Court Opinion

ID: 75460
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:04:33+00
Date Added: 2024-06-11T11:25:38.273430
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[PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT                    FILED
                                                        U.S. COURT OF APPEALS
                                                          ELEVENTH CIRCUIT
                       ________________________               JULY 30, 2001
                                                           THOMAS K. KAHN
                             No. 00-12002                       CLERK
                       ________________________

                   D. C. Docket No. 97-02510-CV-EBD

UNITED STATES OF AMERICA,

                                                                Plaintiff-Appellee-
                                                                  Cross-Appellant,

INTERNAL IMPROVEMENT TRUST FUND, et al,

                                                           Plaintiffs-Appellees,

     versus

GREAT LAKES DREDGE & DOCK COMPANY,

                                                          Defendant-Appellant-
                                                               Cross-Appellee.

                       ________________________

                Appeals from the United States District Court
                    for the Southern District of Florida
                      _________________________

                              (July 30, 2001)

Before ANDERSON, Chief Judge, RONEY and FAY, Circuit Judges.
RONEY, Circuit Judge:

      Defendant Great Lakes appeals the judgment against it in a suit for damages

brought by the United States under the National Marine Sanctuaries Act for damage

to the Florida Keys Marine Sanctuary caused by a grounded tugboat and dredge pipe.

The government’s cross-appeal concerns the district court’s ruling that no primary

restoration is required for the grounding site. We affirm the district court’s decision

on liability, but we vacate a portion of the damages award, specifically that no action

is the best alternative for addressing damage at the grounding site. We remand for

further factual findings regarding this question.

      I.     Facts

      In May 1993, Great Lakes Dredge & Dock Company (Great Lakes) hired

Coastal Marine Towing (Coastal) to tow 500-foot lengths of dredge pipe and other

equipment from Boca Grande to Green Cove on the East Coast of Florida. Coastal

supplied two tugs, Captain Joe and Miss Necie and their crews. Great Lakes supplied

two assist tugs, Volunteer State and Cavalier State.

      While proceeding through the Florida Keys National Marine Sanctuary, one of

the pipes in a raft towed by Miss Necie dragged the sea bottom creating a pipe scar

approximately 13 miles long.

                                          2
      The following facts caused grounding site damage which is the subject of this

appeal. Due to a navigational error by Miss Necie, the flotillas got off course and

Captain Joe ran aground in seven feet of water trying to pass Miss Necie. Great

Lakes’ assist tug, Cavalier State, was tied to the Captain Joe. Sanctuary and state

officials helped devise a plan to extricate Captain Joe. At high tide, Captain Joe was

powered off the bank by a combination of its own motor and the Cavalier State. The

grounding left behind a channel 120 meters long, eight to ten meters wide and two

meters deep. The grounding destroyed 7,495 square meters of sea bottom, consisting

of turtle grass, manatee grass and finger coral. The boats also created a large hole, or

“blowhole,” 120 meters long by nine meters wide.

      The United States brought this action on behalf of the U.S. Department of

Commerce, National Oceanic and Atmospheric Administration (NOAA) under the

National Marine Sanctuaries Act (NMSA) of 1972, as amended, 16 U.S.C. § 1431-

1445, for the destruction caused by the grounding of the sanctuary resources,

primarily seagrasses, in the marine sanctuary. The State of Florida also filed a

complaint against defendants, which was consolidated with the federal case. The first

day of trial, Coastal settled its claims with the United States and the State of Florida

for $618,484. The settlement satisfied Florida’s claims against Great Lakes as well,

and Florida is not a party to this appeal. The State of Florida did file an amicus brief

                                           3
in support of the United States’ positions concerning liability and damages, but argues

only liability.

       After an eight-day bench trial in April 1999, the district court granted in part

and denied in part the relief sought by the government. The court ruled in favor of the

United States on liability, finding that Great Lakes was strictly liable under the NMSA

for all damages to the sanctuary. Regarding damages, the government sought

compensation for implementation of both its primary restoration plan and its

compensatory plan.

       Under the primary restoration component of damages, the government is

entitled to recover the cost of implementing its plan to restore or replace the injured

resource, or the cost of acquiring the equivalent of the sanctuary resource, if it cannot

be restored or replaced. See 16 U.S.C. § 1432(6)(A). Both the government and Great

Lakes agreed that the pipe scar recovered on its own in three years, so the damage

caused is not a part of this appeal. As for the grounding site, the government proposed

a plan to use imported sediment to fill and restore the grounding site, one of three

alternative primary restoration plans considered by the government. The district court

determined that another plan, the “no action” plan for the primary restoration of the

grounding site was appropriate, but that the U.S. should recover the cost of physical

and biological monitoring of the site.

                                           4
      The district court also held that the government was entitled to damages for

compensatory restoration, which is compensation for the interim lost use of the

resources at the pipe scar and grounding site during the period from destruction to

recovery. See 16 U.S.C. § 1432(6)(A). Recovery for lost interim services is in the

form of seagrass restoration projects at other suitable locations within the Sanctuary.

The district court determined that the Prop Scar Restoration Program developed by the

government is an appropriate compensatory restoration project that would provide

seagrass services equivalent to those lost due to the injuries caused by Great Lakes at

both the grounding site and the pipe scar. The court also held that the government’s

reliance on the Habitat Equivalency Analysis (HEA) was appropriate to scale the

compensatory seagrass restoration project. Based on these determinations, the district

court awarded to the government, its response and assessment costs; compensatory

and monitoring costs; and permitting and supervision costs. The district judge

required the government to recalculate the appropriate damages by simple

mathematical computations based on its findings of fact. On March 1, 2000, the

district court entered final judgment against Great Lakes in the amount of $368,796.

97,the figure after setting off the settlement amount paid by Coastal.

      On appeal, Great Lakes argues the district court erred in finding Great lakes

liable to the United States because (1) suit by the United States not authorized under

                                          5
common law; (2) Great Lakes was not vicariously liable for Coastal’s actions, and (3)

the method used to assess restoration was faulty. On cross-appeal, the United States

argues the district court erred in approving “no action” as the primary restoration plan

for the grounding site.

      II.    Applicable Statutory Provisions.

      The National Marine Sanctuaries Act governs the designation and management

of federally protected marine areas of special significance. Congress enacted the

NMSA in response to the increasing degradation of marine habitats and in recognition

of the need to protect marine ecosystems. See S. Rep. No. 100-595,2d Sess. 1 (1998),

reprinted in 1988 U.S.C.C.A.N. 4387.           The NMSA confers authority for the

designation and management of marine sanctuaries on the Secretary of Commerce, 16

U.S.C. § 1433,1434, who has delegated these responsibilities to the NOAA.

      The NMSA imposes civil liability on “any person who destroys, causes the loss

of or injures any sanctuary resource. 16 U.S.C. § 1443.

      The Attorney General, at the request of the Secretary, may commence an action

against any person or vessel who is liable for response costs and damages. 16 U.S.C.

§ 1443(c).    “Response costs” include costs of actions taken to minimize the

destruction of sanctuary resources. § 1432(7). “Damages” include compensation for

(1) the cost of restoring, replacing, or acquiring the equivalent of a sanctuary resource

                                           6
and the interim loss value of the resource pending restoration; (2) damage assessment

costs, and (3) reasonable monitoring costs. 16 U.S.C. § 1432(6).

      III.   Discussion.

      1.     Whether the National Marine Sanctuaries Act Authorizes Damages to
             the United States Government for Injuries to Sanctuary Resources.

      At the outset, we reject Great Lakes’ argument that the government has no

claim for damages in this case because the property at issue is state-owned and the

United States therefore has no proprietary interest. See Robins Drydock & Repair Co.

v. Flint, 275 U.S. 303,308(1927). This argument belies the express language and

scheme of the relevant statutes. On November 6, 1990, Congress enacted the Florida

Keys National Marine Sanctuary Act (the “Sanctuary Act”), Pub. L. No. 101-605, 104

Stat. 3089 (1990), which designated 2800 nautical miles of coastal water in the Florida

Keys as the Florida Keys National Marine Sanctuary. The Sanctuary Act provides

that “[t]he Sanctuary shall be managed and regulations enforced under all applicable

provisions of [the NMSA] as if the Sanctuary had been designated” there under.

Sanctuary Act, § 5(a). In this case, the United States seeks damages from defendants

for a violation of § 1443 of the NMSA, which imposes strict liability for damage or

injury to any sanctuary resource. See, e.g., United States v. M/V Jacquelyn L., 100

F.3d 1520,1521 (11th Cir. `1996); 16 U.S.C. § 1443(a)(1). The NMSA plainly

authorized the United States to recover the damages it seeks for injuries to seagrass

                                          7
resources. The NMSA explicitly provides, “Any person who destroys, causes the loss

of, or injures any sanctuary resources is liable to the United States for an amount equal

to the sum of ...the amount of response costs and damages resulting from the

destruction, loss, or injury....”42 U.S.C. § 1443(a)(1)(A).

      2.     Whether the District Court Erred in Awarding Damages Based on the
             Habitat Equivalency Analysis.

      The United States sought damages under § 1432 of the NMSA for “the cost of

... acquiring the equivalent of a sanctuary resource,” and for the value of lost use of

the resource “pending acquisition of an equivalent” resource. In other words, to

compensate for damages sustained and for lost interim services at the blow hole and

pipe scar sites, equivalent sites were selected for restorative or replacement actions.

The Habitat Equivalency Analysis (“HEA”) was used to scale (quantify the size of)

the equivalent area to be restored, and therefore, to quantify the damages for lost

interim services and the acquisition of equivalent resources.

      Great Lakes argues that the district court erred in accepting the HEA for two

reasons: first, use of an HEA is not appropriate under Daubert v. Merrill Dow

Pharmaceuticals, Inc., 509 U.S. 579, 590 (1993) as a methodology for determining

damages in this case; and second, the underlying “scientific data” plugged into the

mathematical equations as input parameters could not pass muster under Daubert.

                                           8
      The Supreme Court has interpreted the Federal Rules of Evidence to require

scientific evidence to be both relevant and reliable. See Daubert, 509 U.S. at 795. In

Daubert, the Supreme Court set forth four factors, among others, that a trial judge may

consider in determining the reliability of scientific testimony: (1) whether a theory or

technique can be and has been tested; (2) whether a theory or technique has been

subjected to peer review and publication; (3) the known or potential rate of error of

a particular scientific technique; and (4) whether a theory or technique has been

generally accepted. See Daubert, 509 us at 592-593. These factors do not constitute

a definitive checklist, and courts have ample discretion to assess “whether the

reasoning or methodology underlying the testimony is scientifically valid, and

whether that reasoning or methodology properly can be applied to the facts at issue.

See Daubert, 509 U.S. at 592-93.

      The district court did not abuse its discretion when it determined that use of the

HEA was appropriate and that the underlying scientific data satisfied Daubert.

Our review of the evidence indicates, contrary to Great Lakes assertions, that the HEA

was peer reviewed and accepted for publication prior to trial. See e.g. R13-151,185-

87, in which Dr. Brian Julius, who introduced the HEA, discussed the peer review and

publication of the HEA.

                                           9
      Great Lakes remaining arguments address the quality of the data that went into

the HEA and differing interpretations of the underlying data, all of which were

adequately addressed by the district court. Specifically, Great Lakes challenges (1)the

calculation of compensatory restoration, that is the validity of the data used to

determine the recovery rates of the injured sites; (2) the feasibility of the

compensatory sites as equivalent sites; the “compressed succession” technique, which

is a planting technique that achieves a more rapid rate of seagrass recovery by

temporarily substituting a faster growing species, Halodule, for the slower growing

Thalassia, and then allows Thalassia to recolonize the stabilized area; and (3) the

HEA’s sensitivity to major changes in fundamental input parameters. The district

court addressed these objections in its July 28, 1999 Order, stating that evaluation of

the data put into the HEA and the arguments relating to data interpretation are relevant

when the court, as fact finder, weighs the evidence and determines how much weight

to give each experts’ opinion. Our thorough review of the record reveals no error in

the district court’s acceptance of the HEA. We note that necessary modifications to

the HEA were ordered by the court and complied with by the United States, arguably

rendering the HEA more reliable.

      3.     Whether the District Court Erred in Finding Great Lakes Vicariously
             Liable for the Actions of Coastal.

                                          10
         Great Lakes argues it was held vicariously liable for damage when “[t]here was

no proof at trial that Great Lakes’ conduct violated this statute with respect to the blow

hole,” and “ the trial court did not address whether the U.S. proved a prima facie

case.”

         We hold that the district court’s factual findings support the determination that

Great Lakes’ conduct gave rise to strict liability under the NMSA. Specifically, the

court found Great Lakes was responsible for helping Coastal’s vessels maneuver the

tows, maneuver the 500-foot long pipe rafts, and assist with unanticipated problems.

Great Lakes was responsible for preparing the pipe rafts and ensuring they were safe

and seaworthy, and it failed to test the pipes before the trip. Great Lakes failed to send

a welder or crane operator with the flotilla who could have made any needed repairs.

Great Lakes failed to provide Coastal crews with any direction once notified about the

sinking pipes and instead arranged for a welder and crane operator to meet the flotilla

at Marathon. Great Lakes failed to notify the lead tugs that any pipes were dragging.

The dragging pipes caused a 13-mile pipe scar. The dragging pipes slowed down the

Miss Necie, which caused the Captain Joe to maneuver sharply to avoid a collision,

resulting in running aground. Some combination of the Captain Joe’s engines and the

efforts of Great Lakes’ tug, the Cavalier State , dragged the Captain Joe farther along

                                             11
the bank. The grounding and attempts to extricate the Captain Joe from the site

resulted in injuries to sanctuary resources.

      Contrary to Great Lakes assertions, these factual findings are supported by the

record evidence and are not clearly erroneous. These facts are sufficient to

demonstrate causation sufficient to impose liability under the NMSA.

      Great Lakes argues that the district court improperly denied it the affirmative

third-party defense under § 1443. The Act provides three defenses, only one of which

is applicable to this case. Under the statute, a person is not liable if that person

establishes that the injury to sanctuary resources was “caused solely by...an act or

omission of a third party, and the person acted with due care.” § 1443(a)(3)(A). This

provision is substantively identical to those statutes upon which the NMSA was

modeled, the Federal Water Pollution Control Act Amendments of 1972 (Clean Water

Act) § 311(f)(1), 33 U.S.C. § 1321(f)(2); and the Comprehensive Environmental

Response, Compensation, and Liability Act of 1980 (CERCLA), § 101 et seq., 42

U.S.C.A. § 9607(b)(3). The district court correctly determined that under no view of

the evidence could Great Lakes satisfy either of these elements of the defense.

      The district court held Great Lakes was strictly liable, relying upon United

States v. LeBoeuf Brothers Towing Co., 621 F.2d 787 (5th Cir. 1980), a case in which

the Fifth Circuit, under a similar strict liability provision in the Clean Water Act,

                                          12
rejected the argument that an independent contractor acting for and under the control

of a defendant employer is a “third party” for the purpose of absolving the defendant

employer of liability under the statute. In that case, the Fifth Circuit rejected a vessel

owner’s argument that it was not liable under the third-party defense provisions of the

Federal Water Pollution Control Act Amendments of 1972 (Clean Water Act) §

311(f)(1), 33 U.S.C. § 132, for the accidental discharge of oil by an independent

contractor tug crew hired by the defendant. The court concluded that the defendant

held ultimate control over hiring the contractor, specifying its itinerary, and retaining

the contractor throughout the job. LeBoeuf, 621 F.2d at 789-90. The court also

concluded that the third-party defense was not intended to protect a party from the acts

or omissions of those acting under its control or on its behalf. 621 F.2d at 790.

Otherwise, “the statute’s comprehensive scheme for preventing and cleaning up oil

spills would be undermined if barge owners like [defendant] could escape strict

liability merely by hiring out their operations to tugs.” 621 F.2d at 789. In this case,

the district court correctly reasoned that the remedial purpose of the NMSA and the

need to encourage oversight with independent contractors requires an equally strict

reading of the NMSA’s third-party defense.

      Great Lakes has simply failed to prove that the injury was solely the result of

Coastal’s actions and that Great Lakes acted with due care. Great Lakes contends that

                                           13
even if it is liable, it should only pay for a proportional share of damages. Where, as

in this case, however, each defendant is a legal cause of the damage and the damage

is indivisible between the two, the district court correctly held that liability under the

NMSA is joint and several. This holding is consistent with cases finding joint and

several liability under the CWA and CERCLA. See e.g., United States v. M/V Big

Sam, 681 F.2d 432,438-39(5th Cir. 1982)(CWA); Redwing Carriers v. Saraland

Apartment, 94 F.3d 1489,1512,1513(11th Cir. 1996)(CERCLA). The evidence

supports the district court’s findings of facts regarding joint and several liability. The

court’s factual findings indicate that Great Lakes caused damage at both the pipe scar

and the blowhole. Although the district court did not expressly address the divisibility

of the injuries, it is clear from the evidence Great Lakes’ actions during the entire

incident were inextricably tied with Coastal’s actions. The resulting injuries cannot

be attributed to any one defendant. Although the district court concluded that Great

Lakes was jointly and severally liable, it did in fact reduce Great Lakes’ liability by

$618,484,86, or approximately two-thirds of the judgment, in recognition of Coastal’s

payment of that amount.

      A review of Great Lakes challenges to the court’s evidentiary rulings regarding

the admission of affidavits with attached summaries and supporting documentation

                                           14
of two experts, Wiley Wright and Michelle McQuillan, reveal there to be no abuse of

discretion in the various rulings.

      4.     The United States’ Cross Appeal.

      The United States’ cross-appeal concerns the district court’s ruling that “no

action” is the appropriate plan for the grounding site. The government alleges that the

district court erred in relying on the hearsay report of a non-testifying government

consultant and clearly erred in certain factual determinations, including that natural

recovery would occur in 70 years. It argues that approval of a “no action” plan is

contrary to the NMSA and the agency’s expert judgment.

      As contemplated by the NMSA, the NOAA developed a restoration plan for

the injured resources and the grounding site and the pipe scar. Under the NMSA,

damages include: (1) the cost of replacing, restoring, or acquiring the equivalent of an

injured sanctuary resource (“primary restoration”); (2) compensation for the interim

loss of resources and services from the time of injury until resources recover to

baseline (“compensatory restoration”); (3) damage assessment costs; and (4)

reasonable monitoring costs. 16 U.S.C. § 1432(6). The agency recommended

compensatory restoration for both the pipe scar and the grounding site. The agency

did not recommend primary restoration for the pipe scar because it was recovering

                                          15
naturally in a timely manner, but it did recommend primary restoration for the

grounding site.

        The agency narrowed down to three the viable alternative plans for primary

restoration of the grounding site: (1) a “no action” plan; (2) a site regrading plan ; and

(3) the “imported fill” plan. The government recommended the third option, the

imported fill plan, but the district chose the no action alternative.

       The court made the following findings: (1) it was not convinced the plan would

restore the bank to its original condition; (2) it concluded the grounding site would be

expected to fully recover on its own in roughly 70 years and (3) it raised concerns

about potential construction risks.         In reaching this conclusion, the court

misinterpreted the evidence and testimony before it, and certain of these findings are

not based on the evidence.

      One of the more significant factual errors was the court’s finding that natural

recovery without any interference would take approximately 70 years. The evidence

clearly indicated that this seventy-year period upon which the district court relies is

in fact the amount of time the grounding site is expected to achieve full biological

recovery after implementing the United States’ primary restoration plan. The Report

from J. Harold Hudson, Regional Biologist, Key Largo National Marine Sanctuary,

Exh. 18 states in the “PROGNOSIS FOR RECOVERY”:

                                           16
             Complete recovery of this site to pregrounding conditions
             is not expected to occur without human
             intervention...Infilling of channelized areas of the
             grounding site is an essential first step toward site recovery.
             If no other remedial action is taken it is anticipated that
             complete overgrowth of the site by seagrasses and corals to
             pregrounding levels could occur in 75 to 100 years.

       The government’s biologist, Judson Kenworthy, testified that the recovery

horizon for the slower growing Thalassia grass was seventy-one years for an area the

size of the injury at the grounding site. R-12-79,81. Government expert Brian Julius,

elaborated that the seventy-one-year recovery rate was based on the assumption that

the government’s primary restoration plan would be completed. R13-155-156,170.

       There is evidence in the record that natural recovery without human

intervention would take much longer, as much as hundreds of years. Government

expert Dr. Joseph Zieman testified that if the bank were left alone, recovery “would

take a long, long time. Many, many decades to possibly hundreds of years.” R-13-

116.

       Thus, the court’s finding that the government’s primary restoration plan will not

decrease the recovery period is clearly erroneous.

       The court also relies on report of Dr. Kevin R. Bodge, to support its statement

that “the morphological signature of the injury will be visible for many years to come

irrespective of what plan is implemented.” As an initial matter, the government

                                           17
challenges the district court’s reliance on the Bodge report at all, because Bodge was

a non-testifying government consultant and his report was admitted into evidence for

the limited purpose of explaining other experts’ testimony. Assuming for purposes

of this argument that the Bodge report was properly considered, the district court

relied on it for evidence unsupported in either the report itself or other record

evidence. The report only compared the no action alternative to a berm-transfer

alternative, not the government’s infill plan. The report therefore provided no opinion

on the government’s plan’s potential effect on the sited morphology.

      We must also note that the Bodge report’s recommendation of “no action” was

a qualified one based on several critical assumptions: that the banks are stable, the

sediment is not chronically disturbed and the rubble is not susceptible to erosion. The

court made no findings as to whether these underlying assumptions were met.

      The evidence in the record indicates that biological recovery of the site’s

resources would eventually occur only after the site had been stabilized. Kenworthy

testified that the site would remain unstable “[u]ntil the physical topography of that

site is brought back to as near as it was prior to the grounding event.” R-12-113. See

also McCabe’s testimony, R-13-57-58(“[i]f you do not fill it you are still going to be

continually subject to hurricane wave impact...It is never going to stabilize.”); and

Zieman’s testimony regarding the infill R-13-114(“[M]y paramount recommendation

                                          18
is no matter what happened that [it tried] to fill in that crater in there and get it back

to some type of near conforming bank top surface.”)

      The statutory scheme under the NMSA explicitly authorized the Secretary of

Commerce, acting as trustee for sanctuary resources, to take “all necessary actions”

to prevent or minimize the destruction or loss of, or injury to, the resources. 16 U.S.C.

§ 1443(b)(1). Under these circumstances, where several key findings made by the

district court were based on misinterpretations of the record, we deem it necessary to

remand for further consideration, with particular attention paid to the question whether

the fact that it is the government’s plan rather than the “no action” plan that provides

for recovery in approximately seventy years, and how the other factors weigh in

against that element.     Recognizing that part of the court’s order assumes the

government will continue to monitor the effects of the no-action alternative, we

assume the government will take this opportunity to update the court on any new

information that would aid in the district court’s decision.

      By this decision, we do not intend to indicate that a “no-action” plan would not

ultimately be the option of choice. But the choice, in which some discretionary

judgment may be involved, should rest on correct findings of fact supported by

evidence in the record.

      AFFIRMED IN PART, VACATED IN PART AND REMANDED.

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