Coast Guard Proposes Inflation Increases To OPA Liability Limits

The U.S. Coast Guard issued a Notice of Proposed Rulemaking (NPRM) last week to carry out inflation adjustments to the limits of liability under the Oil Pollution Act of 1990 (OPA), 33 U.S.C. 2701, et seq.  Under OPA, the responsible parties for any vessel (other than a public vessel) or facility (including any deepwater port or onshore facility) from which oil is discharged, or which poses a substantial threat of discharge of oil, into or upon the navigable waters or the adjoining shorelines or the exclusive economic zone of the United States, are strictly liable, jointly and severally, for the removal costs and damages that result from such incident.  However, the responsible parties’ OPA liability with respect to any one incident is limited (with certain exceptions) to a specified dollar amount.

OPA limits of liability must be adjusted “by regulations issued not later than 3 years after July 11, 2006, and not less than every 3 years thereafter,” to reflect significant increases in the Consumer Price Index (CPI).  33 U.S.C. 2704(d)(4).  This regulatory authority has been delegated by the President to the Secretary of Homeland Security to the Coast Guard.

In last week’s NPRM, the Coast Guard proposes to carry out inflation adjustments to the OPA limits of liability by raising the limits for onshore facilities and deepwater ports from $350 million to $623.7 million.  The proposed rule would also increase the limits for vessels.  The proposed rulemaking is available here and will be open for 60 days of public comment.  If you would like more information on any specifics, please let us know.