Late on August 24, 2022, a judge in the Southern District of Texas granted the summary judgment motion of Intercontinental Terminals Company (ITC), dismissing claims related to the Oil Pollution Act. Baker Botts represents ITC in connection with litigation by numerous claimants, stemming from a March 2019 incident, which is pending in the U.S. District Court for the Southern District of Texas and Harris County District Court.
Following the 2019 incident, a group of claimants filed lawsuits under the Oil Pollution Act of 1991 (“OPA”) based on the closure of the Houston Ship Channel, seeking millions in lost profits and delay damages and alleging that the presence of oil in the discharged mixture brought the spill within OPA strict liability. Had the claimants prevailed, it would have opened the door to recovery of these losses despite the “economic loss rule” that typically bars tort claims for pure economic damages.
After the parties agreed to seek early resolution of threshold legal issues involving OPA’s coverage, Baker Botts moved for summary judgment, arguing principally that the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) precludes OPA liability for commingled spills of oil and CERCLA-regulated hazardous substances. Baker Botts relied on the text, history, and administrative guidance of CERCLA, all of which foreclosed OPA liability for such a spill.
Magistrate Judge Dena Hanovice Palermo issued a report and recommendation adopting Baker Botts’ arguments and recommending that ITC’s motion for summary judgment be granted. On August 24, 2022, District Judge Kenneth Hoyt issued an order adopting Judge Palermo’s report and recommendation.
“The Court’s order correctly confirms that the OPA cannot be deployed as an alternative method of recovery in the wake of a CERCLA event involving a hazardous substance,” said Baker Botts partner Russell Lewis. “This important ruling ensures that companies will not be faced with multiple and conflicting claims from different statutory schemes arising out of the same incident."
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