Tuesday, October 02, 2007, 9:13 AM

Split COA Orders New Trial In OPHSCA Case

Today the Court of Appeals (COA) reversed a jury verdict which imposed strict liability under North Carolina's Oil Pollution and Hazardous Substances Control Act (OPHSCA). The case, Ellison v. Gambill Oil Co., arose when Plaintiff's well water was contaminated with gasoline leaked from underground storage tanks at a nearby mini mart.

OPHSCA is a strict liability statute. It provides a cause of action for damages to person or property, without regard to fault, against any person with control over oil or other hazardous substances discharged into State waters. However, OPHSCA contains an exception to strict liability when the person subject to liability proves the discharge was caused by the act or omission of a third party, whether or not the third party was negligent. The problem with today's case: the jury wasn't instructed on this "third-party exception" to strict liability; and there was proof that the gas leak was caused by a bad clamp installed by a third party several years earlier. Thus, the COA ordered a new trial. Judge Hunter wrote the majority opinion.

Judge Jackson dissented on the ground that the "third party exception" should be treated as an affirmative defense, which she would deem waived by those defendants who failed to plead it. She relied on other federal and state cases from outside NC holding that exceptions to strict liability environmental statutes (e.g., CERCLA) are affirmative defenses. The majority would have none of that, dismissing those authorities as "not controlling" and choosing not to follow them.

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