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Unknown Owner of Abandoned Anchor Blamed for 2004 M/T ATHOS I Oil Spill

On April 12, 2011, Senior District Court Judge John Fullam of the Eastern District of Pennsylvania issued a final adjudication of the civil actions pending before the Court as a result of the November 26, 2004 ATHOS I oil spill in the Delaware River. In the decision, the Court held that Defendants, CITGO Asphalt Refining Company, CITGO Petroleum Corporation, and CITGO East Coast Oil Corporation, (hereinafter "CARCO") could not be held responsible for the oil clean-up costs and/or the losses associated with the damage to the ATHOS I.

Relevant Facts
The ATHOS I, owned by Frescati Shipping Company Ltd. ("Frescati") was on charter to Star Tankers, Inc., who in turn had sub-chartered the vessel to CARCO. The vessel was carrying approximately 300,000 barrels of heavy crude oil on a voyage from Puerto Miranda, Venezuela to Paulsboro, New Jersey. While traveling up the Delaware River, in an area known as Federal Anchorage No. 9, and only approximately 900 feet from its intended discharge dock at the Paulsboro refinery, the tanker struck a submerged nine-ton abandoned anchor. The submerged object ripped holes in the hull and caused approximately 200,000 barrels of heavy crude oil to spill into the river. The United Statesgovernment launched a successful multi-agency response to clean up the oil.

Litigation
In January 2005, Frescati filed a Petition for Exoneration from or Limitation of Liability pursuant to 46 U.S.C. Ā§ 183 in connection with claims by the government and other parties affected by the spill. CITGO Asphalt Refining Company filed a claim and Frescati filed a counterclaim against all three CARCO entities. In 2008, the government filed a separate action against CARCO. Frescati, the government, and the other third party claimants settled; leaving only the claims by Frescati and the government against CARCO for trial before the Court.

Frescati asserted various causes of action against CARCO blaming defendants for the casualty. Specifically, Plaintiffs contended that CARCO should be held liable in tort under theories of wharfinger negligence and misrepresentation, for failing to survey for obstructions in the anchorage and failing to notify the crew of the ATHOS I that CARCO had recently changed the maximum draft accepted at its berth from 38 feet to 36 feet. Frescati also alleged that CARCO was liable under the Charter Party and bill of lading under breach of contract and warranty theories.

Tort Claims
In analyzing the Plaintiff's claim for negligence, the Court first recited the longstanding case law that the government does not have a statutory or regulatory duty to scan the Anchoragefor hazards to navigation. The Court then held that where no such duty exists for the government, it cannot fall to CARCO. The Court rejected Plaintiff's argument that the site of the casualty was within the "approach" to the berth (and therefore part of CARCO's duty to provide a "safe berth"). The Court held that such a definition was far too expansive and that CARCO did not have control over the use of the Anchorage. Moreover, the Anchorage was open for the passage of all ships, not just those coming to the refinery terminal.

Frescati also alleged that CARCO failed to notify the Master and crew of the ATHOS I that the acceptable draft had been lowered from 38 to 36 feet, which was a material misrepresentation. The vessel had a draft of more than 36 feet, 6 inches and Frescati argued that had the crew been aware, the vessel would not have attempted to reach the berth at that time and would have waited for high tide. The Court held that CARCO's decision was an internal one, made in anticipation of the closing of the refinery's "season", and that it did not cause the loss or affect the depth of the water at the berth.

Contract Claim
Frescati also sought to invoke the safe port and safe berth warranties of the Charter Party and bill of lading as an intended third-party beneficiary of the contracts. The Court found that there was no persuasive evidence that Frescati was an intended third-party beneficiary under the Star Tankers-CARCO Charter Party or the bill of lading. The Court went on to state that even if Frescati did have the benefit of the contracts, CARCO did not breach any contractual warranties. Specifically, the Court stated that the contractual clauses did not make CARCO a warrantor of the safety of the berth, but rather imposed upon the charterer a duty of due diligence to select a safe berth. Reviewing all of the evidence, the Court found the port and berth to be generally safe.

In conclusion, the Court was of the opinion that the fault for the casualty lies with the unknown and unidentifiable (former owner of the anchor, who abandoned it in the river without notifying anyone. The Court entered Judgment in favor of the Defendants and dismissed Plaintiffs claims.

Read a copy of the Eastern District of Pennsylvania's decision

For more information on the Court's decision, OPA '90, U.S. oil spill legislation and/or the National Pollution Funds Center-Oil Spill Liability Trust Fund, please do not hesitate to call on us at: info@chaloslaw.com.

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