Common Law Recovery of Cleanup Cost for Petroleum Spills

Posted By on November 14, 2007

New York’s Oil Spill Act, Article 12 of the New York Navigation Law, provides a natural and attractive starting point for people seeking to recover cleanup costs for petroleum spills. The Act imposition of strict liability holds out the promise of avoiding litigation over events and states of mind for which little or contradictory evidence exists, or that may be vulnerable to highly subjective interpretation long after the fact. Under the Oil Spill Act, if someone’s actions caused or contributed to a discharge of petroleum, he is liable for its cleanup, without regard to his state of mind or relationship to others at the time.

However, the Oil Spill Act’s powerful mechanism of strict liability is not available to everyone who may have been forced to pay for a cleanup of an oil spill. For instance, property owners who are unaware that a fuel oil tank on their property is leaking oil are nevertheless at fault for the spill under the Oil Spill Act, and therefore may not seek full recovery of their cleanup costs from others who may bear more responsibility for the leaky tank. For such a property owner, the only available recourse under the Oil Spill Act may be a contribution action, under which the property owner could only recover part of the total cleanup costs.

In such situations, familiar common law bases for claims against other responsible parties may be more effective and valuable than the Oil Spill Act. A breach of contract action against, for instance, a company that installed a defective oil storage system or an oil delivery company that spilled oil may allow the complete recovery of a property owner damages, even including consequential damages like attorney’s fees and the provision of alternate oil storage systems. Similarly, a negligence claim may allow complete recovery of cleanup costs where an oil system maintenance company causes a leak by failing to observe a duty of care to the property owner.

Common law claims like these often recognize what the Oil Spill Act does not: property owners commonly rely on others with specific expertise, and a better understanding of the risks, to install, operate, or maintain petroleum systems on the owners property. Property owners also often understand their payments to oil system professionals to reflect some premium for the risks that the professionals are assuming by handling such systems. Very often, the Oil Spill Act negates this commonplace market arrangement, making other avenues of recovery more appropriate.

About the author

James Periconi’s practice focuses almost equally on commercial property transaction counseling, on environmental regulatory matters in the U.S. Environmental Protection Agency and the New York State Department of Environmental Conservation (DEC), and on environmental litigation in the federal and state courts. A former Chief of Solid and Hazardous Waste Enforcement for the State DEC and an Assistant New York Attorney General prosecuting civil and criminal environmental cases, he has in private practice since 1989 had substantial experience representing defendants in governmental actions brought for remediation of Superfund and other contaminated sites, and for prosecution and defense of private cost recovery actions for such sites.

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