Coast Guard Cannot Assert Salvage Liens for Mandatory Duties

U.S. v. Ex-USS Cabot/Dedalo, 297 F.3d 378 (5th Cir. 2002).

Magnolia Bravo, M.S., J.D.

The U.S. Court of Appeals for the Fifth Circuit recently ruled that the federal government cannot assert a salvage lien or seek salvage recovery for actions pursuant to the mandatory sections of the Clean Water Act (CWA).1 Specifically, the Coast Guard was unable to recover its costs related to the salvage of a dilapidated aircraft carrier because its duties were required under federal law. Conversely, if the government had acted as a voluntary rescuer, the government could have brought the claim.

The Cabot
The Cabot was a light aircraft carrier used in World War II, later decommissioned and bought by the U.S.S. Cabot Dedalo Museum Foundation in 1989 to be docked permanently in Kenner, Louisiana as a floating museum. The Foundation stripped the ship of all operational equipment and moored it at the Press Street Wharf on the Mississippi River in New Orleans, Louisiana. When the mayor of Kenner withdrew his offer to provide mooring, the Dock Board at the Press Street Wharf requested the Foundation either begin paying dockage fees or move the ship. The Foundation took no action to remove the ship. In April, 1996, the U.S. Coast Guard informed the Foundation that they must move the Cabot by the first of June because of the immediate threat its dilapidated condition and moorings posed to the port. Again, the Foundation took no action, so the Coast Guard informed them that the government would respond to prevent oil pollution pursuant to the CWA, pursue civil penalties against the Foundation, and ultimately invoice the Foundation for any expenses incurred. In response, the Foundation declared bankruptcy. The Coast Guard proceeded to update the Cabot’s moorings, as well as remove chemical drums and oil from the ship.

A year later, the carrier M/V Tomis Future hit the Cabot while steaming downriver, damaging both the Cabot and the wharf. Concerned with the safety of the Cabot’s moor, the Coast Guard ordered the Foundation to have a tugboat on standby to monitor the Cabot and to ultimately move the Cabot to a safe hurricane mooring site within three days. The Foundation failed to move the Cabot, so the Coast Guard informed them that it was assuming responsibility for the ship and would seek reimbursement for expenses under the CWA. The Coast Guard hired tugboats to monitor the Cabot for seven weeks, finally moving the ship downstream to a safe mooring. The Coast Guard incurred $500,868.94 of expenses in relation to the Cabot.

In October, 1997, the Coast Guard moved the Cabot from Louisiana to Texas and, at about the same time, the Foundation sold the ship to Marine Salvage, who provided both wharfage and security services to the ship.

District Court Ruling
In 1999, the federal government, the Dock Board from Louisiana, and Marine Salvage sued to have the Cabot sold at a U.S. Marshal’s sale. The district court in Texas authorized the sale and a shipwrecker bought the Cabot for $185,000. The district court ruled that Marine Salvage had a priority salvage lien, which should be paid first, upon sale of the Cabot. The Court then ruled that because the Coast Guard had acted voluntarily2 in regards to the Cabot, the federal government should receive any remaining funds to pay its salvage lien. Marine Salvage appealed the decision because the district court did not evaluate the merits of its second lien for $56,872.39.

Mandatory vs. Voluntary Rescuer
Marine Salvage argued that the Coast Guard could not assert a salvage claim for its actions because the actions were mandatory.3 The CWA establishes the Coast Guard’s mandatory duty to respond to threatened oil pollution and spills.4 If the Coast Guard has a mandatory duty to respond under CWA, they cannot recover on a salvage lien for costs associated with their actions. In addition, a public employee, such as a Coast Guard official, is not entitled to a salvage award if their services were performed in the line of duty.

The Court concluded that because it is firmly established that the Coast Guard has a mandatory duty to act under threat of oil pollution, the only issue left to determine was whether the Coast Guard’s duty was mandatory or permissive, i.e. did the Coast Guard acted as a pollution abater or as a salver. The Court ruled that because the Coast Guard consistently asserted its authority under CWA throughout its dealings with the Foundation, its duty was mandatory. Alternatively, the Court ruled, if the Coast Guard had originally told the Foundation that it was a salver, the Foundation could have stopped the Coast Guard by refusing the offer of help and thereby denied the salvage claim. Instead, when the Coast Guard took action, it did so pursuant to the broad authority of the CWA, which forced its command on the Foundation, firmly establishing itself as a pollution abater, not a salver.

Outcome
The Fifth Circuit ruled that the district court clearly erred in concluding the Coast Guard acted voluntarily and could therefore make a salvage claim. The Court remanded the case for further proceedings.

ENDNOTES
1. See 33 U.S.C. §§ 1321(c), (d), (j) (2002).
2. The district court relied on precedent set in American Oil, in which a tanker containing gasoline and oil caught fire. The Coast Guard, working alongside firefighters, purchased a specific kind of foam to fight such fires which was flown in by Air Force and Navy planes. The Fifth Circuit distinguishes this case because the Air Force and Navy, not the Coast Guard, had the made salvage claims and had not included any expenses incurred by the Coast Guard. In addition, Congress had expressly allowed both the Air Force and the Navy to make salvage claims and the local firefighters, not the Coast Guard, had legal responsibility for fighting the fire. In re American Oil Co., 417 F.2d 164 (5th Cir. 1969).
3. Marine Salvage also argued that the district court clearly erred in finding the Cabot was in marine peril and the district court abused its discretion when making a salvage award based on the Coast Guard’s unreasonable costs, but the Court declined to rule on these issues because it agreed with Marine Salvage’s first claim.
4. 33 U.S.C. § 1321(b) (1) (2000).