Responder Immunity For Salvors
December 21, 2006
James T. "Jim" Shirley- New York
I. Introduction
The traditional role of the professional Salvor has in many cases become secondary to his role in serving as the first line of defense in preventing or minimizing environmental damage. The unique skills and abilities of professional Salvors are needed more than ever before to save casualties and to prevent environmental damage. However, those who proceed to valiantly perform salvage and pollution response may be threatened with potential civil and criminal liabilities for environmental damage which is arguably caused or worsened in some way by their efforts. Even the threat of such liabilities can damage their personal and professional reputations and wreak financial havoc on their companies.
Unfortunately, once a pollution situation -- or even the threat of one -- develops, it may worsen. This may happen no matter how carefully the Salvor selects his response equipment and personnel, and directs the casualty response. By its very nature a marine casualty is constantly subject to the vagaries of nature and the unknown. No matter how well the response may be planned, quick instinctive reaction is often required to effectively combat the ever-changing conditions. In these circumstances, the Salvor is not often blessed with unlimited time to weigh and analyze all options and their possible consequences, but may nonetheless be held to the same standard of care as those who are afforded such luxury.
This reality has forced Salvors worldwide to demand some form of immunity for those who respond to marine casualties that result in or threaten environmental damage. Some progress has been made, but much still needs to be done in order to enable professional Salvors to perform their jobs to the best of their abilities without the threat of civil and criminal sanctions. Indeed, the Salvor''s job is already made more difficult by the threat of such sanctions being imposed on their client vessel owner or the master and crew of the casualty, causing the stakeholders to be less forthcoming with information the Salvor needs.
II. The United States’ Answer To Responder Immunity
A. Oil Pollution
The term “responder immunity” appears to have its origin as a “short cut” reference to particular provisions in the U.S. Oil Pollution Act of 1990[2] (“OPA 90”) amendments to the Federal Water Pollution Control Act (“FWPCA”) relating to Federal Removal Authority:
“(4) EXEMPTION FROM LIABILITY.-- (A) A person is not liable for removal costs or damages which result from actions taken or omitted to be taken in the course of rendering care, assistance, or advice consistent with the National Contingency Plan or as otherwise directed by the President relating to a discharge or a substantial threat of a discharge of oil or a hazardous substance.
“(B) Subparagraph (A) does not apply--
“(i) to a responsible party;
“(ii) to a response under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
“(iii) with respect to personal injury or wrongful death; or
“(iv) if the person is grossly negligent or engages in willful misconduct.
“(C) A responsible party is liable for any removal costs and damages that another person is relieved of under subparagraph (A). [3]
The concept that the person who responds to an environmental discharge should not be held strictly liable for discharges occurring during the response has been present, although not clearly articulated, in U.S. law and regulation for some time.[4] Somewhat similar immunity language is found in the Comprehensive Environmental Response, Compensation, and Liability Act[5] ("CERCLA").
In any event, from the above quoted language, it is immediately clear that true “responder immunity” is, at best, limited. In fact, it may be a euphemism of doubtful meaning in the event of a major incident and consequential “witch hunt”. Nevertheless, it may provide some solace, so long as one trusts that Salvors, who truly provide the first line of defense against pollution, will be treated as persons entitled to this relief.
It has been the opinion of this writer that Salvors are considered to be "responders" under OPA 90 and related federal law. This interpretation was bolstered by a 1998 amendment that added to the list of events excluded from the definition of "discharges" prohibited by the FWPCA the following:
Discharges incidental to mechanical removal authorized by the President under subsection (c) of this section.[6]
The term "mechanical removal" is not defined in the statute, but is defined in regulations promulgated by the Coast Guard relative to control of pollution by oil and hazardous substances:
The use of pumps, skimmers, booms, earthmoving equipment, and other mechanical devices to contain the discharge of oil and to recover the discharge from the water or adjoining shorelines.[7]
Tugs, pulling gear, and most other tools of the Salvor, including those listed in the definition, are "mechanical" and are employed to effect "mechanical removal". This would seem, therefore, to protect the Salvor as much as if he was specifically identified as an entity to which the responder immunity provisions applied. The growing role of Salvors in environmental matters may depend on whether or not this concept is given a broad or narrow interpretation by the governmental authorities and the courts.
B. Hazardous Substances Pollution
The above, of course, is limited to pollution by oil or the 140 or so hazardous substances which are covered by the FWPCA.[8] It does not apply to pollution from the many other hazardous substances which are covered solely by CERCLA. The responder immunity provisions of the FWPCA and OPA 90 do not apply to a response under CERCLA. CERCLA does, however, provide that "response action contractors" cannot be held liable under CERCLA or any other federal law for non-negligent conduct that results in a release or threatened release of a hazardous substance.[9] The Superfund Amendments[10] provide similar responder immunity, but again only for non-negligent conduct. Therefore, hazardous substance pollution in the United States which would subject a party to the CERCLA regulations may result in liability for the Salvor if the pollution is a consequence of his negligence.
The legislative history makes clear that the FWPCA responder immunity provision was designed to be complementary to, and not to replace, CERCLA responder immunity. It is important to note, therefore, that in CERCLA cases the responder is protected solely from the strict liability, i.e. liability without fault, provisions that are applicable to the “responsible party”, i.e., the owners of the offending vessel. Therefore, a hazardous substance pollution response under CERCLA regulations may result in liability for the “responder” if pollution results as a consequence of his negligence. Liability may also result from a pollution response involving a hazardous substance covered by the FWPCA if the same substance is also covered by CERCLA and the charges are brought pursuant to CERCLA.
The state of federal law in the United States, therefore, is that Salvors will not be held strictly liable for pollution occurring during their response, and will only be held liable for pollution from either oil or from the 140 hazardous substances covered by the FWPCA if the pollution results from their gross negligence or willful misconduct. For the sake of certainty, however, Salvors would be well-advised to have the incident’s Federal On-Scene Coordinator declare on the record that their activities constitute “mechanical removal” under the FWPCA consistent with the National Contingency Plan,[11] and identify them as “responders”. In the event that the incident involves an FWPCA hazardous substance, the Salvor should also request that the Federal On-Scene Coordinator affirmatively state that the mechanical removal action is not being performed under CERCLA.
III. Responder Immunity Under State Law
Concern has been expressed by many that American federalism allows the various states to impose different standards, even for responders'' liability. However, research has failed to reveal any state of the United States in which the legislature has enacted a law prohibiting a Salvor from limiting its liability. On the contrary, various states have been more progressive than the federal government and have adopted laws specifically providing for responder immunity. California law, for example, provides, with limited exceptions:
No person, including, but not limited to, an oil spill cooperative, its agents, subcontractors, or employees, shall be liable under this chapter or the laws of the state to any person for costs, damages, or other claims or expenses as a result of actions taken or omitted in good faith in the course of rendering care, assistance, or advice in accordance with the National Contingency Plan, the California oil spill contingency plan, or at the direction of the administrator, onsite coordinator, or the Coast Guard in response to a spill or threatened spill of oil.[12]
IV. Responder Immunity in Europe
This writer is not qualified to give advice on English or European law, so would defer to anyone who might take issue with what is said in this section. However, about a year before the death of the very learned Geoffrey Brice, Q.C., we had the opportunity to discuss this subject at length. Mr. Brice was quite clear that, in England at least, what he referred to as "channeling" has the same effect as "responder immunity" has in the United States. That is, the government or any third party damaged by a spill will be required to proceed against what in the U.S. we refer to as the "Responsible Party", usually the vessel owner, to recover up to whatever liability limits apply. That will be so even if there is a Salvor on scene who may have caused or worsened the incident.
This position is supported in the Third Edition of Mr. Brice''s highly acclaimed treatise on salvage law,[13] which was published shortly after our conversation on the subject. Mr. Brice relies both on the English Merchant Shipping Act, 1995 and the 1992 Protocols to the CLC[14] and the Fund Convention[15]. Referring to §156(1)(ii) and (2) of the Merchant Shipping Act, 1995, he notes that these exclude "the liability of a number of classes of other persons including (d) of subsection (2) –
''Any person performing salvage operations with the consent of the owner of the ship or on the instructions of a competent public authority''. "
Mr. Brice admits to some vagueness in the statute as to "whether the protection of the salvor is premised on the occurrence taking place before he is engaged with the owner''s consent or the instructions of competent public authority are given or whether it applies to a situation where the salvor is already performing salvage operations when (perhaps due to the salvor''s own fault) the spillage of oil takes place." Mr. Brice concludes, "[it] is submitted that the protection would still apply in the latter case because it is the ship owner who is strictly liable for the spill however caused and thereafter the channeling provisions apply".[16]
V. Special Concerns
A. Criminal Liability
The above does not take into account criminal liability. This is of particular importance in light of the increased use of criminal sanctions in environmental matters. To address the position in the United States, neither the provisions of the FWPCA nor those of CERCLA provide any immunity to “responders” with respect to criminal liability. This could have the paradoxical result of Salvors or other responders being criminally charged as a matter of prosecutorial discretion, while being legally immune from any civil liability for removal costs or damages.
There is no assurance of protection from criminal liability, particularly strict criminal liability under the Rivers and Harbors Appropriations Act of 1899;[17] or the Migratory Bird Treaty Act.[18] Therefore, the responder is left exposed, like vessel owners, operators and others, to the threat of criminal prosecution and penalties simply because a spill results from his activities, even though he always operates with due, or even extraordinary, care!
The responder is, in fact, subject to the political whims of federal and state prosecutors. Similar to vessel operators (e.g. the NORTH CAPE spill), a responder may be forced into a draconian plea bargaining arrangement to avoid incarceration, personal destruction, and/or destruction of his business. The alternative to plea bargaining is risky! A responder can opt to take a chance at trial and endeavor to defeat the imposition of strict criminal liability[19], but must do so with the knowledge that if convicted, the United States Sentencing Guidelines (“U.S.S.G.”) will leave the court with little discretion and almost no alternative but incarceration or heavy financial penalties.[20] An exception may apply if the defendant can demonstrate that a proper “compliance program”, as set forth in the U.S.S.G., was in place before the incident.[21]
These Guidelines provide an organization or business with the opportunity to sharply reduce its liability by taking measures to prevent and report violations of federal law. If the base fine for an offense is $2 million, and the U.S.S.G. is effectively utilized, the court can be expected to reduce that penalty to somewhere between $100,000 and $400,000. Clearly, the Guidelines create a tremendous incentive for organizations to act to reduce this enhanced potential liability.
To take advantage of the Guidelines incentives, a business must implement a corporate compliance program. Compliance programs do more than reduce the fine a corporation must pay upon conviction. The programs also work to reduce the activities and mindsets that initially expose the corporation to criminal liability. Thus, compliance programs implemented prior to alleged criminal conduct are a useful tool in convincing prosecutors that the corporation and its senior managers took all reasonable steps to prevent illegal conduct. This sort of dedication may be useful in persuading a prosecutor to forego seeking an indictment. The official policy of the U.S. Department of Justice is “to encourage self-auditing, self-policing, and voluntary disclosure of . . . violation,” particularly violations of environmental statutes and regulations. To this end, the Department of Justice will view the existence of an effective compliance program as a “mitigating factor . . . in the Department’s exercise of criminal enforcement discretion.”[22]
B. Jettisoning of Cargo
The need to discharge oil into the sea to save a vessel and/or her cargo has been a rare occurrence in recent years. “Contemplation of its use may be even more restricted by OPA ‘90, which introduced a new strict liability standard for damage from oil spills and established criminal sanctions for spillers[23].” It is obvious that the U.S. Congress did not consider the implications that OPA ‘90 would have in cases where jettisoning may be a viable, pollution mitigation measure. The result is that the Salvor''s ability to prevent a significant environmental disaster may have been impaired.
Shipowners and Salvors, in the throes of a vessel crisis, may be faced with two equally unpalatable and conflicting choices. If jettisoning a small portion of the oil cargo would prevent an even greater environmental disaster, should they take such action knowing it could result in civil and criminal penalties for a purposeful discharge? Or, should they refuse to jettison, and attempt to prevent the imminent disaster solely by other means, while knowing full well that such other means are not likely to succeed? In the latter case, will the owner or Salvor again be subject to large penalties for creating a "purposeful discharge" by not acting reasonably to have prevented the spill worsening? There is no easy answer. When it comes to choices such as whether to jettison, the United States Congress appears to believe that owners and Salvors should be able to perform earthly miracles with their hands bound by the legal prescription of vagueness. It is therefore recommended that a Salvor never jettison cargo in waters of the United States without the written authorization of the Federal On-Scene Coordinator.
C. Other Than Pollution
The question inevitably arises whether and to what extent "responder immunity" may apply in situations involving third party damages other than pollution damages resulting from the Salvor''s actions. That is, will the Salvor be entitled to any level of responder immunity if his efforts at refloating a stranded ship result in it colliding with another vessel, or a pier or breakwater, or sinking and blocking a navigation channel? From the perspective of United States law, where serious concerns for such third party incidents exist, the Salvor must protect himself contractually because, insofar as we have been able to determine, there has been no grant by federal legislation or case law of responder immunity in such incidents. A recent decision of the U.S. Court of Appeals for the Fifth Circuit highlights this uncertainty. In that case, an entity attempted to tow a partially submerged wreck of a shrimp boat out of the waterway. It was unsuccessful, moving the boat only a few feet and rotating it 180 degrees. Several months later, a vessel struck the shrimp boat and incurred severe damage. The vessel owner brought suit against the owner of the shrimp boat and the entity that had unsuccessfully attempted to tow the wreck. The unsuccessful tower filed a motion seeking dismissal of the claim against it on the basis of summary judgment, asserting that it was not the operator of the shrimp boat for purposes of the Wreck Act.[24] The district court agreed on that point, but its decision was reversed by the court of appeals, holding that the Wreck Act is to be interpreted broadly and that whether the unsuccessful tower was an operator of the wreck was a question of fact to be decided at a trial on the merits.[25]
CONCLUSION
All who play a role in casualty response deserve responder immunity, and must be given it if they are to continue protecting the waterways of the world and addressing environmental concerns. Salvors and others have done well to survive an era of practically no such immunity, and have now achieved some limited immunity. At the same time, however, the sorts of liabilities imposed for environmental pollution have increased, and modern criminal sanctions deny relief to the Salvor by any means but legislation. Therefore, while heightened concern for the environment increases the need for the services of all types of responders, the encouragement essential to the provision of those services has lagged behind the more aggressive increases in the types and extent of penalties being imposed in environmental damage cases.
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[1] With the valuable assistance and input of Dennis L. Bryant, Esq., Senior Admiralty Counsel, Holland & Knight LLP, which is gratefully acknowledged.
[2] Pub.L. 101-380, Sec. 4201(a), 104 Stat. 524 (August 18, 1990), codified at 33 U.S.C. §1321(c)(4) and as further amended by Pub.L. 105-383, Sec. 411(a)(3), 112 Stat. 3432 (November 13, 1998).
[3] 33 U.S.C. §1321(c)(4).
[4] Although the specific term, “responder immunity”, surfaced only after the “grossly negligent” and “willful misconduct” language appeared in OPA 90, there are no instances on record of responders being held liable before the OPA 90 provisions were written or took effect. The new focus was apparently the result of the increased attention given OPA ‘90 because of the increased liability limits.
[5] 42 U.S.C. §§9601-9675, as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA) Pub. L. 99-499, §119, 100 Stat. 1662 (October 17, 1986).
[6] Section 411(b) of the Coast Guard Authorization Act of 1998, Pub.L. 105-383, section 411, 112 Stat. 3432 (November 13, 1998). (Emphasis added.) This section amended 33 U.S.C. §1321(a)(2).
[7] 33 CFR §153.103(j).
[8] The list of hazardous substances as designated under section 311(b)(2)(A) of the FWPCA may be found at 40 CFR Part 116.
[9] 42 U.S.C. §9619, as added by Pub.L. 99-499, title I, section 119, 100 Stat. 1662 (October 17, 1986).
[10] Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub.L. 99-499, §119, 100 Stat. 1662 (October 17, 1986).
[11] 40 C.F.R. §300.5 (1996).
[12] Calif. Government Code, §8670.56.6(a)(1). The major exception to this responder immunity provision is for liability for damages arising from "acts of gross negligence or willful misconduct in connection with the cleanup of a spill". Calif. Government Code, §8670.56.6(d).
[13] G. Brice, Maritime Law of Salvage, pp. 435-6, 507-9 (Sweet and Maxwell, 3rd Ed. 1999).
[14] The International Convention on Civil Liability for Oil Pollution Damage, 1969.
[15] The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971.
[16] G. Brice at 435-436.
[17] c.425 §§13, 16; 30 Stat. 1152 (March 3, 1899), codified at 33 U.S.C. §§407, 411 (“The Refuse Act”). This act makes it a crime to deposit refuse in the navigable waters of the United States, without regard to fault or negligence.
[18] c.128, 40 Stat. 755 (July 3, 1918), codified at 16 U.S.C. §§703-712. This act makes it a crime to take (kill or disturb) a migratory bird, without regard to fault or negligence. The federal government considers almost all birds to be migratory.
[19] The strict criminal liability statutes currently being used in environmental pollution matters were certainly not intended to be put to this use, and it has only been in recent years that prosecutors have employed them in this fashion.
[20] See 18 U.S.C. Appx. § 8A1 et seq.
[21] See 18 U.S.C. Appx. § 8C2.5.
[22] U.S. Department of Justice Policy Statement: Factors in Decisions on Criminal Prosecutions for Environmental Violations in the Context of Significant Voluntary Compliance or Disclosure. See also, US DOJ, Principles of Federal Prosecution 4 (1980) and United States Attorney Manual (1986).
[23] National Research Council, A Reassessment of the Marine Salvage Posture of the United States, p. 50 (Nat''l Academy Press 1994). ("NRC Reassessment").
[24] 33 U.S.C. §409.
[25] Michael T. Fuesting v. Lafayette Parish Bayou Vermillion District, No. 05-30908 (5th Cir., November 14, 2006).