The Energy Law Blog : Energy Lawyer & Attorney : Liskow & Lewis Law Firm : Gulf Coast, Offshore

by: Megan J. Spencer

            In its decision, filed January 7, 2011, the United States Court of Appeals for the Fifth Circuit reversed, vacated and remanded the opinion of a Texas district court that had found that the National Park Service’s Oil and Gas Management Plan was invalid under the Administrative Procedure Act (“APA”) because it denied Plaintiffs rights of ingress and egress established in the state and federal law creating the park.  Dunn-McCampbell Royalty Interest Inc. v. Nat’l Park Serv., 09-40187 (5th Cir. 2011).  The case involved land in the Padre Island National Park, created in 1963.  The conflict arose between the National Park Service (“Service”), owner of surface estates, and Plaintiffs who were owners of mineral estates.  The Service appealed the decision of the district court.     

            The Service made two arguments on appeal.  First, it advanced a plain language argument based on the text of the Texas law creating that park.  The Texas law made an exception for the use of the surface of the land for the reasonable development of oil, gas, and other minerals –  including the right of ingress and egress.  However, this right was only granted to the “grantors or successors in title” of surface land to the United States.  Plaintiffs argued that this language in the statute was ambiguous, and thus even though they were not grantors or successors in title, the right of ingress and egress applied to them.  The Service argued that the language of the statute was clear, and the right of ingress and egress was only granted to the mineral owners who conveyed surface land to the Service.  The Court agreed with the Service’s plain language interpretation, finding that the right of ingress and egress did not apply to the Plaintiffs here. 

            Second, the Service argued that a second exception in the law creating the park did not apply to the Plaintiffs because the Plaintiffs’ mineral estates were within the Seashore’s boundaries.  The act creating the park excluded from ingress and egress restrictions those minerals that were removed from outside the boundaries of the seashore.  Thus, Plaintiffs argued that because they privately owned the mineral estates, these mineral estates were technically not within the park boundaries.  The Fifth Circuit found that despite the private ownership of the mineral estates below the surface of the land, Plaintiffs’ mineral estates were within the park’s boundaries.     

            Although the case deals with laws specific to the Padre Island National Park and Seashore, it has broader implications for mineral estate owners who have mineral estates located partially or fully within national park boundaries.  The Fifth Circuit joined the position of three other circuit courts finding that “land that is not owned by the Service can still exist within the boundaries of a national park.” 

The full text of the opinion is available at the following link:   www.ca5.uscourts.gov/opinions/pub/09/09-40187-CV0.wpd.pdf

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In Gabarick v. Laurin Maritime (America), Inc., 2010 WL 5421015 (5th Cir. Dec. 30, 2010), the Fifth Circuit reversed the district court’s finding of summary judgment on liability under the Oil Pollution Act of 1990 (“OPA”).  In doing so, the Court determined that at the summary judgment stage of a complex OPA case involving a number of different parties, it was improper for the court to rely solely on allegations made in the pleadings in order to find that one particular party was not liable under OPA. 

            The facts of the case are as follows:  In July 2008, an ocean-going tanker traveling on the Mississippi River collided with a barge which contained oil.  As a result, a large amount of oil spilled from the barge into the river near New Orleans.  Immediately after the spill, the owner of the barge denied liability; however, as the owner of the discharging vessel, it agreed to coordinate the removal and cleanup efforts with the Coast Guard.  A number of lawsuits followed involving the owner of the barge (“Barge Owner”), the owners of the tanker (“Tanker Owner”), DRD Towing, LLC (“DRD”), which was the company that supplied the crew for the tug that was towing the barge, as well as other parties.  These lawsuits were then consolidated into the first-filed action.  The Tanker Owner moved for summary judgment arguing that it was not liable under OPA.

            OPA provides generally that each “responsible party” for a vessel or facility from which oil is discharged is liable for the damages caused by such an incident.  Further, the responsible party for a vessel is any person owning or operating the vessel.  OPA, however, also provides a responsible party with a complete defense to liability in the following circumstance:

A responsible party is not liable…if the responsible party establishes, by preponderance of the evidence, that the discharge or substantial threat of discharge of oil and the resulting damage or removal costs were caused solely by an act or omission of a third party, other than…a third party whose act or omission occurs in connection with any contractual relationship with the responsible party…. 

33 U.S.C. § 2703(a)(3).  The Tanker Owner argued that because the Barge Owner’s pleadings admitted that the Barge Owner was in a contractual relationship with DRD, and because the pleadings also admitted that DRD had some fault in causing the collision, as a matter of law, the Barge Owner could not shift liability to the Tanker Owner under OPA.  Accordingly, summary judgment was proper in favor of the Tanker Owner.  The district court granted the Tanker Owner’s motion finding that at least some fault was attributable to the Barge Owner and/or DRD.

            On appeal, the Fifth Circuit found that summary judgment was premature and, therefore, reversed the lower court’s ruling.  First, the Court found that the Barge Owner had taken inconsistent positions in its pleadings in the various district court actions.  Specifically, although the Barge Owner admitted in its pleadings that it had a contractual relationship with DRD, the Barge Owner had also filed a separate declaratory judgment action to have any contracts with DRD declared void ab initio.  Citing Fifth Circuit precedent, the Court reasoned that one of two inconsistent pleas cannot be used as evidence in the trial of another.  Accordingly, the district court erred in treating the allegations in any one of the Barge Owner’s pleadings as an admission sufficient to settle an issue of fact. 

            Given the complex nature of the case and the unresolved relationships between the parties, the Court also found that it was premature to treat any party’s mere allegations as sufficient evidence to conclude that a contractual partner of the Barge Owner had some fault in the collision such that summary judgment in favor of the Tanker Owner was warranted.  Further, there had not been sufficient factual development to conclusively assign fault to any of the parties.  Thus, the Court reversed the granting of summary judgment.

            The Gabarick opinion suggests that in certain OPA cases involving complex factual scenarios and numerous different parties, it may be improper for a court to rely solely on allegations made in the pleadings in order to grant summary judgment absolving a party of OPA liability. 

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