The Court of Appeals published a decision in the Athos I oil spill. It is a consolidated case arising from a limitation action and an action to apportion liability for oil spill clean up costs, to the tune of $180 million.
The opinion is lengthy and I'm still digesting it. But, it can be found here and is a must read for practitioners involved in litigation over pollution cleanup cost recovery.
The introduction is reproduced below:
As the oil tanker M/T Athos I neared Paulsboro, New Jersey, after a journey from Venezuela, an abandoned ship anchor lay hidden on the bottom of the Delaware River squarely within the Athos I‘s path and only 900 feet away from its berth. Although dozens of ships had docked since the anchor was deposited in the River, none had reported encountering it. The Athos I struck the anchor, which punctured the ship‘s hull and caused approximately 263,000 gallons of crude oil to spill into the River. The cleanup following the casualty was successful, but expensive.
This appeal is the result of three interested parties attempting to apportion the monetary liability. The first party (actually two entities consolidated as one for our purposes) includes the Athos I‘s owner, Frescati Shipping Company, Ltd., and its manager, Tsakos Shipping & Trading, S.A. (jointly and severally, "Frescati"). Although Frescati states that the spill caused it to pay out $180 million in cleanup costs and ship damages, it was reimbursed for nearly $88 million of that amount by the United States (the "Government")—the second interested party—pursuant to the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. In order to recoup the unreimbursed losses, Frescati made claims in contract and tort against the third interested party—a set of affiliates known as CITGO Asphalt Refining Company, CITGO Petroleum Corporation, and CITGO East Coast Oil Corporation (jointly and severally, "CARCO")—which requested the oil shipped on the Athos I and owned the marine terminal where it was to dock to unload its oil. Specifically, Frescati brought a contract claim for CARCO‘s alleged breach of the safe port/safe berth warranty (jointly and severally, ―safe berth warranty‖) it made to an intermediary—Star Tankers, Inc.—responsible for chartering the Athos I to CARCO‘s port, and alleged negligence and negligent misrepresentation against CARCO as the owner of the wharf the Athos I was nearing when it was holed. The Government, as a statutory subrogee that stepped into Frescati‘s position for the $88 million it reimbursed to Frescati under the Oil Pollution Act, has limited its claim for reimbursement from CARCO to Frescati‘s contractual claim pursuant to a limited settlement agreement.
Following a 41-day bench trial, the District Court for the Eastern District of Pennsylvania held that CARCO was not liable for the accident under any of these theories. The Court, however, made no separate findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52(a)(1). That calls for a remand to set out these mandated matters. However, for the sake of efficiency, we discuss—and, to the extent necessary, make holdings on—the legal issues appealed.
In regard to the contractual safe berth warranty, the Court determined that Frescati (and the Government as a subrogee) could not recover on their contractual claims. First, Frescati was not a party to the agreement that contained the warranty between CARCO and Star Tankers, and was not an intended beneficiary of that agreement. Furthermore, even if Frescati could claim the protection of the warranty, it was only a promise by CARCO to exercise due diligence and not an unconditional guarantee; moreover, sufficient diligence existed here. In any event, the warranty was excused because CARCO specified the port ahead of the Athos I‘s arrival, placing the burden on the Athos I‘s captain to accept it as safe or reject it under what is called the ―named port exception."
For reasons elaborated below, we disagree with all three of these rulings. Instead, we hold that the Athos I—and by extension, its owner, Frescati—was an implied beneficiary of CARCO‘s safe berth warranty. We conclude as well that the safe berth warranty is an express assurance of safety, and that the named port exception to that warranty does not apply to hazards that are unknown to the parties and not reasonably foreseeable. We cannot be sure, however, that this warranty was actually breached, as the District Court made no finding as to the Athos I‘s actual draft nor the amount of clearance actually provided.
If on remand the District Court rules in favor of Frescati on its contractual warranty claim, its negligence claim becomes unnecessary. If this issue is reached, we do not agree with the District Court‘s conclusion that CARCO cannot be liable in negligence because the anchor lay outside the approach to CARCO‘s terminal—the area in which CARCO had a duty to exercise reasonable care in proving a safe approach. As such, the District Court would need to resolve the appropriate standard of care required, whether CARCO breached that standard, and if so, whether any such breach caused the accident. Conversely, we find no error with the Court‘s holding that CARCO‘s alleged misrepresentation as to the depth of its berth was geographically (and hence factually) irrelevant to the ultimate accident. In addition, we conclude that the Government has waived reliance on a partial settlement agreement with CARCO that, the Government contends, precludes CARCO from making certain equitable defenses to the Government‘s subrogation claims. In this context, we affirm in part, and vacate and remand in part for additional factfinding on the contractual (and possibly negligence) claims.
The Fifth Circuit, en banc, just reversed an earlier panel decision in a Longshore Act case which turned on the situs of the injury and whether it met the jurisdictional requirements of the Longshore and Harbor Worker Compensation Act.
En Banc decision is here.
Per the Court:
In particular, the BRB found that the claimant’s employment activities with NODSI took place in an area or location “adjoining” navigable waters“customarily used by an employer in loading [or] unloading . . . a vessel” and therefore NODSI’s facility met the situs requirement of the Act. We conclude that because the NODSI facility where Mr. Zepeda worked did not border on navigable waters, it was not a covered situs and Mr. Zepeda is entitled to no benefits under the Act from Petitioner NODSI. We therefore vacate the award of the BRB as against NODSI and remand for further proceedings.
Circuit Split ALERT.... Stay tuned.
The Ninth Circuit just issued a decision regarding guarantor liability for unpaid amounts following shipment of goods under several bills of lading.
The case is Clevo, Co. v. Hecny Transportation, Inc. and the original opinion case be found here.
From the court's syllabus (which is a handy-dandy tool the Ninth Circuit is using to provide a snapshot of the opinion:
Affirming the district court’s summary judgment in an admiralty action filed bya seller of computer parts, the panel held that misdelivery claims against a freight forwarder were barred by a one-year limitations period set forth in bills of lading.
The panel held that a guarantee, which established no express statute of limitations, was initially effective to place the seller and the freight forwarder in direct contractual privity. That initial relationship was modified when the bills of lading issued. By operation of a Himalaya clause, the benefit of the one-year statute of limitations in the bills of lading was extended beyond the non-vessel-operating common carrier that issued the bills of lading to the freight forwarder, an agent of the carrier.
Plenary session with David Axelrod, Mayor Emanuel and Senator Cullerton
On April 15, 2013, I was pleased to be on a panel discussing federal appeals. My co-panelists were Judge Rick Clifton of the Ninth Circuit Court of Appeals and Clare Connors of the Davis Levin Livingston firm.
Lots of pointers about fonts, briefs, and oral arguments.
Lost so
I am in trial this week, but a very interesting case was just handed down by the Ninth Circuit Court of Appeals. The title is Kealoha v. Leeward Marine, Inc. and the opinion can be found here.
The Longshore Act precludes compensation for injuries caused by an employee's "willful intent to injure or kill himself." 33 U.S.C. 903 (c). But, courts interpreting similar provisions of state worker compensation laws have allowed for compensation if the suicide, or attempted suicide, was work related. Those courts that have found the statutory bar inapplicable have done so using a "chain of causation" test instead of a "fault" or "voluntariness" test.
In this case, the Administrative Law Judge applied an "irresistable impulse" test. The Ninth Circuit held that the causation test was the more reasoned approach, stating:
Given the best-reasoned modern trend of case law, we hold that a suicide or injuries from a suicide attempt areNo apparent circuit splits, but this is an issue to watch.
compensable under the Longshore Act when there is a direct and unbroken chain of causation between a compensable
work-related injury and the suicide attempt. The claimant need not demonstrate that the suicide or attempt stemmed
from an irresistible suicidal impulse. The chain of causation rule accords with our modern understanding of psychiatry. It
also better reflects the Longshore Act’s focus on causation, rather than fault. See 33 U.S.C. § 904(b) (“Compensation
shall be payable irrespective of fault as a cause for the injury.”).
According to this report in the Miami Herald ("Houseboat activist Fane Lozman wins again; says he will seek million from city over civil rights"), the fellow who recently prevailed in the U.S. Supreme Court in Lozman v. City of Riviera Beach, No. 11-626 (Jan. 15, 2013) isn't giving up.
The Herald reports:
The 11th Circuit Court of Appeals reinstated a 2008 lawsuit Lozman filed against the city, claiming it repeatedly violated his civil rights by hiring a private investigator to trail him, kicking him out of public meetings and, at one point, having him arrested when he refused to leave."Today felt just a tad lower than winning at the Supreme Court," Lozman said shortly after the decision was announced. "The Supreme Court ruling was a 10. Today was a 9½."
...
But, while the high court’s ruling may have stung more, the 11th Circuit’s could be more costly.
When the nation’s high court in January ruled that the city improperly used ancient maritime law to seize and ultimately destroy Lozman’s 60-foot two-story floating home, the possible damages were somewhat fixed. City officials were faced with the prospect of paying Lozman for the $167,000 he claims it would cost to replace his home, the $300,000 he spent for attorneys and an undetermined amount to reimburse him for the money he shelled out for living expenses after his home was destroyed.
However, he said, if he succeeds in proving that the city violated his constitutional rights, the damages could skyrocket.
"If I was the city, I’d be concerned," he said. "That’s a seven-figure sum.
Download the 11th Circuit opinion here.Lozman v. City of Riviera Beach, No. 11-15448 (11th Cir. Apr. 1, 2013)
Since most of my practice involves the use or transfer of land (and not water - sorry) and since there is a very, VERY large public transportation infrastructure project in development in Honolulu, we thought we would provide some of the requirements for the Honolulu Area Rapid Transit (HART) project.
Because the HART rail project will involve federal funds, federal laws and regulations provide property owners (and their tenants) with additional statutory and regulatory protections above what is required by the Fifth Amendment, the Hawaii Constitution or Hawaii Revised Statutes Chapter 101. This is the first post in a series about Honolulu Rail.
Title 42, Chapter 61 of the U.S. Code is entitled: "The Uniform Relocation Assistance and Real Property Acquisition Policies for Federal and Federally Asssisted Programs" and provides the statutory authority for the regulations which provide the details of the various benefits of the Uniform Relocation Act program.
The federal regulation (as originally published in the Federal Register) that provides the procedures and specific requirements for eminent domain projects that use federal funds can be found here.
Of note, the Uniform Act has unusual application in courts. The Uniform Act does not create any element of value or damage not in existence prior to the date of enactment. 42 U.S.C. 4602.
Courts have grappled with landowners rights under the Uniform Act - fodder for future posts for sure.
- Improvements shall be disregarded, either to increase, or decrease, fair market value as of the date of valuation. 42 U.S.C. 4651(3).
- Expenses incidental to acquisition, conveyance taxes, property taxes must be born by the federal agency. 42 U.S.C. 4653.
- Property owners are entitled to reimbursement of attorney's fees if the federal agency cannot condemn or the condemnation is abandoned. 42 U.S.C. 4654. If the landowner is forced to bring an inverse condemnation claim, the property owner is entitled to a reimbursement of attorney's fees, appraisal and engineering fees. 42 U.S.C. 4653 (c).
- These protections apply equally to HART or any State or County acquisition using federal funds. 42 U.S.C. 4655. Any "acquiring agency" must provide assurances to the federal agency funding the acquisition that the acquiring agency will comply with the protections of the Uniform Act.