1990) ....................... 16 4 Jacobson v. Hughes Aircraft Co.. 105 F.3d 1288 (9th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . .. 19 5 6 Jenkins v. McKeithen. 395 U.S. 411 (1969) ........................................ 19 7 8 Leboeufv. Texaco, 9 F.Supp.2d 661 (E.D. La.1998) ................................. 15 9 10 Marathon Pipe Line Co. v. LaRoche Industries. Inc. 944 F.Supp. 476 (E.D. La.1996) ....... 15 11 12 Patenaude v. Equitable Life Assur. Soc'y of the United States. 290 F.3d 1020 (9th Cir. 2002) . 18 13 Puerto Rico v. MN Emily S. (In re Metlife Capital Corp.). 132 F.3d 818 (1 st Cir. 1997) .. 10,11 14 15 Syntek Semiconductor Co. Ltd. v. Microchip Tech. Inc.. 307 F.3d 775 (9th Cir. 2002) ....... 24 16 17 Travelers Indemnity Co. v. Madonna. 914 F.2d 1364 (9th Cir.1990) . . . . . . . . . . . . . . . . . . . . .. 21 18 Tug Alle-B. Inc. v. United States. 273 F.3d 936 (11th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . .. 7 19 20 Tull v. United States. 481 U.S. 412 (1987) ..................... . . . . . . . . . . . . . . . .. 10,20 21 22 U.S. Indus.. Inc. v. Blake Const. Co.. Inc.. 765 F.2d 195 (D.C. Cir. 1985) .............. 17,21 23 24 U.S. v. MN Jacqueline L.. 100 F.3d 1520 (1 ph Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8 25 26 United States v. Barge Shamrock. 635 F.2d 1108 (4th Cir. 1980) ........................ 20 27 United States v. English. 2001 A.M.C. 1756 (D. Hawaii, March 28,2001) . . . . . . . . . . . . . . .. 11 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se iii Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 3 of 34 1 2 United States v. Fisher, 977 F.Supp 1193 (S.D. Fla. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8 3 United States v. Great Lakes Dredge and Dock Co., 259 F.3d 1300 (1lth Cir. 2001) . . . . . . . . .. 8 4 5 United States v. Hyundai Merchant Marine Co.. Ltd. 172 F.3d 1187 (9th Cir. 1999), cert. denied, 528 U.S. 963 (1999) ....................................... 14, 15 6 7 8 United States v. Locke. 529 U.S. 89 (2000) ....................................... 4, 5 9 United States v. MN Miss Beholden. 856 F. Supp. 668 (S.D. Fla. 1994) .................. 8 10 11 Wilshire Westwood Assocs. v. Atlantic Richfield Corp.. 881 F.2d 801 (9th Cir. 1989) .... 18, 19 12 13 FEDERAL STATUTES 14 15 16 U.S.C. § 703 .............................................................. 25 16 17 18 16 U.S.C. § 1431 .............................................................. 1 16 U.S.C. § 707 .............................................................. 25 19 20 16 U.S.C. § 1431(b)(2) ........................................................ 18 21 22 16 U.S.C. § 1431(b)(3) ........................................................ 18 23 16 U.S.C. § 1432(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8 24 25 16 U.S.C. § 1432(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8 26 27 16 U.S.C. § 1432(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8, 10 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se IV Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 4 of 34 1 16 U.S.C. § 1436(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18 2 3 16 U.S.C. § 1436(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18 4 16 U.S.C. § 1437(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 5 6 16 U.S.C. § 1437(e)(1)............................................... 2,9,10,17,18 7 8 16 U.S.C. § 1437(e)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 9 10 16 U. S. C. § 1437 ( e)( 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 11 12 16 U.S.C. § 1443(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9, 16 13 16 U.S.C. § 19jj ............................................................... 1 14 15 16 U.S.C. § 19jj(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6, 10 16 17 16 U.S.C. § 19jj-1 ............................................................ 16 18 16 U. S. C. § 19jj -1 (a) ........................................................... 6 19 20 16 U. S ,C. § 19jj -1 (b) ........................................................... 6 21 2 2 16 U. S . C. § 19jj -1 (c) ........................................................... 7 23 24 16 U.S.C. § 19jj-1(d) ....................................................... 2, 7, 8 25 26 21 U.S.C. § 881 .............................................................. 18 27 21 U.S.C. § 881 (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se v Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 5 of 34 1 33 U.S.C. § 1319(c)(1)(a) ...................................................... 24 2 3 33 U.S.C. § 1321(b)(3) 4 33 U.S.C. § 1321(b)(6) 5 6 33 U.S.C. § 1321(b)(7) 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,25 ........................................................ 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1, 10, 19,20 8 33 U.S.C. § 1321(b)(7)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 9 10 33 U.S.C. § 2701 ............................................................ 1,5 11 12 33 U.S.C. § 2701(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 13 33 U.S.C. § 2701(20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 14 15 33 U.S.C. § 2701(27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 16 17 33 U.S.C. § 2702(2)(A) ........................................................ 10 18 33 U.S.C. § 2702(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5, 10 19 20 33 U.S.C. § 2702(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10 21 22 33 U.S.C. § 2703 .............................................................. 5 23 24 33 U.S.C. § 2703(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 i 25 26 33 U.S.C. § 2703(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. i i 27 33 U.S.C. § 2704 ........................................................... 5,23 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se VI Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 6 of 34 1 2 33 U.S.C. § 2704(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23,24 3 33 U.S.C. § 2704(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 4 5 33 U.S.C. § 2704(c)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 6 7 33 U.S.C. § 2704(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 8 9 33 U.S.C. § 2704(c)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 10 33 U.S.C. § 2706(b)(1) ......................................................... 9 11 12 33 U.S.C. § 2713 ................................................. 10, 12, 13, 15, 16 13 14 33 U.S.C. § 2713(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 15 16 33 U.S.C. § 2713(b)(1) ........................................................ 14 17 18 33 U.S.C. § 2713(b)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 19 33 U.S.C. § 2713(b)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 20 21 33 U.S.C. § 2713(b)(1)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 22 23 33 U.S.C. § 2713(b)(1)(D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 24 25 33 U.S.C. § 2715(c) ........................................................... 10 26 33 U.S.C. § 2717(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se VII Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 7 of 34 1 33 U.S.C. § 2717(f)(1)(B) ................................................. 4, 12,22 2 3 33 U.S.C. § 2717(f)(2) .............................................. 2,12,13,15,23 4 33 U.S.C. § 2718 ............................................................ 1,3 5 6 33 U.S.C. § 2718(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6 7 8 PUBLIC LAW 9 10 Pub.L. 101-337 (July 27,1990,104 Stat. 379). ...................................... 6 11 Pub.L. 101-380 (August 18,1990, 104 Stat. 489). .................................... 6 12 13 Pub.L. 106-513 (November 13,2000,114 Stat. 2389) ................................. 9 14 15 LEGISLATIVE HISTORY 16 1 7 H.R. Rep. 106-224 (1999) ....................................................... 9 18 19 S. Rep. No. 100 - 595 (1988) as reprinted in 1988 U.S.C.C.A.N. 4387, 4388 .............. 9 20 S. Rep. No. 101 - 328 (1990) as reprinted in 1990 u.S.C.C.A.N 603 ..................... 6 21 22 S. Rep. No.1 01 - 328 (1990) as reprinted in 1990 U.S.C.C.A.N. 603, 607 . . . . . . . . . . . . . . . .. 7 23 24 S. Rep. No. 101 - 328 (1990) as reprinted in 1990 U.S.C.C.A.N. 611 ..................... 8 25 26 FEDERAL RULES 27 Fed.R.Civ.P.8 ............................................................... 19 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se VlI Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 8 of 34 1 Fed.R.Civ.P. 8(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19,20 2 3 FEDERAL REGULATIONS 4 15 C.F.R. § 990.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 5 6 15 C.F.R. § 990.64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 7 8 33 C.F.R. § 136 .............................................................. 15 9 10 40 C.F.R. § 110.3 ....................................................... 10,19,20 11 40 C.F.R. § 19.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 12 13 OTHER AUTHORITIES 14 15 Thomas J. Schoenbaum, 1 Admiralty & Maritime Law § 3-2 (2d ed.1994). ............... 24 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se IX Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 9 of 34 1 PRELIMINARY STATEMENT AND SUMMARY OF ISSUES 2 On November 12, 1936, the San Francisco-Oakland Bay Bridge was first opened. For 3 seventy-one years, including the years prior to the use of radar for navigation and global positioning 4 satellites, the bridge safely co-existed with all manner of ships and all tyes of weather, not the least of which is fog. On the morning of November 7,2007, the nine hundred foot-plus COSCO BUSAN set out from Oakland in thick fog for intended passage to the Far East. Despite the fact COSCO 6 BUSAN was equipped with a suite of sophisticated electronic navigation gear that literally would 7 have been unimaginable to a World War II-era sea captain, the ship did what no others had managed 8 in over seven decades: it hit the Bay Bridge. 9 By any measure, the ship's allsion with the Bay Bridge and the resulting oil spil of well over 10 50,000 gallons of heavy, toxic bunker fuel was consequential, and especially so in its impact on natural resources and what truly can be described as some of the crown jewels of our nation's environmental heritage. The names ofthe affected waters and natural resources speak for themselves 12 and include: the San Francisco Bay, the Pacific Ocean, the Gulf of the Farallones National Marine 13 Sanctuary, the Monterey Bay National Marine Sanctuar, the Golden Gate National Recreation Area, 14 the Point Reyes National Seashore, and the San Francisco Maritime National Historic Park. 15 The United States filed this action against the Hong-Kong flagged COSCO BUSAN, in rem, 16 and against the ship's pilot (John Cota), owner (Regal Stone Limited), and operator (Fleet Management), all of whom have appeared and are subject to the Court's jurisdiction. The Amended Complaint states four separate and independent statutory bases of liabilty: the Oil Pollution Act 18 ("OPA"), 33 U.S.c. §§ 2701, et seq.; the National Marine Sanctuaries Act ("NMSA"), 16 U.S.C. §§ 19 1431, et seq.; the Park System Resource Protection Act ("PSRPA"), 16 U.S.C. §§ 19jj, et seq.; and 20 the Clean Water Act ("CWA"), 33 U.S.c. § 1321 (b)(7), as amended by OPA. 5 11 17 In response, Defendants Regal Stone and Fleet Management ("Defendants") filed a motion to dismiss the Amended Complaint that ignores or fails to meaningfully discuss the very statutory 22 language and legislative history that negate their argument. In simplest terms, Defendants' argument is this: OP A somehow deprives this Cour of jurisdiction and precludes the entirely separate 24 statutory bases of suit under NMSA, PSRP A, and the CW A. Why do we say the argument is rendered 25 void? Answer: OP A contains, front and center, an unambiguous savings clause that preserves the 26 authority of the United States to bring claims - in this case the Governent's claims under NMSA, 21 23 27 PSRPA, and the CWA - in addition to OPA claims. Section 1018 ofOPA, codified at 33 U.S.C. § 2718 and entitled "Relationship to other law", states: 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 10 of 34 1 c) Additional requirements and liabilties; penalties Nothing in this Act. . . shall in any way affect, or be construed to affect, the authority of the United States or any State or political subdivision thereof- (1) to impose additional liability or additional requirements; or (2) to impose, or to determine the amount of, any fine or penalty (whether cflminal or civil in nature) for any violation of law; relating to the discharge, or substantial threat of a discharge, of oiL. 2 3 4 5 6 Even if the OP A savings clause was the only thing to guide the Court, Defendants' argument 7 could be laid to rest. But there is more - far more. As discussed in detail below, PSRP A dovetails 8 precisely with OP A's savings clause and states that liability under PSRP A is "in addition to any other 9 liability which may arise under Federal or State law." 16 U.S.c. § 19jj-1(d). Similarly, NMSA's 10 forfeiture provision requires that proceeds from forfeiture constitutes a separate recovery from monies recovered as civil penalties or civil damages under the statute. 16 U.S.C. § 1437(e)(1). 11 Lest the statutes themselves be anything less than clear about their scope, the legislative 12 history of both PSRPA and NMSA clearly state that they apply to oil spils. And in what can only 13 be described as consummate irony, relevant provisions of NMSA were passed as a result of the 14 sinking of the tanker PUERTO RICAN and the resulting oil spil offshore the Golden Gate in 1984 15 - a sinking and oil spil that led to litigation handled by this very Court and Your Honor. Furher compounding their errant ways, Defendants' "presentment" argument is not even based upon the statutory authority the United States relied upon in commencing this action - yet 17 Defendants fail to cite to, much less address, this critical OP A provision. As described in a later 18 section of this Memorandum, Section 1017(f)(2) ofOP A, 33 U.S.C. § 27l 7(f)(2), explicitly provides 19 that the United States can initiate an action "at any time" to recover removal costs incurred by the 16 20 United States. This OP A provision clearly authorizes the United States to immediately fie ajudicial 21 action without any presentment requirement that might have been argued by Defendants - if they had 22 addressed this provision. This authorization, in and of itself, provides a basis for the Cour to deny Defendants' motion to dismiss. 23 Finally, the underlying construct of the motion fied by Defendants, whose ship caused so 24 much damage and spawned five civil lawsuits to date (three in federal court and two in state court), 25 is premised upon their desire to be repaid - indeed, repaid and reimbursed - from the United States 26 Coast Guard's Oil Spil Liabilty Trust Fund for their own liability, for their own expenditures, and 27 for the damages they pay to the federal governent, the state governent, local governents, and 28 private paries (such as fishermen) hared by the spil. See, Underhil Dec., Exhibits "A" and "B". UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 2 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 11 of 34 1 To their credit, Defendants do not attempt to hide their view of the Court's role in the process since 2 they state it openly: they claim the Cour lacks both the jurisdiction and the ability to weigh 3 testimony, issue rulings, and decide the relevant issues. We beg to differ. More importantly, so did Congress. 4 DISCUSSION 5 6 I. THE INDEPENDENT STATUTORY BASES OF LIABILITY ARE STAND-ALONECAUSES OF ACTION NOT SUBJECT TO DISMISSAL 7 The United States' claims were brought pursuant to OP A, NMSA, PSRP A, and the CW A, 8 each of which is a stand-alone and independent basis of jurisdiction and liability. Defendants' motion 9 seeks dismissal or, in the alternative, a stay of all four statutory causes of action with what reasonably can be called a "tail that wags the dog" rationale. Essentially, Defendants argue (incorrectly) that the 10 United States' action under OP A is premature because of what Defendants call a "claims presentation 11 requirement" that we address in a later section of this Memorandum. 12 In their view of the legal landscape, Defendants decry the prospect that a "premature" suit 13 by the United States and any rulings made by this Court could stymie Defendants' intention to seek 14 reimbursement of tens of millons of dollars via an administrative claim they seek to fie with the Coast Guard's National Pollution Funds Center, which administers the Oil Spil Liability Trust Fund 15 ("Fund"). So that the Cour is clear on this stunning central tenet of Defendants' argument, we restate 16 it: a liability action fied by the United States in this Court cannot proceed, according to the owner 17 and operator of the COSCO BUSAN, since this Court's jurisdiction and rulings might hamper those 18 same Defendants' ability to attempt to be reimbursed for their own liability via an administrative 19 claim they later want to file with a federal agency. In essence, Defendants would have an Article II 20 court reduced to the status of a legal bystander - all in order to benefit the same Defendants whose ship caused the oil spilL. We respectfully suggest that Defendants' view both ofOP A and this Court's 21 'urisdiction is fudamentally wrong. A. OP A's Savings Provision Authorizes Each of the United States' Claims 23 As described above, OP A contains an unambiguous savings clause that preserves the 24 authority of the United States to bring claims - in this case the Governent's claims under NMSA, 25 PSRPA, and the CW A-in addition to OPA claims. 33 U.S.C. § 2718. Notwithstanding that OPA's savings clause should result in the denial of Defendants' motion, Defendants fail to discuss this 26 motion defeating savings clause until late in its brief when discussing NMSA and the PSRP A - however, even then Defendants have no choice but to concede that the United States is not 28 constrained by OP A and that the United States can "impose additional liability or additional 22 27 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 3 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 12 of 34 1 requirements relating to a discharge of oil" and that "(t)his provision preserves the rights of States and 2 Congress to enact laws in addition to OP A that impose additional liabilities on polluters."( emphasis 3 in original). Dfs. Br. at 11. Recognizing that this explicit statutory savings language is, by itself, grounds to deny Defendants' motion, Defendants leap into the abyss without support and argue that any federal or state claim is subject to OP A's claims presentation requirement - regardless of whether such claim 6 is an OP A claim or may relate to Fund reimbursement (i.e., the United States' CW A penalty 7 claim). Defendants' twisted interpretation would lead to an absurd result where any claim that has 8 any connection to the COSCO BUSAN oil spil - such as the ongoing criminal action; a private 9 citizen's health complaint; a trespass, theft, or other propert claim against Defendants; a traffic ticket issued to a contractor responding to the oil spil; or any other number of actions - would be placed 10 in limbo for up to eight years or morel/ until completion of the unelated OP A claims presentation 11 and the natural resource damage assessment processes. This is not the intent of the savings clause. The next step of Defendants' argument, which necessarily ignores OP A's savings clause, is 13 the non-sequitur that since the OP A cause of action is "premature"(a false premise), and since the 1 4 non-OP A causes of action under NMSA and PSRP A seek identical damages compensable under OP A 15 (a false premise), then the non-OPA counts must fall too. Defendants have not, of course, pointed to any provision of NMSA or PSRP A that condition suit or recovery under those statutes on any 16 "claims presentation requirement" under OP A (there obviously are none). Nor have Defendants 17 explained how OP A would preclude the in rem maritime lien causes of action against COSCO 18 BUSAN that are provided by PSRP A and NMSA, as well as NMSA' s in rem forfeiture remedy, given 19 the fact that OP A contains neither an express in rem lien provision nor an in rem forfeiture cause of 20 action. Likewise, they have not explained how a purorted "claims presentation requirement" under 21 OP A would affect the NMSA and PSRP A claims against Defendant Cota, who is not an OP A defendant. 4 5 12 22 Since Defendants fail to meaningfully discuss the OP A's savings clause despite the obvious 23 impact on their motion, we shall do so in their stead. The savings clause was passed as par of Title 24 IofOPA. As summarized by the Supreme Court in United States v. Locke, 529 U.S. 89, 101-02, 120 25 26 Ii Defendants proffer that the COSCO BUSAN natural resource damage assessment process might take five years to complete. Dfs. Br. Pg. 4; Mauseth Decl. ~6. In addition to this five year time period, the fiing of the lawsuit would be delayed under Defendants' scenario to allow the "presentment" process to be completed; and there might be an additional three year period as OP A allows the natural resource damage claim to be brought within three years after the assessment is completed. See, 33 U.S.C. § 271 7(f)(1)(B). 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 4 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 13 of 34 1 S.Ct. 1135, 1144, 146 L.Ed.2d 69 (2000), also not cited by Defendants: 2 The OP A contains nine titles, two having the most significance for these cases. Title I is captioned 'Oil Pollution Liabiliry, and ComlJensation' and adds extensive new 3 provisions to the United States Code. See 104 Stat. 2375, 33 U.S.C. § 2701 et seq.... Title I imposes liability (for both removal costs and damages) on parties responsible for an oil spilL. ~- 2702. Other provisions Frovide defenses to, and 4 limitations on, this liabilty. 33 U.S.C. §§ 2703, 2704.0 considerable importance to these cases are OPA's saving clauses, found in Title I of the Act, § 2718, and to 5 be discussed below. 6 Locke involved regulations passed by the State of Washington that attempted to govern 7 taner operations and their interrelation with federal statutes and international treaties. Stated another way, the Washington regulations at issue in Locke did not involve liability issues and damages 8 remedies, but, instead, the manner in which vessels were to be operated safely so as to avoid spils 9 in the first place. In response to the argument that the vessel operating regulations were pre-empted, 10 the State urged that the savings clause in Title I ofOPA, i.e., the same savings clause at issue here, 11 rescued the regulations. The Cour disagreed, stating, id., 529 U.S. at 105-06, 120 S.Ct. at 1146 12 (emphasis added): The saving clauses are found in Title I ofOP A, captioned Oil Pollution Liability and Compensation and creating a liabilty scheme tor oil pollution. In contrast to the Wasllington rules at issue here, Title r does not regulate vessel operation, design, or maning. Placement of the saving clauses in Title I of OP A suggests that Congress intended to preserve state laws 01 a scope similar to the matters contained in Title I of OP A, not all state laws similar to tlie matters covered by the whole of OP A or to the whole subject of maritime oil transport. The evident purpose of the saving clauses is to preserve state laws which, ratHer than imposing substantive regulation ofa vessel's p,rimary conduct, establish liability rules anáfinancial requurements relating to oil spils. (Citation omitted.) Our conclusion is fortified by Congress' deddsion to limit the saving clauses by the same key words it used in declaring the scope of Title I of OP A. Title I of OP A permits recovery of damages involving vessels 'from which oil is dischar~ed or which pos(e) the substantial threat of a discharge of oiL.' 33 U.S.C. § 2702(a). the saving clauses, in parallel maner, permit States to impose liabiliry or requirements 'relating to the discharge, or substantial threat of a discharge, of oiL.' § 2718( c).... The COSCO BUSAN suit is not about vessel operating regulations, manning requirements and the like, etc., but instead asserts statutory causes of action under NMSA, PSRP A, and the CW A 22 that, as quoted in Locke, "impose liabilty ... 'relating to the discharge, or substantial threat of a 23 discharge, of oiL. ", ¡d. at 105. Therefore, the United States' independent causes of action are properly 24 brought and are preserved under the 0 P A savings clause that reads in relevant par (emphasis added): Nothing in this Act . . . shall in any way affect, or be construed to affect, the authorrty of the United States or any State or political subdivision thereof - (1) to impose additional liability or additional requirements; or (2) to impose, or to determine the amount of, any fine or penalty (whether cflminal or civil in nature) for any violation of law - 13 14 15 16 17 18 19 20 21 25 26 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 5 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 14 of 34 1 33 U.S.C. § 2718(c). Notably, this Court's recent ruling in the related Chelsea LLC case, in response to plaintiffs' motion for a protective order, is wholly consistent with Locke and held, "(t)he OP A Procedure is 3 separate and independent from plaintiffs state law claims." This ruling is important as Defendants 4 contend that all the United States' claims should be dismissed ifthe Court rules in Defendants' favor 2 5 on the OP A "presentment" issue. However, as in the Chelsea LLC matter, the United States' OP A 6 claim is just one claim of several and is wholly separate and apar from its causes of action under 7 NMSA, PSRP A, and the CW A. See, Court's Amended Civil Minute, dated Februar 22, 2008, 8 Docket No. 80 in Chelsea LLC v. Regal Stone, Ltd., et at., N.D. of Cal. Case No. C07-5800-SC. B. The Park System Resource Protection Act 1. Strict Liabilty. In Personam and In Rem Against the backdrop ofOP A's savings clause, we now address the non-OP A statutory causes of 11 action. The first thing we find is that PSRP A was enacted in 1990 by the same Congress that passed 12 OPA.~/ PSRPA was put into law to protect and preserve the resources of the National Parks. As 13 stated by Congress, the purose ofPSRPA was to authorize the United States: 9 10 14 to initiate legal action against individuals who destroy or injure living or non-living marine or Great Lakes aquatic resources within units of the National Park System, and to allow the Secretar to use funds recovered as a result of damage to living or non-living resources. . . for restoration of such resources.15 SenateComm. on Energy &Nat. Res., S. Rep. No. 328, 101stCong., 2d Sess. 1, as reprinted in 1990 U.S. Code Congo & Admin. News 603 (1990)N17 16 PSRP A provides that "any person who destroys, causes the loss of, or injures any park system 18 resource is liable to the United States for response costs and damages resulting from such destruction, 19 loss or injur." 16 U.S.C. § 19jj-1(a). Park system resources are defined as "living or non-living 20 resource(s)... located within the boundaries of a unit of the National Park System." 16 U.S.C. § 21 19jj( d). Significantly for this case and the United States' action against Defendant COSCO BUSAN, 22 PSRP A also enacted an in rem liabilty provision at 16 U.S.C. § 19jj-1 (b): 23 (b) Liabilty in rem Any instrumentality, including but not limited to a vessel... that destroys, causes the loss of, or injures any park system resource or any marine or aquatic park resource 24 25 26 '21 The PSRPA was signed into law on July 27, 1990, Pub.L. 101-337, 104 Stat. 379. OPA was enacted on August 18,1990, Pub.L. 101-380, 104 Stat. 489. 27 28 2.1 The PSRP A was amended in 1996 to extend its scope to all resources within any unit of the National Park System. UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 6 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 15 of 34 1 shall be liable in rem to the United States for response costs and damages resulting from such destruction, loss, or injury to the same extent as a person is-liable under subsection (a) of this section.2 The standard ofliability under the statute is strict liabilty. TugAlle-B, Inc. v. United States, 273 F.3d 936,942 (11th Cir. 2001). PSRPA provides limited statutory defenses, i.e., the injury being caused solely by an act of God or war; or by a third par other than an employee or agent. 16 U.S.c. 5 § 19jj-1 (c). These limited defenses are inapplicable to the present action as Defendants concede that 6 they are strictly liable for the United States' claims. Dfs. Br. at 2, 14. 2. PSRP A's Savings Clause, Legislative History, and Its Applicabilty to Oil Spils PSRPA perfectly dovetails OPA's savings clause with one of its own, but once again is not 9 cited or discussed by Defendants. Indeed, PSRPA canot be clearer, stating unambiguously that 10 liabilty under the statute is "in addition to any other liabilty which may arise under Federal or State 11 law." 16 U.S.C. § 19jj-1(d). The legislative history of the statute leaves no doubt that PSRPA's 3 4 7 8 savings clause means exactly what it says and that the United States has the immediate right to bring 12 its PSRP A claim as an independent cause of action: The Committee wishes to emphasize that the provisions ofthis Act are in addition to and not in lieu of other remedies available under Federal, State or local lawhand is not intended to suggest that the Federal governent does not already ave authority to prevent actions which threaten Federal property or recover damages when injur actually occurs. Section 3 authorizes the Attorney General of the United States to commence civil actions against persons who damage park system resources. Subsection (a) provides that upon the request of the Secretar, and upon a finding by the Secretar of damage to a park system resource (or absent the undertaking 01 response costs, damage to the park system resource would have occured), the Attorney General is authorized to commence a civil action against the person in the approprrate United States district court. 13 14 15 16 17 18 19 S. REp. No. 101-328, at 7 (1990), as reprinted in 1990 U.S.C.C.A.N. 603, 607; see, e.g., Tug 21 Alle-B, Inc., 273 F .3d 936. (As should be obvious, the United States, through the Attorney General, exercised its discretionar right to bring a PSRP A action in this Court.) And consistent with 22 PSRP A's savings clause, the statute contains absolutely no requirement whatsoever, either explicitly or implicitly, that fiing suit under PSRP A is preluded unless the United States first "presents" an 24 OP A claim to a defendant. 20 23 25 The statute's application to oil spils is also established since the legislative history indicates 26 that a suggestion was made to exclude oil spils from the statutes coverage: Also, Mr. Chairman S.1360 and H.R.2844 would appear to include oil spils which cause resource damage. As a technical matter" this legislation should be amended to assure that it does not cover claims or liabihties arising under section 311 of the Clean Water Act and the Comprehensive Environmental Response, Compensation, 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 7 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 16 of 34 and Liability Act. 1990U.S.C.C.A.N.,supra at611. The suggestion was rejected and the bil was not amended, however, and instead Congress adopted 16 U.S.C. § 19jj-1(d), PSRPA's broad savings clause, which 3 was fuher buttressed by the emphatic language quoted above regarding the final bil that was passed 4 ("The Committee wishes to emphasize that the provisions ofthis Act are in addition to and not in lieu 5 of other remedies available under Federal, State or local law..."). 6 C. The National Marine Sanctuaries Act 1 2 1. Strict Liabilty. In Personam and In Rem NMSA governs the designation and management of federally protected marine areas of specific interest. Congress enacted NMSA in response to the increasing degradation of marine habitats and in recognition of the need to protect marine ecosystems. United States v. Great Lakes 10 Dredge and Dock Co., 259 F.3d 1300, 1304 (1 ph Cir. 2001). A purpose ofNMSA is to preserve 11 sensitive areas for their conservation, recreational, ecological, or aesthetic value. United States v. 7 8 9 12 Fisher, 977 F.Supp 1193,1999 (S.D. Fla. 1997). Under NMSA, any person that injures any sanctuar resource is strictly liable for an amount equal to response costs and damages resulting from this injur. Great Lakes Dredge & Dock Co., 259 14 F.3d at. 1304-05; Us. v. M/V Jacqueline L., 100 F.3d 1520, 1521 (11th Cir. 1996); United States v. 15 M/V Miss Beholden, 856 F. Supp. 668 (S.D. Fla. 1994) (owners and operators ofa grounded freighter 16 strictly liable for damage to coral reef within the Florida Keys Sanctuar). The defenses to liability 17 are extremely limited, and in this case inapplicable as the Defendants concede that they are strictly 13 18 liable for the COSCO BUSAN oil spil. Dfs. Br. at 2, 14. 19 "Response costs" are "the costs of actions taken. . . to minimize destruction or loss of, or injur to, sanctuary resources, or to minimize the imminent risks of such destruction, loss, or injur." 20 16 U.S.C. § 1432(7). "Damages" are defined as: "(A) compensation for- - (i)(I) the cost of replacing, 21 restoring, or acquiring the equivalent of a sanctuar resource; and (II) the value of the lost use of a 22 sanctuar resource pending its restoration or replacement or the acquisition of an equivalent sanctuar 23 resource; or (ii) the value of a sanctuar resource if the sanctuary resource cannot be restored or 24 replaced or if the equivalent of such resource canot be acquired; and B) the cost of damage assessments." Id. at § 1432(6). 25 Like PSRPA, NMSA's list of covered resources exceeds those addressed by OPA. Under 26 16 U.S.C. § 1432(8), a "sanctuar resource" is defined as "any living or non-living resource of a 27 natural marine sanctuary that contributes to the conservation, recreational, ecological, historical, 28 educational, cultural, archeological, scientific, or aesthetic value of the sanctuary." NMSA also UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 8 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 17 of 34 1 provides an explicit in rem remedy that allows the arest and assertion of a maritime lien against 2 vessels used in injur of marine sanctuar resources. 16 U.S.C. § 1443(a)(2). The United States has availed itself of that remedy via its action against COSCO BUSAN. NMSA further provides a 3 separate in rem forfeiture provision at 16 U.S.C. § 1437(e)(1) that we address in a subsequent section 4 of this Memorandum. 5 2. NMSA. Its Legislative History. and Its Applicabilty to Oil Spils First, and as with PSRP A, absolutely nowhere in NMSA is there any provision, express or 7 implied, that fiing suit under the statute is dependent upon the "presentation" of an OP A claim to Defendants. Conversely, NMSA applies to oil spils. As stated in the House Report accompanying 8 the 2000 amendments to NMSA (emphasis added): The NMSA protects areas designated as National Marine Sanctuaries in several ways. ... Sanctuaries are coverea by strict vesselUabilty provisions, which appl~ to oil spils, groundings, or other actions that damage marine sanctuary resources.-/ 6 9 10 11 In yet further irony, NMSA was amended in 1988 parly in response to an oil spil that arose 12 in this District and in one of the sanctuaries hared in this case, the Gulf of the Farallones National 13 Marine Sanctuar, a spil which led to suit before this Court. See, S. Rep. 100-595 (1988), as reprinted in 1988 U.S.C.C.A.N. 4387, 4388 ("In recent years, two accidents have caused significant 14 damage to marine sanctuar resources. (One ofJ these events involved the ... grounding and rupture 15 of an oil tanker, the MN Puerto Rican, near the Farallones National Marine Sanctuary. In both 16 incidents, NOAA sued and collected large cash settlements for the damage done to the sanctuaries.") 17 PSRP A, NMSA, OP ~ and the CW A Address Separate and Independent Damage and Penalty Liaims Defendants incorrectly assert that "damages recoverable under those statutes (NMSA and PSRP A) are identical to those recoverable under OP A" and then argue that the United States' NMSA 20 and PSRP A claims should also be dismissed. Dfs. Br. at 1, 2. This is wrong. Though OP A, NMSA, 21 and PSRP A can address certain similar injuries, these statutes address unique natural resources that 22 are not addressed coextensively. Furthermore, the United States' CW A civil penalty case is in no 23 maner addressed by these other statutes that comprise the United States' claim. As an example, while certain injuries that can be pursued under OP A can also be pursued under PSRP A, the latter statute includes a larger category of resources within a unit of the National 25 Park System. OP A authorizes recovery of damages for injuries to natural resources and the services 26 they provide. See, 33 U.S.c. § 2706(b)(1). PSRPA, on the other hand, also covers a "park system D. 18 19 24 27 28 11 H.R. REP. 106-224, accompanying H.R. 1243, 106TH Cong., lt Sess. 1999,1999 WL 493 119 * I (Leg.Hist.). See, Pub.L. 106-513, November 13,2000, 114 Stat. 2389. UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 9 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 18 of 34 1 resource", which includes any resources, natural or manade, located within the boundaries of a 2 national park (other than those owned by a non-Federal entity). Such resources that would be included within PSRP A, but not OP A, include cultural, architectural, and historic structures and 3 items. See, 16 U.S.C. § 19jj(d). By way of example, in this incident 15 historic vessels berthed atthe 4 San Francisco Maritime National Historic Park were oiled by the COSCO BUSAN spilL. Similarly, 5 the broader definition of sanctuary resources under NMSA at 16 U.S.C. § 1432(8) could include 6 resources not covered under OP A. Further, the United States' CW A penalty claim seeks civil penalties that are completely distinct from OPA, NMSA, and the PSRPA claims. See, 33 U.S.C. § 1321(b)(7). 40 C.F.R. § 110.3. 8 The CW A claim, without any "presentment" requirement, provides for assessment of a judicially 9 assessed penalty in an amount that shall be determined by the Cour. See, e.g., Tull v. United States, 10 481 U.S. 412, 107 S.Ct. 1831,95 L.Ed.2d 365 (1987). Likewise, the United States' action for in rem 11 forfeiture under NMSA, 16 U.S.C. § 1437(e)(1), obviously has no connection to OPA. 7 12 II. OP A AUTHORIZES THE UNITED STATES TO BRING AN IMMEDIATE CLAIM A. OPA in General13 OP A authorizes the United States to recover removal costs incurred responding to oil spils. 15 33 U.S.C. § 2702(b). OPA states that "each responsible par for a vessel or a facility from which 16 oil is discharged. . . is liable for the removal costs and damages." 33 U.S.c. § 2702(a). OPA is a strict liability statute subject to limited defenses, discussed below. Puerto Rico v. M/V Emily S. (In re Metlife Capital Corp.), 132 F.3d 818 (1 st Cir. 1997). 14 17 18 Moreover, the natural resource trustees ("Trustees")1j can recover "damages" for "injur to, 1 9 destruction of, loss of, or loss of use of natural resources" arising from an oil spil to waters of the 2 0 United States. 33 U.S.C. § 2702(2)(A). "Natural resources" include land, fish wildlife, biota and 21 other resources belonging to, managed by, or held in trust by the federal governent and any state. 33 U.S.C. § 2701(20). OPA also authorizes private paries to seek reimbursement from the Fund. 22 33 U.S.C. § 2713. OP A provides thatthe United States, through the National Pollution Funds Center, 23 which manages the Fund, shall be subrogated to all rights, claims and causes of action of claimants 24 to whom it has paid compensation. The United States is authorized to commence an action on behalf 25 of the Fund to recover such compensation paid by the Fund to private paries. 33 U.S.C. § 2715(c). 26 27 28 ~I In this case, the federal Trustees are the Department of the Interior and the National Oceanic and Atmospheric Administration. UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 10 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 19 of 34 1 B. OP A's Limited Statutory Defenses and the Declaratory Relief Cause of Action Defenses to OPA's strict liability are extremely limited. See, Puerto Rico, 132 F.3d 818; 3 United States v. English, 2001 AM.C. 1756 (D. Hawaii, March 28, 2001). To establish a defense, 4 the responsible par must prove that the discharge or substantial threat of a discharge was caused: 5 (1) solely by act of God, (2) solely by act of war, (3) solely by the act or omission of a third par, or solely by a combination of one or more of the foregoing three defenses. OP A, 33 U.S.c. § 2703(a). 6 The act of God and act of war defenses are obviously inapplicable. The "sole fault third party" 7 defense under 33 U.S.C. § 2703(a)(3) is extremely narow. It applies to: ... an act or omission of a third par, other than an employee or agent of the responsible paa or a third part whose act or omission occurs in connection with any contractual relationsh.ip 'Yith the re.spons,ible par (except where th~ sole contractual arrangement arises In connection with cariage by a common carier by rail), if the responsible part establishes, by a preponderance of the evidence, that the responsible par- (A) exercised due care with respect to the oil concerned, taking into consideration the characteristics of the oil and in light of all relevant facts and-circumstances; and (B) took precautions against foreseeable acts or omissions of any such third par and the foreseeable consequences of those acts or omissions; ... We note the well-settled rule that the "third par" defense is narowly construed to encompass only actions entirely outside the ship and that compulsory pilots, like Defendant Cota, are not deemed 15 "third paries" within the statutory meaning ofthe exception. See, e.g., Burgess v. M/V TAMANO, 16 564 F.2d 964 (pt Cir. 1977), cert. denied, 435 U.S. 941 (1978) (decided under the CWA). 2 8 9 10 11 12 13 14 17 In any event, all of the statutory defenses are inapplicable since Defendants have conceded 18 before the Court that they are strictly liable to pay for removal costs and damages resulting from the 19 COSCO BUSAN incident. Dfs. Br. at 2, 14. We bring to the Court's attention - and that of the Defendants - the fact that this critical judicial admission, including the waiver of a "third par" 20 defense, is greatly significant in the context ofthis motion, the overall scope of the case, in any further claims or actions relating to the oil spil, as well as in the context of the other federal and state actions 22 that have been fied and whose cours and plaintiffs therein wil rely upon the judicial admission .2 23 We would find it hard to believe that these separate statements, which constitute an irrevocable 24 admission and waiver of their OP A defenses, were made accidentally or without conscious 21 25 26 21 City and County of San Francisco et al. v. Regal Stone, Ltd. et al., California Superior Court, Case No. CGC-07-469876; John Tarantino; Steven F. Fitz, dba Fitz-Buskirk, Inc.; and others similarly situated v. Hanjin Shipping Co., Ltd.; Regal Stone, Ltd.; Synergy Maritme; John J Cota; and Does 1-100, California Superior Court, Case No. CGC-07-469379; Shogren Living Trust v Regal Stone, Ltd. et al., U.S. District Court, Northern District of California, Case No. 07-05926- SC; and Chelsea LLC v. Regal Stone, Ltd., et al., U.S. District Court, Northern District of California, Case No. 07-5800-SC. 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 1 I Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 20 of 34 1 forethought and full consultation between counsel and client(s). Defendants assert, however, that their admission ofliabilty deprives the Court "of a case or controversy" such that the Fourh Cause of Action should be dismissed. It is a most peculiar position 3 to take and, in any event, a most fudamentally wrong one. When a defendant admits liability and 4 responsibility in response to a complaint, the normal course of action for any cour to take is to enter 5 'udgment on the cause of action - not to dismiss the case. 2 6 7 The United States Has Authority to File an Action under OP A That Is Independent of the OP A Fund Claim Provisions Defendants assert that the United States' OP A claim should be dismissed because the United c. 8 States did not first present its full claim to the responsible parties. Before addressing this assertion, 9 it is important to point out that the OPA presentment provision contained in 33 U.S.C. § 2713 10 addresses claims to the Fund, and is not the statutory authority the United States relied upon in 11 commencing this action. Rather, a separate OP A provision specifcally authorizes the United States 12 to immediately fie this judicial action. Critically, Defendants fail to acknowledge, let alone discuss, Section 1 017(f)(2) ofOP A, 33 U.S.C. § 2717(f)(2), which provides that the United States can initiate an action "at any time" to 14 recover removal costs incurred by the United States: An action for recovery of removal costs referred to in section 2702(b)(1) (ofOP A) must be commenced within 3 years after completion of the removal action. In any such action described in this subsection, the cour shall enter a declaratory judgment on liability for removal costs or damages that wil be bindin~on any subsequent action or actions to recover further removal costs or damages. - Excel?t as otherwise provided in the paragraph, an action may be commenced under tlîis subchapter lor recovery of removal costs at any time after such costs have been incurred. 13 15 16 17 18 19 Id. (emphasis added). In addition to authorizing the United States to bring an action "at any time" to recover removal costs, OP A allows the United States great latitude in unilaterally determining when to fie 21 its OP A claims. For example, rather than fiing its natural resource damage claim in conjunction with 22 its removal costs claim as in the instant case, the United States is entitled to bring the natural resource 23 damage component at a later date so long as its suit is fied within three years after the completion 20 24 of the natural resource damage assessment. See, 33 U.S.C. § 2717(f)(1)(B). In the event the United 25 States chooses to subsequently bring a separate natural resource damage case, the declaratory . udgment on liability reached in the earlier "removal cost action" wil be binding upon the defendants. 26 See, 33 U .S.C. § 271 7(f)(2)("the court shall enter a declaratory judgment on liability for removal costs 27 or damages that wil be binding on any subsequent action or actions to recover further removal costs 2 8 or damages"). Although these options are available to the United States, in the COSCO BUSAN UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 12 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 21 of 34 1 case, the United States chose to exercise its prosecutorial discretion to bring its removal costs and 2 damages claim at one time. Caterpilar Inc. v. Willams, 482 U.S. 386, 392 n. 7 (1987)(The par who brings a suit is master to decide what law he wil rely upon.); Healy v. Sea Gull Specialty Co., 3 237 U.S. 479, 480 (1915)(The plaintiff is the master of the complaint). 4 As stated above, Defendants concede, and there is simply no question that the United States 5 incurred removal costs and other damages resulting from the COSCO BUSAN oil spil within the 6 meaning of this provision. Dfs Br. at 3. Consequently, OPA authorizes the United States to 7 immediately fie this action without any presentment requirement that might have been argued by 8 Defendants - if they had addressed this provision. This authorization, in and of itself, provides a basis for the Court to deny Defendants' motion to dismiss. Although it does not impact the application of 33 U.S.C. § 2717(f)(2) as costs have been incurred, the Court should note that 10 Defendants have not agreed to reimburse the United States for in excess of $1.1 milion in clean-up 11 and other removal costs paid by the Fund.Zj D. OP A's Presentation Requirements Do Not Restrict the United States' Abilty to Take Immediate Judicial Enforcement Action 9 12 13 Rather than addressing OP A's explicit language authorizing the United States to commence 14 this enforcement action "at any time," Defendants focus upon other inapplicable provisions of OP A 15 and argue that the United States canot bring its OPA claim at this time. According to Defendants, 16 this is because the United States must first submit the claims to Defendants before filing suit. When analyzed in their entirety, it is evident that the OP A presentment requirements do not provide a basis i 7 to dismiss the United States' action. 18 The relevant sections of33 U.S.C. § 2713 state (emphasis added): (a) Presentation Except as otherwise provided in subsection (b) ofthis section, all claims for removal costs or damages shall be presented first to the reslonsible p~ or guarantor oftne source designated under section 27 4(a) of this title. (b )(2) Limitation on presenting claim No claim of a person against the Fund may be approved or certified 19 20 21 22 23 24 25 2; The United States has submitted a demand to Defendants for interim partial payment of over $ I. I milion in removal costs paid out by the U.S. Coast Guard, National Pollution Funds Center, Oil Spil Liability Trust Fund. The demand has not yet been paid. See, Declaration of R. Michael Underhil, fied herewith, and Exhibits "A" and "B" thereto. The exhibits are the demand letters for the monies and set forth the terms ofthe demand. The letters were sent before Defendants fied their motion to dismiss and before their foregoing concession and waiver that they are strictly liable to pay for removal costs and damages resulting from the COSCO BUSAN incident. 26 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 13 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 22 of 34 during the pendency of an action by the person in cour to recover costs whicn. are the subject of the claim. Initially, Defendants fail to examine the critical relationship between these complementar 3 provisions, and fail to note that Section 2713(b)(2) ofOPA applies to a "person", which is defined 1 2 4 as "an individual, corporation, parnership, association, State, municipality, commission, or political 5 subdivision of a State, or any interstate body." 33 U.S.c. § 2701(27). Notably, the United States is excluded from this definition. 6 Furthermore, reading the OP A "presentment requirement" as providing a basis for dismissing 7 the United States' action would lead to a patently absurd and ilogical result. We shall explain. The 8 United States is suing in this case, in part, on behalf of the Fund. (Amended Complaint, Third Cause 9 of Action.) Indeed, the Ninth Circuit has held that "The Coast Guard and the Fund are both part of 10 the federal governent." United States v. Hyundai Merchant Marine Co., Ltd. 172 F .3d 1187, 1192 (9th Cir. 1999), cert. denied, 528 U.S. 963 (1999). Thus, if a responsible par could assert a "presentment requirement" as a defense to the United States (including the Fund), it would mean that 12 the Fund would have to "present" its claim to the responsible part and, if the responsible parties 13 denies the claim or simply fails to pay it within 90 days, then the Fund could fie suit under OP A - 14 or - present its claim to the Fund ... that is, to itself1 Similarly, the Fund (on whose behalf the Third 15 Cause of Action is asserted) is not defined in OP A as either a "person" or a "claimant", but instead is a separately defined entity. 33 U.S.C. § 2701(11). Once again, were the Fund to be considered a 16 "claimant", Section 2713 quite ilogically and improbably would provide the Fund with the right to 17 fie a claim against itself. Thus, this Court should reject Defendants' argument and find that Section 18 2713 is not available to Defendants as a defense to claims of the Government - thereby haronizing 19 the statute by avoiding what otherwise would be an absurd result. Other provisions of OP A are consistent with this logical reading that the OP A "presentment requirement" does not provide a basis for dismissing the United States' action. For example, the 21 United States is visibly absent from the exceptions contained in 33 U.S.C. § 2713(b)(1), which 22 specify when claims may be submitted by private or state entities directly to the Fund. Notably, 23 although Section 2713(b)(1) enumerates several exemptions to the general prohibition on submitting 24 claims to the Fund prior to submitting claims directly to the responsible part or the responsible 25 part's guarantor, none of these exceptions mentions the United States. Section 2713(b)(l)'s exemptions include provisions for private claimants (33 U.S.C. § 2713(b)(l)(A, D), the Responsible 26 Par (33 U.S.C. § 2713(b)(1)(B), and the Governorofa State (33 U.S.C. § 2713(b)(1)(C). However, 27 there are no similar provisions that apply to the United States. It would be inconsistent with OP A to 28 specify that other paries are not bound by OPA's presentation requirements, fail to provide any 11 20 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 14 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 23 of 34 1 exception for the United States, and then limit the United States' ability to take enforcement action 2 as argued by Defendants. Davis v. Mich. Dep't of Treasury, 489 U.S. 803,809, (1989) ("statutory language cannot be construed in a vacuum. It is a fundamental canon of statutory construction that 3 the words of a statute must be read in their context and with a view to their place in the overall 4 statutory scheme.") It would, however, be consistent with OP A to preclude a defendant from seeking to utilize 6 Section 2713 as a defense to claims of the United States due to the Governent's relationship to the 7 Fund. That is, the Fund is part of the United States, and the Coast Guard is responsible for overseeing the claims procedure outlined in 33 U.S.C. § 2713 and its associated regulations found in 33 C.F.R. 8 § 136. The United States is treated differently under OP A in light of its responsibilty for ensuring 9 that the public and the environment are protected, and the United States serves a unique role in 10 overseeing and administering these statutory provisions. See, Hyundai Merchant Marine Co., Ltd., 11 172 F.3d at 1192 (Coast Guard and the Fund are both par of the federal governent). While certain courts have interpreted the presentation requirement of 33 U.S.C. § 271 3(a) as establishing a necessary precursor to seeking judicial enforcement of private claims, these cases 13 do not apply to the United States. For example, Defendants rely upon Boca Ciega Hotel, Inc. v. 14 Bouchard Transp. Co., Inc., 51 F.3d 235 (11th Cir. 1995), in which the court held that 33 U.S.C. § 15 2713(a) established a mandatory condition precedent to fiing of private lawsuits under OPA. This 16 simply does not apply to the United States as Boca Ciega's holding is limited to claims involving private litigants. Furthermore, this limited application of Boca Ciega to private claimants is 17 supported by subsequent district court decisions. See, Marathon Pipe Line Co. v. LaRoche Industries 18 Inc., 944 F.Supp. 476,479 (E.D. La.1996)(OPA's presentation requirement does not apply to a 19 responsible par seeking declaratory judgment of third par liability noting that, to adopt the 20 Defendant's interpretation of Section 2713 "would graft onto the OP A a requirement that would 21 render some provisions of the OPA meaningless."); Leboeufv. Texaco, 9 F.Supp.2d 661 (E.D. La. 1998)(1imited to private claimants; Section 2713 is not jurisdictional but akin to exhaustion of administrative process.) Other than these inapplicable cases, Defendants fail to cite a single case in which a cour has 24 held that the United States must comply with the OP A presentment provisions prior to filing a lawsuit 25 against a responsible part. Moreover, the Court must not lose sight that Defendants' interpretation 26 would directly conflct with Congress' clear mandate of33 U.S.C. § 2717(f)(2), described above, that the United States is authorized to bring a judicial action for removal costs "at any time" after such 27 costs have been incurred, and that the court "shall" enter a declaratory judgment on liability for 28 removal costs or damages that wil be binding on any subsequent action or actions to recover fuher 5 12 22 23 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 15 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 24 of 34 1 removal costs or damages. Environmental Defense Center, Inc. v. Us. E.P.A., 344 F.3d 832,844 (9th 2 Cir. 2003) (an interpretation canot violate the bedrock principle that statutes not be interpreted to render any provision superfluous). 3 E. This Court Should Reject Defendants' OP A Presentment Argument Because It Would Undermine OPA's Purpose If this Cour finds that OPA is ambiguous with respect to whether Defendants can attempt to assert the OP A presentation clauses as a defense to an action by the United States, it should afford deference to the United States' reasonable interpretation. The interpretation offered by the United 7 States is a logical reading of the text of the statute as a whole and effectuates congressional intent 8 behind the passage OP A. In contrast, this Court should reject Defendants' interpretation of OP A's 9 presentation requirements as it would directly undercut the clear purose of the Act. In re Arizona 10 Appetito 'S Stores, Inc. 893 F.2d 216,219 (9th Cir. 1990)("We interpret a federal statute by ascertaining the intent of Congress and by giving effect to its legislative wil). 11 Strict adherence to the OP A presentation provisions as argued by Defendants would severely 12 limit the United States' ability to fulfill the mandates of OP A "to make the environment and public 13 whole for the injuries to natural resources and services resulting from. . . a discharge. . . of oil" and 14 to "promote expeditious and cost-effective restoration of natural resources and services injured as a 4 5 6 15 result of (the spil)." 15 C.F.R. § 990.10. This goal is achieved through restoration of natural resources and services hared as a result of the incident and provision of compensation for interim 16 losses. Id Fulfilling OP A's purpose requires that the United States be able to expeditiously fie suit 17 in order to protect the opportunity for recovery. Following the presentation process set out in 33 18 U.S.c. § 2713 would cause delays that could enable Defendants to escape liability and frustrate the 19 foundational purpose ofOPA. See, 15 C.F.R. §§ 990.10 and 990.64. 20 Defendants' approach of delaying judicial action until the United States provides Defendants 21 with notice of damages under OP A attempts a neat "hat trick" that would eliminate the potential for relief by the United States. However, NMSA and PSRP A claims are also based on in rem 22 'urisdiction. 16 U.S.C. § 1437(e); 16 U.S.C. § 19jj-1. The COSCO BUSAN was flagged in Hong 23 Kong and was en route to a foreign port of call, believed to be South Korea. U.S. Amended Compo 24 at iiii 5 and 20. In order to guarantee viabilty ofNMSA and PSRPA claims against the COSCO 25 BUSAN, it was imperative for the United States to establish in rem jurisdiction over COSCO BUSAN 26 and obtain a lien before the vessel could leave our waters. 16U.S. C. § 1443(a)(2), 16U.S.C. § 19jj-1. Delay in fiing all claims until a sum certain for natural resources damages could be ascertained would have allowed the COSCO BUSAN to depar United States' waters, escape in rem 28 'urisdiction, and ultimately deprive the United States recovery under NMSA and PSRP A. Because 27 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 16 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 25 of 34 1 of the need to fie this action, the United States included its remaining OP A, NMSA, and PSRP A 2 claims in order to avoid a potential argument that the United States is barred from bringing claims at a later date. Us. Indus., Inc. v. Blake Const. Co., Inc., 765 F.2d 195,205 (D.C. Cir. 1985) 3 (generally, a plaintiff is expected to present in one suit all claims arising out of the same occurrence). Defendants' argument that the United States need not have fied its in rem action since "it is 5 not necessar to institute a lawsuit to obtain such security, and it is standard practice for insurers of 6 vessels such as the COSCO BUSAN to issue security when it is requested, without first requiring that 7 a lawsuit be filed" and that Defendants "provided the United States security for its claims in the 8 amount of$79,500,000" is misleading to the Court and disingenuous. Dfs. Br. at 4. Why? Because the Governent attempted to secure a voluntar security (a "letter of undertaking") over a week before suit was filed. See, Docket No.5, page 2. In return, the United States was met with silence, 10 thus requiring suit in order to secure in rem jurisdiction. The $79.5 milion letter of undertaking was 11 not provided until after the suit was fied. 4 9 12 III. THE FORFEITURE ACTION UNDER NMSA IS PROPERLY PLED Defendants contend that taking or retaining a sanctuar resource triggers forfeiture of the offender's vessel, but that injuring or destroying the same resource does not. Defendants' flawed 14 reasoning disregards the plain meaning of NMSA's statutory language and would create absurd 15 results that contradict the environmentally protective purose ofNMSA. NMSA' s general forfeiture 16 provision, 16 U.S.C. § 1437(e)(1), reads as follows: 13 17 Any vessel (including the vessel's equipment~ stor~s, and cargo) aad other it~m used, and any sanctufI resource taken or retained, in any maner, in connection with or as a result of any violation of this chapter or of any_ regulation or permit issued under this chapter shall be subject to forfèiture to the United States pursuant to a civil proceeding under this subsection. . . The plain language of this section indicates that Congress was simply listing in the first sentence of Section 143 7( e)(1) those items for which the United States could seek forfeiture in the 18 19 20 21 event of a NMSA violation: the offending vessel, associated "other" items, any taken resource(s), 22 or all of the aforementioned. In focusing on the use of "and" rather than "or," the Defendants 23 misconstrue the quoted language as a series of prerequisites for a claim rather than a list of forfeitable 24 items. More importantly, however, Defendants' interpretation would lead to the completely ilogical 25 result of making both a vessel and a taken or retained sanctuar resource necessary to maintain a forfeiture claim. 26 Thus, the Defendants' argument inexplicably would mean that the United States would be 27 unable to seek forfeiture of taken sanctuar resources unless the taking was accomplished by vesseL. 28 Application of Defendants' interpretation to other federal forfeiture statutes creates equally UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 17 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 26 of 34 1 nonsensical results. Under 21 U.S.C. § 881 (a)(2), the United States may seek forfeiture of "(a) 11 raw 2 materials, products, and equipment of any kind which are used, or intended for use, in manufactuing, compounding, processing, delivering, importing, or exporting any controlled substance. . .." It 3 seems unlikely that Congress intended the forfeiture of "raw materials" to be conditioned on the 4 associated use of "products" and "equipment."~j Wilshire Westwood Assocs. v. Atlantic Richfield 5 Corp., 881 F.2d 801, 804 (9th Cir. 1989)(the plain meaning incorporates not only the words in 6 isolation but also in the context of the relevant statutory provisions as a whole; the court is aided in 7 this inquiry when one interpretation would thwar the purpose of the over-all statutory scheme or lead 8 to an absurd result.) Defendants' interpretation of Section 1437(e)(1) as limiting the tyes ofNMSA violations that trigger forfeiture contradicts that section's plain language. Despite Defendants' contention, 10 forfeiture is not conditioned upon conduct occurring in connection with or resulting in a sanctuary 11 resource being taken or retained. Rather, forfeiture is expressly triggered by "any violation of this 12 chapter or of any regulation or permit issued under this chapter. . .." 16 U.S.C. § 1437(e)(1). "Any 13 violation" would include a violation of16 U.S.C. § 1436(1), which prohibits destroying, causing the loss of, or injuring sanctuar resources. The plain meaning of the language selected by Congress 14 indicates that it did not intend to limit forfeiture to only certain tyes of violations. Patenaude v. 15 Equitable Life Assur. Soc y of the United States, 290 F.3d 1020, 1025 (9th Cir. 2002)(the court must 16 begin with the plain language of the statute and if that language is clear, that is the end of the inquiry). This inclusive interpretation is also consistent with the stated purpose ofNMSA: "to provide 18 authority for comprehensive and coordinated conservation and management of (marine sanctuaries), and activities affecting them . . ., to maintain the natural biological communities in the national 19 marine sanctuaries, and to protect. . . natural habitats, populations, and ecological processes." 16 9 1 7 20 U.S.C. § 1431(b)(2, 3). Pursuanttothis purose, NMSA's prohibitions logically include not only acts 21 such as possession, sale, delivery, and transport of sanctuary resources (which would presumably 22 implicate the taking or retention of a resource) but also causing destruction of or injury to such 23 resources. See, 16 U.S.C. § 1436(1, 2). Defendants' interpretation of Section 1437(e)(1) would 24 permit a defendant to avoid forfeiture by simply destroying a sanctuar resource rather than taking or retaining it - clearly a less environmentally protective alternative. Given Congress' intent stated 25 26 27 §,i A reading of 2 I U.S.c. § 88 I indicates that Congress is not always as selective in its choice of language when listing forfeitable items as Defendants imply. In that section, "and" and "or" are used nearly interchangeably, apparently without effect: "raw materials, products, and equipment"; "aircraft, vehicles, or vessels"; "books, records, and research"; "moneys, negotiable instruments, securities, or other things." ¡d. (emphasis added). UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 18 28 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 27 of 34 1 above, this Cour should construe NMSA' s provisions "liberally to avoid frustration of the beneficial 2 legislative puroses." Wilshire Westwood Assocs., 881 F.2d at 804. Also, simply because Section 1437(e) contains provisions specifically addressing the disposition of seized sanctuary resources does not imply that the general forfeiture provision applies 4 only when there are seized resources. See, 16 U.S.C. § 1437(e)(3, 4). Rather, these are the only 5 situations in which such provisions would have any meaning. In situations without seized resources, 6 there would, of course, be no resources in custody of which to dispose. Accordingly, this Court 7 should not insert a limitation provision into NMSA that was unintended by Congress. See, generally, 8 A-l Ambulance Serv., Inc. v. California, 202 F.3d 1238, 1244 (9th Cir. 2000)("We wil not add a term to the statute that Congress elected not to include.") 3 9 iv. THE CLEAN WATER ACT CIVIL PENALTY ACTION is PRO PERL Y PLED 10 Defendants claim that the United States' cause of action for judicially assessed civil penalties 11 under the CW A, 33 U.S.C. § 1321 (b)(7), must be dismissed pursuant to Rule 8(a)(2) of the 12 Fed.R.Civ.P..!j The argument fails on its face. The standard established in Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief..." Specific facts are not necessar; the statement 14 need only" 'give the Defendant fair notice of what the ... claim is and the grounds upon which it 15 rests.' " Erickson v. Pardus, 127 S.Ct. 2197, 2200,167 L.Ed.2d 1081 (2007) (citation omitted). A 16 complaint does not need detailed factual allegations and such allegations need only be enough to raise 17 arightto relief above the speculative leveL. See, e.g., Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 18 1964-65, 167, L.Ed.2d 929 (2007). For the purposes of a motion to dismiss, the material allegations 19 of the complaint are taken as true and the complaint is to be liberally construed in a light most favorable to plaintiff. See, e.g., Jenkins v. McKeithen, 395 U.S. 411,421,89 S.Ct. 1843,23 L.Ed.2d 404 (1969). Finally, all reasonable inferences are to be drawn in favor of the plaintiff. Jacobson v. 21 Hughes Aircraft Co., 105 F.3d 1288, 1296 (9th Cir. 1997). Taking the material allegations of the 13 20 22 Amended Complaint as admitted and drawing all reasonable inferences in favor of the United States, 23 more than a suffcient pleading under Fed.R.Civ.P. 8 has been made. Paragraph 51 of the penalty cause of action expressly incorporates by reference all prior24 25 l'l The CW A prohibits the discharge of oil into navigable waters of the United States or adjoining shorelines that cause a fim or sheen upon or discoloration of the water surface or adjoining shorelines, or which cause a sludge or emulsion to be deposited beneath the water surface or on adjoining shorelines. 33 U.S.C. § 1321(b)(3); 40 C.F.R. § 110.3. Penalties under this provision of the CWA are partially volume based and allow penalties of up to $32,500 per day of violation or up to $ I, I 00 per barrel of oil or unit of reportable quantity of hazardous substances discharged. 33 U.S.C. § 1321(b)(7)(A), 40 C.F.R. § 19.4. 26 27 28 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 19 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 28 of 34 1 paragraphs of the Amended Complaint, which include the primafacie elements of the penalty: (a) 2 the allegations identifying Regal Stone and Fleet Management as, inter alia, the owner and operator of the COSCO BUSAN, and (b) the "General Allegations" of Paragraphs 20 through 28. The latter 3 allege, inter alia, that the vessel allided with the Bay Bridge, thereby discharging oilllj into navigable 4 waters of the United States, and that "The COSCO BUSAN Incident was proximately caused, inter 5 alia, by the acts, omissions, strict liability ... by the in rem and in personam Defendants and, as 6 applicable, their agents, servants, employees, crew, and others for whom Defendants were responsible 7 ..." ¡d. at Paragraph 27. Those allegations clearly satisfy the liberal standards of Rule 8(a)(2) of the Fed.R.Civ.P. 8 Defendants next argue that the count fails since the United States did not assert a monetar 9 figure. Again, the argument falls flat. The reason the Governent did not set out a figure is because 10 the cause of action asserts a judicially assessed penalty action, as opposed to an administrative 11 penalty. Cf, 33 U.S.C. § 1321(b)(6), CW A's administrative penalty provision, with 33 U.S.C. § 1321 (b )(7), the judicially assessed penalty asserted in this case. In short, the amount of the penalty 12 is for the Court to determine, not the United States. See, e.g., Tull, 481 U.S. 412 (CW A non- 13 administrative civil penalty to be set by the court). Defendants also cite two cases in support of their argument, both of which they have 15 fundamentally misread. Defendants cite Connolly v. United States, 149 F.2d 666 (9th Cir. 1945), 16 which dismissed a penalty action since the penalty statute was not cited either directly or indirectly in the complaint. We frankly do not understand why the case was cited since the penalty statute here, 17 33 U.S.C. § 1321(b)(7), is cited three separate times in the Sixth Cause of Action. Similarly, 18 Defendants cite to United States v. Barge Shamrock, 635 F.2d 1108 (4th Cir. 1980), for the argument 19 that a penalty action does not accrue until clean-up is completed. In fact, Defendants cite to the 20 Mauseth Declaration and argue to the Cour that the penalty action canot be fied for approximately 21 five years. In any event, Defendants apparently fail to understand the word "accrue" and its context in the cited case. In Shamrock, the district court dismissed the penalty count, holding that it was barred by a purported three year statute of limitation. The Fourth Circuit reversed, holding that the 23 cause of action accrued for purposes of the expiration of any applicable statute of limitation upon 24 completion of cleanup, and thus that the complaint timely was fied under the facts of the case. 14 22 25 v. JUDICIAL ECONOMY REQUIRES THAT DEFENDANTS' MOTION BE DENIED 26 Judicial economy wil be served if the Court denies Defendants' motion to dismiss. 27 Permitting each of the United States' claims to proceed wil allow this case to be efficiently litigated, 28 III See, 40 C.F.R. § I 10.3, which establishes the "sheen test" as the base limit of violation of the CW A. UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 20 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 29 of 34 1 and wil create efficiencies in the other state cour and federal court cases that have been fied. As 2 described above, the United States' OPA, NMSA, PSRPA, and CWA claims are individual claims that have been brought in this case. The United States has demonstrated that these claims are timely 3 brought and that the Court has subject matter jurisdiction. Nevertheless, even if the Cour were to 4 determine that a paricular/single claim is premature, that claim should not be dismissed but should 5 be litigated in one action. See, Us. Indus., Inc., 765 F.2d 195, 205 (D.C. Cir. 1985)(generally a 6 plaintiff is expected to present in one suit all claims arising out of the same occurrence). There is no dispute that these federal statutes involve common issues of law and fact - the oil spil - and that it would not be judicially efficient or economic for this Court to review these claims at different times. If the Cour were to follow the Defendants' logic (and desire), a lawsuit 9 could only be fied in, say, five to eight years, at which time the paries and the Cour would begin 10 anew. Defendants actually have the audacity to suggest at least five years as a minimum litigation 11 staring point, see, Defendants' Mauseth Declaration at ~ 6, at which time witnesses and evidence 12 likely would be lost or unavailable, especially in a case in which the ship's crew are foreign nationals). Cf, Dias v. Bank of Hawaii, 764 F.2d 1292, 1296 (9th Cir. 1985), citing Gilespie v. 13 United States Steel Corp., 379 U.S. 148, 152-53 (1964)(the most important competing considerations 14 are the inconvenience and costs of piecemeal review on the one hand and the danger of denying 15 'ustice by delay on the other.) Furthermore, there are the two other related actions pending in this Court and two others in 1 7 state court. Judicial economy and efficient case management would dictate that aspects ofthese cases 18 be consolidated for the federal cour action. For example, the deposition of Defendant Cota could take place once with each ofthe paries paricipating in that deposition. Other aspects ofthe litigation could also be consolidated, as occurred when the Cour set a single scheduling conference on 20 Februar 22, 2008, that was attended jointly by all parties paricipating in the three federal court 21 actions. Similarly, as the United States proposed in its portion of the proposed Case Management 22 Order, the federal court and state court litigation can be consolidated for certain puroses. Again, the 23 deposition of certain witnesses such as Defendant Cota could be scheduled so that representatives of all parties to the COSCO BUSAN oil spil litigation are accorded an effcient opportunity to develop 24 the facts of this case. Cerit v. Cerit, 188 F.Supp.2d 1239, 1249 (D. Hawaii 2002)(quoting Travelers 25 Indemnity Co. v. Madonna, 914 F.2d 1364, 1368 (9th Cir.1990)(Piecemeal litigation occurs when 26 different tribunals duplicate efforts and possibly reach different results). Finally, the United States' proposed Case Management Order resolves Defendants' alleged 28 concerns with proceeding with this case at this time. A common cry in Defendants' motion is that the natural resource damage case should be deferred as a result of ongoing discussions between the 7 8 16 19 27 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 21 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 30 of 34 1 Trustees and Defendants and the scientific complexities and studies associated with a natural resource 2 damage assessment. Defendants' solution to this expressed concern - the dismissal of each ofthe United States' independent claims, regardless of whether these claims relate to natural resource 3 damages - is not only harsh, but would thwar Congress' mandate that allows the United States to 4 bring these claims at any time. The far better approach, and an approach that is consistent with the 5 statutory language and recognizes the valuable role that this Court wil contribute to this case, is 6 described in the United States' proposed Case Management Order. Specifically, the United States 7 proposes an effcient three phased approach that allows the litigation relating to liability to proceed immediately; allows the paries a reasonable time to complete the natural resource damage process; 8 and if the parties cannot reach agreement on the natual resource damage issues, litigation would then 9 proceed to determine the extent of these damages. See, Case Management Order at 7 - 8. The United 10 States three phased approach is also consistent with the spirit of OP A, which provides the United 11 States with an option of litigating its natural resource damage claim in a subsequent lawsuit so long as it is filed within three years after the completion ofthe natural resource damage assessment. See, 12 33 U.S.C. § 2717(f)(1)(B). This approach also benefits the public and the environment as it would 13 allow the United States to bring Defendants before this Court to avoid foot dragging and delay and 14 Defendants' apparent desire to create an unwanted and uneeded five year or more natual resource 15 damage assessment process. 16 VI. ISSUES OF SOVEREIGN IMMUNITY ARE NOT APPLICABLE AS THEFUND'S DETERMINATIONS REGARDING REIMBURSEMENT WOULD BE UNHAMPERED BY THIS COURT'S DETERMINATIONS 17 Without basis, as it is not alleged in the United States' Amended Complaint, Defendants 18 assert that the United States "has advised" that it wil ask the Court to rule on whether Defendants 19 are entitled to parial reimbursement oftheir OP A liabilities from the Fund. Defendants also state that 20 "although not expressly set out in its Complaint", the United States is seeking findings by this Court 21 that would bind the United States (the Fund) as it relates to OP A limitations and reimbursement from the Fund. Dfs. Br. at 2, 18. Defendants misstate the United States' case. Contrar to Defendants' expressed fears, the United States is not asking this Cour to manage 23 the Fund. This litigation is not overly complex - the United States wil pursue its statutory 24 enforcement rights under OP A, NMSA, PSRP A, and the CW A and wil demonstrate that it has 25 incurred substantial damages, and that Defendants are liable for costs, natural resource and other 26 damages, and penalties. As par of this case, the United States, as in any other enforcement action, wil pursue discovery intended to bring forth evidence relating to the facts surrounding the COSCO BUSAN oil spil. Discovery is yet to commence; however, it is reasonable to assume that this 28 discovery wil seek all relevant information relating to the oil spil. 22 27 UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - eo 7 - 6045 se 22 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 31 of 34 1 A determination by this Court that the COSCO BUSAN oil spil was proximately caused, 2 for example, by Defendants' breach of federal safety and operating regulations, 33 U.S.c. § 2704( c)(1 )(B), or that Defendants failed to report or comply with a relevant order as described under 3 33 U.S.C. § 2704(c)(2)(C), does not implicate sovereign immunity concerns (concerns, we note, that 4 belong solely to the United States as sovereign, not private parties). Reimbursement through the Fund 5 is a separate administrative process divorced from this proceeding..!l 6 Specifically, in order to eliminate Defendants' entitlement to OP A's liability limits described 7 under 33 U.S.C. § 2704, the United States has sought declaratory judgment, as required by 33 U.S.C. § 2717(f)(2), that Defendants are liable to the United States without limit because the oil spil was 8 proximately caused, for example, by Defendants' gross negligence, wilful misconduct, or violation 9 of federal safety, construction, or operating regulation under 33 U.S.C. § 2704(c)(1), or Defendants' 10 failure to report the incident or comply with orders described in 33 U.S.C. § 2704(c)(2). This Cour 11 is granted jurisdiction under 33 U.S.C. § 2717(b) (among other statutes) to consider such culpable conduct by Defendants. This Court also has jurisdiction to assess Defendants' culpability under 33 12 U.S.C. § 2704(c). However, contrar to assertions by Defendants, such a determination under 33 13 U.S.C. § 2704(c) would not preclude Defendants' ability to fie a claim with the Fund. To the extent 14 information is developed or findings are made by this Cour, the parties are free to present that 15 evidence or those findings to the Fund as par of the normal Fund process. The Fund would review 16 claims for reimbursement in its normal course of business, and the parties would retain all traditional rights to respond to a Fund decision, including the right to appeal to an Aricle II cour, which then 17 would review the Fund's determination under the applicable standards and rules of law governing 18 review of administrative determinations. This process is wholly consistent with Fund practice, and 19 is consistent with the approach maintained by the United States Department of Justice in previous 20 cases. There is no intent to undermine the administrative process. The United States is merely 21 exercising its statutory rights to fie an enforcement action under the environmental statutes - as enacted by Congress. 22 VII. DEFENDANTS' ATTEMPT TO INVOKE THE PRIMARY JURISDICTION DOCTRINE IS MISPLACED23 The primar jurisdiction doctrine is inapplicable to this Court action as the issues that this Cour would consider under are not novel or paricularly complex, and wil have no impact on 25 maintaining national uniformity in the administration of OP A. At the outset, the argument suffers 24 26 27 111 The United States agrees that Defendants must exhaust their administrative remedies prior to challenging a denial by the United States of their claim for reimbursement through the Fund. Defendants correctly note that as Responsible Parties, they are required to submit claims to the Fund prior to challenging any denial of such claims in court. UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 23 28 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 32 of 34 1 a fatal flaw since Defendants' "square peg in a round hole" rationale would in fact violate primar 2 'urisdiction concepts. There are several separate federal agencies that have jurisdiction under their own statutory grants. Thus, according to Defendants, the Deparment of Homeland Security and the United States 4 Coast Guard would have jurisdiction over OP A issues. But, Defendants completely ignore the 5 Deparent of Commerce, which statutorily is entrustedjurisdiction over NMSA, and the Deparment 6 of the Interior, which has jurisdiction over PSRP A. Defendants' argument therefore would establish conflct between these separate agencies' respective jurisdictional spheres, while, meanwhile, this 7 Cour has all the statutory causes of action before it and obviously is entrusted by the Constitution 8 with adjudicating all the causes put before it in the United States' Amended Complaint. Finally, we 9 assume (and hope) that Defendants would not urge, contrary to constitutional law, that anyone of 10 these several agencies has jurisdiction to adjudicate in rem maritime lien claims under NMSA and 11 PSRP A given the ineluctable fact that the Constitution vests such actions solely in an Article II court. See, e.g., Schoenbaum, 1 Admiralty & Maritime Law § 3-2, at 60-61 (2d ed.1994). 12 The focus in the 33 U.S.C. § 2704(c) inquiry is with the character of Defendants' actions in 13 this case, e.g., breach offederal safety operating regulations or other tyes of conduct. This analysis 14 requires no special expertise on the par of an administrative agency and this Cour is well-equipped 15 to engage in such an inquiry. Davel Communications, Inc. v. Qwest Corp., 460 F.3d 1075,1086 (9th 16 Cir. 2006)(The primar jurisdiction doctrine is not intended to secure expert advice from regulatory agencies every time a cour is presented with an issue conceivably within the agency's ambit). The 17 issues before this Cour are far different than those in the case cited by Defendants, 18 Syntek Semiconductor Co., Ltd. v. Microchip Tech, Inc., 307 F.3d 775 (9th Cir. 2002), a complicated 19 technical computer code case in which that cour found that "decompiled object code qualifies for 2 0 registration as source code under the Copyright Act and regulations is an issue of first impression" that "involves a complicated issue that Congress has committed to the Register of Copyrights." Id. 21 at 782. This is in sharp contrast to the findings sought by the United States such as, for example, the 22 Court's consideration of Defendants' actions under 33 U.S.c. § 2704(c). These are not inquiries that 23 Congress has committed to an administrative agency's discretion. Brown v. MCI WorldCom Network 24 Services, Inc. 277 F.3d 1166 (9th Cir. 2002)(primar jurisdiction does not require that all claims 25 within an agency's puriew be decided by the agency). 3 26 VIII. THIS CASE SHOULD BE STAYED TEMPORARILY DUE TO THE CRIMINAL CHARGE. BUT SHOULD NOT BE STAYED FOR ANY OTHER REASON 27 On March 17,2008, the United States brought a criminal proceeding against Defendant Cota. 28 The criminal charge alleges, inter alia, that Cota violated provisions of the CW A, 33 U.S.C. §§ UNITED STATES' RESPONSE TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 24 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 33 of 34 4 1 1319(c)(1)(a) and 1321 (b)(3), as amended by OPA, and the Migratory Bird Treaty Act, 16 U.S.C. §§ 2 703 and 707. In light of the pending criminal proceeding, the United States agrees, subject to one reservation described in the immediately following paragraph, that this civil action should be stayed 3 pending the outcome of the criminal proceeding. On Februar 26, 2008, the United States filed an Amended Notice of Examinations Before 5 Trial in which the United States seeks to examine witnesses/crew of the COSCO BUSAN that may 6 later be outside the jurisdiction of the United States and beyond the subpoena power of the Cour. 7 The Cour's February 22, 2008, Amended Order specified that the time and place of the specified witnesses/crew wil be determined. The United States requests that if this case is stayed as a result 8 ofthe criminal proceeding that these depositions proceed so that the evidence can be preserved. The 9 United States agrees that these depositions should be scheduled so that there is not a conflct with the 10 criminal action. As described in this Memorandum, this action is properly before this Cour as the United 12 States' timely claims are based upon independent statutory bases authorizing the United States to immediately seek costs, damages, and penalties. Even if the Court finds that one or more of these 13 claims need not be brought at this time, judicial economy requires that these claims proceed together as they involve common issues of fact and law, and because these claims are related to ongoing 15 litigation in both the federal and state courts. Therefore, with the exception of a stay relating to the 16 criminal action, the United States opposes any stay ofthis case. 11 14 17 CONCLUSION 18 For the reasons stated above, Defendants' motion to dismiss the United States' Amended 19 Complaint should be denied. 20 Dated: April 18, 2008. 21 22 23 24 25 26 27 28 UNITED STATES' RESPONSE JEFFREY S. BUCHOLTZ Acting Assistant Attorney General /s/ R. Michael Underhil R. MICHAEL UNDERHILL Attorney In Charge, West Coast Offce Torts Branch, Civil Division U.S. Deparment of Justice RONALD J. TENPAS Assistant Attorney --eneral Environment and Natural Resources Division /s! Bradle:yR. O'Brien BRADLE R. O'BRIEN Environmental Enforcement Section Attorneys for Plaintiff United States of America TO DEFENDANTS' MOTION TO DISMISS - e07-6045 se 25 Case 3:07-cv-06045-SC Document 56 Filed 04/18/2008 Page 34 of 34