Opinion
03 Civ. 2748 (RWS).
October 6, 2004
KENNEDY LILLIS SCHMIDT ENGLISH, New York, NY, By: CRAIG S. ENGLISH, ESQ., Attorneys for Plaintiff.
FOWLER RODRIGUEZ CHALOS, Port Washington, NY, By: EUGENE J. O'CONNOR, ESQ., Attorneys for Defendants.
OPINION
Plaintiff GMD Shipyard Corp. ("GMD") brought this action in rem against the M/V ANTHEA Y, and its owner Dermaga Shipping ("Dermaga") and its manager and operator Technomar Shipping, Inc. ("Technomar") (collectively, the "Defendants") to recover the removal cost of an oil spill which occurred while the M/V ANTHEA Y was in the GMD drydock for repairs. Based upon the evidence presented at a non-jury trial held on March 23, 2004, April 26, 2004, and May 19, 2004, and the following findings of fact and conclusions of law, that cost will be shared by the parties and judgment will be entered upon the following facts and conclusions.
The Parties
GMD is a New York corporation that operates a shipyard in the Brooklyn Navy Yard, Brooklyn, New York.
The in rem defendant, M/V ANTHEA Y, is an ocean-going bulk carrier of 21,551 gross tons, 195.18 meters in length overall, and 25.3 meters in depth.
Dermaga is the registered owner of the M/V ANTHEA Y.
Technomar is the company which manages the M/V ANTHEA Y.Prior Proceedings
This action was commenced by GMD on April 21, 2003, by the filing of a complaint alleging four causes of action.
The first cause of action alleged that the M/V ANTHEA Y is liable in rem because the repairs GMD provided to the M/V ANTHEA Y were "necessaries" under the Federal Maritime Lien Act, recodified at 46 U.S.C. §§ 31341- 31342 as part of the Maritime Commercial Instruments and Lien Act of 1988, 46 U.S.C. § 31301et seq.
The second cause of action alleged is for quantum meruit.
The third cause of action alleged negligent misrepresentation, a claim that has been withdrawn as set forth in GMD's trial papers.
The fourth cause of action alleged a violation of the Oil Pollution Act of 1990 ("OPA 90"), 33 U.S.C. § 2701 et seq.
A verified amended complaint was filed on August 5, 2003.
Following the completion of discovery, the non-jury trial commenced on March 23, 2004 and proceeded on April 26, 2004. The witnesses were Michael Cranston, president of GMD ("Cranston"); Captain Robert Weeks, a marine surveyor hired by the Defendants ("Captain Weeks") to plan and supervise the removal of heavy fuel oil from double-bottom tank No. 4A port of the M/V ANTHEA Y; Kurt Erlandson, president, operations manager of Randive, Inc. ("Erlandson"), an entity hired by the Defendants to survey the hull damage and make temporary repairs to the M/V ANTHEA Y; Nikolaos Petritzis, technical manager for Technomar ("Petritzis"), in charge of the hull repairs for the Defendants; Richard Gayton ("Gayton"), a surveyor retained by the Defendants' hull and machinery underwriter; and Antonios Koukas ("Koukas"), the superintendent for Technomar, attending the M/V ANTHEA Y repairs. Koukas testified by deposition.
On March 31, 2004, after trial had commenced, the Defendants moved to dismiss the fourth cause of action pursuant to Rule 12(b)(6) of the Federal Rules for Civil Procedure or, in the alternative, for summary judgment on that same cause of action pursuant to Rule 56(b), Federal Rules of Civil Procedure. The decision on that motion was deferred until after the trial of this action concluded, and on May 19, 2004, it was decided that the legal arguments advanced in support of and opposition to the Defendants' motion would be deemed part of the parties' proposed conclusions of law. Final argument in the trial was heard on that same date, at which time all matters were considered fully submitted. Findings of Fact
The following constitute the findings of fact by this Court and are based upon evidence adduced from the trial, testifying witnesses, exhibits submitted, and the proposed findings of fact of GMD and of the Defendants.
On January 14, 2003, while bound for Cementon, New York, with a cargo of rock salt, the M/V ANTHEA Y ran aground in the Hudson River causing damage to the flat bottom shell plate of the vessel. The Defendants hired divers, Randive, Inc. ("Randive"), to conduct a damage survey. In a report dated January 23, 2003, the divers found that the bottom was set-in for nearly the entire length of the ship. The M/V ANTHEA Y had a crease or indent 3 or 4 feet across running longitudinally from stem to stern, with gashes in tanks No. 2A port ("2P"), No. 4A port ("4P"), and No. 5A port ("5P"). Tanks 4P and 5P were breached during the grounding and open to the sea.
Double-bottom tank 4P is 5.24 feet high, measures 101 feet in the fore/aft direction, and is approximately 24 feet wide. There are non-watertight bulkheads inside the double-bottom tank with elliptical lightering holes. These bulkheads were spaced approximately 1 meter apart in the tank. The tear in 4P allowed 306 metric tons of river water to enter the tank. The flooded capacity of the tank was 403 metric tons.
It was determined at Cementon that there was a large tear in double-bottom tank 4P measuring 21 feet long by 4 1/2 inches wide. Tank 4P contained No. 6 oil, a heavy, dark, viscous fuel oil.
The Defendants hired The O'Brien's Group to pump the No. 6 oil from 4P at Cementon. The O'Brien's Group reported that, as of January 25, 2003, the oil in tank 4P was floating in the tank on approximately 4 feet of water.
The divers at Cementon also found a tear in the bottom of tank 5P measuring approximately 52 feet in length and 4 1/2 inches in width. Tank 5P contained light diesel oil.
The hull of the M/V ANTHEA Y was severely damaged, the double-bottom plates having been breached from almost its stem to its stern and with its longitudinal strength reduced to 80% of its original strength, well below the vessel's classification society requirements. Due to the severity and extent of the damage, an estimated 100 plus tons of steel would need to be renewed and/or replaced. Even temporary repairs of the vessel's bottom shell plating would have been extensive.
In a meeting on January 24, 2003, the United States Coast Guard (the "Coast Guard") advised The O'Brien's Group that unless a metal plating of the same thickness as the hull could be welded over the temporary repair to the gash in tank 4P, the vessel would not be permitted to sail with the fuel oil in tank 4P. The Coast Guard would approve a wedge and epoxy temporary repair to the gash in tank 4P only if the Defendants removed the heavy fuel oil from tank 4P. The Coast Guard required the Defendants to remove all pumpable oil from tank 4P before leaving Cementon.
Captain Weeks, an oil pollution response contractor hired by the Defendants, arrived at the vessel at Cementon on January 30, 2003, and obtained "an approximate amount" from the chief engineer.
There were conflicting estimates at Cementon of the amount of No. 6 oil in 4P. Captain Weeks calculated that there were 110.5 metric tons of oil in 4P (130 cubic meters). Gayton reported that tank 4P contained 97 tons of No. 6 oil. The O'Brien's Group reported 100 tons of oil in tank 4P.
The ambient weather conditions complicated the process of removing the oil from the damaged tanks as temperatures were well below freezing.
Captain Weeks reported to the Coast Guard at Cementon that he had pumped out more than the 130 cubic meters of oil which he believed were in tank 4P. His records indicate that 6.95 cubic meters more were pumped out from tank 4P than Captain Weeks believed were in the tank.
Captain Weeks completed the pumping of 4P at Cementon on February 5, 2003. On that day, Captain Weeks sent a telefax to Lieutenant Commander John Hillin of the Coast Guard containing his report for February 5, 2003. In his February 5, 2003 report, Captain Weeks stated: "The master witnessed the final pumping, until no significant amounts of oil were considered to remain." Captain Weeks certified to the Coast Guard that all of the "reasonably pumpable" oil in the damaged double-bottom tanks was pumped out.
Randive, which had inspected the damage to the doublebottom plating while underwater, was contracted by the Defendants to apply a temporary patch, consisting of soft wooden wedges inserted into the breach and sealed with epoxy, on the approximately 21-foot gash in the 4P port double-bottom plating. While the external hydrostatic pressure of the river kept the wedges in place, ballasting the M/V ANTHEA Y to maintain the level of remaining residual oily water inside the 4P port double-bottom tank about the actual breach kept the trapped oil from contaminating the river.
Because of the unsuccessful attempts to dewater tank 4P at Cementon, New York, Captain Weeks believed that either there was a breach in the bulkhead between tanks 4P and 5P or the temporary patch to the hull at tank 4P was not watertight, and that most, if not all, of the light diesel oil has been pumped out of the 5P port double-bottom tank, which had suffered an approximately 52-foot gash.
When GMD learned that the M/V ANTHEA Y had run aground near Cementon, GMD's agent in Greece contacted the owner of the vessel, and Cranston traveled to meet Captain Weeks in Cementon. Captain Weeks and Commander Cameron from the Coast Guard advised Cranston that all pumpable oil had been removed from 4P.
The M/V ANTHEA Y transited down the Hudson River to the GMD Shipyard facility in Brooklyn, New York, on February 7 to February 8, 2003, rested at a layberth in Brooklyn, New York, on February 8 to February 9, 2003, and was floated into the drydock and rested on its blocks on February 9 to February 10, 2003. No oil was observed being released from the vessel into the surrounding waters. The M/V ANTHEA Y was accepted by GMD with the knowledge that some unpumpable oil residue remained onboard.
GMD represented to the Defendants that it had experience with repairing vessels with breached fuel oil tanks and proposed a plan for pumping out the remaining oil onboard to minimize, if not avoid, any oil spilling into the drydock.
The proposed plan was to slowly and carefully reduce the level of the water in the drydock in incremental stages and at each stage to simultaneously pump out any oil, or oil-water mixture at the various levels until it was ascertained that the tanks were clean of oil. Normally vessels do not enter a drydock for work on tanks containing oil unless the tanks are first made gas free. "Gas free" means that all the oil in the tank has been removed from the tank, and there is no flammable atmosphere in the tank. It is important that tanks be gas free to prevent explosions from hot work, such as flame-cutting and welding. Cranston and Captain Weeks discussed the proposed plan.
GMD assumed that some residual oil would probably spill during the drydocking, and that the estimated resulting clean-up would cost $250,000. GMD and the Defendants discussed the possibility of an oil spill, but there was no agreement with respect to payment of any clean-up costs of an oil spill if one should occur. The actual repairs to the vessel were carried out over roughly two months and cost approximately $2.2 million.
GMD rigged a boom around the back end of the vessel in the drydock. On February 10, 2003, GMD lowered the water level in the drydock to 1.6 meters (5.2 feet) on the hull. The 1.6 meter level is just below the level of the tank top of 4P. GMD then opened the manhole covers for tank 4P and pumped out approximately 5 barrels of oil at the 1.6 meter level. The level of liquid in tank 4P did not go down when the oil was pumped out. GMD attempted to heat the oil by having the ship turn on the tank's heating coils. GMD also inserted a portable heat exchanger into the bank. Because the level of liquid in tank 4P did not go down despite pumping, GMD believed that there was a breach in the watertight bulkhead separating tanks 4P and 5P, and that water was thus entering tank 4P through the approximately 50-foot gash known to exist in the bottom of tank 5P.
GMD then brought the level of the water in the drydock down to about 3.3 feet on the ship's hull, which was just below the top edge of the elliptical lightering holes in tank 4P, to enable any oil in the tank to flow through the lightering holes. The top of the lightering hole was 3.93 feet about the bottom of the tank. When the water level in the drydock was lowered from 5.2 feet to 3.3 feet on the hull, the level of liquid in tank 4P also dropped to match the drydock water level.
With the level of liquid in the tank just below the top of the lightering holes (3.3 feet on the hull), GMD pumped out 22 barrels of an oil-water mixture. Every time GMD lowered the level of water in the drydock, Koukas, the vessel's attending port engineer, was notified.
The level of the liquid in tank 4P could only be controlled by lowering or raising the level of water in the drydock. GMD next lowered the level of water in the drydock to 7 feet, or about 2 feet on the hull. As GMD prepared to resume pumping from tank 4P, Cranston was told that there was oil in the dock. GMD did not anticipate any discharge of oil when the level of the drydock was still two feet on the hull. After seeing the oil in the drydock, GMD brought the drydock water level up to a level of 8 feet on the hull. In doing so, GMD overfilled the drydock slightly, causing some oil and water to rise above the tank top and into the cargo hold through the open manholes. GMD then pumped 100 tons of an oil-water mixture out of tank 4P, and thereafter continued reducing the level of the liquid in the tank by lowering the level of water in the drydock.
On Friday, February 14, 2003, GMD was able to pump the drydock out and the full extent of the oil discharge from the M/V ANTHEA Y became apparent.
Gayton reported that GMD had removed approximately 20 tons of heavy oil from tank 4P. In his "Sixth Advice," Gayton reported on the oil spill and stated in a "Note" to his advice, that when the water level in the drydock was lowered below the shell plate level, "unpumpable excess heavy oil" leaked out through the crack in tank 5P.
In his "8th Advice," Gayton reported that upon further investigation, in his opinion, the oil leaked directly through the temporary patch applied by Randive to 4P, and not through 5P as originally thought. Gayton believed the temporary patch gave way over a length of 24 inches due to internal hydrostatic pressure as the exterior water level was dropped, although Gayton was not present when the oil discharge occurred, or for the events leading up to the oil discharge.
Koukas testified that the oil discharge occurred because GMD lowered the water in drydock to a point of 4 feet below the level of the liquid in the bank, creating what Gayton had referred to as hydrostatic pressure.
It had not been possible to create a difference between the level of the tank and the level of the drydock. In Cementon, Captain Weeks was never able to reduce the level of the liquid in the tank and that situation continued when the vessel entered drydock. Because there was an open gash in tank 4P, the level of the tank went up or down with the level of the drydock.
When the oil discharge occurred, all involved believed that the gash in 4P had been effectively patched by wooden wedges and epoxy and that water was entering from a breach in the bulkhead between tanks 4P and 5P. With an opening directly on the bottom of tank 4P it was not possible for GMD to create a "head" in the tank.
The temperatures recorded during this period at LaGuardia Airport were as follows:
Maximum Temperature Minimum Temperature
February 9, 2003 37 o F 23 o F February 10, 2003 36 o F 32 o F February 11, 2003 34 o F 16 o F February 12, 2003 33 o F 22 o F February 13, 2003 25 o F 18 o F February 14, 2003 31 o F 16 o F
Cranston hired outside companies to assist in cleaning the oil discharged from the M/V ANTHEA Y for an amount of $625,187.03, which included a 15% profit margin for GMD amounting to $71,267.88. Defendants have raised no objections to the amount of GMD's damages other than objections with regard to the profit claimed by GMD and with regard to the fact that GMD has not paid the invoice of Miller's Launch, an outside contractor, in the sum of $232,788.18.
The discharge of oil resulted from certain assumptions shared equally by GMD and the Defendants. These included that the statements made on behalf of the Defendants to the Coast Guard were accurate that all the oil that could be reasonably pumpable had been removed, that tank 4P contained only residual oil, and that there was a breach in the bulkhead between tank 4P and tank 5P that caused the inability to remove the liquid in tank 4P. Both parties failed to recognize the effect of the temperature conditions and the possibility that, as a consequence, substantial quantities of oil remained in tank 4P. Neither of the parties recognized that the temporary patch on tank 4P would fail when the outside hydrostatic pressure was removed.
Although GMD was in charge of the vessel and the dewatering, it operated on the basis of assumptions provided by the Defendants. GMD in fact caused the oil discharge but the information provided by the Defendants upon which GMD relied was inaccurate. Both parties are consequently equally responsible for the discharge.
Conclusions of Law I. The Court Has Jurisdiction
The amended complaint has alleged a maritime lien, a quantum meruit claim, and a claim under OPA 90, and jurisdiction pursuant to 28 U.S.C. § 1333. Under 28 U.S.C. § 112(b), this Court has concurrent jurisdiction with the United States District Court for the Eastern District of New York over the waters within the Eastern District.
The Defendants have not challenged jurisdiction, and the facts as found above establish the jurisdiction of this Court.
II. The Maritime Lien Has Not Been Established
Under Rule C(1) of the Supplemental Rules for Certain Admiralty and Maritime Claims, an action in rem may be brought to enforce any maritime lien and GMD has asserted such a lien against the M/V ANTHEA Y on the basis that GMD has provided "necessaries" to the vessel under the Federal Maritime Lien Act (the "FMLA"), recodified at 46 U.S.C. §§ 31341- 31342 as part of the Maritime Commercial Instruments and Liens Act of 1988, 46 U.S.C. § 31301 et seq. (the "MCILA"). Cases interpreting the FMLA are applicable to the current codification in the MCILA.See Integrated Control Sys. Corp. v. Consolidated Edison Co. of New York, 990 F. Supp. 295, 298-99 (S.D.N.Y. 1998) (noting that the MCILA "provisions relevant to the furnishing of necessaries to vessels were substantially equivalent to those contained" in the FMLA and that "the cases interpreting the statutory scheme prior to the 1988 recodification remain instructive"); see also Maritrend Inc. v. Serac Co. (Shipping), 348 F.3d 469, 470-71 (5th Cir. 2003) (explaining that the recodification of the FMLA in 1988 "did not make any substantive changes to the law"); Racal Survey U.S.A., Inc. v. M/V COUNT FLEET, 231 F.3d 183, 187 (5th Cir. 2000) (concluding that caselaw developed under the FMLA remains "persuasive, if not controlling"), cert. denied sub nom. Racal NCS, Inc. v. Tidewater Marine Int'l, Inc., 531 U.S. 1051 (2001); cf. Itel Containers Int'l Corp. v. Atlanttrafik Express Serv. Ltd., 982 F.2d 765, 767 n. 1 (2d Cir. 1992) (noting that a portion of the FMLA was "superseded without substantial change by 46 U.S.C. § 31342").
In order to prove a maritime lien under the statute, GMD must show (1) that it furnished repairs, supplies or other necessaries, (2) to the vessel, (3) upon the order of the owner of the vessel or a person authorized by the owner under 46 U.S.C. § 31341. See Barwil ASCA v. M/V SAVA, 44 F. Supp. 2d 484, 487 (E.D.N.Y. 1999); Integrated Control Sys., 990 F. Supp. at 298. Pursuant to 46 U.S.C. § 31341, the vessel owner, the master, a person entrusted with the management of the vessel at the port of supply, or an officer or agent appointed by the owner has the authority to procure necessaries for a vessel and subject the vessel to a maritime lien. See 46 U.S.C. § 31341(a). The term "necessaries" includes "repairs, supplies, towage, and the use of a dry dock or marine railway." 46 U.S.C. § 31301(4). Courts have interpreted "necessaries" to include "any goods and services `reasonably needed' in a ship's business for a vessel's continued operation." Barwil ASCA, 44 F. Supp. 2d at 487 (citations omitted).
GMD argues that it was authorized to effect the clean-up for the oil discharged from the M/V ANTHEA Y because it was engaged to place the vessel in drydock and ascertain the extent of damage to the M/V ANTHEA Y. The clean-up costs incurred as a result of the discharge of oil were part of the costs to drydock the vessel, according to GMD, and thus constitute "necessaries" under the meaning of the MCILA.
Here, although GMD and the Defendants discussed the possibility of an oil spill, no agreement was reached with respect to the expense of removing the oil that it was anticipated might be discharged during the repairs to the M/V ANTHEA Y while in the GMD drydock. While GMD was engaged to place the M/V ANTHEA Y in drydock, it has not been shown that the clean-up of the oil spill from the vessel was ordered by Defendants, and, under the circumstances here, such an order will not be inferred from the terms of GMD's engagement with regard to the repair of the M/V ANTHEA Y. Consequently, no maritime lien has been established.
III. No Quantum Meruit Claim Has Been Established
"[T]he law is clear that quasi-contractual claims may be considered by the federal courts in admiralty if they arise out of maritime contracts, or other inherently maritime transactions." Peninsular Oriental Steam Navigation Co. v. Overseas Oil Carriers, Inc., 553 F.2d 830, 835 (2d Cir. 1977) (internal citations and footnote omitted); see also Archawski v. Hanioti, 350 U.S. 532, 535-36 (1956) ("Rights which admiralty recognizes as serving the ends of justice are often indistinguishable from ordinary quasi-contractual rights created to prevent unjust enrichment. . . . [A]dmiralty has jurisdiction, . . . provided that the unjust enrichment arose as a result of the breach of a maritime contract."). GMD's quantum meruit claim thus sounds in admiralty.
Although asserting maritime jurisdiction, GMD has cited no authority for its quantum meruit claim drawn from federal jurisprudence. Rather, GMD cites to New York law in support of its quantum meruit claim and posits that "courts applying maritime law may adopt state law by express or implied reference or by virtue of the interstitial nature of federal law."Palestina v. Fernandez, 701 F.2d 438, 439 (5th Cir. 1983).
Assuming, as GMD suggests, that state-law principles govern with respect to GMD's quantum meruit claim whether "by virtue of the interstitial nature of federal law" or through supplemental jurisdiction, cf., e.g., Integrated Control Sys., 990 F. Supp. at 298 (considering a third-party defendant's quantum meruit counterclaim under New York law where the plaintiffs had invoked admiralty jurisdiction), GMD's claim is barred nonetheless. "In order to make out a cause of action in quantum meruit or quasi contract, a plaintiff must establish (1) the performance of services in good faith; (2) the acceptance of those services by the person to whom they are rendered; (3) an expectation of compensation therefor; and (4) the reasonable value of the services." Landcom, Inc. v. Galen-Lyons Joint Landfill Comm'n, 259 A.D.2d 967, 968, 687 N.Y.S.2d 841, 842 (N.Y.App.Div. 4th Dep't 1999) (concluding that the plaintiff had failed to establish that it performed services with the expectation that it would be compensated); accord In re Alu, 302 A.D.2d 520, 520, 755 N.Y.S.2d 289, 290 (N.Y.App.Div. 2d Dep't 2003) (noting that "[t]he question of whether a party had a reasonable expectation of compensation for services rendered is a matter for the trier of fact to determine based on the evidence before it"); Freedman v. Pearlman, 271 A.D.2d 301, 304, 706 N.Y.S.2d 405, 408 (N.Y.App. Div. 1st Dep't 2000). The facts as found above bar such an acceptance of services or reasonable expectation of compensation.
GMD's reliance on Todd Shipyards Corp. v. The M/V ANNA K, No. 77 Civ. 86, 1979 U.S. Dist. LEXIS 8765 (E.D. La. 1979), is misplaced, as Todd Shipyards applies Louisiana principles of law and GMD has ascribed to New York law with respect to this claim.
IV. The Defendants Are Liable Under OPA 90
Under OPA 90,
[E]ach responsible party for a vessel or a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines or the exclusive economic zone is liable for the removal costs and damages specified in subsection (b) of this section that result from such incident.33 U.S.C. § 2702(a). The removal costs referred to in subsection (a) include "any removal costs incurred by any person for acts taken by the person which are consistent with the National Contingency Plan." 33 U.S.C. § 2702(b)(1)(B).
With regard to the statutory language of 33 U.S.C. § 2702, a "responsible party" means, "in the case of the vessel," "any person owning, operating, or demise chartering the vessel." 33 U.S.C. § 2701(32)(A). Dermaga and Technomar have not disputed GMD's contention that they are owners or operators of the M/V ANTHEA Y within the meaning of 33 U.S.C. § 2701(26). See 33 U.S.C. § 2701(26)(A)(i) (explaining that "owner or operator" means, "in the case of a vessel, any person owning, operating, or chartering by demise, the vessel").
Removal costs under OPA 90 are "the costs of removal that are incurred after a discharge of oil has occurred or, in any case in which there is a substantial threat of a discharge of oil, the costs to prevent, minimize, or mitigate oil pollution from such an incident." 33 U.S.C. § 2701(31). The responsible party is liable for all removal costs or damages under Section 2702 unless that party "establishes, by a preponderance of the evidence, that the discharge or substantial threat of a discharge of oil and the resulting damages or removal costs were caused solely by — (1) an act of God; (2) an act of war; (3) an act or omission of a third party . . .; [or] (4) any combination of paragraphs (1), (2), and (3)." 33 U.S.C. § 2703(a).
The Defendants have contended that OPA 90 is inapplicable. First, the Defendants argue that the M/V ANTHEA Y was unseaworthy at the time of the oil discharge and withdrawn from navigation while in GMD's drydock, and consequently is not a vessel under 33 U.S.C. § 2701(37). Second, the Defendants argue that OPA 90 is inapplicable because oil was never discharged into navigable waters, but was, instead, safely contained in the controlled environment of the drydock.
A. The M/V ANTHEA Y Was A Vessel Under OPA 90 At All Relevant Times
Under OPA 90, "vessel" means "every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water, other than a public vessel." 33 U.S.C. § 2701(37). The Defendants acknowledge that there is limited caselaw interpreting "vessel" as it is employed in OPA 90, but argue that the body of law interpreting "vessel" in other contexts should be relied upon in construing the term under OPA 90.
Specifically, the Defendants opine that whether a ship is in navigation or capable of navigation while undergoing substantial repairs should be determinative in this context, as it is in cases interpreting the Jones Act, 46 App. U.S.C. § 688. The Defendants point to the Supreme Court's decision in Chandris, Inc. v. Latsis, 515 U.S. 347 (1995), as the leading case with regard to this distinction. In Chandris, the Supreme Court was called upon to determine if a vessel in drydock could be said to be "in navigation" for purposes of a Jones Act claim. The Court observed that:
Under our precedent and the law prevailing in the Circuits, it is generally accepted that a vessel does not cease to be a vessel when she is not voyaging, but is at anchor, berthed, or at dockside, even when the vessel is undergoing repairs. At some point, however, repairs become sufficiently significant that the vessel can no longer be considered in navigation. In West v. United States, 361 U.S. 118, 80 S. Ct. 189, 4 L. Ed. 2d 161 (1959), we held that a shoreside worker was not entitled to recover for unseaworthiness because the vessel on which he was injured was undergoing an overhaul for the purpose of making her seaworthy and therefore had been withdrawn from navigation. We explained that, in such cases, the focus should be upon the status of the ship, the pattern of the repairs, and the extensive nature of the work contracted to be done. The general rule among the Courts of Appeals is that vessels undergoing repairs or spending a relatively short period of time in drydock are still considered to be in navigation whereas ships being transformed through major overhauls or renovations are not.Chandris, 515 U.S. at 373-74 (internal quotation marks and citations omitted). The Court proceeded to explain that "while the distinction at issue here is one of degree, the prevailing view is that `major renovations can take a ship out of navigation, even though its use before and after the work will be the same.'" Id. at 374 (quoting McKinley v. All Alaskan Seafoods, Inc., 980 F.2d 567, 570 (9th Cir. 1992)).
Assuming, without deciding, that the definition of "vessel" under OPA 90 should be construed in accordance with the construction of that same term under the Jones Act, the cases cited by the Defendants establish that the M/V ANTHEA Y was a vessel at the time the oil was discharged.
According to the Defendants, McKinley v. All Alaskan Seafoods, Inc., 980 F.2d 567 (9th Cir. 1992), establishes that even if the vessel's use is the same before and after the work, major renovations can still take the ship out of navigation. The "major renovation" in McKinley that took the vessel out of navigation was the conversion of the vessel from an oil drill vessel to a seagoing fish and crab processing vessel, renovations which took 17 months and cost $14 million and which the McKinley characterized as "more analogous to a new construction than repair or overhaul." McKinley, 980 F.2d at 571. The repairs to the M/V ANTHEA Y were not "major" in the sense described in the court in the McKinley case. The M/V ANTHEA Y repairs did not change her function or invoke new construction, and lasted only approximately two months at a cost of roughly $2.2 million. The vessel was not overhauled nor were there any conversions or renovations. Compare Chandris, 515 U.S. at 374 (observing that the vessel's relatively short period of repair, amounting to "only about six months, which seems to be a relatively short period of time for important repairs on oceangoing vessels," weighs against concluding that the vessel was withdrawn from navigation during that time), with Wixom v. Boland Marine Mfg. Co., 614 F.2d 956, 957 (5th Cir. 1981) (holding that a ship under repair for nearly three years at a cost exceeding $25 million was not a vessel in navigation for purposes of a Jones Act claim). In view of the nature and extent of the repairs performed on the M/V ANTHEA Y, and of the cost and duration of those repairs, it may not be said that the M/V ANTHEA Y was removed from navigation during the two months in which repairs were being performed.
The Defendants have also contended that West v. United States, 361 U.S. 118, 123 (1959), is relevant here. In West, the Supreme Court held that a vessel is withdrawn from navigation when she is unseaworthy and in the process of being repaired.See West, 361 U.S. at 120-22. However, the issue in West was whether a shipowner could be held liable under the warranty of seaworthiness to a shore-based worker involved in the overhaul and reactivation of a ship which had been deactivated for several years. The M/V ANTHEA Y had not been deactivated, much less for a span of several years, and she was not being overhauled by GMD. Accordingly, the Defendants' reliance on West is misplaced.
In addition, the Defendants have relied on Gonzalez v. United States Shipping Bd. Emergency Fleet Corp., 3 F.2d 168 (E.D.N.Y. 1924). In Gonzalez, the court held that a worker living on board a ship that was part of a laid-up fleet was not a seaman. The court found that "these `dead ships' are in fact not being used nor capable of being, nor intended to be used as a means of transportation. They apparently are simply useless hulks eventually to be sold as junk." Gonzalez, 3 F.2d at 170. Although there was hull damage to the M/V ANTHEA Y, the vessel sailed under her own power from Cementon to GMD's drydock and was not comparable to the "dead ships" discussed in Gonzalez. Indeed, the oil spill occurred while the water was being pumped from the drydock, prior to the commencement of repairs on the M/V ANTHEA Y and while her hull plating had not yet been cut out.
In view of the foregoing discussion, the M/V ANTHEA Y was a vessel at the time the oil was discharged. Consequently, there is no need to reach GMD's alternate argument that the M/V ANTHEA Y could be construed as a facility as defined in OPA 90 if it did not qualify as a vessel.
B. The Discharge Of Oil From The M/V ANTHEA Y Was "Into or Upon the Navigable Waters" Within The Meaning Of OPA 90
The Defendants argue that, since no oil was discharged into "navigable waters," 33 U.S.C. § 2702(a), OPA 90 is inapplicable to the facts here. OPA 90 provides that "each responsible party for a vessel or a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines or the exclusive economic zone is liable. . . ." 33 U.S.C. § 2702(a) (emphasis supplied).
Navigable waters are defined under OPA 90 as "the waters of the United States, including the territorial sea." 33 U.S.C. § 2701(21). Although courts have reached varying conclusions as to the exact scope of this definition, see, e.g., Rice v. Harken Exploration Co., 250 F.3d 264, 267-68,reh'g en banc denied, 263 F.3d 167 (5th Cir. 2001); Sun Pipe Line Co. v. Conewago Contractors, Inc., No. 4:CV-93-1995, 1994 WL 539326, at *3-13 (M.D. Pa. Aug. 22, 1994); see generally Kevin Batik, OPA's Reach: The Geographic Scope of "Navigable Waters" Under the Oil Pollution Act of 1990, 21 Rev. Litig. 419 (2002) (describing varying interpretations of "navigable waters"), there is little dispute that "the waters of the United States, including the territorial sea" under OPA 90 at least encompasses the narrow definition of navigable waters employed for purposes of assessing admiralty jurisdiction. See, e.g., Rice, 250 F.3d at 268 (observing that "navigable waters" under OPA 90 should be construed in accordance with case law interpreting the Clean Water Act and that the Supreme Court has endorsed an interpretation of navigable waters under the Clean Water Act that is broader in scope than the jurisdictional definition of navigable waters); United States v. Mizhir, 106 F. Supp. 2d 124, 125 (D. Mass. 2000) (determining that "navigable waters" under OPA 90 should be interpreted in "broad terms" that exceed the jurisdictional definition of navigable waters).
The "exclusive economic zone" means "the zone established by Presidential Proclamation Numbered 5030, dated March 10, 1983." 33 U.S.C. § 2701(8). The term "adjoining shorelines" is not defined in OPA 90.
For jurisdictional purposes, navigable waters are those waters that are navigable in fact and susceptible to use as highways for commerce, see, e.g., LeBlanc v. Cleveland, 198 F.3d 353, 356-59 (2d Cir. 1999) (discussing the jurisdictional definition of navigable waters), a definition that specifically encompasses such items as drydocks. Thus, the Supreme Court, in rejecting an argument that admiralty jurisdiction was lacking, has explained that:
This argument must necessarily rest upon the assumption that repairs put upon a vessel while in dry dock are made upon land We are unwilling to admit this proposition. . . . All injuries suffered by the hulls of vessels below the water line, by collision or stranding, must necessarily be repaired in a dry dock, to prevent the inflow of water, but it has never been supposed, and it is believed the proposition is now for the first time made, that such repairs were made on land Had the vessel been hauled up by ways upon the land and there repaired, a different question might have been presented, as to which we express no opinion; but, as all serious repairs upon the hulls of vessels are made in dry dock, the proposition that such repairs are made on land would practically deprive the admiralty courts of their largest and most important jurisdiction in connection with repairs. No authorities are cited to this proposition, and it is believed none such exist.The Robert W. Parsons, 191 U.S. 17, 33-34 (1903). The Supreme Court reaffirmed the proposition set forth in The Robert W. Parsons some six years later, stating:
In reason, we think it cannot be held that a ship or vessel employed in navigation and commerce is any the less a maritime subject within the admiralty jurisdiction when, for the purpose of making necessary repairs to fit her for continuance in navigation, she is placed in a dry dock and the water removed from about her, than would be such a vessel if fastened to a wharf in a dry harbor, where, by the natural recession of the water by the ebbing of the tide, she for a time might be upon dry land Clearly, in the case last supposed, the vessel would not cease to be a subject within the admiralty jurisdiction merely because, for a short period, by the operation of nature's laws, water did not flow about her. Nor is there any difference in principle between a vessel floated into a wet dock, which is so extensively utilized in England for commercial purposes in the loading and unloading of vessels at abutting quays, and the dry dock into which a vessel must be floated for the purpose of being repaired, and from which, after being repaired, she is again floated into an adjacent stream. The status of a vessel is not altered merely because, in the one case, the water is confined within the dock by means of gates closed when the tide begins to ebb, while, in the other, the water is removed and the gates are closed to prevent the inflow of the water during the work of repair.The S.S. Jefferson, 215 U.S. 130, 142 (1909); see also Sea Vessel, Inc. v. Reyes, 23 F.3d 345, 348 (11th Cir. 1994) ("The Supreme Court has said that a vessel in dry dock is in water, not on land, for purposes of admiralty jurisdiction.").
As a drydock such as that at issue here is understood to be within navigable waters for purposes of admiralty jurisdiction, and the definition of "navigable waters" under OPA 90 is broader than the definition of that same term for jurisdictional purposes, the discharge of oil from the M/V ANTHEA Y was "into or upon the navigable waters" within the meaning of OPA 90. 33 U.S.C. § 2702(a).
V. GMD And The Defendants Shall Share The Damages Of Clean-Up Equally
Had GMD and the Defendants been sued by a third party with respect to the clean-up costs at issue here, under the facts found above both GMD and the Defendants would have been liable, as they were all responsible parties for the discharge of the oil into navigable waters. In that case, the liability imposed on them under OPA 90 would have been joint and several. Since GMD and the Defendants are equally responsible for the oil discharge as set forth above, GMD on the one hand and the Defendants on the other shall share equally in all damages related to the clean-up of the oil discharged from the M/V ANTHEA Y. Those damages amount to $553,919.15, or $625,187.03 less the $71,267.88 profit margin assessed by GMD. The amount owed on the invoice of Miller's Launch, $232,788.18, will be considered part of GMD's portion of the total damages.
GMD, like Dermaga and Technomar, is a "responsible party" within the meaning of OPA 90. Regulations promulgated by the Coast Guard with respect to OPA 90 provide that:
Operator means a person who is an owner, a demise charterer, or other contractor, who conducts the operation of, or who is responsible for the operation of, a vessel. A builder, repairer, scrapper, lessor, or seller who is responsible, or who agrees by contract to become responsible, for a vessel is an operator.33 C.F.R. § 138.20 (emphasis supplied). While these regulations pertain to OPA 90's financial responsibility requirements, they offer a persuasive construction of the term "operator," one that will be employed here.
OPA 90 provides that "each responsible party for a vessel or a facility from which oil is discharged . . . is liable. . . ." 33 U.S.C. § 2702(a) (emphasis supplied). "Where there is more than one responsible party, the use of the word `each' would indicate that such liability is joint and several." 3 Benedict on Admiralty § 112(a)(2) (7th ed. rev. 2004); see also H.R. Conf. Rep. No. 101-653, at 102 (1990), reprinted in 1990 U.S.C.C.A.N. 779, 780 (describing the terms "liable" and "liability" under OPA 90 as expressing a standard of "strict, joint and several liability").
GMD has cited to only one authority in support of its claim for a profit of $71,267.88, Todd Shipyards Corp. v. The M/V ANNA K, No. 77 Civ. 86, 1979 U.S. Dist. LEXIS 8765 (E.D. La. 1979). Unlike Todd Shipyards, there has been no evidence offered here to establish what the industry custom is with respect to assessing profits or what the reasonable amount of a profit percentage might be in the industry. GMD's claim for a 15% profit on certain of the services performed by outside contractors in conjunction with the clean-up efforts is therefore disallowed.
Conclusion
Based upon the facts as found above and the conclusions of law just set forth, the cost of the clean-up is to be shared by the parties. The first cause of action for a maritime lien and the second cause of action for quantum meruit are dismissed. The Defendants' motion with respect to the fourth cause of action under OPA 90 is denied, and judgment in favor of GMD shall be entered on that claim. Damages will be shared among the parties as set forth above.
Submit judgment on notice.
It is so ordered.