October 11, 1979
Page 27853
LIABILITY FOR OIL POLLUTION
Mr. MUSKIE. Mr. President, Congress has considered oil pollution legislation for nearly 13 years. A variety of measures have been enacted to provide adequate funding for cleanup of oil spills. Other measures have been adopted which provide compensation for loss associated with those spills. International agreements have been negotiated to rationalize the oil pollution liability schemes applicable to oceangoing vessels. And President Carter has proposed a comprehensive cleanup and liability scheme for oil and hazardous substances.
A discussion of the oil pollution aspect of this problem was recently published by the Journal of Maritime Law and Commerce. In an article by Allan Mendelsohn and Eugene R. Fidel entitled "Liability for Oil Pollution — United States Law," the history of and need for this kind of comprehensive scheme is discussed. Mr. Mendelsohn has been a long time, knowledgeable contributor to the oil pollution liability dialog. He has been a consultant to me and to the Subcommittee on Environmental Pollution. He has written extensively in the field and he prepared a definitive analysis of the preemption section of the 1972 Federal oil pollution liability amendment to which the Supreme Court referred in the case of AWO against Askew. I shall submit the Mendelsohn-Fidel article for the RECORD at the end of these remarks.
There is real value in continuing the public dialog on the question of comprehensive spill liability laws. I continue to have reservations about the degree to which comprehensive liability and cleanup funds may serve to reduce the standard of care of those who handle oil and hazardous substances. This basic concern must be answered before any legislation is enacted.
In addition, I am deeply concerned that a liability fund financed from revenues collected from manufacturers and handlers of oil and hazardous substances may simply become a substitute for collection from the parties responsible for spills. The resources of the Federal Government are already strained. I suspect that, faced with the alternative of "tapping the fund" or going to court to collect from those responsible for discharges, the Government would be inclined to take the easy way out. This question too must be answered before legislation of this kind can be enacted.
Finally, Mr. President, in addition to the preemption issue which needs no discussion here, we need to be sure that we do not inadvertently create a subsidy for giant supertankers and other handling systems. These massive carriers and storers of oil and chemicals must be responsible for the full risks of spills. Anything short of that could result in either the public or the environment bearing an unreasonable cost. If this question, together with the others I have outlined above, can be answered to the satisfaction of the Congress during the current and subsequent session. comprehensive legislation could be enacted before the end of this Congress.
The article follows:
LIABILITY FOR OIL POLLUTION — UNITED STATES LAW
(By Allan I. Mendelsohn and Eugene R. Fidel)
INTRODUCTION
As the United States approached the last two decades of the Twentieth Century, few areas of its law proved to be as complex as that governing liability for oil pollution. The subject involves not only some of the most fundamental principles of tort law but also admiralty doctrines largely judge-made, legislative enactments, and international conventions. If further complexity were needed, the interplay of federal and state legal systems amply provides it. Because of these varied sources of law, and because the matter of oil pollution has still not been the subject of comprehensive federal legislation, it is perhaps a larger task than ought to be the case to render a brief account of American liability law in this area. Nonetheless, the present chapter will provide at least a cursory overview of the major elements of federal legislation, subject to the caveat that critical elements of the story — particularly those having to do with state regulation.
The Limitation of Liability Act of 1851
The first statute we shall consider is not directly addressed to oil pollution as such, rather it deals with the general liability of shipowners, and in this way has an impact on liability for pollution.
The basic maritime liability law of the United States today is a federal statute enacted in 1851 and amended since that time only so as to bring about some improvement in recoveries available by or on behalf of passengers who suffer personal injury or death in a ship disaster. So far as concerns vessel owner liability for oil pollution damage, therefore, the principal governing law in the United States today is, with some exceptions, one that was adopted almost 130 years ago?
It' is necessary to begin with a consideration of this statute, which was inspired by English legislation, even if its judicial construction was soon "liberated" from its English antecedents.
Section 183(a) of the Shipowner's Limitation of Liability Act provides that, in the event of an accident "occasioned or incurred without the privity or knowledge" of the vessel owner and involving damage to property, the owner's liability shall not "exceed the amount or value of the interest of such owner in such vessel, and her freight then pending." In 1871, the Supreme Court held that "value"as used in Section 183(a) meant the vessel's value after, not before, the accident, thus severely restricting the potential recovery where, for example, the vessel for which limitation is sought lies unsalvageable on the ocean bottom. A series of Supreme Court decisions in 1885 specifically held that even though an owner, after an accident, is fully compensated by insurance, the funds so received are not a part of the vessel's value and hence need not be made available to pay claims. In the case of the Torrey Canyon disaster off the coast of Britain in March, 1967, a United States court, following the letter of Section 183(a), would have been able to award damages of no more than $50 — the value of the single lifeboat that was salvaged from the disaster.
Given the potentially harsh results from this statute as it has been construed, it is not surprising that ways have been tried — and found — to "break the limits". One of these ways is simply by showing that the damage was done or incurred with "the privity or knowledge of" the owner — in which event the owner's liability becomes unlimited. No one can really divine the meaning of the words "privity and knowledge" in Section 183 and, indeed, Professors Gilmore and Black, in their excellent treatise on The Law of Admiralty, have called the terms "devoid of meaning . . . empty containers into which the courts are free to pour whatever content they will". "Like an accordion", Gilmore and Black added, the Act "can be stretched out or narrowed at will" depending on the facts of the particular case and the philosophy of the judge hearing the case.
Another method of breaking the limits is for the court to ignore the traditional admiralty rule holding that the law of the forum governs limitation and, instead, to invoke the law of the vessel's flag, assuming, of course, that this approach permits a higher recovery than would otherwise be available under Section 183. But any court viewing its function as judicial rather than legislative ultimately faces a philosophical problem in continuing the search for ways to ignore the limitation. This is particularly true at present, because the Congress has had ample opportunity to amend, update, and/or repeal Section 183, but has failed to do so in any meaningful manner except indirectly and in the limited context of water pollution control legislation. It is to the development of the law in this area to which we next turn.
Federal Water Pollution Control Act Amendments of 1972
Amending and expanding upon various provisions of earlier Congressional enactments, the Congress in 1972 adopted comprehensive legislation pertaining to virtually all aspects of water pollution and federal government recovery for costs of cleanup. The Federal Water Pollution Control Act Amendments of 1972, recently codified and updated in 33 U.S.C. Sections 1251-1376 (now known as the Clean Water Act), declares it to be a national goal that the discharge of pollutants into the navigable waters of the United States be eliminated by 1985. Section 1321(b) (1) declares it to be the policy of the United States that there be "No discharges of oil or hazardous substances into or upon the navigable waters of the United States, adjoining shorelines, or into or upon the waters of the contiguous zone or in connection with activities under the Outer Continental Shelf Lands Act or the Deepwater Port Act of 1974, or which may affect natural resources belonging to, appertaining to, or under the exclusive management authority of the United States (including resources under the Fishery Conservation and Management Act of 1976) .
Oil is defined as "oil of any kind or in any form, including, but not limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil."A discharge is defined as including but not being limited to "any spilling, leaking, pumping, pouring, emitting, emptying or dumping."
A vessel owner, operator or any other person in charge of a vessel, including a demise charterer, is subject to a $5,000 civil penalty for any unlawful discharge, and the Environmental Protection Agency ("EPA") may, under amendments passed in 1978, commence a civil action for penalties up to $250,000. In the event of failure by such person immediately to notify designated agencies of the United States federal government of a discharge, the statute prescribes a maximum fine of $10,000 or imprisonment for not more than one year, or both.
When a discharge occurs, the United States Government is authorized to undertake and complete the cleanup unless the President determines that the vessel owner or operator can and will properly perform the task. In any instance where the federal government cleans up, the vessel owner or operator is strictly liable to the government for its "actual costs incurred" in the cleanup — but not to exceed, in the case of all vessels (other than inland oil barges), the greater of $150 per gross ton or $250,000. A tanker of 200,000 tons could thus be subject under this provision to a potential cleanup liability to the federal government of $30 million. A somewhat lower limit of the greater of $125 per gross ton or $125,000 is provided for inland oil barges. To meet this potential liability, the statute requires vessel and barge owners to show evidence of financial responsibility (by insurance, surety bonds, self-insurance or other means) in sums sufficient to cover the limits.This latter program is administered by the Federal Maritime Commission.
Vessel or barge owners may avoid liability entirely by showing that the discharge was "caused solely by (A) an act of God, (B) an act of War, (C) negligence on the part of the United States Government, or (D) an act or omission of a third party without regard to whether any such act or omission was or was not negligent, or any combination of the foregoing clauses." An "act of God" is defined as "an act occasioned by an unanticipated grave natural disaster."
On the other hand, the right to limitation can be extinguished and full liability assessed against the vessel owner in any case where the federal government can show that the discharge "was the result of willful negligence or willful misconduct within the privity and knowledge of the owner..." The United States is also expressly authorized to bring an action for the recovery of its costs "in any court of competent jurisdiction," which does not necessarily preclude bringing actions in foreign courts should it ever be necessary to do so, and should the forum state have no domestic doctrine barring access to its courts in these circumstances. Finally, Section 1321(k) of the statute carries over the $35 million revolving fund which was originally created by Section 11(k) of the 1970 Water Quality Improvement Act. This is a fund financed by Congressional appropriation and available to assist the Government in carrying out its obligations under the Act, including the payment of expenses incurred on those occasions when the Government cleans up but, for one reason or another, cannot recover its costs, or when a private party cleans up and then, in accordance with Section 1321 (i), sues the Government to recover its clean up costs."
It should be noted that the foregoing provisions establish vessel owner liability only for claims by the federal government for its costs of clean up.None of them cover claims of private citizens whose property is damaged as a result of an oil spill. These types of claims can always be asserted under state law, though to do so necessarily raises issues concerning, for example, the applicability of the limits of the 1851 Limitation of Liability Act, and the varying damages compensable under different state statutes. On the other hand, Section 1321(o) (2) of the 1972 Act, adopting almost the verbatim text of Section 11(o) (2) of the 1970 Water Quality Improvement Act, declares that "[n]othing in this section shall be construed as preempting any State or political subdivision thereof from imposing any requirement or liability with respect to the discharge of oil or hazardous substance into any waters within such State."
In the landmark case of Askew v. American Waterways Operators, Inc., 411 U.S. 325 (1973), a unanimous Supreme Court held that the federal legislation did not preempt or preclude the State of Florida from enacting its own Oil Spill Prevention and Pollution Control Act imposing strict liability on vessel owners and on operators of onshore terminals for any damages incurred by the State or by private persons as a result of an oil spill in the State's territorial waters. The Court reasoned that, as the federal legislation governed only claims by the federal government for recovery of its cleanup costs, it would not be proper "to allow federal admiralty jurisdiction to swallow most of the police power of the States over oil spillage — an insidious form of pollution of vast concern to every coastal city or port and to all the estuaries on which the life of the ocean and the lives of the coastal people are greatly dependent." The Court expressly declined to reach the question whether damages under the Florida Act would be subject to the 1851 Limitation of Liability Act..
The Trans-Alaska Pipeline Authorization Act of 1973
Specifically allowing private parties to recover for oil pollution damage without regard to the 1851 Limitation of Liability Act, the Trans-Alaska Pipeline Authorization Act (the "TAPS" Act) was adopted by the U.S. Congress in November, 1973. As for vessel owners, the Act extends only to "oil that has been transported through the trans-Alaska pipeline" and on vessels operating "between the terminal facilities of the pipeline and ports under the jurisdiction of the United States".
However, the Act holds the vessel owner "strictly liable without regard to fault ... for all damages, including clean up costs, sustained by any person or entity, public or private, including residents of Canada, as a result of discharges of oil" from vessels.
In addition to vessel owner liability, the TAPS Act also improves liability on the holder of the pipeline right-of-way for any "damages in connection with or resulting from activities along or in the vicinity of [such] right-of-way." Like the vessel owner, the holder of the right-of-way is "strictly liable to all damaged parties, public or private, without regard to fault for such damages." As for defenses to liability, the TAPS Act treats the vessel owner identically to the holder of the right-of-way, limiting both their defenses only to those cases where damages "were caused by an act of war or by negligence of the United States or other governmental agency."
The TAPS Act therefore significantly expands the ambit of protection beyond the cleanup costs available only to the federal government under the Federal Water Pollution Control Act Amendments of 1972. In addition, it eliminates two of the defenses generally available to vessel owners under the 1972 Act (discharges caused either by "an act of God" or by "an act or omission of a third party without regard to whether any such act or omission was or was not negligent"). In this latter regard, moreover, the TAPS Act expressly recognizes those circumstances where damage is caused by the conduct or activity of a third party. Unlike the 1972 Amendments, however, the TAPS Act provides that such circumstances may not be used by the vessel owner or the holder of the right-of-way as a. defense against all claims but only against claims by that third party and then only if negligence by that third party can also be proven.
The liability of the right-of-way holder is limited to $50 million for any one incident. If the damage is caused by a vessel, however, this Act for the first time incorporates the concept of a liability-type fund to assure both that all damaged parties can be compensated for damages they might suffer and to shift and apportion the economic responsibility for such damages to those who benefit from the carriage of oil by vessels, namely, the shipowner, the oil industry, and the oil consumer. Financed by a 5-cent per barrel fee levied by the pipeline operator upon the oil owner at the time the oil is loaded on a vessel, the Trans-Alaska Pipeline Liability Fund ultimately will total $100 million to be used for the purpose of providing compensation in circumstances where proven damages exceed $14 million. Up to $14 million, liability is borne by the vessel owner or operator "jointly or severally". Beyond that amount, the Fund takes over the responsibility of compensation up to its $100 million ceiling. By August, 1978, the Fund contained $13 million.
Like the 1972 Water Pollution Control Act Amendments, the TAPS Act expressly addresses the subject of preemption of state laws, and similarly declares that its liability provisions "shall not be interpreted to preempt the field of strict liability or to preclude any State from imposing additional requirements." Finally, and again following the precedent — indeed, referring to the precise provision — of the 1972 Amendments, the TAPS Act requires vessel owners to show evidence of financial responsibility (by insurance, surety bonds, self-insurance or other means) sufficient to cover their potential liability of $14 million.
The Intervention On The High Seas Act of 1974
In November 1969, the Brussels International Legal Conference on Marine Pollution adopted the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties. On May 20,1970, President Nixon transmitted this Convention to the Senate for its advice and consent. In 1971, the Senate gave its advice and consent, and in 1974, the Congress enacted the Intervention on the High Seas Act for the purpose of implementing and incorporating into United States statutory law the right, duties, and responsibilities of the United States under the convention. Recently codified in 33 U.S.C. Sections 1471-87, the Act authorizes the Secretary of the Department of Transportation (in which the Coast Guard ordinarily operates) to take such measures on the high seas as may be necessary to prevent, mitigate, or eliminate "grave and imminent danger to the coastline or related interests of the United States from pollution or threat of pollution of the sea by oil." Among the listed "interests" of the United States are "fish, shellfish, and other living marine resources, wildlife, coastal zone and estuarine activities, and public and private shorelines and beaches."
When the Secretary determines that a "grave and imminent" danger exists, he is authorized to "remove, and, if necessary, destroy the ship and cargo which is the source of the danger."
However, actions taken by the Secretary must be reasonable given the circumstances, and the Act makes the United States liable, by way of a suit in the Court of Claims, for damages caused by actions beyond "those reasonably necessary" in any particular situation. Finally, the Act makes available to the Secretary, for the purpose of financing "actions and activities" undertaken by the Government pursuant to the Act, the resources of the revolving fund of $35 million created by the 1970 Water Quality Improvement Act and carried over by the 1972 Federal Water Pollution Control Act Amendments
The Deepwater Port Act of 1974
Because the waters surrounding most of the United States (and especially adjacent to Gulf and East Coast ports) are not sufficient to accommodate supertankers requiring depths of up to 100 feet, Congress in late 1974 enacted the Deepwater Port Act, establishing a licensing and regulatory program governing offshore deepwater port development beyond the territorial limits and off the coasts of the United States. Codified in 33 U.S.C. Sections 1501-24, the Act prohibits oil discharges from any of the facilities of the port or from any vessel operating to or from the port or in a surrounding area technically denominated a "safety zone". Designated by the Secretary of Transportation "subject to recognized principles of international law", this "safety zone" is an area "of appropriate size around and including any deepwater port for the purpose of navigational safety."
A discharge in violation of the Act either by a vessel owner or operator or by an individual or company licensed to operate the port is punishable by a civil penalty not to exceed $10,000 for each violation. Failure to notify the Government of a discharge is punishable by a fine of not more than $10,000 or imprisonment for not more than one year or both.
As for the nature of liability, the Deepwater Port Act adopts the same strict liability with the same limited defenses as were adopted the year before in the TAPS Act. Both the vessel owner and the licensee are strictly liable "without regard to fault" for damages, which are broadly defined as "clean up costs and ... damages that result from a discharge of oil." The only defenses available are, as in the TAPS Act, "an act of war, or negligence on the part of the Federal Government in establishing and maintaining aids to navigation." In addition, if it can be shown that the damages resulted solely from the negligence of the party asserting a claim for the damage, neither the owner nor the licensee would be liable to that party. The vessel owner's liability arises from any "discharge of oil from such vessel within any safety zone, or from a vessel which has received oil from another vessel at a deepwater port." The licensee's liability arises when the discharge is "from a vessel moored at such deepwater port" or from the deepwater port itself.
As for limits of liability, the owner and the licensee are subject to unlimited liability if it can be shown that the discharge occurred because of "gross negligence or willful misconduct within [his] privity and knowledge." Absent such a showing, the limitation is $50 million for the licensee and the lesser of $150 per ton or $20 million for the vessel owner.
For damages in excess of those compensated by the vessel owner or the licensee, the Act again follows the precedent of the TAPS Act by creating a $100 million fund, called the Deepwater Port Liability Fund, financed by a 2 cent per barrel fee collected by the licensee "from the owner of any oil loaded or unloaded at the deepwater port." The Fund, like the owner and licensee, is also liable "without regard to fault." But unlike the owner and the licensee, the Fund's liability appears to be absolute in the sense that, though the Act allows the Fund a defense against claims by a party whose negligence caused the damage, it does not allow the Fund to invoke either of the other two defenses, namely, act of war and negligence of the federal government in establishing and maintaining aids to navigation. It thus appears that the Deepwater Port Act represents an expansion of the scope of liability from earlier federal legislation in the oil pollution area. Compare, for example, the provision governing the scope of the TAPS Fund liability in 43 U.S.C. Section 1653(c) (2), exonerating that Fund from liability where the damage was caused by an act of war or government negligence.
Another innovation adopted in the Deepwater Port Act which appears to have no precedent in earlier federal pollution legislation is a provision which: (1) allows the Attorney General of the United States to institute a class action "on behalf of any group of damaged citizens he determines would be more adequately represented as a class in recovery of claims," and (2) authorizes the Secretary of Transportation, acting "on behalf of the public as trustee of the natural resources of the marine environment," to sue and recover for damages to such resources and then to apply any sums recovered "to the restoration and rehabilitation of such natural resources."
Expansive though these provisions are, the Deepwater Port Act, like the TAPS Act, has only very limited applicability. It was at least partially for this reason — though also to attempt to arrive at some element of uniformity in the face of the continuing profusion of varying federal and state funds as well as varying federal and state laws on the subject — that attempts began, soon after passage of the Deepwater Port Act, to enact as federal legislation what has since become colloquially known as the "superfund" bill. The purpose of such a measure is to establish a "superfund" together with a comprehensive legal regime governing liability and compensation, public as well as private, for all damages and cleanup costs caused by oil pollution no matter the source and no matter the location. But the enactment of such legislation is fraught with difficulties — not only because of its inherently controversial nature, but also because, as more laws on the subject continue to be enacted with increasingly stringent terms, the pressure on any new comprehensive law to equal or exceed the most protective of the terms and levels of all the other laws becomes virtually irresistible. And it is in this context that, before examining the options under consideration for the comprehensive law, we must first examine in some detail the most recent law which the Congress has enacted in the oil pollution context.
The Outer Continental Shelf Lands Act Amendments of 1978
Enacted in the closing days of the 95th Congress, the Outer Continental Lands Act Amendments of 1978 ("the 1978 OCS Act") amend the 1953 Outer Continental Shelf Lands Act by establishing a new statutory regime for the management of oil and natural gas resources of the outer continental shelf and by adopting provisions to expedite the systematic development of the shelf but at the same time protect the marine and coastal environment. It should be kept in mind that, while as a land mass, the OCS is almost one-third the size of the continental United States, only approximately 3 percent of the United States continental margin, or some 14.4 million acres, have so far been leased for oil and gas development.
Nevertheless, in passing the 1978 Act, Congress seemingly anticipated a much more active program of exploration and exploitation and, to meet the risks of such a program, Congress devised and adopted an unprecedentedly broad system to govern pollution damages, cleanup and liability. Applicable to owners and operators of any offshore facility in the outer continental shelf or vessels operating over the shelf and carrying OCS oil, which "causes or poses an imminent threat of oil pollution," the Act sets up a system of strict liability under which, except for costs of removal, a vessel owner is potentially liable for damages up to a limit of $300 per ton (subject to no overall ceiling), and the offshore facility owner is potentially liable up to a limit of $35 million"'
As far as removal costs are concerned — and these are broadly defined to include "cleanup costs" and any other costs "incurred" under subsection (c), (d) or (1) of Section 311 of the Federal Water Pollution Control Act and Section 5 of the Intervention on the High Seas Act — Section 304(d) of the OCS Act expressly precludes the applicability of all "limitations, exceptions, or defenses". It thus renders the vessel or facility owner (as the case may be) absolutely liable, and without limitation, for "all costs of removal incurred by the Federal Government or any State or local official or agency in connection with a discharge of oil from any offshore facility or vessel." This may well be the first instance of unlimited and absolute liability in a federal statute.
Somewhat like the TAPS and the Deepwater Port Acts, though more capable of being relied upon by damaged parties (not only because of its unique use of the word "primarily" but also because it includes the violation of federal standards and regulations as a trigger for extinguishing the right to limitation), Section 304(b) of the OCS Act provides that the owner or operator of the vessel or the facility may lose the right to limitation and thus also be liable without limit for damages other than removal costs when "The incident is caused primarily by willful misconduct or gross negligence, within the privity or knowledge of the owner or operator, or is caused primarily by a violation, within the privity or knowledge of the owner or operator, of applicable safety, construction, or operating standards or regulations of the Federal Government," (Emphasis added)
On the other hand, and except for removal costs, a vessel or facility owner may avoid liability entirely if it can be shown that the incident was ". . . caused solely by an act of war, hostilities, civil war, or insurrection, or by an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character [or if it was caused] solely by the negligent or intentional act of the damaged party or any third party (including any government entity)."
Other than the defenses enumerated in the 1970 Water Quality Improvement Act, as they were carried over into the 1972 Water Pollution Control Act Amendments, no subsequent federal statute dealing with oil pollution damage allows acts of God (e.g., a natural disaster) and negligence of third parties to operate as complete defenses to liability — though the required proof that the incident be caused "solely" by one of these factors reduces the potential sweep of the defense.
Damage recoveries, referred to as "claims for economic loss", are specifically permitted not only for removal or cleanup costs of the federal and local governments, but also for such elements of damage as—
(A) injury to, or destruction of, real or personal property;
(B) loss of use of real or personal property;
(C) injury to, or destruction of, natural resources;
(D) loss of use of natural resources;
(E) loss of profits or impairment of earning capacity due to injury to, or destruction of, real or personal property or natural resources [so long as the claimant "derives at least 25% of his earnings from activities which utilize the property or natural resources"]; and
(F) loss of tax revenue [" by the Federal Government and any State or political subdivision thereof"] for a period of one year due to injury to real or personal property?"
In addition, there is another unique provision in the Act rendering the vessel and facility owner liable "without regard to the limitation of liability [of $300 per ton or $35 million respectively] . for interest on the amount paid in satisfaction of the claim for the period from the date upon which the claim is presented to such person to the date upon which the claim is paid."
Finally, where the damages might exceed the limits or where defenses might exonerate the vessel or facility owner from liability, the1978 Act creates an Offshore Oil Pollution Compensation Fund not to exceed $200 million, to be financed by a fee of not more than 3 cents per barrel imposed on the owner of oil when such oil is produced on the OCS. The $200 million is not an inflexible ceiling, as the Act authorizes the Government to borrow "[i]f at any time the moneys available in the Fund are insufficient to meet the obligations of the Fund." The Act also expressly provides that "the Fund shall be liable, without limitation, for all losses for which a claim may be asserted under [the Act] to the extent that such losses are not otherwise compensated."
The Act additionally requires the promulgation of regulations requiring vessel and facility owners to show financial responsibility "to satisfy (their) maximum amount of liability" subject to the limitations The Act also provides civil and criminal penalties for failure to give notice to the Government of a discharge or for failure to comply with the financial responsibility requirements. Other sections of the Act include detailed provisions governing such matters as suits by the Attorney General, class actions by private citizens suffering damages, claims settlement procedures, rights of the Fund to sue and be sued, subrogation, jurisdiction and preemption. In all, this Act contains by far the most comprehensive and far reaching provisions that have appeared to date in any federal legislation dealing with oil pollution. And if only because it was the most recent federal enactment, it is probably the most significant backdrop for Congress' current consideration of the various legislative proposals for a comprehensive "superfund" act.
Proposed new Federal legislation
In a sense, perhaps the most important provision of the Deepwater Port Act, discussed above, was section 18(a), which called for a detailed study to be performed by the Attorney General, in consultation with other agencies, regarding "methods and procedures for . implementing a uniform law providing liability for clean up costs and damages from oil spills from Outer Continental Shelf operations, deepwater ports, vessels, and other ocean-related sources" This provision was eloquent evidence of Congressional dissatisfaction with the piecemeal character of its past efforts; and the Report that was eventually submitted by Attorney General Levi proved to be influential in shaping subsequent proposals for legislation.
Following on the heels of the Justice Department's Report, a host of superfund bills were introduced by various Senators and Representatives during the 94th and 95th Congresses. Three emerged with some possibility of enactment at the close of the 95th Congress. These were H.R. 6803, which was passed by the House; the version of S. 2083 which was reported out by the Senate Committee on Commerce, Science and Transportation (hereafter Senate Commerce Committee) ; and the version of S. 2083 which was reported out by the Senate Committee on Environment and Public Works (hereafter Senate Environment Committee). But the press of business at the close of the 95th Congress was such that, apart from the Outer Continental Shelf Lands Act Amendments, no comprehensive oil pollution legislation was adopted. In addition, the thorny substantive differences that continued to emerge during the final days of the Congress among the supporters of the various bills made it unlikely that, absent a willingness for substantial compromise on all sides, any new oil pollution legislation could be enacted even during the relative calm of a new Congress.
Because of the comprehensive nature of the bills plus the fact that none was ultimately enacted, little purpose would be served by a detailed analysis of their respective provisions. But so that the reader may gain some understanding of the overall directions in which United States pollution law is apparently moving and of the controversies surrounding that movement, we shall very briefly outline the various areas of general agreement and disagreement common to the bills.
1. Vessel Owner Liability: There seems to be general agreement, at least in the Senate, that the limit of liability for oil tankers should be the same $300 per gross ton (with no ceiling) as was enacted in the 1978 OCS Act. A tanker of 200,000 dwt would thus be exposed to a potential liability of $60 million — exactly double the $30 million potential liability to which that tanker is exposed under the current Clean Water Act. Regarding vessels other than tankers, the Senate Committee on Environment prefers the same $300 per gross ton, while the Senate Commerce Committee prefers $150 per gross ton — in either version without a ceiling. For its part, the House of Representatives is likely to accept the $300 per gross ton limit, for oil tankers but prefers to make it subject to a $30 million ceiling.
2. Liability of Facilities: Both Senate Committees as well as the House are reportedly prepared to adopt the limit of $50 million presently in the Clean Water Act for onshore and offshore facilities and for deepwater ports. There is also apparent general agreement that such a limit may be reduced in the event a determination is reached that a lower limit would be more appropriate for a particular class or category of facility. In this later respect, however, the Senate Environment Committee prefers a "floor" or minimum liability exposure of at least $8 million.
3. The Fund and Its Funding: Both Senate Committees and the House are in agreement that there should be an Oil Spill Fund to compensate for oil pollution damage and that such Fund, like the OCS Fund, should be in the amount of $200 million, financed by a fee of up to 3 cents per barrel to be imposed on each barrel of crude oil received at any refinery or terminal for import to or export from the United States. There is similar agreement that, once established, this Fund will supersede all the Funds established under other federal laws to provide oil pollution liability protection. These include the TAPS Act Fund, the Deepwater Port Fund, the OCS Fund, the revolving fund established under the 1970 Water Quality Improvement Act and carried over in the 1972 Water Pollution Control Act Amendments, and the availability of that latter fund under the Intervention on the High Seas Act. As in the OCS Fund, the $200 million amount would not be limited, because there is agreement in principle that the Fund may borrow money if the damages exceed $200 million or any other amount that may be in the Fund at the time an incident occurs. The $200 million amount, which the entire Congress now seems inclined to accept, is so much higher than the $39 million fund provided for in the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (or even the increase to $78 million permitted by the Convention if three-quarters of the states parties thereto so agree) that it is now highly unlikely that the United States will ratify that Convention.
4. Hazardous Substances: The Senate Environment Committee, drawing on the 1972 Water Pollution Control Act Amendments and its inclusion of "hazardous substances" within the protective ambit of the cleanup and liability provisions, prefers similarly to include "hazardous substances" in any new law that may now be adopted. The Environment Committee also wishes to set up a second fund, separate from the Oil Spill Fund, to cover cleanup costs and damage compensation resulting from spills or discharges of hazardous substances. The Environment Committee has not yet suggested a monetary level nor a fee system to finance this second fund, but the bill calls for an Administration study (to be completed in 18 months) which would make recommendations on these points. The Senate Commerce Committee, like the House, limits its bill and proposed Fund to pollution caused by oil.
5. Terms, Scope and Nature of Liability: The Environment Committee prefers to employ Section 311 (now codified in 33 U.S.C. Section 1321) of the 1972 Water Pollution Control Act Amendments, as amended by the 1977 Clean Water Act, as the basis for setting out the terms, scope and nature of any system of liability adopted in new pollution legislation. The Environment Committee suggests that, as Section 311 has been part of United States law since its adoption as Section 11 of the 1970 Water Quality Improvement Act, there is a persuasive reason not to fashion a new system. The Senate Commerce Committee and the House, for their part, prefer to adopt a new system. Space does not permit a detailed comparison of the proposed systems, but it appears that there is general agreement that, at least as pertains to oil pollution damage, strict liability should be continued. The differences seem to emerge principally in the phraseology of the rights that are entitled to protection as well as the defenses and exceptions that may be invoked to escape liability. As between the two Senate bills, neither is significantly more pro-industry or pro-environment than the other. As between those two bills and the House bill, however, Senator Muskie and the Committee on Environment are understood to believe the differences to be substantial and significant enough to warrant serious public attention and discussion.
6. Preemption: The extent to which state law should be permitted to operate in the area of oil pollution liability has long been one of the most troublesome issues between the industry, the environmentalists, and the United States Government. It is even more contentious today than it was in 1970, when Congress, in adopting Section 11(o) (2) of the Water Quality Improvement Act, first declared that states would be permitted to play a role in this area. For by 1978, a Library of Congress Congressional Research Service study showed that eighteen coastal states had enacted their own oil spill laws. A copy of the Library's study in chart form is reproduced below, showing the states which have enacted such legislation and the substantive differences between the various enactments. Given the Askew decision (supra, pp. 480-481), the industry can look only to Congress and the courts for any real hope of superseding these state enactments and achieving some degree of uniformity on the basis of the doctrine of federal supremacy.
The Congressional debate over preemption is a lively one, reflecting the range of views of the various interested outside parties. The Committee on Environment prefers no preemption, finding that even though its reported bill was "the most stringent of the three 'superfund' bills in the Congress,"were it to preempt state statutes it would impose "a lower standard of liability in one or more areas than virtually every State statute." Close examination of the argument for preemption, so the Environment Committee concluded:
... reveals it as an argument rejected as flawed and dangerous in the adoption of the Federal system 200 years ago. Neither the circumstances nor dangers have changed so much since that time that the Committee is now willing to embrace an authoritarian Federal regime.
The Senate Commerce Committee, expanding on comparable provisions in the 1978 OCS Amendments, is probably inclined to authorize preemption in at least two contexts: (1) precluding required contributions to any state funds whose purpose is to pay compensation for losses that can be compensated under the federal act; and (2) precluding states from requiring any evidence of financial responsibility beyond that required under the federal act. But, adopting language similar to that in the OCS Act, the Commerce Committee is still not prepared to preempt "the field of liability or to preclude any State from imposing additional requirements or liability for damages and cleanup costs, within the jurisdiction of such State, resulting from a discharge of oil." It cannot be said that this "field" of non-preemption is a model of clarity.
For its part, the House prefers general preemption but goes about trying to achieve it not by outlawing or invalidating state laws on the subject, but by making the superfund and the federal courts the exclusive means for the collection of oil pollution damages.
CONCLUSION
Building upon the basis of the Shipowner's Limitation of Liability Act of 1851, United States law regarding liability for oil pollution has proceeded at an irregular pace, providing what may fairly be characterized as a patchwork scheme of liability limits, legal defenses, and compensation fund programs. The pattern is further complicated by the uncertain limits placed by the Constitution upon the power of the States to legislate in an area that has, in important respects, been entered by the Congress. Although the existence of diverse liability regimes may be explained as a matter of history, and to some extent justified as a recognition of separable factual settings of different areas of industrial activity, the proliferation of federal legislative programs through a process of accretion has probably reached the point where the law begins to lose coherence, much as the addition of excessive levels of icing may topple an otherwise appealing four-layer cake. Congress now appears to be on the brink of redoing the uppermost layers of the legislative cake, although the precise ingredients will remain unclear until the task is done. The issue that will then have to be addressed is the need to reconcile domestic and international oil pollution compensation expectations and programs in a way that will give due recognition not only to the "common heritage of mankind" concept as applied to the global commons, but also to the proper interests of coastal states in preserving their environments, maintaining a regulatory and legal climate that will foster continued international trade in oil, and compensating those who have been injured as a result of that commerce. American law currently attempts this reconciliation, but the drive towards a comprehensive approach is such that the present legislative arrangements should probably be considered essentially transitory.