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United States v. Egan Marine Corp.

March 30, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
EGAN MARINE CORPORATION, IN PERSONAM, MOTOR VESSEL LISA E., IN REM, TANK BARGE EMC-423, IN REM, DEFENDANTS.
EGAN MARINE CORPORATION, DEFENDANT/THIRD PARTY PLAINTIFF,
v.
EXXON MOBIL CORPORATION AND EXXONMOBIL OIL CORPORATION THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Honorable David H. Coar

MEMORANDUM OPINION AND ORDER

Before this Court is the Defendant Egan Marine Corporation's ("Defendant") motion to dismiss two counts of the Plaintiff United States' ("Plaintiff") Amended Verified Complaint. On July 24, 2008, Plaintiff filed an Amended Verified Complaint containing five counts: Claims under the Oil Pollution Act ("OPA") (Count I); Subrogation Rights of the Oil Spill Liability Trust Fund (the "Fund") under OPA (Count II); OPA Civil Penalties (Count III); Claim under the Rivers and Harbors Act (Count IV); and Claims under the General Maritime Law (Count V). On August 26, 2008, Defendant filed a Motion to Dismiss on Counts IV and V of Plaintiff's Amended Verified Complaint. Plaintiff now requests that Count V be dismissed, but contests the Defendant's motion for dismissal on Count IV. For the reasons stated below, Defendant's Motion to Dismiss on Count IV is DENIED. However, pursuant to Plaintiff's request, Count V is DISMISSED.

I. Alleged Facts

On or about January 19, 2005, while under the control of the LISA E, the EMC-423 exploded, which resulted in the discharge of clarified slurry oil into the Chicago Sanitary and Ship Canal. The EMC-423 and LISA E were both owned by Egan Marine Corp.

Plaintiff alleges that immediately prior to the explosion, a member of the LISA E crew went onboard the EMC-423 and improperly began using a propane torch on a piece of equipment that had malfunctioned because of the cold temperature. The open flame of the propane torch ignited combustible vapors, emanating from a malfunctioning valve on the EMC 423. This led to the explosion, the sinking of the EMC 423, and the crewmember's death.

The sinking of the EMC-423 obstructed the Canal and caused a large quantity of clarified slurry oil to be discharged. The freezing temperatures on that day and the nature of the clarified slurry oil caused a portion of it to become an asphalt-like substance which deposited into the Canal and, along with the remnants of the EMC-423, resulted in the Canal being closed to navigation for a period of the time and subject to limited navigation for an additional period of time.

Plaintiff responded to the oil spill in the Canal beginning on January 19, 2005, and incurred pollution removal and other costs in connection with the clean-up effort. Plaintiff alleges that as a result of the oil spill, it has incurred and will continue to incur substantial costs.

Pursuant to OPA, each responsible party is liable to the United States for its removal costs, damages, and/or disbursements. The United States alleges that it has incurred costs, damages, and/or disbursements by reason of claims for removal costs and damages brought by third-parties, which are also compensable. Finally, Plaintiff alleges that pursuant to these costs and claims, the Fund has expended $1,562,101.78.

On July 14, 2005, EMC filed a Limitation Proceeding to require all claimants with any interest in the Oil Spill and related explosion to bring forth their claims against EMC. Plaintiff filed a claim in that action on September 8, 2005, asserting various claims, both under OPA, the RHA, and the General Maritime Law. On August 9, 2005, an injunction was issued barring any further claims against EMC not timely brought before the Court in the Limitation Proceeding.

On December 8, 2005, Plaintiff moved the Court to modify the injunction order to permit the United States to proceed separately on its OPA and RHA Claims. The Court granted the United States' motion and dismissed it from the Limitation Proceeding.

II. Standard of Review

In ruling on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court will assume that all facts alleged in the Complaint are true and construe the allegations in the Plaintiff's favor. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). A party's claim should only be dismissed if it is clear that no set of facts in support of the claim would entitle the party to relief. Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir. 1997) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)). Under Federal Rule of Civil Procedure 12(b)(6), this Court may take judicial notice of matters of public record, including public court documents filed in other proceedings, in deciding Defendant's Motion. Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994).

III. Analysis

Plaintiff's complaint alleges claims under RHA sections 33 U.S.C. § 403, prohibiting the alteration or modification of any navigable water of the United States unless such work has been authorized by the Secretary of the Army, and 33 U.S.C § 407, also known as the Refuse Act, which prohibits the discharge into ...


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