Opinion ID: 197732
Heading Depth: 2
Heading Rank: 1

Heading: The Limitation Act and the OPA

Text: A. The Limitation Act and the OPA The Limitation Act was enacted in 1851 to promote shipbuilding and to induce investment in the growing American shipping industry. See Hartford Accident & Indem. Co. v. Southern Pac. Co., 273 U.S. 207 (1927). The law permits the shipowner to limit his or her liability as to certain claims for damages arising out of the voyage of his or her vessel to the post-accident value of the vessel plus pending freight. See 46 U.S.C. 183, 186. Rule F governs the filing and adjudication of a limitation action. The vessel owner must file a complaint no later than six months after receipt of a claim as well as depositing the amount of the limitation fund with the court. See Rule F(1). Rule F concursus, once referred to as the heart of a limitation action, Maryland Cas. Co. v. Cushing, 347 U.S. 409, 417 (1954), requires multiple claimants to pursue relief in a single forum and marshals the assets of a limited fund. See Rule F(3), F(7). Concursus is intended to provide a prompt and economical disposition to controversies. Cushing, 347 U.S. at 415. Today, many question the continued usefulness and vitality of the Limitation Act. See, e.g., 2 Thomas J. Schoenbaum, Admiralty and Maritime Law (2d ed. 1994) (the Limitation Act's -7- original purpose . . . seems to have lost much of its force with the availability of insurance, bills of lading statutes that put substantial limits on liability for cargo loss, and the ability to limit claims by contract). However, Congress has never repealed the act, and therefore, courts continue to apply it. See, e.g., Keller v. Jennette, 940 F. Supp. 35 (D. Mass. 1996). The Oil Pollution Act was passed in the wake of the 1989 Exxon Valdez tanker disaster and created a more comprehensive compensation and liability scheme for oil spill pollution than had existed under earlier legislation. Prior to the OPA, the Federal Water Pollution Control Act (FWPCA) (commonly known as the Clean Water Act), 33 U.S.C. 1251-1387, provided liability limitations for federal pollution removal costs associated with oil spills. See id. 1321(c). The OPA imposes strict liability for pollution removal costs and damages on the responsible party for a vessel or a facility from which oil is discharged. See 33 U.S.C. 2702(a). Responsible parties include owners, operators, or demise charterers of a vessel. See id. 2701(32). The OPA limits the liability of responsible parties based upon the type of vessel and its tonnage. For tank vessels, the limit can be as high as $10 million. Id. 2704(a)(1). For all other vessels, the limit is the greater of $600 per gross ton or $500,000. Id. 2704(a)(2). Responsible parties may face unlimited liability for, inter alia, acts of gross negligence or willful misconduct. In addition, state law applies free of these -8- liability limits. See id. 2718(a), 2718(b). Finally, the OPA consolidated previously established oil pollution funds into the Oil Spill Liability Trust Fund (the Fund), which pays claims brought under the OPA after they have first been presented to the responsible party, if the responsible party is entitled to a defense, or the liability limit under the statute has been reached. See 33 U.S.C. 2708(a), 2713(b)(1)(B). See generally Schoenbaum, supra, at 384.