Liability Under the Oil Pollution Act: Current Law and Needed Revisions

Author:Kenneth M. Murchison
Position::B.A., Louisiana Polytechnic Institute; J.D., M.A., University of Virginia; S.J.D., Harvard Law School) is Professor Emeritus at the Paul M. Hebert Law Center of Louisiana State University
Pages:917-956
 
FREE EXCERPT
Liability Under the Oil Pollution Act: Current Law
and Needed Revisions
Kenneth M. Murchison
INTRODUCTION
Federal law governing liability for oil pollution has largely
developed at two-decade intervals in response to major oil spills.
Major spills from a tanker and an offshore oil platform led to the
enactment of the first federal statute governing oil pollution
liability, the Federal Water Quality Improvement Act of 1970.
1
Twenty years later, the release of oil following the grounding of
the Exxon Valdez prompted Congress to enact the Oil Pollution Act
of 1990.
2
Today, the oil released as a result of the blowout at BPs
Deepwater Horizon well in the Gulf of Mexico has raised new
questions regarding the adequacy of the existing federal provisions
governing liability for oil spills.
This Article begins by tracing the growth of federal liability
standards over the last 40 years. It then summarizes the current
liability provisions of the Oil Pollution Act and proposes solutions
to problem areas revealed by the Deepwater Horizon well blowout.
Specifically, it advocates eliminating the limits on liability
included in the Oil Pollution Act, expressly allowing claimants to
recover attorney fees in claims under the Act, strengthening the Oil
Spill Liability Trust Fund to guarantee compensation to injured
parties, improving claims procedures, clarifying the provisions that
preserve the rights claimants have under other laws, and imposing
a penalty when a responsible party fails to pay claims promptly.
Copyright 2011, by KENNETH M. MURCHISON.
Mr. Murchison (B.A., Louisiana Polytechnic Institute; J.D., M.A.,
University of Virginia; S.J.D., Harvard Law School) is Professor Emeritus at the
Paul M. Hebert Law Center of Louisiana State University. Prior to his retirement
in January 2011, he was the James E. and Betty M. Phillips Professor at the Law
Center. He is currently a visiting professor at the Moritz College of Law of the
Ohio State University.
1
. Pub. L. No. 91 -224, 84 Stat. 91 (1970).
2
. Pub. L. No. 101 -380, 104 Stat. 484 (1990).
918 LOUISIANA LAW REVIEW [Vol. 71
I. THE DEVELOPMENT OF FEDERAL LIABILITY STANDARDS FOR OIL
POLLUTION
A. Federal Law Prior to 1970
Historically, production of oil occurred on land, and state law
governed liability for costs of cleanup and any damages resulting
from production activities.
3
In the 1960s, two new dangers of
damage from production and transportation activities beyond the
reach of state law emerged. First, international transportation of
petroleum increased the risk of tanker spills in the navigable waters
that the federal government had traditionally regulated. Second,
offshore drilling technology improved significantly, creating the
risk of damage from oil production activities outside the
jurisdiction of any state.
4
Events soon demonstrated that the risks associated with these
activities were not hypothetical. The grounding of the tanker
Torrey Canyon off the western coast of England in 1967
5
and the
release of oil following a blowout on an oil drilling platform off
the California coast near Santa Barbara in 1969
6
led Congress to
enact a statute establishing the first liability standards for oil spills
in 1970.
7
3
. See, e.g., LA. REV. STAT. ANN. § 31:22 (2000) (owner of mineral
servitude ―is obliga ted, insofar as practicable, to restore the surface to its
original condition at the earliest reasonable time‖); TS&C Invs. L.L.C. v. Beusa
Energy, Inc., 637 F. Supp. 2d 370 (W.D. La. 2009) (business owners along
interstate highway whose businesses were affected by the closure of highway as
a result o f an oil well blowout not entitled to recover damages for their
economic losses allegedly occasioned by the closure of the interstate); Corbello
v. Iowa Prod., 850 So. 2d 686, 692 93 (La. 2003) (damages for failure to restore
premises as required in mineral lease not limited to the market value of the land
that was leased); Dupree v. Oil, Gas & Other Minerals, 731 So. 2d 1067 (La. Ct.
App. 1999) (mineral servitude owners liable for damage to land caused by the
lessee of the servitude owners when the lessee was bankrupt).
4
. See The History of Offshore Oil and Gas in the United States 913
(Nat‘l Comm‘n on the BP Deepwater Horizon Oil Spill & Offshore Drilling,
Staff Working Paper No. 22, 2011), available at http://www.eoearth.org/files/
154601_154700/154673/historyofdrillingstaffpaper22.pdf.
5
. See Patrick Barkham, Oil Spills: Legacy of the Torr ey Canyon, THE
GUARDIAN (June 24, 2010), http://www.guardian.co.uk/environment/2010/jun/
24/torrey-canyon-oil-spill-deepwater-bp.
6
. See Keithe C. Clarke & Jeffrey J. Hemphill, The Santa Barbar a Oil
Spill: A Retrospective, 64 Y.B. ASSN PAC. COAST GEOGRAPHERS 157 (2002).
7
. William L. Andreen, The Evolution of Water Pollution Con trol in the
United StatesState, Local, a nd Federa l Efforts, 17891972: Part II, 22 STAN.
ENVTL. L.J. 215, 257 (2003).
2011] LIABILITY UNDER THE OIL POLLUTION ACT 919
B. The Water Quality Act of 1970: Limited Liability for Cleanup
The Water Quality Improvement Act of 1970
8
made several
significant changes in federal law relating to oil spills. It enacted
new prohibitions on discharges of oil, authorized federal actions to
respond to oil spills, and provided for the assessment of civil
penalties against violators. The Act also made the owner or
operator of the vessel or facility where the discharge occurred
liable for the cost of cleaning up the oil, but it limited the
maximum liability that the owner or operator could face.
The 1970 Act prohibited the discharge of oil in harmful
quantities into the navigable waters of the United States,
adjoining shorelines, or . . . the waters of the contiguous zone
9
and required any person responsible for such a discharge to notify
the appropriate federal agency immediately.
10
The statute itself
defined discharge to include spilling and leaking,
11
and it
directed the President
12
to determine by regulations those
quantities of oil the discharge of which, at such times, locations,
circumstances, and conditions, will be harmful.‖
13
The Act also
conferred on the President the power to issue regulations
establishing methods and procedures for oil removal; criteria for
local and regional contingency plans; and procedures, methods,
8
. Pub. L. No. 91 -224, 84 Stat. 91 (1970) (codified as amended in scattered
sections of 33 U.S.C.). See generally Douglas Meiklejohn, Note, Liability for
Oil Pollution Cleanup and the Water Quality Improvement Ac t of 1970, 55
CORNELL L. REV. 973 (1970). In 1978, Congress broadened the prohibition to
forbid discharges ―in such quantities as may be har mful as determined by the
President.‖ Act of Nov. 2, 1978, Pub. L. No. 95-576, § (b)(4)(5), 92 Stat. 2467,
246768 (codified at 33 U.S.C. § 1321(b)(3) (2006)) (emphasis added).
9
. Water Quality Improvement Act, sec. 102, § 11(b)(2), 84 Stat. at 92.
The prohibition implemented the congressional declaration o f United States
policy ―that there should be no discharges of oil into or upon the navigable
waters of the United States, adjoining shorelines, or . . . the waters of the
contiguous zone.‖ Id. § 11(b)(1).
10
. Id. § 11(b)(4).
11
. Id. § 11(a)(2), 84 Stat. at 91.
12
. The Act granted the President authority to delegate t he various powers
granted by the Water Quality Improvement Act ―to t he heads of those Federal
departments, agencies, and instrumentalities which he determines to be
appropriate.‖ Id. § 11(l), 84 Stat. at 97.
13
. Id. § 11(b)(3), 84 Stat. at 92. T he initial regulation defining when an oil
spill was har mful applied the so-called ―sheen‖ test. This regulation determined
that any oil spill that caused ―a film or sheen upon or discoloration of the s urface
of the water or adjoining shorelands‖ was ―harmful to the public health or
welfare of the United States.‖ Part 61 0—Discharge of Oil, 35 Fed. Reg. 14,306
(Sept. 10, 1970). Despite the 1978 amendment to the statutory prohibition, see
supra note 8, the modern codification of the successor to the original rule retains
the sheen test, see 40 C.F.R. § 110.3 (2010).

To continue reading

FREE SIGN UP