Opinion ID: 568017
Heading Depth: 2
Heading Rank: 1

Heading: The Limitation Act and TAPAA

Text: 5 The Limitation Act, enacted in 1851, permits vessel owners and charterers, who meet certain conditions, to limit their liability for damage caused by their vessel to the post-accident value of the vessel plus pending freight. 46 U.S.C.App. §§ 183, 186. 5 The Act was intended to promote investment in the American shipping industry by making the American industry competitive with that of Great Britain. See Just v. Chambers, 312 U.S. 383, 385, 61 S.Ct. 687, 690, 85 L.Ed. 903 (1941); University of Tex. Medical Branch v. United States, 557 F.2d 438, 454 (5th Cir.1977), cert. denied, 439 U.S. 820, 99 S.Ct. 84, 58 L.Ed.2d 111 (1978). While the Limitation Act has been criticized by some commentators in recent years as being outdated, 6 it has not been repealed by Congress, and courts therefore continue to apply it. See, e.g., Matter of Hechinger, 890 F.2d 202, 206 (9th Cir.1989) (finding that Limitation Act is applicable to private, noncommercial boats), cert. denied, --- U.S. ----, 111 S.Ct. 136, 112 L.Ed.2d 103 (1990). In fact, in 1984, Congress amended the Act by increasing the minimum limitation liability amount prescribed by § 183(b). Pub.L. 98-498, 98 Stat. 2306 § 213(a) (1984). 6 TAPAA, enacted in 1973, is part of the legislation which authorized the construction of the trans-Alaska oil pipeline. 43 U.S.C. § 1653(c). 7 TAPAA establishes a comprehensive liability scheme applicable to damages resulting from the transportation of trans-Alaska pipeline oil. It creates strict liability for damages resulting from spills of trans-Alaska oil up to $100,000,000 per spill. The first $14,000,000 is to be paid by the vessel's owner and operator (collectively owner). 43 U.S.C. § 1653(c)(3). Any remaining claims, up to the additional $86,000,000, are paid by the Trans-Alaska Pipeline Fund (the Fund), which was created by TAPAA. Id. The Fund is an accumulation of money raised by taxing trans-Alaska oil. 43 U.S.C. §§ 1653(c)(4), (5). If the total claims exceed the $100,000,000 of strict liability, they are reduced proportionately, and the claimants may pursue the unpaid portions under other applicable state and federal laws. 43 U.S.C. § 1653(c)(3). Once payment is made to the oil spill victims, where either negligence or unseaworthiness of the vessel caused the spill, the various parties have subrogation rights and may pursue legally those responsible for the spill. 43 U.S.C. § 1653(c)(8). 8 7