by its contracting party the argy towing initially i want to present that this case is before you from the granting of a summary judgment motion denying a c l its rights to exoneration under section twenty seven zero three of the evolution act or limitation under section twenty seven zero four as such this case comes before this court for de novo review this is not a clearly erroneous situation court has the obligation to review the record and determine whether or not the district court has probably applied the rules furthermore with regard to the limitation of liability defense it is important to note that liability this limitation is to be granted except under some circumstances for which the government has the burden of proof if you search this record i believe you will  y find that the district court did not have sufficient evidence to grant this potion for summary judgment particularly in regards to the denial of limitation of liability under section twenty seven zero four whereby the responsible party is designated not by fault but by status that's if you are the carrying of us all the owner of the petroleum product and it is discharged itself against this type of liability but open is a very strict liability statute with very narrow defenses but in this case the defense is warranted also recall we are not asking for repayment with taxpayer dollars out of the u s treasury the funds which would be recovered come from the trust fund the source of those trust funds are soling are derived out of a tariff which is a ten cents or twenty cents per barrel tax on all imported oil if you prefer i was wondering that if you prevail on the third party defense what would you recover i recover the amounts we paid which is a law over seventy million dollars and if you prevail on  limited liability you know the numbers right away was i believe the limit of liability is somewhere in the area for six million dollars you still recover that's correct i would hope the amount of the recovery would no way color the interpretation else asked jan i was just wondering how the whole regime work that's how the regime works and it was purposeful the purpose of opal was to ensure cleanup pay when other people couldn't pay but more importantly not to punish someone who's found strictly libel particularly without fault and the funds come from a source outside of us taxpayer that's the purpose the fund has has been caught in this money but from twenty just jumping to the merits issue the two twenty seven zero three and twenty seven zero four are somewhat close when we look at the st language we are asking your client as responsible party is what did this bill occur connected to or pursuant to a relationship with your client with all due respect your honor i think those statutes a demonstrate to this court the tremendous distinction between the two sections of the uncased all the help so that i know you've made that point in the language is different but where do we look to establish your or you're about to convince this is a case of first impression i know but so how do you add the word tremendous distinction in there where do you get that for two reasons one being at all contract lawyer that i am particularly insurance i look at the word and then i look at  if there's no definition within the statute i then look at the dictionary definitions in connection with as closely associated with the rising from arising out of this court has numerous decisions interpret ing arising out of giving it a very broad sco pursuant to if you look at the dictionary text if definition is in accordance with that's a tremendous distinction it means if i can demonstrate a grossly material breach of my contract the acts of my contracting party cannot be pursuant to ok this is extremely helpful to me in clear but when you made your first point trying to diminish the first you don't want to argue against yourself but if it's arising out of then it would make sense that you'd have complete third party defense if there were an act of god or the little vandal in l that walks in and pulls the plug but maybe not here where they're working for you well again let me let me let me explain that ok i would agree with your argument somewhat your honor if you're focusing on twenty seven zero three well i'm jumping because you're young i'm interested in both at the totality of the contract and i would think the rule is that you're not pursuant to that contract if you have a grossly material breach of that contract that is causative to the event that is that's how pursuant to should be read in this context i'm not saying any mere regulatory violation which gave reid which may give rise to a breach of contract takes me out of her so again i am not suggesting that at all you have a very specific set of facts here and we don't have to worry about the floodgate argument which the government has made because of the facts of this particular case but why wouldn't this be exactly where congress would want to force you to be a two step process on the twenty seven zero four so that's why it's more than just looking at the contract they impose upon my client the bird of due diligence what did we do to ensure ourselves that this a b or c and of course i passed the course we did exercise due diligence but let's go a bit further and let's compare a c l activities in investigating its particular contracting party y in both cases the age of your way the american waterways organization did not discover the i d s criminal activity that's what makes this case so unique i but what are the facts that would get you will always insulate the responsible party and i'm not saying that at all ok what i'm saying is those criminal acts must be causative to the event and if you look at the gabber act to see which was the district court's first decision in this case it's pacifically an atmosphere which allowed their crews to do the same even without your does not and in this case we have a captain leaving a vessel but criminal acts sounds like a clear thing but when would how would that become a rule of law because what it would have prosecutors just choose not to prosecute or they defer prosecution how it's not always bright line criminal act but in this case you do you have that bright line and that's why i'm saying you don't have to worry about the floodgate argument you've got a very bright line here where you have an operator that  it should have had to license cap and support it whenever it operated if there was a license captain aboard on this night and he violated a regulation such as the rules of the road i would be standing before you they were operating pursuant to that contract because they had a legally licensed captain aboard who made a mistake we don't have that situation here the only thing the government proved that summary judgment was to to satisfy the any entity in this country cannot can not limit its liability by the very nature that a charter party permits the contracting party to designate the load port doesn't take the time to pick up that you need to to the port of discharge and time of the charge that is not sufficient pursuant to the contractual relationship it's got to be more than that the activity to satisfy pursuant to language must be cause it must be a serious violation of  with you however that's either an immaterial breach or a minor breach of contract what was the real cause of the accident was it because he ran aground a misread is misread his charge that would not give us a defense  to this limitation but it wasn't in the me he wasn't acting pursuing contractual relationship to the because he wasn't doing what the contract called to do i just i'm just i just have a hard time i don't like the balls and strikes and your theory i understand that but i think it's pretty easy to call this a strike because we have a consistent pattern of illegal conduct going over series of years is that relevant is the legal compliance provision in the contract relevant to your human or not i would think it's not  it's helpful itself i would think any time you operate outside the legal bounds of a contract it's not pursuant to but the government's response would be then any time you put one in a contract you're always out of again i'm not looking for that far reaching role  case that you think articulate the interpretation even though there's nothing in the o p s i would think if you look at the statute itself it's easy but easily been ridiculous to say including criminal conduct when they use the terms you any money basically going on with their lives and a c l and it's underwriters on the one who are paying a penalty for acts which were not foreseeable which were not legal and who would say did their best to protect against and that's what the good morning and may it please the court my name is sarah keystone behalf of the united states this is a case that falls within the core of the exception to limitation of liability for acts by contractual third party specifically safety or operating or construction regulations by the responsible party or a party acting pursuant to a contractual relationship and noted mr nicoletti says we shouldn't punish a party that is old or go strictly liable but out at fault a sale is found to not various possibilities for the spill under the general maritime law because of the shield provided by the bareboat charter in this case but congress explicitly meant over to go beyond the general maritime law and it passed this provision that said that allows a party to limits liability if it's with without fault and it is liable to a certain point regardless of fault except in this specific circumstance where the spill is caused by gross negligence or  violation of a safety or operating regulation by it or somebody acting pursuant to traction relationship would be a strange reading of the statute if a c l could limit its liability and unless the spill was caused by a violation of a safety or operating regulation by a particle tractor relationship except if the regulatory violations were especially important to preventing oil spill such as the proper manning and the rest requirements congress considered manning in rest lets out of its strict liability when the statute provides no such outlet in the text i think is contrary that only the tax but also the the intention of the statute which put its focus on twenty seven zero four sort of  has some compelling the general rule is you do limit liability correct yet you're arguing for the exemption so we would construe that narrowly against you as a general matter just statutory construction right i think that this that may be true but this case falls within the core of what this exception is and what it's meant for but then he says you know if the focus is the pursuant to it really wasn't pursu congress created the succession to limitation of liability it's not just for regulatory violations it's for gross negligence too and i think this is this is contemplating egregious contact a gross negligence and that is going to  the violation of the negative rules the violation of the radio rules and these are exactly the type of regulations that are intended to prevent collisions and oil spills and as i mentioned congress specifically recognize this in the passage of opa and i the charters were completed in august of two thousand and seven and presumably the relationship would have continued after that and judge the mal in the limitation trial which is the nine hundred us up second six six nine decision specifically think the fact that a c l knew there was a shortage of license crew should have put them on notice to make sure their vetting was more than has led to characterize it minimal sufficient escape negligence but not sufficient for four strict liability and i think the other piece of that is it's not just whether a c l could have discovered it although i think their reading could have been better and they could have monitored  towing logic and reasoning or it's not helpful to i think it is it is related to the third party defense not the limitation because there isn't that analog but what  was doing was saying a third of the term their party which wasn't defined in the statute does not include third parties with with whom you have a contractual relationship now when congress passed they made that an explicit part of  think the reasoning is the same and there i apologize for not having the side of my fingertips we do make a site in the case in the briefs that congress intended to to incorporate the law that had been development of recommend from wrong is that the well that's connected to essentially the same thing is pursuant to whatever we rule in the twenty seven zero three context is pretty much the result is that over simplified i think less relief in the limited liability context if you're modifying the actor right because with that embrace all of these kind of i mean i think that the difference is it could be any kind of act in the third party defense whereas crimes it's the violations that break regulation or violations of safety in operating regulations intended to prevent oil spills whether they are are not also crimes i don't think is relevant the fact that the regulations is what triggers the limitation the taxes that say violations of safety are at operating regulations except those that could be charged as crimes i also want to note that the crime here that was charged  the reporting violation i don't know about the discussion of fleeing down to the charging documents or in the record the crimes that were charged were the reporting violation and the plain water acts discharge violation and that's it and i know also in the briefs that there's a reference to  some of the language in the factual basis for the plea that creating the dangerous situation but if the court looks at the the crime the charge of the crime are the elements the crime it can't be expanded by the factual basis this was a failure to report  hazardous condition on a vessel and so on that there you could change you could take all these underlying radial safety operating regulation violations that are not themselves criminal and argue their criminal and i think that is there any let's that history th think this it characterization of the act that would allow their sponsor party out of strict liability for this particularly serious violations of the very regulations that are meant to prevent oil spills would be contrary relationship i also think that the rule proposed by a c l is hard to hard to see how it would be workable because it doesn't create a bright line rules between what is criminal and was a criminal is not criminal especially in a highly regulated regulated field where violations of safety and operating regulations can be charged whether through failure to report or otherwise as criminal activity and i also think it would be hard to understand where the line would be drawn  maybe it's helpful to i think talk about a hypothetical that wouldn't be pursuant to a contractual relationship as was mentioned the telling was operating vessels on behalf of various towing companies if was operating a vessel for kirby for example and conduct committed regulatory violations and ran into a more dear de barge that wouldn't be pursuant to the contract move this particular barge on this particular mission and the regulatory violations were committed during the execution of that contract would you want you have been your in your  strongly disfavoring the second circuit's extra something yes yes your honor but you don't really tell us what what you greedy it's not just mere existence it has to be something more the second circuit says what they think it means you say that's wrong but you don't really mind my understanding tell us what the extreme is where we look i think it's whether the act is well this is just a twenty seven zero three zero s the act is in connection with a contractual relationship so you look at whether the connection between the act in the contract relationship so if it's a completely unrelated contract or a relationship you know i happen to have a contract you know to tell my colleague the hypothetical you get right court  articulated the position the government favors on twenty seven zero three is the case i don't know there's a case in that addresses and that much detail but the twenty seven zero three cases out there if you look at the facts of them they all end up like that yeah ok i guess in response to the a sales argument that this reading would turn all charters into contracts where negligence would be pursuant to that charter i think that that's not strange or surprising you're talking about charters if you hire a company to move your fuel barge and they conduct commit regulatory violations in the course of moving that fuel barge then that falls within the provisions of  and i don't think it's relevant that that would be the case with most charters to move a fuel barge i don't think that is a reason to limit what types of regulatory violations fall under the exception the only problem we have a hardship is if that's the extent of the limitation it would seem to be twenty seven zero four would would always be met when you meet twenty seven o three i think the difference is there has to have been a reason they wanted to limit liability even when it was a third party differences in available we're still going to give the responsible party a limitation there's got to be some wind window between the two right look the window is that you can have limitation if this bill is caused by ordinary negligence of a third party rather than or just an accident that doesn't have fault involved it's limited by the gross negligence and regulation violation of operating or safety regulation whereas twenty seven of three is about any actor a instructed garrity to pick up this barge have it filled with oil and make the strip this is in the the core of what twenty seven zero four c is intended to cover and i would like to emphasize that a c l did choose  me address the above decision that comes under the clean water act most importantly the defense is limited to acts of third parties and on the baf they found that the actor who committed the spill was under contractual relationship with the responsible party under that act neither the mere existence of the contract was sufficient to defeat the defense under the clean water act but that is where they gave the example a vandal gets on board the boat pulls the plug absolutely and that's absolutely not but so we're talking an action that's a third party right but when it's the same person you hire reaches down and pulls the plug well that's the reason why twenty seven o three has had twenty seven or four has its language i mean in our brief we hope the following where congress includes particular language in one section of a statute but omits it in another section of the same act is generally presumed that congress acts intentionally in purposely in the disparity inclusions will the exclusion you have a twenty seven of three in connection with it twenty seven zero four we ha under dictionary definitions there radically different standards radically different applications therefore this court cannot rely on any case which interprets the language of arising from or connection with interpret in pursuing two hundred twenty seven zero four because congress purposely did not use the same language the government has not refuted that more importantly under twenty seven all four of the government has the burden of proof the only thing they've shown you to date is the tug and barge was sent out at the instructions of a charter which was a c l and no more more importantly we're not talking about the acts of negligence at the time of the incident that is most instructive because in that case the court specifically noted the foregoing evidence of d r d's privity of knowledge is certain is further corroborated by the pleas of guilty to federal crimes by d been a car of the captain the idea itself was found to have violated criminal statutes specifically in the way it operated its fleet not just in this instance but generally again the government is trying to say that somehow a c l saved money by doing these charter charter agreements this was a local operation it was that it was the hanrahan fleet a c l is out of indiana so to operate to move its barges within the fleet had to have been had expired as up to an old they specifically called the idea and told him type about and say you have a license cap and we don't want that bill to move so what the government suggests a c e o should have done they actually did do and