U.S. Supreme Court Oral Arguments: Maritime Charters and the Specter of a New Permitting Regime


supremecourt-294x300Earlier this month, the Supreme Court heard oral arguments in two important environmental cases—one that could change the approach to routine maritime charters and another that could introduce a potentially punishing permitting regime via a CWA citizen suit.

Cleaning the Delaware: CITGO Asphalt Refining Company v. Frescati Shipping Company
The CITGO case involves a large oil spill into the Delaware River, and who bears financial responsibility for the cleanup. CITGO chartered an oil tanker to bring Venezuelan crude oil to CITGO’s New Jersey refinery located on the Delaware River. The tanker struck a submerged and abandoned anchor within yards of the refinery, and a large and expensive oil spill resulted. In accordance with the Oil Pollution Act, both the shipper, Frescati Shipping Company, and the United States, paid for the immediate oil spill response, and CITGO was later sued for a large share of these costs based on the fact that it entered into a charter with Frescati, which obliged CITGO to provide a “safe berth.” The U.S. Court of Appeals for the Third Circuit held that CITGO was liable under the principles of maritime law, meaning that CITGO was strictly liable for the spill even if no one knew that the anchor was present on the floor of the river or lurking in the waters of the Delaware River. CITGO has argued that this result is unfair and poses a threat to the maritime shipping industry if it is held to be strictly liable for this spill. It appears that this is may well be the majority rule that is applied when interpreting these routinely entered maritime charters. The Court’s decision will be immensely important to the shipping industry.

In Search of a “Limiting Principle”: County of Maui, Hawaii v. Hawaii Wildlife Fund
The County of Maui case presents another kind of challenge to the Court. Enacted nearly 50 years ago, the Clean Water Act (CWA) defines “discharge of a pollutant”—the linchpin of EPA’s National Pollutant Discharge Elimination System (NPDES) regulatory power under the Act—as any addition of any pollutant to navigable waters from any point source.” Such discharges must receive an NPDES permit from EPA or an authorized state. Maui has for many years operated, with state and federal authorizations, underground injection wells to dispose of treated wastewater. The pollutants are discharged to area groundwater, which conveys the pollutants to the Pacific Ocean. There is no direct discharge from a point source—either from the end of the pipe or the groundwater itself—to the navigable waters of the Pacific Ocean. A CWA citizen suit filed by the Hawaii Wildlife Fund resulted in a ruling from the Ninth Circuit that this discharge requires an NPDES permit. Maui appealed, and argued before the Court that no NPDES permit is required, that the EPA’s non-point regulatory scheme applies here, and that Maui has obtained the non-point source permits it requires. The plaintiff argues that the law is clear that an NPDES permit is required (thereby exposing the County to significant legal fees under the CWA’s citizen suit provisions and possibly a burdensome new permitting requirement). The argument before the Court was very spirited, and the Justices were concerned that imposing a new permitting regime on thousands of small operators—such as those persons who depend on septic tanks—requires some kind of limiting principle if the Court concludes that the plaintiff’s view of the law is correct. When the Justices asked counsel for some kind of “limiting principle” to avoid these risks, they did not seem to find the suggestions made in the oral arguments to be especially helpful. (It should be noted that EPA’s interpretations of the relevant provisions of the CWA over the years have been inconsistent.)