After the Collision: Oil Spill Reporting, Cooperation and Avoiding the Handcuffs
The purpose of this presentation is to discuss the criminal and civil oil spill liability and compensation regimes applicable for carriage oil cargoes to and from the United States. The Oil Pollution Act of 1990 ("OPA") is the federal statutory scheme that applies the release or discharge of oil in waters subject to the jurisdiction of the United States. Under the U.S. system, both the federal and state governments are authorized to legislate in the area of oil spill liability. States may adopt oil spill liability legislation that supplements the provisions of OPA. Texas is one of the states that has exercised this authority by enacting the Oil Spill Prevention and Response Act of 1991 ("OSPRA"). Therefore, the potential liability of the NAUGHTY ROSE and the HUNGRY KNIGHT must be analyzed under both OPA 90 and Texas state law.
OPA was designed to impose a comprehensive regulatory scheme on the maritime industry to address among other things liability for clean-up, removal and damages issues in the aftermath of an oil spill in U.S. waters. In addition to creating a civil liability scheme, OPA 90 strengthened the criminal provisions of related statutes including the Federal Water Pollution Control Act ("FWPCA") or Clean Water Act ("CWA"), the Deep Water Ports Act of 1974, the Intervention on the High Seas Act, The Ports and Waterways Safety Act, and The Act to Prevent Pollution from Ships. Pursuant to OPA 90, a "Responsible Party" (or parties) is designated to be liable initially for the discharge of oil and resulting clean-up, removal costs and damages. Responsible Parties are jointly and severally liable for clean-up and removal costs. OPA 90 sets limitations of liability for designated Responsible Parties, but has strict requirements for (1) prompt reporting of oil spill incidents and (2) cooperation with government officials in connection with response and removal activities.
With respect to potential criminal liability, the U.S. Department of Justice ("DOJ") is charged with enforcing marine pollution and environmental crime statutes. Similar to the civil regime created by OPA 90, the marine pollution and environmental crime statutes primarily concern the vessel interests'' obligations (1) to comply with regulations for the safe carriage of oil cargoes and (2) to engage in prompt, truthful and accurate reporting of an oil spill and cooperation with government officials. In the event that an oil spill results in a criminal investigation, the owners, operators or managers and their employees (including the master and crew) are faced with potentially conflicting obligations. As the potential target of a criminal investigation, vessel interests personnel must be concerned with protecting and preserving their individual rights while at the same time owners and operators of vessels (and their insurers) must be concerned with preserving the OPA and state law limitations of liability by meeting the reporting and cooperation requirements imposed by the civil liability regime.
The Federal Scheme: OPA 90 Limits of Liability, Defenses, and Obligations to Preserve Applicable Limits.
In the aftermath of a collision such as that between the oil tanker NAUGHTY ROSE and container ship HUNGRY KNIGHT described in our scenario, government officials directly involved with the response, usually the U.S. Coast Guard, will form a Unified Command in order to coordinate and manage the governmental response to the oil spill. The tank vessel NAUGHTY ROSE is obligated to activate its Vessel Response Plan ("VRP") to notify government officials and to deploy oil spill response resources to respond to the reported release of 8,000 metric tons of Arabian Crude Oil from the NAUGHTY ROSE.
The Federal Water Pollution Control Act ("FWPCA" which is also known as the Clean Water Act ("CWA")) places the federal government firmly in charge of ensuring that the clean-up is performed in an orderly fashion. State agencies or local government officials will consult with and provide support to the federal government officials during the primary response effort. Even if the federal responsible official has determined that Responsible Parties have met their clean-up obligations, State agencies or local authorities can require that the clean-up operation be continued to meet State and local requirements.
The U.S. Coast Guard will be the primary federal agency involved in managing the clean-up and response efforts. If the federal government perceives that the Responsible Parties are not adequately responding to the oil spill, the Coast Guard may take over the clean-up operation and hire commercial contractors to undertake the clean-up at the expense of the responsible parties. The key to implementing an oil spill response is to have an effective plan to mobilize resources timely, and to put the resources to work at the most appropriate locations in order to contain and minimize the oil spill. This requires the utmost cooperation between vessel interests and federal, state and local officials involved in the response efforts. From the very first moments of the reported casualty, it is crucial to gather the pertinent information, on the casualty, confirm its accuracy, and provide a detailed report to government authorities. It is also important to establish a clear line of communication with government authorities, and to gain the trust of the individual officials involved in the management of the oil spill.
Under OPA, each Responsible Party for a vessel or facility from which oil is discharged or which possess substantial threat of discharge is liable for removal costs and damages. The definition of Responsible Party is intended to include owners, operators and managers. OPA requires Responsible Parties timely to notify appropriate federal officials in the event of a release or discharge of oil from a vessel. OPA further requires that all responsible parties provide reasonable cooperation and assistance to agency personnel in conducting clean-up activities.
With regard to the definition of "operator", the U.S Coast Guard regulations concerning financial responsibility requirements provide that traditional time charterers and voyage charterers are not intended to be included in the definition of responsible parties. Under our scenario, pursuant to OPA, the vessel interests for the HUNGRY KNIGHT and the NAUGHTY ROSE would initially both be designated Responsible Parties because the collision of the two vessels caused the release or discharge of oil from the NAUGHTY ROSE and threatened a release or discharge from the HUNGRY KNIGHT. However, CUT and RUN LTD., the time charterer of the NAUGHTY ROSE, would likely not be designated a Responsible Party despite perhaps contributing to the cause of the oil spill by providing off-spec bunkers.
Limits of Liability under OPA 90
OPA 90 sets limitations of liability for clean-up, removal costs and damages for responsible parties. For a tank vessel of 3,000 gross tons or more, the limit is $1200 per gross ton or $10 million (whichever is greater). For tank vessels of 3,000 gross tons or less, the limit is $1200 per gross ton or $2 million (whichever is greater). For any other vessel, the limit is $600 per gross ton or $500,000 (whichever is greater). The statute holds Responsible Parties strictly liable for clean up costs and other damages and may subject a responsible party to civil and criminal sanctions.
Responsible Party - Preserving Limitations and Defenses to Liability
Under OPA 90, a Responsible Party has a defense to liability if it can show that the oil spill was caused by an Act of God, Act of War, or the Act or omission of a third party (not an agent of the responsible party). The Responsible Party bears the burden to prove its defense by a preponderance of the evidence.  The federal government usually requires the Responsible Party to initially pay for all the removal costs and damages. If those damages exceed the limits of liability under OPA, then the Responsible Party may file a claim with the National Pollution Funds Center ("NPFC") for recovery of the excess.
OPA Limits of Liability do not apply if the incident was proximately caused by the gross negligence of a Responsible Party, or the failure of the Responsible Party to comply with an applicable federal safety, construction or operating regulation OPA 90 limits are further not applicable if the Responsible Party fails to report an incident, fails to provide all reasonable cooperation and assistance requested by the responsible government official in connection with removal activities, or without sufficient cause, fails to comply with a proper order issued by a responsible federal official.
Texas State Oil Spill Liability Legislation - OSPRA
Similar to the liability provisions of OPA, the Texas Oil Spill Prevention and Response Act of 1991 ("OSPRA") provides for joint and several liability of "Persons Responsible" for oil pollution. Under OSPRA, a "Person Responsible" includes but is not limited to the owner or operator of a vessel from which unauthorized discharge of oil emanates or threatens to
emanate.  Accordingly, the vessel interests for the HUNGRY KNIGHT and NAUGHTY ROSE have an argument that CUT and RUN Ltd., the time charterer of the NAUGHTY ROSE, should be a Person Responsible under OSPRA, and therefore subject to its strict liability provisions. The limits of liability under OSPRA for a tank vessel in excess of 8,000 gross tons is $1200 per gross ton not to exceed $100,000,000 (100 million dollars). Under OSPRA, a Person Responsible has a defense to liability for: (1) An act of war or terrorism; (2) An act of federal, state or local government; (3) an unforeseeable occurrence exclusively occasioned by the violence of nature without interference or any human act or omission; (4) willful misconduct or negligent act or omission of a third party.
Accordingly, under both OPA and OSPRA, the owners of the HUNGRY KNIGHT and the NAUGHTY ROSE must immediately report the oil spill, provide all reasonable cooperation and make diligent efforts to comply with all proper orders issued by the responsible federal and local government officials. Failure to meet the reporting and cooperation, obligations imposed by OPA 90 and OSPRA puts the Responsible Party or Person Responsible at substantial risk of exposure to increased and potentially unlimited liability for the oil spill.
Department of Justice ("DOJ") Investigation of Oil Spills for Environmental Crimes
A criminal investigation after an oil spill incident to a collision involves a large cast of characters, including the U.S. Coast Guard, the Environmental Protection Agency, the FBI, state police, United States attorney, local District Attorney, and the Attorney General. When complying with the reporting and cooperation obligations described above, maritime industry personnel face the ever present risk that the DOJ will seek to investigate the facts leading to an oil spill for purposes of enforcement of criminal environmental statutes. Federal marine pollution laws provide several bases to criminally charge individuals or corporations in the aftermath of an oil spill.
The criminal conduct underlying the pollution laws may be separated into two main areas: reckless or grossly negligent carriage of oil cargoes in violation of existing regulations or false statements and obstruction of justice in responding to an oil spill. Significant maritime environmental crimes involving criminality in the carriage of oil cargoes include:
1. Discharging Oil or Hazardous Substance under the CWA; 33 U.S.C. §1319 (c)(4);
2. Sending a Vessel to Sea in an Unseaworthy Condition, 46 U.S.C. §10,908 (1994);
3. Discharging oily substances from a vessel in violation of the Act to Prevent Pollution from Ships,("APPS") 33 U.S.C. §§1901-1915 (2004);
4. Willfully and Knowingly violating requirements for the Carriage of Dangerous Cargoes, 46 U.S.C. §3718;
5. Operating a Vessel in a grossly negligent manner, 46 U.S.C. §2302 (b).
With respect to reporting and cooperation requirements, the federal or local governments may pursue criminal investigations for violations in the following areas:
1. Failing to report to a discharge of oil or hazardous substance under the Clean Water Act, 33 U.S.C. §1321 (b) (5);
2. Knowingly making a false statement in a report or document under the Clean Water Act, 33 U.S.C. 1319(c)(4);
3. Failing to report hazardous conditions that may affect the vessel under the Ports and Waterways Safety Act, 33 U.S.C. 1232 (b);
4. Obstructing Justice or knowingly using false statements or documents;
5. Failing to report a discharge under the APPS, 33 U.S.C. 1906;
6. Falsifying evidence, 46 U.S.C. 2302 (b).
Under the CWA, as enhanced by OPA, a responsible party may be held strictly liable for the discharge of oil for purposes of imposing a civil penalty. Criminal penalties under the CWA are available to prosecutors for "negligent" or "knowing" violations of the Act. Under these criminal penalties provisions, DOJ prosecutors may impose fines of up to a million dollars and imprisonment for up to 15 years. In addition to the Clean Water Act, DOJ prosecutors have utilized environmental statutes only marginally related to oil spills (if at all) such as the Refuse Act and the Migratory Bird Treaty Act ("MBTA") to impose a threat of criminal prosecution. The threat of criminal prosecution is used by the DOJ to gain leverage in settlement negotiations with Responsible Parties for oil pollution events. The clear benefit to prosecutors of a "strict liability" charge is the absence of a requirement to prove negligence on the part of a Responsible Party. In the unfortunate event that an owned, operated or managed vessel is involved in an oil spill in the U.S., immediate and accurate reporting along with steadfast and transparent cooperation with government officials will be the most effective way to limit the Responsible Party's exposure for damages and removal costs and to avoid a situation which would encourage or embolden a DOJ criminal investigation.
When there is an oil spill incident to a collision, the focus of the criminal investigation will usually be the master and crew members, and then on the corporate owner, and corporate officers. In view of the potentially severe consequences, individuals who are subject to a federal criminal investigation resulting from a discharge of oil in the United States are advised to secure criminal counsel prior to responding to an investigation concerning their personal involvement in the facts leading to the release or discharge.
It is a well-established principal under U.S. criminal law that a corporation can incur vicarious criminal liability for the actions of its employees acting within the scope of their employment. A corporation also may have direct liability for the acts of its directors, officers, or employees. Under the "Responsible Corporate Officer" Doctrine, a corporate officer may be held criminally liable for the violation of a criminal environmental statute even if the officer did not actually commit the illegal conduct. The U.S. Supreme Court has held that all who have a "responsible share" in the offending transaction may be held personally liable for failing to prevent or correct violations committed by employees. Thus, exposure to criminal prosecution includes officers and members of the crew, as well as managerial personnel, officers and directors of owners, managers and operators of vessels involved in an oil spill.
Federal Investigations of Environmental Crimes after and Oil Spill
When an oil spill is reported, the possibility of a criminal referral maybe considered by the Coast Guard from the earliest stages of the response. The Coast Guard's position, however, has been to encourage cooperation with clean-up and response efforts. The Coast Guard agency guidelines suggest that some form of culpable conduct (i.e. purposeful or reckless behavior) is required before the Coast Guard will refer a matter to the DOJ for criminal investigation. Nonetheless, government agencies charged with investigating environmental pollution and enforcing environmental statutes may conduct criminal investigations of there own initiative. The DOJ maintains its authority to impose strict criminal liability on responsible parties through the use of the CWA or other federal statutes noted above. The threat of criminal prosecution necessarily raises the intensity of any investigation of an oil spill in the US.
Under DOJ guidelines, prosecutors have wide latitude to determine when, whom and how to prosecute for violations of federal criminal law. One of the key factors prosecutors consider is the extent of cooperation of voluntary disclosure of information including wrongdoing. In some cases, DOJ prosecutors may also seek a waiver of the attorney-client privilege. In other words, DOJ officials will attempt to use the threat of criminal prosecution against individuals or companies in order to compel disclosure of complete information on the activity of the corporation including attorney-client communications and reports as a condition for avoiding a criminal prosecution.
OPA 90 was designed to require prompt reporting and voluntary cooperation by companies involved in marine oil spills in order to promote effective clean-up and response efforts. OPA 90 also determines financial responsibility to compensate for environmental losses, and seeks to punish those who carelessly engage in the transportation of oil cargoes. The DOJ's enforcement of marine pollution statutes adds a level of complexity to the legal situation following a release or discharge of oil in U.S. waters impacting the individuals personally involved. By its enforcement of strict liability criminal provisions to prosecute environmental crimes, the DOJ seeks to obtain maximum leverage in its negotiations with companies and individuals after an oil spill. The combination of the OPA 90 reporting and cooperation obligations and the DOJ criminal investigations thus requires a comprehensive strategy to respond to the oil spill.
The contents of this paper are not intended to be, and should not be construed as, legal advice. The assistance of attorneys should be sought with regard to any specific circumstance for which legal advice is required.
 This paper is intended to expand and supplement the presentation made at the Norton Rose/Holland & Knight seminar held on May 11, 2006 at Piraeus, Greece. I wish to acknowledge the work and support of Dennis Bryant, Senior Counsel, Holland & Knight LLP in the preparation of the presentation on May 11 and this paper.
 Pub. L. 101-380, 104 Stat. 484 (August 18, 1990) codified at 33 U.S.C. §§ 2701-2719.
 33 U.S.C. § 2718.
 Tex. Nat. Res. Code, ch. 40.
 See 33 U.S.C. §§ 1514(a), 1481(a), 1232 (b), 1908(a).
 33 U.S.C. §1251-1387.
 33 U.S.C. §2701 (32)
 33 U.S.C. §1321 (b)(5)
 Final Rule, 59 Fed. Reg. 34210 at 34217-18 (July 1, 1994).
 33 U.S.C. §2704(a)(1).
 33U.S.C. §2704(c)(1)
 Tex. Nat. Res. Code 40.0003(20).
 33U.S.C. §2704(c)(2)
 Tex. Nat. Res. Code 40.202(a)
 Tex. Nat. Res. Code 40.204.
 For an in depth discussion and analysis of significant marine pollution crimes, see Alfred J. Kuffler, "Prosecution of Maritime Environmental Crimes Versus OPA 90''s Priority for Response and Spill Prevention: A Collision Avoidance Proposal," Tul. L. Rev. 1623, 28-29 (2001).
 33 U.S.C. § 1319(c)
 River and Harbors Appropriation Act of 1899, CH425§13, 50 Stat. 1121, 1152 (codified as amended at 33 U.S.C. §407), and the Migratory Bird Treaty Act ("MBTA")
 Migratory Bird Treaty Act, CH.128, 40 Stat. 755 (1918) (codified as amended at 16 U.S.C. §§703-12 (2&Supp. 2004))
 There has been extensive legal writing and discussion concerning the criminalization of negligent acts which lead to oil spills in United States. It is beyond the scope of this paper to address that issue in detail.
 United States v. Automated Medical Laboratories, 770 F.2d 399, 406 (4th Cir. 1985) (citing United States v. Basic Construction Co., 711 F.2d 570, 573 (4th Cir.), cert. denied, 464 U.S. 956 (1983)).
 United States v. Dotterweich, 520 U.S. 277(1943).
 United States v. Park, 421 U.S. 658, 672-74 (1975).