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Chevron Pipe Line Company v. Pacificorp

United States District Court, D. Utah, Central Division

August 4, 2017

CHEVRON PIPE LINE COMPANY, Plaintiff, [1]
v.
PACIFICORP, d/b/a ROCKY MOUNTAIN POWER, Defendant.

          ORDER AND MEMORANDUM DECISION

          TENA CAMPBELL U.S., DISTRICT COURT JUDGE.

         Plaintiff Chevron Pipe Line Company (CPL) seeks $30 million in damages from Defendant Pacificorp d/b/a Rocky Mountain Power (RMP) resulting from an oil spill in Salt Lake City, Utah. CPL brings a claim for contribution under the federal Oil Pollution Act (OPA) as well as state law claims for negligence, trespass, and nuisance.

         In two motions for summary judgment, RMP asks the court to dismiss the claims. (See Mot. Summ. J. for Failure to Prove Amount of Damages, ECF No. 237 (“Damages Motion”); Mot. Summ. J. on OPA, Negligence, Trespass, and Nuisance Claims, ECF No. 236 (“RMP's OPA Motion”).) CPL counters with a motion for partial summary judgment focused on its OPA claim. In that motion, CPL asks the court to hold that CPL has a right to contribution from RMP under the OPA, that CPL may recover the categories of damages identified in its motion, and that the jury need only determine what percentage of fault is attributable to RMP. (See Mot. Partial Summ. J. on CPL's OPA Claim, ECF No. 225 (“CPL's OPA Motion”).)

         For the reasons set forth below, the court concludes that RMP is not entitled to summary judgment on either of its motions. As for CPL's motion, the court grants it in part. Specifically, the court holds that the OPA provides an independent right to contribution. But the court declines to hold that CPL has established a right to contribution from RMP, that CPL may recover the damage categories it has identified, or that the only issue left for the jury is apportionment of fault.

         FACTUAL AND PROCEDURAL BACKGROUND

         In June 2010, in the foothills of Salt Lake City, an electrical arc from RMP's electrical transition station (ETS) created a hole in CPL's underground oil pipeline.[2] Crude oil leaked into Red Butte Creek and flowed into Liberty Park Lake and the Jordan River.

         The Pipeline and Hazardous Materials Safety Administration (PHMSA) designated CPL as the “Responsible Party” under the OPA.[3] CPL cleaned up the spill and conducted remediation activities under the direction of government regulators.

         According to CPL, “[a]n oil spill response in public waterways is led by a Unified Command, which here consisted of representatives from the state agencies, federal agencies, CPL and the incident commander. Government regulators were intimately involved in the process and [in] determining the clean-up work to be performed.” (CPL's Opp'n to Damages Motion at 11 (internal citation omitted), ECF No. 261.) A CPL employee summarized the process:

Once the Unified Command agreed upon the objectives for that day, logistics people would work to obtain the necessary resources . . . . CPL did the work necessary to comply with regulatory requirements because “under Unified Command, everyone must agree before you go forward” - the state and federal agencies had to “sign off on everything.”

(Id. at 11-12 (quoting Dep. of Lloyd Watkins), ECF No. 268.) In addition to its clean-up and remediation activities, CPL responded to individual claims and to regulators, who investigated, claimed reimbursement for costs, ordered payment of damages, and assessed penalties against CPL.

         In March 2012, people living along the path of the spill (the Homeowners) sued CPL and RMP in the case now before the court. They asserted claims for negligence, trespass, and nuisance. Although they originally filed a claim under the OPA, they dismissed that claim.

         CPL then filed a counterclaim against RMP alleging negligence, trespass, private nuisance, and a right to contribution under the OPA. (See CPL's Am. Counterclaim Against Defendant Pacificorp, ECF No. 63.) CPL alleged that “RMP's acts and omissions proximately caused the electrical arc to burn a hole in CPL's pipeline, leading to the release of approximately 800 barrels of oil near or into Red Butte Creek.” (Id. ¶ 29.) CPL asserts that RMP must reimburse CPL for “all or part of the costs incurred by CPL in responding to the spill.” (Id. ¶ 30.) In response, RMP filed a Notice and Cross-Claim for Apportionment of Fault under the Utah Liability Reform Act (ULRA). (See ECF No. 92 at 6-7.)

         Ultimately, CPL settled with the Homeowners, who then dismissed their claims against CPL and RMP. RMP did not participate in the settlement.

         CPL seeks approximately $30 million in damages, which are summarized in a spreadsheet and divided into five categories: (1) Emergency Response and Cleanup Costs paid to CPL Contractors, Vendors, and Suppliers; (2) Emergency Response and Cleanup Costs for CPL Labor and Expenses; (3) Payments to Local, State and Federal Agencies; (4) Payments and Settlements With Private Parties; and (5) costs incurred during Post-Closure Activities. (See Ex. 2 attached to CPL's Mot. Partial Summ. J. on OPA Claim, ECF No. 225-2.) To support its damages claim, CPL proffers the testimony of three witnesses and documentation, including 16, 000 invoices and settlement agreements.

         One of those witnesses is Dr. Edward Owens. According to CPL,

Dr. Edward Owens, CPL's timely disclosed expert[4] in emergency oil spill response operations, will provide testimony regarding the appropriateness of the type and amount of resources expended after the spill, the process by which contractors were engaged and resources were expended, whether costs were consistent with industry standards, and whether costs were as expected for a[n] oil spill of that scale and scope[.]

(CPL's Opp'n to Damages Motion at pp. 5-6 ¶ 4.) CPL also cites to the anticipated fact witness testimony of two CPL employees.[5] Lloyd Watkins will testify about “the expenses invoiced and paid by CPL and the process by which contractors were engaged and resources were expended during the clean up[.]” (Id. at p. 5 ¶ 2.) James Myers will describe “the process by which contractors were engaged and resources were expended during the clean up[.]” (Id. at p. 5 ¶ 3.)

         RMP challenges CPL's evidence of damages in one motion, and in another motion, targets CPL's entire case. Specifically, RMP asserts that CPL's claim for damages fails as a matter of law because none of CPL's proffered evidence satisfies CPL's burden of proof. (See Damages Motion.) In the other motion for summary judgment, RMP asks the court to dismiss all of CPL's claims because (a) the OPA does not allow CPL to recover its damages unless CPL proves that the spill was solely caused by RMP, which CPL cannot prove given documents demonstrating CPL's fault; (b) the tort claims fail because they are barred by the ULRA; (c) CPL's allegations do not establish key elements of nuisance and trespass; and (d) two settlements identified in CPL's damages spreadsheet are not recoverable damages. (See RMP's OPA Motion.)

         CPL filed its own motion seeking an order that the OPA does provide an independent claim for contribution that is an alternative to CPL's tort claims. (See CPL's OPA Motion.) In that motion, CPL asks the court to hold that CPL has established its right to contribution from RMP and that the itemized categories of damages are recoverable from RMP. It asserts that the only step remaining under the OPA claim is to submit the claim to the jury to determine the percentage of fault to assign to RMP.

         As discussed below, the court rejects RMP's position on the OPA, the tort claims, and proof of damages. And although the court finds that CPL's motion correctly states the law concerning contribution under the OPA, the court declines to grant all the relief CPL seeks.

         ANALYSIS

         A court must grant summary judgment when the moving party “shows that there is no genuine dispute as to any material fact” and that party “is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         CPL's OPA Claim for Contribution

         The OPA makes a “responsible party” strictly liable for cleaning up and remediating harm resulting from an oil spill. “[E]ach responsible party for a vessel or a facility from which oil is discharged [for example, an oil pipeline], . . . is liable for the removal costs and damages specified in subsection (b) of this section[6] that result from such incident.” 33 U.S.C. § 2702(a). The PHMSA designated CPL as the “responsible party” because CPL owns and operates the pipeline. See id. § 2701(32)(E) (defining “responsible party” to include, “[i]n the case of a pipeline, any person owning or operating the pipeline.”). The OPA requires that, immediately after a spill, the pipeline owner assume initial responsibility for cleaning up the oil and remediating the damage.

         In two different situations, the liability of a responsible party may be shifted completely to a third-party. First, a third-party may be treated as the responsible party if the damages “were caused solely” by an action or omission of the third-party. Id. § 2702(d)(1)(A). In that situation, the third-party is substituted for the responsible party designated by the government agency. Alternatively, the responsible party that pays the removal costs and damages up front may then pursue the third-party through subrogation to the rights of the United States government and individual claimants. That section, titled “Subrogation of responsible party, ” requires that the spill be “caused solely by an act or omission of [the] third party[.]” Id. § 2702(d)(1)(B). CPL is not relying on those sections to recover its costs.

         Instead, CPL seeks recovery of “removal costs” and “damages” under OPA Section 2709, entitled “Contribution, ” which provides in relevant part as follows:

A person may bring a civil action for contribution against any other person who is liable or potentially liable under this Act or another law.

33 U.S.C. § 2709 (emphasis added). CPL reads that section, particularly the “under this Act” phrase, to incorporate traditional common law principles of comparative fault in a contribution action. In other words, CPL ultimately asks for reimbursement of the percentage of its costs that corresponds to the percentage of RMP's fault. RMP disagrees with CPL's interpretation.

         RMP's OPA Motion

         In RMP's OPA Motion, RMP asserts, under its interpretation of Section 2709, that CPL cannot establish a right to contribution under either “this Act” or “another law.”

         First, according to RMP, the language “under this Act” requires CPL to prove that RMP was the “sole cause” of the spill, but because CPL cannot meet that burden, that avenue of recovery is barred.[7] Second, RMP asserts that CPL cannot receive contribution under “another law”-here, Utah state tort law-because the Utah Liability Reform Act (ULRA)[8] bars CPL's claim for recovery of costs ...


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