Judge makes $120M ruling against Citgo in massive 2004 Delaware River spill
After 12 years, three trials, and 70 days of court testimony, a federal district judge in Philadelphia has ruled in favor of the Greek owners and operators of the oil tanker Athos I, which struck an anchor in the Delaware River in November 2004 as it nudged toward the Citgo refinery dock in Paulsboro.
After 12 years, three trials, and 70 days of court testimony, a federal district judge in Philadelphia has ruled in favor of the Greek owners and operators of the oil tanker Athos I, which struck an anchor in the Delaware River in November 2004 as it nudged toward the Citgo refinery dock in Paulsboro.
Judge Joel H. Slomsky in a 173-page opinion in late July and a final order Aug. 17 ruled that Citgo, the refinery operator, had failed its duty to provide "safe berth warranty" to the Athos I tanker sailing from Puerto Miranda, Venezuela.
Slomsky ordered Citgo Asphalt Refining Co. to pay Frescati Shipping Co., the ship owner, and Tsakos Shipping & Trading, the ship operator, $55.5 million plus $16 million in interest for a total of $71.5 million. The judge ordered Citgo to pay about half of the federal government's costs for the spill cleanup, or $48.6 million.
Citgo has filed a notice to appeal the ruling to the U.S. Third Circuit Court of Appeals in Philadelphia.
A submerged rusty ship anchor punctured the hull of the Athos I, causing 264,000 gallons of oil to spill, and affecting hundreds of miles of shoreline. The Salem nuclear power plant was temporarily shut down. Shipping was delayed. More than 180 birds died, according to reports.
Frescati paid $143 million to clean up the spill, and was seeking about $55 million, plus more for damage to the ship, said John J. Levy, a lawyer from Montgomery McCracken Walker & Rhoads who represented the ship owners.
The U.S. government reimbursed Frescati $88 million "and then they stepped into our shoes and sued for that $88 million," Levy said.
Slomsky's ruling was the third go-around in the courts.
Frescati filed an original contract claim against Citgo for breaching the "safe berth warranty," and a negligence claim against Citgo for failing to locate, warn of, or remove the anchor.
After a 41-day nonjury trial in 2010, U.S. District Judge John Fullam ruled that Citgo was not liable.
Frescati appealed and in May 2013, the Third Circuit appeals court affirmed in part, and vacated in part, Fullam's decision.
The Third Circuit sent the case back to the District Court. Slomsky got the case because Fullam had retired.
Slomsky after another trial reversed the 2010 decision, ruling in favor of the ship owner and the vessel operator, which claimed that when the Athos I struck the anchor on the river bed, Citgo Asphalt Refining Co. had failed its responsibility to provide a safe berth for the ship. The ship has since been scrapped, although part of it is in Baltimore.
Citgo had chartered the ship, the Athos I, to bring in the crude oil.
"The story of the final voyage of the Athos I and the reasons why it came to rest prematurely may be in the minds of the maritime community for years to come," Slomsky wrote. "But in this court, for now, its legal journey will conclude here."
The court found that the Athos I pilots, captain, and crew maintained proper safety management, which made the vessel seaworthy. The U.S. Coast Guard determined, not long after the spill, that the crew and pilots did nothing wrong in their approach and had not violated any regulations.
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