Source: https://chaloslaw.com/a-practical-guide-to-the-oil-spill-liability-trust-fund-claim-submission-procedures-george-m-chalos/
Timestamp: 2019-04-25 00:51:03+00:00

Document:
A Practical Guide to the Oil Spill Liability Trust Fund Claim Submission Procedures George M. Chalos – Chalos& Co, P.C.
However, as stated above, under OPA § 2708, an RP may assert a claim to the OSLTF only if it can demonstrate its entitlement to a defense or limitation of liability under OPA.15 In fact, this is the first step which an RP must successfully complete before the NPFC will proceed with the review of any claim.
When presenting a claim to the OSLTF, each claimant has the burden of proving its entitlement to receive compensation. When presenting a claim on behalf of an RP, the RP is responsible for demonstrating its defenses and right to limitation of liability. Ostensibly, the RP must affirmatively prove that the spill was not caused by its own gross negligence. In meeting this burden, the RP can rely on the Coast Guard investigative findings, judicial determinations, and any other evidence the RP wishes to submit.
Difficulty may arise if the Coast Guard investigation report is delayed. The bureaucratic nature of the Coast Guard infrastructure tends to lend itself to requiring a substantial amount of time and internal review before the final findings are available. This may create an obstacle for a party proving its entitlement for further review of its claim.
While the NPFC provides an initial claim form for presenting a claim to the NPFC, there is no prescribed format for presenting a claim against the OSLTF. The claim regulations provide some guidance as to the content of general claim submissions.89 A claim submission must be a signed written document with a sum certain stated. In addition to identifying the date, time, place of incident, and identity of claimant, the claim submission must contain a statement certifying that all material facts are included therein and are accurate.
In providing factual narratives and other evidence as part of the claim process, the claimant must be very careful in selecting what statements to make. Such statements may be used as admissions in third-party litigation or by the Coast Guard to supplement its own findings.
The NPFC review process can be painstakingly slow, as undertaking such a review is a complex and tedious task. Once a claimant has demonstrated its entitlement for claim submission, an NPFC Claims Adjuster must review each and every item on each and every document submitted. In order to facilitate review and processing, a neat, detailed, and organized claim is necessary. The use of summary sheets and spreadsheet software is recommended. Summaries are useful as guides for reviewing supporting documentation such as invoices and daily job reports. Additionally, backup or supporting documentation segregated in binders for each spill responder or contractor with clear delineation of sub-contractor support, documents, and invoices is also recommended.
The neater and more organized a claim, the more likely it will be reviewed and adjusted “in-house” by the NPFC. A claimant may present summary spreadsheets by hard copy or on computer diskette, utilizing any major spreadsheet applications. Presenting a claim in this manner not only saves the NPFC time by way of facilitating its claim review process, but also may speed up the claim determination process, saving the claimant time and money. Haphazard submissions may result in unnecessary delay in the processing of a claim.
Some problems can arise, even when a neat and organized claim has been submitted. The NPFC Claims Adjuster will necessarily review each and every item on all invoices. Thorough review often reveals problems inherent in the supporting documentation. Due to the chaotic nature of an oil spill response, support documents, including sign-in logs or daily reports, are often missing or incomplete. Illegible documents and inconsistent subcontractor documents are problematic. Computation and transcription problems may become evident in summaries or support documents. Other discrepancies may occur when a response contractor’s notes are inconsistent, missing, or otherwise objectionable to the NPFC Claims Adjuster.
The government, in an effort to pay what it deems to be an appropriate rate, will attempt to pay Basic Ordering Agreement (“BOA”) rates rather than the contractor’s actual response rate. However, in evaluating a claim, the government may allow for some reasonable mark-ups. In reviewing claims including overtime payments, “overtime” is generally considered only after the eight hours per day and forty hours per week threshold has been surpassed. New policy directives may be issued in the near future, providing better guidance.
The relevant guidelines and regulations for presenting a claim against the OSLTF are clearly set forth in the United States Code and the Code of Federal Regulations. However, despite such legislation and the fact that OPA and the NPFC have been in existence for nearly a decade, the case law precedent concerning what is or is not a valid claim on behalf of an RP is scarce. In this author’s opinion, the claims process and its controlling legislation is well drafted, however, the without the supplementation of court interpretations, specific guidance is lacking.
There is a scarcity of case law interpreting the provisions of OPA, specifically section 2704, and case law defining when an RP has a limited liability entitlement. As discussed above, an RP must demonstrate its entitlement to a limitation of liability prior to the NPFC undertaking the task of further review of any claim presented. However, from the current precedent available and the statutory legislative history, it seems clear that only a finding of gross negligence or willful misconduct will defeat the assertion of a limitation of liability under OPA § 2704.
The National Shipping decision does not elaborate on the distinction between ordinary negligence and the requisite level of gross negligence or recklessness required before an RP would otherwise be denied its right to limit its liability pursuant to OPA § 2704, although it has been successfully argued to the NPFC that the only reasonable reading of the language of the governing statute and the court’s decision in National Shipping must recognize that in order for section 2704(c)(1)(a) to apply, there must be a finding of something significantly more than mere carelessness or ordinary negligence.
Based upon the foregoing, it has been our position and contention that Congress envisioned a high standard of negligence when it ultimately enacted the final version of OPA. However, there has been no case law upon which to concretely rest such assertion. While it seems to be the clear and logical conclusion drawn from the legislative history and the case law most closely related, this author looks forward to the day when the issue of what constitutes mere negligence and what constitutes gross negligence in an oil pollution incident is decided. Accordingly, when such bright line distinctions are available, an RP may have some guidance and authority to rely upon in presenting its claims for reimbursement to the NPFC, and will not have to defer solely to the NPFC Director’s learned discretion.
For more information of presenting a claim to the NPFC, please contact George M. Chalos at gmc@chaloslaw.com.
. National Pollution Funds Center, User Reference Guide 569 (1999).
. 33 C.F.R. § 136.1(a)(1) (1998).
. 33 U.S.C. § 2713 (1994).
. 26 U.S.C. § 9509 (1994).
. 33 U.S.C. § 2708(a) (1994).
. 33 U.S.C. § 2703(a) (1994).
. 33 U.S.C. § 2704(c)(1) (1994).
. 33 U.S.C. § 2702(b) (1994).
. 33 U.S.C. § 2704(a)(1)-(2) (1994).
. 33 C.F.R. § 136.105(a) (1998).
. See 33 U.S.C. § 2712(h) (1994); 33 C.F.R. § 136.101 (1998).
. 33 C.F.R. § 136.101(a) (1998).
. 33 U.S.C. § 2712(h)(1) (1994); 33 C.F.R. § 136.101(a)(2) (1998).
. 33 C.F.R. § 136.101(a)(2) (1998).
. 33 U.S.C. § 2712(h)(2) (1994); 33 C.F.R. § 136.101(a)(1)(i) (1998).
. 33 C.F.R. 136.101(a)(1)(ii) (1998).
. 33 C.F.R. § 136.201 (1998).
. 33 C.F.R. § 136.211(a) (1998).
. 33 C.F.R. § 136.217(b) (1998).
. See §§ 136.219; 136.221; 136.223; 136.225.
. 33 C.F.R. § 136.219(b) (1998).
. 33 C.F.R. § 136.227(a) (1998).
. 33 C.F.R. § 136.231(c) (1998).
. 33 C.F.R. § 136.241 (1998).
. National Pollution Funds Center, supra note 2, at 579-80.
. 33 C.F.R. § 136.115(a) (1998).
. 33 C.F.R. § 136.115(d) (1998).
. The jurisdiction of the relevant district court rests on 28 U.S.C. § 1331 (1994) (which deals with issues of federal question); 33 U.S.C. § 2717(b) (1994) (original jurisdiction granted under the Oil Pollution Act); and section 10(a) of the Administrative Procedure Act, codified at 5 U.S.C. § 702 (1994).
. 5 U.S.C. § 702 (1994).
. International Marine v. Oil Spill Liab. Trust Fund,903 F. Supp. 1097, 1102 n.3 (S.D. Tex. 1994).
. 5 U.S.C. § 706(2)(A) (1994).
. Gatlin Oil Co. v. United States,169 F.3d 207 (4th Cir. 1999).
. Gatlin Oil, 169 F.3d at 210.
. Id. (citing 33 C.F.R. §§ 136.205 and 136.235, providing for the type of compensation allowable under these regulations).
. Based on the experience of The Chalos Law Firm, LLC in presenting claims against the OSLTF and the NPFC, this section is intended as a summary of experience and suggestions which may prove useful to others in presenting claims to the NPFC.
. See 33 C.F.R. §§ 136.105-136.113 (1998).
. National Shipping Co. v. Moran Mid-Atlantic Corp.,924 F. Supp. 1436 (E.D. Va. 1996), aff’g, 1998 A.M.C. 163 (4th Cir. 1997).
. Id. (citing Benedict on Admiralty § 3.02[B] (7th ed. 1995)).
. 135 Cong. Rec. H 8120, 8134 (1989) (statement of Mr. Carper).
. 135 Cong. Rec. H 8157, 8157(1989).
. Id. at H 8165.
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References: § 2708
 § 2704
 § 2704
 § 136
 § 2713
 § 9509
 § 2708
 § 2703
 § 2704
 § 2702
 § 2704
 § 136
 § 2712
 § 136
 § 136
 § 2712
 § 136
 § 136
 § 2712
 § 136
 § 136
 § 136
 § 136
 § 136
 § 136
 § 136
 § 136
 § 136
 § 136
 § 1331
 § 2717
 § 702
 § 702
 v. 
 § 706
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