Owners and operator of an oil tanker formerly known as the Exxon Valdez (SeaRiver), challenged the constitutionality of section 5007 of the Oil Pollution Act (OPA).[1] The district court dismissed the complaint and SeaRiver appealed. The Ninth Circuit held that the OPA was not a bill of attainder and did not deny SeaRiver due process or equal protection.

On March 23, 1989, the Exxon Valdez ran aground, spilling approximately eleven million gallons of oil into Prince William Sound. In the wake of the disaster, Congress passed the OPA, increasing penalties and regulations on oil tankers in an attempt to prevent future spills in “environmentally sensitive area[s].”[2] Section 5007 of the OPA excluded from the Prince William Sound any vessel that spilled over one million gallons of oil after March 22, 1989.[3]

SeaRiver first challenged section 5007 as an unconstitutional bill of attainder for inflicting punishment through legislation without the protections of trial.[4] The Ninth Circuit identified a three element test of a bill of attainder comprised of the following: 1) specification of the party, 2) infliction of punishment, and 3) lack of a judicial trial.[5] Addressing the specificity of the OPA, the Ninth Circuit evaluated whether the OPA named Valdez, made its identity readily ascertainable, defined past conduct which identified Valdez, or defined Valdez by “irrevocable acts” it committed.[6] Applying these factors, the Ninth Circuit determined that although the Valdez was not named, exclusion on the basis of the date and size of irreversible oil spills occurring prior to the passage of the OPA made it easily ascertainable that the statute targeted the Valdez. However, while the court
determined that the contested statute included the first characteristic of a bill of attainder, it did not satisfy the second prong of the test.

In evaluating whether section 5007 punished the Valdez, the Ninth Circuit looked to the purpose of the attainder clause and found that it concerned punishment of individuals.[7] Although a bill of attainder concerns punishment of individuals, not vessels, the Ninth Circuit found that a statute affecting individuals by targeting their property could be a bill of attainder. The court considered these three aspects in determining whether the statute inflicted punishment on the Valdez: 1) whether the statute historically would be defined as legislative punishment, 2) whether the statute rationally had nonpunitive purposes, and 3) whether legislative history indicates Congress intended the statute as punishment. Finding that the statute affected the vessel and not the owners or operator as individuals, the Ninth Circuit held that it did not “punish” in the constitutional sense. The court also applied a functional test to determine whether the burden of the statute furthered nonpunitive purposes.[8] Citing the purpose of protecting the sensitive marine environment of Prince William Sound, the Ninth Circuit decided that the passage of section 5007 had a legitimate purpose rather than solely a punitive intent because it addressed the prospective risk of future spills and protected sensitive areas from known offenders in a way that other alternatives could not achieve. Finally, the statute had little legislative history, and none that clearly indicated an intent to punish. Because the statute failed to meet the punishment prong, it did not constitute a bill of attainder.

SeaRiver also argued that section 5007 violated the Due Process Clause[9] because it applied retroactively. The Ninth Circuit relied on the test set out by the Supreme Court in Usery v. Turner Elkhorn Mining Co.,[10] to evaluate the retroactive application of section 5007 by considering the clarity of congressional intent that it should apply retroactively and the rational basis for that intent. Without delving into legislative history, the Ninth Circuit reasoned that previous oil spills could rationally correlate with future conduct and thus reasonably relate to the purpose of protecting Prince William Sound. Based on this rational justification for the statute, the court held that section 5007 did not violate the due process rights of SeaRiver.

Finally, the Ninth Circuit also rejected SeaRiver’s argument that section 5007 denied it equal protection in violation of the Fifth Amendment by singling it out as an unpopular target. Relying on the Supreme Court decision in Village of Willowbrook v. Olech,[11] the Ninth Circuit evaluated whether the Valdez had received intentional differential treatment compared to other similarly situated individuals without a rational basis for that difference in treatment.[12] The court found that it was “reasonable for Congress to single out the Exxon Valdez” and “rational for Congress to use this past disaster as a measure of future performance.”[13] The court thus held that section 5007 did not violate the Equal Protection Clause. In total, the Ninth Circuit affirmed the decision of the district court, dismissing the complaint.

[1] Oil Pollution Act of 1990, 33 U.S.C. §§ 2701-2761 (2000).

[2] SeaRiver Maritime Financial Holdings, Inc. v. Mineta (SeaRiver), 309 F.3d 662, 667 (9th Cir. 2002) (quoting 33 U.S.C. § 2732(a)(2)(A)(2000)).

[3] 33 U.S.C. § 2737 (2000).

[4] The Ninth Circuit relied on the U.S. Supreme Court’s interpretation of Article I, Section 9, clause 3 of the U.S. Constitution, which prohibits bills of attainder, in Nixon v. Administrator of General Services, 433 U.S. 425 (1977).

[5] SeaRiver, 309 F.3d at 668-69 (citing Selective Serv. Sys. v. Minn. Pub. Interest Research Group, 468 U.S. 841, 847 (1984)).

[6] Id. at 669 (citing Selective Serv. Sys. v. Minn. Pub. Interest Research Group, 468 U.S. 841, 847 (1984); United States v. Brown, 381 U.S. 437, 448-49 (1965)).

[7] U.S. Const. art. I, § 9, cl. 3.

[8] SeaRiver, 309 F.3d at 674.

[9] U.S. Const. amend. V.

[10] 428 U.S. 1 (1976).

[11] 528 U.S. 562 (2000).

[12] Id. at 564. The Ninth Circuit held that because the Valdez was not a suspect class, any conceivable rational basis for the differential treatment would defeat its equal protection claim. SeaRiver, 309 F.3d at 679 (quoting FCC v. Beach Communication, Inc., 508 U.S. 307, 313 (1993)).

[13] SeaRiver, 309 F.3d at 679.

A 1995 crude oil pipeline spill discharged over 45,000 gallons of oil in Norwalk, California, at least fifty gallons of which escaped through a storm drain and contaminated a local creek and river. The Union Oil Company of California (Unocal) sued the Southern California Regional Rail Authority (Metrolink) and its subcontractors, seeking reimbursement of cleanup costs. A jury entered a verdict in favor of Unocal pursuant to the Oil Pollution Act of 1990 (OPA)[1] and on theories of negligence and breach of contract.[2] Both parties filed appeals to the Ninth Circuit. The Ninth Circuit upheld the jury verdict against Metrolink, affirmed the trial judge’s award of pre-judgment interest to Unocal under the OPA, and denied Unocal’s request for attorney’s fees.

The oil spill occurred on a Metrolink construction site situated directly above a section of Unocal’s pipeline and located in close proximity to a storm drain operated by the Los Angeles County Flood Control District (LACFCD). Before the spill, Unocal sent two site inspectors to mark the course of the pipeline and determine its depth in the area surrounding the storm drain. In 1995, while leveling an access road with a large Caterpillar, one of Metrolink’s subcontractors punctured the pipeline approximately forty feet from the storm drain. Employees from another Metrolink subcontractor then placed plywood and a dirt mound over the inlet to divert oil from entering the storm drain and ultimately reaching Coyote Creek. Unocal representatives arrived on the scene and managed the oil spill response and cleanup efforts. However, after initial visual inspections, Unocal’s agents did not know–nor were they informed–that the pool of oil was located above the storm drain and that Metrolink’s subcontractors had covered the pool.

Unocal contacted LACFCD later that evening to inform them that a spill had occurred, but that no oil reached the storm drain and no waterways were affected by the spill. After several more hours of cleanup preparation, Unocal realized the oil pool was situated directly above the storm drain and called LACFCD a second time to request monitoring assistance for the planned excavation. The next day, an LACFCD crew discovered oil in both Coyote Creek and the San Gabriel River. The crew also discovered that oil had entered the storm drain inlet that was covered by Metrolink’s subcontractors. Metrolink’s construction manager then informed Unocal that Metrolink would pay the costs of removing the spilled oil.

Unocal submitted a formal claim to Metrolink for reimbursement of the $4.66 million in cleanup costs. After Metrolink rejected that claim, Unocal presented a written claim to the National Pollution Funds Center (NPFC)[3] for reimbursement from the Oil Spill Liability Trust Fund (Fund).[4] NPFC denied Unocal’s request, prompting Unocal to sue Metrolink. Unocal also sought judicial review, under section 702 of the Administrative Procedure Act,[5] of NPFC’s refusal to fund the cleanup effort. Unocal agreed to stay that cause of action pending resolution of its claims against Metrolink.

At trial, the jury found Metrolink eighty percent liable and its subcontractor twenty percent liable under the OPA.[6] Metrolink challenged that finding, arguing that Unocal was partially responsible. The Ninth Circuit reviewed de novo the district court’s denial of Metrolink’s motion for judgment as a matter of law and held that the jury’s verdict was supported by substantial evidence. The court also held there was no abuse of discretion and affirmed the trial judge’s denial of Metrolink’s motion for a new trial.

The Ninth Circuit first determined the standards of liability and defenses under the OPA. The OPA designates owners and operators of pipelines as responsible parties who are strictly liable for oil discharges.[7] A responsible party may state a complete defense to liability if it establishes by a preponderance of the evidence that 1) the discharge was caused solely by a third party, 2) the responsible party exercised due care with respect to the pipeline, and 3) the responsible party took precautions against foreseeable third-party acts and their consequences.[8] If these three factors are established, “the third party who caused the spill becomes a ‘responsible party,’ and the owner/operator no longer bears any liability for the spill.”[9]

The Ninth Circuit rejected Unocal’s argument that the company could not be held liable because of the OPA’s definition of “removal costs.”[10] Unocal argued that because the OPA references the limitation on liability for removal costs under section 311(c) of the Clean Water Act (CWA),[11] it should not be held liable because Unocal is not a responsible party. The court disagreed, reasoning that the OPA does not contain any explicit temporal definition of cause that might distinguish between antecedent causes of a spill and the failure to contain a spill once it occurs. The court held that under the OPA, Unocal remained a responsible party as a pipeline owner/operator and that Unocal was “not relieved of its obligations by the insulating provisions of [CWA] section 1321(c).”[12] The court emphasized that Unocal’s theory was incompatible with the OPA’s goal of encouraging rapid private party responses because that would excuse pipeline owners and operators from participating in cleanups of their own oil and “exempts from liability those owner/operators who are foolish enough to join the cleanup efforts.”[13] The Ninth Circuit concluded that because Unocal was not relieved of its duties, it bore the burden of establishing the affirmative third party defense. The court affirmed the district court because Unocal presented substantial evidence at trial to meet those burdens.

The Ninth Circuit next considered Unocal’s purported negligence, rejecting Metrolink’s argument that Unocal failed to foresee the possibility of a rupture. The court emphasized that Unocal’s affirmative legal obligations under California law did not include measuring the depth of the pipeline.[14] Therefore, the court held the jury could reasonably have concluded that Unocal could not foresee excavation in that area because Metrolink never informed Unocal of its plans. The court also refused to disturb the jury’s findings with respect to Metrolink’s assertion that Unocal misled its subcontractors about the depth of the pipeline. In addition, the court rejected Metrolink’s argument that Unocal’s failure to obtain a full briefing constituted a lack of due care. Because fire department officials told Unocal’s agents that the oil spill was fully contained, the jury reasonably concluded the blame should not fall on Unocal’s shoulders. Rejecting Metrolink’s argument that Unocal’s assessment and inspection of the site constituted a failure to exercise due care, the court refused to overturn the jury verdict based on hindsight and Unocal’s failure to locate the storm drain.

Metrolink then attempted to impose a higher standard of care on two Unocal agents. Before the spill, two Unocal agents came to the site for environmental and operations assistance; however, they failed to follow the directions in Unocal’s Standard Operating Procedures Manual to obtain briefings from onsite workers and review maps and charts. The court rejected this argument, citing trial testimony that these two agents were not “environmental person[s]” and were not bound to follow the manual.[15] Therefore, the court refused to impose a higher standard of care on Unocal and held that substantial evidence supported the jury’s finding that Unocal exercised due care in assessing the site. Metrolink then argued that if Unocal’s agents had considered the appropriate maps and overlays they would have discovered that the storm drain was underneath the oil pool; this oversight, argued Metrolink, constituted failure to exercise due care. The court again disagreed, emphasizing that none of the maps held by Unocal’s agents indicated the existence or location of the storm drain. The court also disagreed with Metrolink’s assertion that Unocal negligently reported the spill’s effects to LACFCD. The court concluded that Unocal acted diligently in pursuing the cleanup.

With respect to Unocal’s cross-appeal, the Ninth Circuit affirmed the trial judge’s award of pre-judgment interest to Unocal under the OPA.[16] The court rejected Metrolink’s argument that Unocal was not a claimant entitled to interest pursuant to two sections of the OPA,[17] concluding that a responsible party who successfully asserts a complete defense may be considered a claimant. However, the court also rejected Unocal’s claim that it was entitled to a higher award of pre-judgment interest–12 percent rather than the 5.87 percent–under its contract with Metrolink. Unocal relied on section 3287 of the California Civil Code,[18] which sets the legal rate of interest at ten percent,[19] or even higher if stipulated by the parties in contract.[20] The court concluded it was inequitable to apply a higher interest rate, noting that the California law refers to agreements between both parties, whereas here one party unilaterally imposed terms on the other. The Ninth Circuit affirmed the district court’s award of interest at a rate of 5.87 percent.

Finally, the court considered the attorney’s fees issue, rejecting Unocal’s request for attorney’s fees under the OPA. Although the OPA permits recovery for fees sought by the Attorney General,[21] the court refused to extend that provision to Unocal. The court dismissed Unocal’s emphasis on OPA’s subrogation rights,[22] concluding that the Act “does not necessarily give to the responsible party the benefit of all the rights held by the federal government.”[23] The court also denied Unocal’s request for attorney’s fees under the “tort of another” doctrine.[24] California law permits a court to award attorney’s fees to a prevailing party in an action for implied indemnity, but only when that party is required to bring or defend an action.[25] Unocal was not required to do so here. Finally, the court also rejected Unocal’s “private Attorney General” argument.[26] Although California law authorizes an award of attorney’s fees to a party that successfully prosecutes an action “result[ing] in the enforcement of an important right affecting the public interest,”[27] the court held that Unocal was not acting as a private Attorney General in this case. Although the purpose of the law is to encourage public interest suits that private parties would otherwise have no incentive to pursue, the court recognized that this suit’s only purpose was to recover costs already paid by Unocal.

The Ninth Circuit remanded to the district court because of that court’s failure to issue a declaratory judgment under the OPA.[28] Although the district court properly refused to grant Unocal’s request for declaratory judgment for all future litigation, the Ninth Circuit held that the district court was required to issue a declaration identifying the responsible parties. The court also refused Unocal’s request for a declaration substituting Metrolink and its subcontractors for Unocal as the generator on its hazardous waste manifests associated with the cleanup. The court emphasized that under California and federal law, every party involved in the generation, transportation, or disposal of waste must complete a shipping “manifest.”[29] Unocal provided no evidence that it should no longer be considered a “generator.”[30] Furthermore, the court noted that the OPA says nothing about generators, and because the jury did not consider Unocal’s request, the Ninth Circuit declined that invitation.

[1] 33 U.S.C. §§ 2701-2761 (1994 & Supp. IV 1998).

[2] Unocal Corp. v. United States, 222 F.3d 528, 531 (9th Cir. 2000).

[3] 33 U.S.C. § 2736 (Supp. IV 1998). NPFC administers the Fund for the Internal Revenue Service. Id.

[4] 26 U.S.C. § 9509 (1994 & Supp. IV 1998). The Fund is defined under the OPA. 33 U.S.C. § 2701(11) (1994).

[5] 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (1994 & Supp. IV 1998).

[6] 222 F.3d at 533.

[7] 33 U.S.C. § 2702(a) (1994).

[8] Id. § 2703(a)(3).

[9] 222 F.3d at 534 (quoting 33 U.S.C. § 2702(d)(1)(A) (1994)).

[10] 33 U.S.C. § 2701(31) (1994).

[11] Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1387 (1994 & Supp. IV 1998). Persons other than responsible parties are not liable for costs or damages incurred in the course of assisting cleanup of an oil spill if conducted in compliance with the National Contingency Plan. Id. § 1321 (c) (4).

[12] 222 F.3d at 535 (citing 33 U.S.C. § 2701(32)).

[13] Id.

[14] SeeCal. Gov’tCode § 4216-216.9 (West 2000).

[15] 222 F.3d at 538.

[16] 33 U.S.C. § 2705(a) (1994).

[17] Id. §§ 2701(4), 2708(a).

[18] Cal. Civ. Code § 3287 (West 2000).

[19] Id. § 3289(b).

[20] Id. § 3289(a).

[21] 33 U.S.C. § 2715(c) (Supp. IV 1998).

[22] Id. § 2702(d)(1)(B) (1994).

[23] Unocal Corp. v. United States, 222 F.3d 528, 543 (9th Cir. 2000).

[24] Cal. Civ. Proc. Code § 1021.6 (West 2000).

[25] Id.

[26] Id. § 1021.5.

[27] Id.

[28] 33 U.S.C. § 2717(f)(2) (1994).

[29] Cal. Health & Safety Code § 25160(b)(1) (West 2000); Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6922(a)(5) (1994 & Supp. III 1997) (amending Solid Waste Disposal Act, Pub. L. No. 89-272, 79 Stat. 992).

[30] See 40 C.F.R. § 260.10 (2000) (defining “generator” as “any person, by site, whose act or process produces hazardous waste identified or listed in part 261 of this chapter or whose act first causes a hazardous waste to become subject to regulation”).

Natural Resources Defense Council and Snake River Alliance (collectively “NRDC”) sought to have the Department of Energy’s (DOE) Order 435.1 (the Order) set aside as contrary to the Nuclear Waste Policy Act (NWPA).[1] NRDC argued that the Order defined high-level radioactive waste in a manner contrary to the NWPA’s definition.[2] Because the Ninth Circuit determined that the Order was not an agency decision pursuant to section 10139(a) of the NWPA, which confers original jurisdiction in the U.S. courts of appeals,[3] the court concluded that it lacked subject matter jurisdiction over the petition and transferred it to the District of Idaho.

Section 10139(a)(1)(A) of the NWPA states that “the United States courts of appeals shall have original and exclusive jurisdiction over any civil action (A) for review of any final decision or action of the Secretary, the President, or the Commission under this part. . . .”[4] The NWPA states that the purposes of subchapter I, to which original jurisdiction refers, are to develop siting schedules, regulate construction and operation of repositories, establish the federal responsibility and policy for civilian waste and spent fuel disposal, define the federal and state relationship regarding waste disposal, and establish a Nuclear Waste Fund.[5] Further, the NWPA is a scheme created to manage waste generated by civilian facilities, and “does not apply to any atomic energy defense activity or facility.”[6]

DOE Order 435.1 addressed waste management at the DOE facilities at Hanford, Savannah, and the Idaho National Engineering Laboratory, which generate and store high-level waste, but pre-date the NWPA and are not repositories. For these reasons, DOE argued that the NWPA does not govern waste management at these facilities, and therefore, the Order was not a decision under the NWPA subject to original jurisdiction in the federal courts of appeals.

The Ninth Circuit first noted that authority for DOE’s Order derives from the Atomic Energy Act (AEA),[7] the Energy Reorganization Act (ERA),[8] and the Department of Energy Organization Act (Organization Act).[9] The AEA authorized the Atomic Energy Commission (AEC)–reorganized as DOE and Nuclear Regulatory Commission (NRC)[10]–to promulgate regulations governing possession and use of nuclear material and the operation of nuclear facilities.[11] The ERA gave NRC authority to license and regulate commercial facilities and to license DOE facilities that are authorized for long-term storage of high-level radioactive waste.[12] DOE took over most of the remaining functions originally performed by AEC, including regulation of existing government facilities and defense nuclear waste.[13] Because the Order applies to the management of high-level, transuranic, and low-level waste for which DOE is responsible, which are actions covered under the AEA, the ERA, and the Organization Act, the court concluded that the Order is not a decision “under this part” of the NWPA.

NRDC argued that even though the Order is pursuant to authority under the AEA, because the Manual and Guide that accompanies the Order states that all high-level waste must be disposed pursuant to the NWPA, the NWPA is implicated whenever high-level waste is disposed, and the AEA cannot exclusively control disposal of defense waste. NRDC also pointed to the purpose of the NWPA–to establish a federal policy for safe disposal of high-level waste[14]–to support its argument that the NWPA should apply to the disposal of any high-level waste. Finally, NRDC relied on a D.C. Circuit case[15] that expanded the judicial review provision to apply to a section of the NWPA not found in subchapter I, to support its argument that the Ninth Circuit should take jurisdiction over the case.

The Ninth Circuit rejected these arguments and found that the case relied on by NRDC dealt with a DOE decision that was promulgated pursuant to statutory mandate under the NWPA.[16] Additionally, a similar case that expanded original jurisdiction involved DOE conduct required under a section of the NWPA that incorporated part A.[17] In the current situation, however, the court determined that DOE’s Order defining “waste incidental to reprocessing” was not required by any section of the NWPA that could be linked to subchapter I. Thus, the court concluded that it lacked subject matter jurisdiction over the petition. However, rather than dismissing the action, the court determined that on balancing the equities, it was more appropriate to transfer the petition to a district court. The Ninth Circuit chose to transfer to the District of Idaho because “it is the only district in this circuit where a target plaintiff resides.”[18]

[1] Nuclear Waste Policy Act of 1982, 42 U.S.C. §§ 10101-10270 (1994 & Supp. IV 1998).

[2] Id. § 10101(2).

[3] Id. § 10139(a).

[4] Id. § 10139(a)(1)(A) (emphasis added).

[5] Id. § 10131(b).

[6] Natural Res. Def. Council v. Abraham, 244 F.3d 742, 744 (9th Cir. 2001) (citing 42 U.S.C. § 10107(a) (1994)).

[7] Atomic Energy Act of 1954, 42 U.S.C. §§ 2011-2297g-4 (1994 & Supp. V 1999).

[8] Energy Reorganization Act of 1974, 42 U.S.C. §§ 5801-5891 (1994 & Supp. IV 1998).

[9] 42 U.S.C. §§ 7101-7382f (1994 & Supp. V 1999).

[10] See id. § 5811 (abolishing AEC and establishing the Energy and Research Development Agency (ERDA)); id. § 5841 (establishing NRC); id. § 7151(a) (transferring functions of ERDA to DOE).

[11] Id. § 2201 (1994).

[12] Id. § 5842 (1994 & Supp. IV 1998).

[13] Id. § 5814.

[14] Id. § 10131(b) (1994).

[15] Gen. Elec. Uranium Mgmt. Corp. v. U.S. Dep’t of Energy, 764 F.2d 896, 904 (D.C. Cir. 1985) (holding one-time fee subject to judicial review because Congress provided review for waste disposal, and incongruous not to provide for review of fees for the Nuclear Waste Fund, which was established in Part A).

[16] Natural Res. Def. Council v. Abraham, 244 F.3d 742, 746 (9th Cir. 2001) (citing Gen. Elec. Uranium Mgmt. Corp., 764 F.2d at 901-02).

[17] Tennessee v. Herrington, 806 F.2d 642, 651 (6th Cir. 1986) (holding DOE proposal for construction of monitored retrievable storage (MRS) facility subject to original jurisdiction, in part because section 10161(h) makes Part A applicable to the MRS sitting process).

[18] 244 F.3d at 747.