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In re Glacier Bay

filed: September 13, 1991.

IN RE THE GLACIER BAY, KEE LEASING COMPANY; MATHIASEN'S TANKER INDUSTRIES, INC.; GLACIER BAY TRANSPORTATION CORP.; TRINIDAD CORPORATION, APPELLANTS,
v.
MERRILL MCGAHAN, ET AL.; TRANS-ALASKA LIABILITY FUND; KENAI PIPE LINE CO.; S.P.C. SHIPPING, INC.; TESORO ALASKA PETROLEUM COMPANY; COOK INLET RECOURSE ORGANIZATION, ET AL.; UNITED STATES OF AMERICA, APPELLEES



Appeal from the United States District Court for the District of Alaska. D.C. Nos. CV-88-115-HRH CV-A89-376-HRH. H. Russell Holland, Chief Judge, Presiding.

Charles Wiggins, Melvin Brunetti and Thomas G. Nelson, Circuit Judges.

Author: Wiggins

WIGGINS, Circuit Judge

Kee Leasing Company, Mathiasen's Tanker Industries, Inc., Glacier Bay Transportation Corp., and Trinidad Corporation (collectively "Trinidad") appeal from an order of the district court dismissing their complaint. In the complaint, Trinidad petitioned for an exoneration from and limitation of its liability for claims arising out of the 1987 grounding of an oil tanker, the Glacier Bay, in Cook Inlet, Alaska. The district court ruled that the Trans-Alaska Pipeline Authorization Act, 43 U.S.C. §§ 1651-1655 ("TAPAA"), implicitly repealed the Limitation of Vessel Owner's Liability Act, 46 U.S.C. App. §§ 181-189 (the "Limitation Act"), upon which Trinidad relied in its complaint to limit liability. The court therefore concluded that Trinidad's complaint failed to state a claim upon which relief could be granted under Fed. R. Civ. P. 12(b)(6). This court has jurisdiction of Trinidad's timely appeal pursuant to 28 U.S.C. § 1291 (1988). We affirm.

BACKGROUND

On July 1, 1987, the Glacier Bay, an American flag tanker, sailed from Valdez, Alaska, bound for Nikiski, Alaska, carrying a cargo of trans-Alaska pipeline crude oil.*fn1 On July 2, the Glacier Bay attempted to anchor in Cook Inlet, below the port of Nikiski, to await a discharge berth. The vessel unexpectedly grounded at that position and, as a result of damage to its hull, the Glacier Bay discharged an estimated 150,000 gallons of crude oil.

Following the discharge of oil, suits were filed seeking compensation for damages allegedly caused by the spill.*fn2 On September 7, 1989, Trinidad filed a complaint seeking an exoneration from and limitation of its liability for claims arising out of the grounding of the Glacier Bay. The complaint was based on the Limitation Act, which purports to limit the liability of vessel owners and charters to the post-accident value of the ship plus pending freight. The adverse parties filed motions to dismiss Trinidad's complaint pursuant to Fed. R. Civ. P. 12(b)(6). The motion to dismiss was based on two grounds: 1) that TAPAA implicitly repealed the Limitation Act with respect to the transportation and spills of trans-Alaska pipeline oil, and 2) that the limitation complaint was untimely filed. On April 12, 1990, the district court entered an order granting the Rule 12(b)(6) motion to dismiss based on its determination that TAPAA implicitly repealed the Limitation Act. In re Glacier Bay, 741 F. Supp. 800 (D. Alaska 1990).*fn3 Trinidad appeals.

Discussion*fn4

A district court's dismissal for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) is a ruling on a question of law, and therefore, we review the dismissal de novo. Kruso v. Int'l. Tel. & Tel. Co., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 496 U.S. 937, 110 L. Ed. 2d 664, 110 S. Ct. 3217 (1990). This appeal involves only one issue. We must determine whether Congress, in enacting TAPAA, implicitly repealed the Limitation Act with regard to vessels transporting trans-Alaska pipeline oil. This too is an issue of law, and therefore, we review it de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.), cert. denied, 469 U.S. 824, 83 L. Ed. 2d 46, 105 S. Ct. 101 (1984). We will first discuss the Limitation Act and TAPAA generally. Then, we will analyze the implicit repeal doctrine and its application to these statutes.

I. The Limitation Act and TAPAA

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.*fn5 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, 85 L. Ed. 903, 61 S. Ct. 687 (1941); University of Tex. Medical Branch v. United States, 557 F.2d 438, 454 (5th Cir. 1977), cert. denied, 439 U.S. 820, 58 L. Ed. 2d 111, 99 S. Ct. 84 (1978). While the Limitation Act has been criticized by some commentators in recent years as being outdated,*fn6 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, 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).

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).*fn7 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).*fn8

II. TAPAA's Implicit Repeal of the Limitation Act

The sole issue in this appeal is whether, in enacting TAPAA, Congress implicitly repealed the Limitation Act with regard to the transportation of trans-Alaska oil. The Supreme ...


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