UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF PENNSYLVANIA

In re Petition of FRESCATI SHIPPING )

CO., LTD. as Owner of the M/T )

ATHOS I, for Exoneration from ) Civil Action No. 05-cv-305

or Limitation of Liability, )

)

)

UNITED STATES OF AMERICA, )

)

 Plaintiff, ) Civil Action No. 08-cv-2898

)

 v. )

)

CITGO ASPHALT REFINING ) 

COMPANY, CITGO PETROLEUM )

CORPORATION, and CITGO EAST )

COAST OIL CORPORATION, )

)

 Defendants. )

PLAINTIFF UNITED STATES OF AMERICA’S PRE-HEARING BRIEF

STEPHEN G. FLYNN

Assistant Director Admiralty

SHARON K. SHUTLER

Trial Attorney

SARAH S. KEAST

Trial Attorney

Torts Branch, Civil Division

Department of Justice

Post Office Box 14271

Washington, D.C. 20044-4271

Telephone: (202) 616-4070

Facsimile: (202) 616-4002

Stephen.Flynn@usdoj.gov

Sharon.Shutler@usdoj.gov

Sarah.Keast@usdoj.gov

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TABLE OF CONTENTS

TABLE OF CONTENTS .............................................................................................................. i

TABLE OF AUTHORITIES....................................................................................................... iv

I. INTRODUCTION ...................................................................................................... 1

A. Challenges to Recovery of Cleanup Costs Fail .................................................... 1

B. Non-Statutory Defense to Liability Fail ............................................................... 3

II. OPA IS A COMPREHENSIVE OIL SPILL RESPONSE AND LIABILITY 

SCHEME THAT GOVERNS THE RESPONSIBILITIES OF THE COAST 

GUARD AND THE RESPONSIBLE PARTY .......................................................... 4

A. Summary of the Liability Scheme of the Oil Pollution Act of 1990 .................... 4

B. Response is Carried Out by the Responsible Party and Directed by the 

Coast Guard .......................................................................................................... 6

C. OPA’S Liability Scheme Governs the Responsible Party’s Recovery of 

Removal Costs from the Fund .............................................................................. 9

D. Pursuant to OPA, the United States is Subrogated to Frescati’s Rights............. 11

E. Preservation of Maritime Remedies ................................................................... 12

III. OIL SPILL RESPONSE, LIMITATION DETERMINATION AND 

DAMAGES DETERMINATION ............................................................................ 12

A. The ATHOS Oil Spill Response Complied with the Federal Oil Spill 

Statutory Scheme Including the National Contingency Plan ............................. 12

B. The Coast Guard Determined that Frescati was Entitled to Limit its 

Liability............................................................................................................... 17

C. Coast Guard’s Adjudication of the Responsible Party’s Removal Costs 

Claims................................................................................................................. 18

IV. CLEANUP COSTS WERE REASONABLE AS DETERMINED BY 

COAST GUARD’S ADJUDICATION ................................................................... 23

A. Reasonableness of Mitigation Based on Facts and Circumstances Unique 

to Case ................................................................................................................ 23

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B. Frescati’s Costs were Reasonable Based on the Magnitude of the Spill 

and the OPA Scheme .......................................................................................... 24

C. Reasonableness of Cleanup Costs in an Analogous Oil Spill Case.................... 28

V. CITGO CANNOT MEET ITS BURDEN TO DEMONSTRATE THAT 

FRESCTI’S CLEANUP COSTS, REIMBURSED BY THE NPFC, WERE 

UNREASONABLE .................................................................................................. 30

VI. CITGO CANNOT AVAIL ITSELF OF THE THIRD-PARTY 

LIMITATIONS OF LIABILITY PARTIAL DEFENSE ......................................... 35

VII. CITGO HAS NO VALID CLAIM FOR RECOUPMENT OR OTHER 

EQUITABLE DEFENSES AGAINST THE UNITED STATES ............................ 36

A. CITGO has No Valid Claim for Recoupment .................................................... 38

B. Equitable Estoppel ............................................................................................. 40

Unjust Enrichment.............................................................................................. 41

C. CITGO’s Assertion that the United States was in a Better Position to 

Prevent the ATHOS Oil Spill is Incorrect and Irrelevant................................... 42

D. United States Statutory Right to Subrogation May Not be Preempted 

by Equitable Theories ........................................................................................ 43

VIII. THE UNITED STATES HAS NO GENERAL OBLIGATION TO 

GUARANTEE SAFETY OF VESSELS IN THE NAVIGATION 

PROJECT ................................................................................................................. 44

A. No General Obligation to Guarantee Safety of Vessels that Traverse 

Designated Anchorages...................................................................................... 44

B. The United States Has No Statutory or Regulatory Duty to Search for 

Hidden Underwater Obstructions ...................................................................... 45

IX. THE UNITED STATES’ COURSE OF CONDUCT, PUBLICATIONS, 

SURVEYS AND DREDGING PRACTICES DO NOT CREATE 

INCHOATE DUTIES FOR WHICH CITGO CAN ASSERT EQUITABLE 

DEFENSES .............................................................................................................. 47

A. The Role of the Army Corps of Engineers with Respect to the Delaware 

River Navigation Project ................................................................................... 48

B. NOAA’s Role with Respect to the Delaware River ........................................... 50

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C. The Coast Guard’s Role with Respect to the Delaware River ........................... 52

D. Japan Lines is Irrelevant ..................................................................................... 54

X. THE MARITIME INDUSTRY DID NOT – AND HAD NO BASIS - TO 

RELY ON GOVERNMENT TO GUARANTEE THE SAFETY OF 

VESSELS IN THE DELAWARE RIVER NAVIGATION PROJECT .................. 55

XI. THERE IS NO EVIDENCE THAT THE ANCHOR WAS LEFT BY A 

GOVERNMENT CONTRACTOR ......................................................................... 56

XII. NOTHING PREVENTS A PRIVATE PARTY FROM SURVEYING, 

REMOVING OBSTRUCTIONS, OR DREDGING WITHIN THE 

DELAWARE RIVER NAVIGATION PROJECT .................................................. 57

XIII. CONCLUSION......................................................................................................... 58

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TABLE OF AUTHORITIES

Cases

Apex Oil Co. v. United States, 208 F. Supp. 2d 642, 

651-52 (E.D. La. 2002)......................................................................................................... 5, 9

APL Co. PTE Ltd. v. Blue Water Shipping U.S. Inc., 

592 F.3d 108, 111 (2nd Cir. 2010) ................................................................................... 23, 24

Barber v. Hawai’i, 42 F.3d 1185, 1193 (9th Cir. 1994)............................................................. 47

Bull v. United States, 295 U.S. 247, 258-62 (1935) ................................................................... 38

Citizens Fed. Bank .v United States, 66 Fed Cl. 179, 186 (2005) .............................................. 32

Crescent Ship Serv. v. M/V Mitera Vassiliki, No. 94-2391, 1995 

U.S. Dist. LEXIS 9130 (E.D. La. June 28, 1995)................................................................... 28

Dedham Water Co. v. Cumberland Farms Dairy, Inc., 

805 F.2d 1074, 1081 (1st Cir. 1986)......................................................................................... 6

Deltona Corp. v. Alexander, 682 F.2d 888, 891-92 (11th Cir. 1982)......................................... 40

Ellerman Lines Ltd. v. President Harding, 288 F.2d. 288, 290 

(2d Cir. 1961).......................................................................................................................... 24

Fortis Corporate Ins., S.A. v. M/V Cielo Del Canada, 

320 F. Supp. 2d 95, 106 (S.D.N.Y 2004) ............................................................................... 24

Gatlin Oil Co. v. United States, 169 F.3d 207, 211 (4th Cir. 1999)........................................... 11

Gercey v. United States, 540 F. 2d 536, 538-539 (1st Cir. 1976), 

cert denied, 430 U.S. 954 (1977)............................................................................................ 53

In re Frescati Shipping Co., 718 F.3d 184, 214 (E.D. Pa. 2013) ..................................... 4, 36, 45

In re Hokkaido Fisheries Co., 506 F. Supp. 631, 634 (D. Alaska 1981) ................................... 43

In re Jahre Spray II K/S24 , No. 95-3495, 1996 U.S. Dist. 

LEXIS 11594 (D.N.J. Aug. 5, 1996)........................................................................................ 6

In re Kellet Aircraft Corp., 186 F.2d 197, 198 (3d Cir. 1950) ................................. 23, 24, 25, 32

In re Oswego Barge Corp., 664 F.2d 327, 340 (2d Cir. 1981)................................................... 43

Japan Line, Ltd. v. United States, 1976 A.M.C. 355, 364 (E.D. Pa. 1975), 

aff’d, 1977 A.M.C. (3d Cir. 1976).......................................................................................... 55

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Johnson v. Guhl, 357 F.3d 403, 409-10 (3d Cir. 2004).............................................................. 40

Jones v. Horton & Horton, Inc., 100 F.2d 345, 346 (5th Cir. 1938).......................................... 28

Kamara v. Columbia Home Loans, LLC, Case No. 08-5998, 2009 

U.S. Dist. LEXIS 66003, at *8 (E.D. Pa. July 24, 2009)........................................................ 39

Koppers Co., Inc v, Aetna Cas. & Sur. Co. 98 F.3d 1440, 

1448 (3d Cir. 1996)........................................................................................................... 24, 30

Livera v. First Nat’l State Bank, 879 F.3d 1186, 

1195 (3d Cir. 1989)..................................................................................................... 38, 39, 40

Metlife Capital Corp. v. M/V EMILY S., 132 F.3d 818, 

822 (1st Cir. 1997).................................................................................................................... 6

Murphy Oil USA v. United States 2014 WL 794134 at *2 

(E.D. La. February 27, 2014).................................................................................................. 35

Nereus Shipping v. United States, 2014 WL 1096131 at *5 

(E.D. Pa. March 20, 2014)...................................................................................................... 35

Nunley v. M/V Dauntless Colocotronis, 727 F.2d 455, 461 (5th Cir. 1984), 

cert. denied, 469 U.S. 832 (1984)........................................................................................... 46

Office of Pers. Management v. Richmond, 496 U.S. 414, 419 (1990) ....................................... 40

Pension Benefit Guar. Corp. v. White Consol. Indus., 

72 F. Supp. 2d 547, 550 (W.D. Pa. 1999)............................................................................... 38

Portmann v. United States, 674 F.2d 1155, 1167 (7th Cir. 1982).............................................. 41

Prusky v. ReliaStar Life Ins. Co., 532 F.3d 252, 259 (3d Cir. 2008).................................... 24, 30

Redwing Carriers, Inc. v. United States, No. 295-76, 1978 U.S. Ct. Cl. 

LEXIS 764 (Ct. Cl. June 29, 1978) ...................................................................... 28, 29, 30, 32

Rice v. Harken Exploration Co., 250 F.3d 264, 266 (5th Cir. 2001)............................................ 6

Sunpride (Cape) (pty) Ltd., v. Mediterranean Shipping Co., Ltd., No. 01 Civ. 

3493(CSH), 2003 WL 22682268 at *37 (S.D.N.Y Nov. 12, 2003) ....................................... 24

Sweet Pea Marine, Ltd. v. APJ Marine, Inc. 411 F.3d 1242, 1249 (11th Cir. 2005) ................. 28

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Tennessee Valley Sand & Gravel Co. v. M/V Delta, 598 F.2d 930, 934 (5th Cir. 1979), 

reh’g denied and op. amended by 604 F.2d 13 (5th Cir. 1979)........................................ 25, 26

Tew v. United States, 86 F.3d 1003, 1006 (10th Cir. 1996)................................................. 46, 53

The Aller, 73 F. 875, 877 (2d Cir. 8916) .................................................................................... 45

The Isaac T Mann, 63 F. Supp. 339, 341 (S.D.N.Y. 1945)........................................................ 45

The Southern Cross, 93 F.2d 297, 299 (2d Cir. 1937)................................................................ 44

United States v. Am. Color & Chem. Corp., 858 F. Supp. 445, 451 

(M.D. Pa. 1994) ................................................................................................................ 38, 39

United States v. American Commercial Lines, L.L.C. 2014 U.S. App 

LEXIS 13592, at *5-6 (E.D. La. Mar. 21, 2013).............................................................. 11, 12

United States v. Boccanfuso, 882 F.2d 666, 670 (2d Cir. 1989) ................................................ 40

United States v. Conoco, Inc., 916 F. Supp. 581, 584 (E.D. La. 1996)...................................... 10

United States v. Great Lakes Dredge & Dock, Co., No. 97-2510-CIV-DAVIS/BROWN, 

1999 U.S. Dist. LEXIS 17612, at *20 (S.D. Fla. Sept. 27, 1999) , 

aff’d in part, vacated in part by 259 F.3d 1300 (11th Cir. 2001).............................................. 6

United States v. Inter-Bay Towing Co., No. H-03-5727, 2005 U.S. Dist 

LEXIS 41974, at *22 (S.D. Tex. Aug. 8, 2005) ..................................................................... 12

United States v. LeBeouf Bros. Towing Co., 621 F.2d 787, 789 

(5th Cir. 1980) .......................................................................................................................... 5

United States v. Riley Tar & Chem. Corp., 546 F. Supp. 1100, 

1112 (D. Minn. 1982)............................................................................................................... 6

United States v. Slaey, Case No. 06-4930, 2008 U.S. Dist. 

LEXIS 55699, at *9 (E.D. Pa. July 23, 2008) ........................................................................ 38

United States v. St. Louis & Mississippi Valley Transp. Co., 

184 U.S. 247, 255 (1902)........................................................................................................ 45

United States v. U.S. Fidelity & Guar. Co., 309 U.S. 506 (1940).............................................. 38

Unocal Corp. v. United States, 222 F.3d 528, 535 (9th Cir. 2000).............................................. 6

Water Quality Ins. Syndicate v. United States, 632 F. Supp. 2d 108, 114 (D. Mass. 2009) ........ 5

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Wyandotte Transportation v. United States, 389 U.S. 191, 207 (1967)..................................... 45

Treatises

25 Op. Att’y Gen. 37, 38 (1903)................................................................................................. 44

Dan B. Dobbs, Law of Remedies, Damages, Equity, Restitution, § 3.9 (2nd ed. 1993)............ 23

Restatement (Second) of Contracts § 347 (1981)....................................................................... 23

Vol. 1 Restatement (Second) of Contracts § 350(2)................................................................... 24

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I. INTRODUCTION

Plaintiff United States, as a statutory subrogee to the rights of Frescati Shipping

Company Limited and Tsakos Shipping & Trading S.A. (collectively “Frescati”), seeks to 

recover oil spill removal costs from CITGO.iThe United States, therefore, joins in Frescati’s 

pre-hearing brief regarding issues of CITGO’s liability to Frescati. The United States writes 

separately to discuss issues related to the proper measure of damages to which it is entitled and 

to address CITGO’s argument that the United States’ significant role in regulating navigation to 

the Delaware River creates a defense for CITGO to the government’s claim. 

A. Challenges to Recovery of Cleanup Costs Fail

On November, 26, 2004, at approximately 9 p.m., the Athos I struck an uncharted,

abandoned anchor lying on the riverbed of the Delaware River near the CITGO Asphalt 

Refinery Facility, Paulsboro, NJ. The anchor pierced the vessel’s hull, causing a spill of 

approximately 264,000 gallons of heavy crude into the Delaware River. Ex. USA-1 at Athos

016637; Ex. USA-157 at NPFC 000085; Trial Day 10, October 6, 2010, Hall at 193:6-21;1Ex.

P- 1203. The Athos I was owned by Frescati and managed by Tsakos and, pursuant to the Oil 

Pollution Act (“OPA”), both were deemed Responsible Parties without regard to fault and 

required to clean up the spill under the direction and oversight of the U.S. Coast Guard.2 33 

U.S.C. §§ 2701(32), 2702(a), 1321(c)(1) and (d); 40 C.F.R. § 300 App. E § 3.3.1. 

Frescati incurred cleanup costs of approximately $140 million.ii OPA, however, 

provides Responsible Parties, such as Frescati, with the right to seek a liability limitation 

 

i The United States refers to CITGO Asphalt Refining Company, CITGO Petroleum Corporation, and CITGO East 

Oil Corporation collectively as either “CITGO” or Defendant.

ii The initial claim for cleanup (or removal) costs was $124,226,443. There was a net adjustment upward by 

$1,454,246. From this amount, the limitation of $45,474,000 reduced the total claim. Frescati submitted a 

supplemental claim of $14,353,979 for cleanup costs.

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provided they meet statutory and regulatory requirements. 33 U.S.C. §§ 2708(a), 2712(a)(4); 

33 C.F.R. § 136.205. The Coast Guard, which determines whether Responsible Parties are 

entitled to limit their OPA liability for an oil spill response, granted Frescati its OPA limitation, 

$45,474,000, and authorized reimbursement of approximately $88 million in cleanup costs in 

excess of the limitation amount. Trial Day 19, Oct. 25, 2010, Morrison at 170:17-22,

3

175:5-

7;

4

Ex. USA - 367. Reimbursement came from the United States’ Oil Spill Liability Trust Fund 

(“Fund”) which is administered by the Coast Guard’s National Pollution Funds Center 

(“NPFC”) in Arlington, Virginia. 33 U.S.C. §§ 2712(a)(4) and (e).

Upon reimbursement of Frescati for such costs, OPA explicitly provides that the United 

States is subrogated to Frescati’s causes of action up to the amount reimbursed from the Fund. 

33 U.S.C. § 2715(a) and (c). Accordingly, the United States seeks to recover $87,789,147.31

plus interest from CITGO. Trial Day 20, Oct. 26, 2010, Hellberg at 41:15-42:6,

5

42:21-

43:25,

6

49:9-15;751:19-52:7;

8

Exs. USA - 161 at 000095-102; 157 at 000085, 000090.

CITGO challenges the United States’ right to recover these cleanup costs. With respect 

to challenges on the quantum, CITGO argues that the expenditures for cleanup costs were too 

high or were insufficiently supported by documentation and that Frescati (and thus the United 

States, to the extent it reimbursed Frescati) overpaid for clean-up activities. CITGO similarly

asserts that the United States’ reimbursement of Frescati was excessive and that the evidence 

relating to the United States’ evaluation of reasonableness of Frescati’s expenditures should be 

excluded. See Doc. 750-1, Memorandum in Support of Defendant’s Motion in Limine to 

Exclude the Reports and Findings of the National Pollution Funds Center. 

The cleanup costs were generated from actions taken by Frescati, though its contractors,

at the direction of the Coast Guard, to ensure “immediate removal of a discharge” and to 

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mitigate the effects of the oil as required by OPA and the Federal Water Pollution Control Act 

(“FWPCA”). 33 U.S.C. §§ 1321(c)(1) and (d). The Coast Guard’s National Pollution Funds 

Center, charged with adjudicating whether cleanup costs are compensable under OPA, 

painstakingly reviewed the costs and support documentation, determined that the costs were 

incurred in accord with the statutory and regulatory scheme, and were reasonable in light of the 

exigency of a major spill and standard industry charges for cleanup actions. 

On August 15, 2014, CITGO raised a new defense, asserting for the first time a right to

limit its liability as a third party under OPA for $45,474,000, the same amount accorded to

Frescati as vessel owner/operator.

iii

 By failing to raise this defense until three and a half years 

after completion of trial and 15 months after the appellate decision and remand, CITGO has 

waived this defense. Irrespective, the new defense cannot succeed. CITGO does not qualify as 

a third-party Responsible Party because it does not meet OPA’s statutory prerequisites. Lastly, 

if CITGO was allowed the limitation, it would not affect CITGO’s obligation to indemnify 

Frescati (and the United States) under the safe berth warranty because OPA specifically 

preserves such indemnification agreements. 

B. Non-Statutory Defenses to Liability Fail

With respect to liability, CITGO asserts various equitable defenses only as to the United 

States’ claim. These defenses are not only legally deficient but are based on the notion that the 

United States’ prominent regulatory role in the Delaware River would somehow make it unfair 

to allow the government to recover, even as to the contractual warranty CITGO provided the 

shipowner. These defenses suffer from a fundamental misunderstanding of the government’s 

 

iii See U.S. Memorandum in Support of its Motion to Strike CITGO’s OPA Defense or in the Alternative Motion 

for Partial Summary Judgment, Doc. 741-1; Defendant’s Memorandum in Opposition, Doc. 771; CITGO’s 

Memorandum in Support of its Motion for Partial Summary Judgment Granting Limitation of Liability under 

OPA, Doc. 749; .U.S. Memorandum in Opposition, Doc. 773; Frescati’s Memorandum in Opposition, Doc. 772. 

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role in navigable waters. The United States does not, as CITGO asserts, ensure the navigability 

of federal waterways or the safety of vessels navigating the Delaware River Navigation Project.

The Third Circuit properly recognized that the United States has no general obligation to keep 

federally-regulated waters free of hazards to navigation. “No Government entity... is 

responsible for preemptively searching all federal waters for obstructions, and the District 

Court found that the Government does not actually survey the Anchorage for hazards.” In re 

Frescati Shipping Co., 718 F.3d 184, 214 (E.D. Pa. 2013). It is beyond dispute that the United 

States had no notice of the anchor and, absent notice, had no obligation to mark, remove, or 

provide notice to the public. Hence, CITGO’s equitable defense theories are not permissible in 

light of the Third Circuit’s opinion and, as will be shown, in any event, have no legal merit. 

II. OPA IS A COMPREHENSIVE OIL SPILL RESPONSE AND LIABILITY 

SCHEME THAT GOVERNS THE RESPONSIBILITIES OF THE COAST 

GUARD AND THE RESPONSIBLE PARTY

A. Summary of the Liability Scheme of the Oil Pollution Act of 1990 

OPA is a comprehensive oil spill response and liability scheme designed by Congress to 

ensure “those who produce, handle, and transport oil” are held strictly liable. See H.R. Rep. 

No. 101-242, pt. 2, at 36 (1989). 

Congress explicitly recognized that the existing federal and state 

laws provided inadequate cleanup and damages remedies, 

required large taxpayer subsidies for costly cleanup activities, 

and presented substantial barriers to victims’ recoveries such as 

legal defenses, corporate forms, and burdens of proof unfairly 

favoring those responsible for the spills. See S. Rep. No. 94, 

101st Cong., 1st Sess. (1989); 1990 U.S.C.C.A.N. 772. Congress 

also recognized that, pre-OPA, the costs of cleanup and damage 

from spills were not high enough to encourage greater industry 

efforts to prevents spills, and develop effective techniques to 

contain spills that did in fact occur. Id. Congressional intention 

is manifestly that the new law would effect compensation to 

victims, quick and efficient cleanup with minimization of 

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damages to natural resources, and the internalization of the costs 

of oil spills within the oil industry. 

Water Quality Ins. Syndicate v. United States, 632 F. Supp. 2d 108, 114 (D. Mass. 2009)

(“WQIS”) (citing Apex Oil Co. v. United States, 208 F. Supp. 2d 642, 651-52 (E.D. La. 2002)).

A hallmark of OPA’s scheme is that the liability of those that discharge oil is strict, 

joint, and severaliv for removal costs and related damages.v 33 U.S.C. §§ 2702 and 2703. OPA 

increased the liability limit for vesselsvi from limits previously established under the FWPCA, 

33 U.S.C. § 2704; expanded the scope of damages recoverable from Responsible Parties, 33

U.S.C. § 2702(b); and disallowed the liability limitation altogether when the Responsible 

Parties’ gross negligence, willful misconduct, or violation of a federal safety, construction, or 

operating regulation proximately caused the oil spill. 33 U.S.C. § 2704. The statute restricts 

complete defenses to liability to acts of God, acts of war, or the acts or omissions of a third 

party, provided however, that the third party was not in contractual relationship with the 

Responsible Party.

vii

 33 U.S.C. § 2703. It specifically allows the Responsible Party to obtain 

indemnification of its OPA obligations through contract. 33 U.S.C. § 2710.

 

iv OPA adopted the FWPCA’s standard of liability, which has been “determined repeatedly to be strict, joint, and 

several liability.” S. Rep. No. 101-94, at 11 (1990), as reprinted in 1990 U.S.C.C.A.N. 722, 732-33; see also H.R. 

Rep. No. 101-653, at 102 (1990), as reprinted in 1990 U.S.C.C.A.N. 779, 779-80.

v Congress amended OPA to expand the definition of Responsible Party to include an entity such as CITGO that 

owns oil that is transported on a single hull vessel. Pub. L. No. 111-281, § 713 (2010).

vi OPA provides that “except as otherwise provided in this section, the total liability of a responsible party under 

section 2702 of this title . . . with respect to each incident shall not exceed – (1) for a tank vessel, the greater of –

(A) $1,200 per gross ton; or (B)(1) in the case of a vessel greater than 3,000 gross tons or less, $10,000,000 . . .” 

33 U.S.C. § 2704(a)(1). Since the incident, Congress has amended the limitation amounts.

vii OPA shares a liability scheme similar to the FWPCA, the Comprehensive Environmental Response, 

Compensation and Liability Act (“CERCLA”), and the National Marine Sanctuaries Act. 33 U.S.C. §§ 1241 et 

seq.; 42 U.S.C. §§ 9601 et seq.; 16 U.S.C. §§ 1431 et seq. Courts have concluded these statutes are remedial in 

purpose and have construed their provisions liberally to avoid frustration of the beneficial legislative purposes. 

See, e.g., United States v. LeBeouf Bros. Towing Co., 621 F.2d 787, 789 (5th Cir. 1980) (in a pre-OPA, FWPCA 

case the Fifth Circuit narrowly interpreted application of third-party defense provisions noting that the “statute’s 

comprehensive scheme for preventing and cleaning up oil spills would be undermined if barge owners like 

LeBeouf could escape strict liability merely by hiring out their operations to tugs and independent contractors.”); 

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B. Response is Carried Out by the Responsible Party and Directed by the Coast 

Guard

Congress also sought to spur quick and efficient oil spill cleanups. See Rice v. Harken 

Exploration Co., 250 F.3d 264, 266 (5th Cir. 2001) (“OPA was . . . intended to streamline 

federal law so as to provide quick and efficient cleanup of oil spills, compensate victims of 

such spills, and internalize the costs of spills within the petroleum industry.” (citing S. Rep. No. 

104-94, reprinted in 1990 U.S.C.C.A.N. 722, 723); Unocal Corp. v. United States, 222 F.3d 

528, 535 (9th Cir. 2000) (“The purpose of OPA, as well as other remedial legislation passed by 

Congress and the states to address environmental disasters such as oil spills, was to encourage 

rapid private party responses.” Citing Metlife Capital Corp. v. M/V EMILY S., 132 F.3d 818, 

822 (1st Cir. 1997) quoting In re Jahre Spray II K/S24 , No. 95-3495, 1996 U.S. Dist. LEXIS 

11594 (D.N.J. Aug. 5, 1996)). Thus, OPA imposes the primary duty of oil cleanup on the 

Responsible Party and requires an owner or operator of a tank vessel to develop a Vessel 

Response Plan and secure in advance the personnel and equipment to cleanup a worst-case 

scenario spill. 33 U.S.C. § 1321(c)(3); 33 C.F.R. § 155.1510 et seq. A Vessel Response Plan 

must identify a Qualified Individual to implement removal actions and a contractor, referred to 

as an Oil Spill Response Organization (“OSRO”), with the capacity to address a worst case 

 

Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir. 1986) (“CERCLA is 

essentially a remedial statute designed by Congress to protect public health and the environment. We are therefore 

obligated to construe its provisions liberally to avoid frustration of the beneficial legislative purpose.”); United 

States v. Riley Tar & Chem. Corp., 546 F. Supp. 1100, 1112 (D. Minn. 1982) (“Congress intended that those 

responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for 

remedying the harmful conditions they created. To give effect to these congressional concerns, CERCLA should 

be given a broad and liberal construction. The statute should not be narrowly interpreted to frustrate the 

government's ability to respond promptly and effectively, or to limit the liability of those responsible for cleanup 

costs beyond the limits expressly provided.”); United States v. Great Lakes Dredge & Dock, Co., No. 97-2510-

CIV-DAVIS/BROWN, 1999 U.S. Dist. LEXIS 17612, at *20 (S.D. Fla. Sept. 27, 1999) (“[T]he NMSA, like the 

FWPCA, is a remedial statute that should be interpreted in a way that will effectuate its remedial purposes. The 

FWPCA and NMSA have very similar provisions for remedial action and limited categories of defenses that were 

intended to provide a straight forward means to impose liability for environmental damage.”), aff’d in part, 

vacated in part by 259 F.3d 1300 (11th Cir. 2001).

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spill.

viii The Coast Guard must approve this plan. 33 C.F.R. § 155.1065; Trial Day 18, October 

21, 2010, Laferriere at 13:16-24;9Trial Day 19, October 25, 2010, Benson at 9:22-10:5,10

12:16-19.11 Thus, to ensure that critical resources can be immediately deployed at the outset of 

a spill, the Responsible Party and its prime OSRO(s) enter into a pre-spill contract for the 

services to be supplied and the rates to be charged in such event. 

While the principal responsibility for oil spill cleanup and damages lies with the 

Responsible Party, the Coast Guard directs the cleanup effort. Specifically, section 4201 of 

OPA amended the FWPCA to make clear that the Coast Guard must “ensure effective and 

immediate removal of a discharge, and mitigation or prevention of a substantial threat of a 

discharge of oil.” 33 U.S.C. § 1321(c)(1)(A) (emphasis added). 

The Coast Guard carries out this authority through the Federal On Scene Coordinator 

(“FOSC”), the federal official pre-designated by the Coast Guard, who is authorized to “direct 

or monitor all federal, state, and private actions to remove a discharge.” 33 U.S.C. § 

1321(c)(1)(B); 40 C.F.R. §§ 300.120(a), 300.135(a), 300.305(c) and (d). Further, where a 

discharge poses: 

a substantial threat to the public health or welfare of the United 

States (including but not limited to fish, shellfish, wildlife and 

other natural resources . . . of the United States), the President 

shall direct all Federal, State, and private actions to remove, 

mitigate or prevent the threat of the discharge. 

 

viii Specifically, the Vessel Response Plan must: “(ii) identify the qualified individual having full authority to 

implement removal actions and require immediate communications between that individual and the appropriate 

Federal official and the persons providing personnel and equipment pursuant to clause (iii); (iii) identify, and

ensure by contract or other means approved by the President, the availability of private personnel and equipment 

necessary to remove to the maximum extent practicable a worst case discharge . . . and to mitigate or prevent a 

substantial threat of such a discharge; (iv) describe the training, equipment, testing, periodic unannounced drills, 

and response actions of persons on the vessel . . . to be carried out under the plan to ensure the safety of the vessel . 

. . and to mitigate or prevent the discharge, or the substantial threat of a discharge. . .” 33 U.S.C.§ 4202(b), 33 

U.S.C. § 1321(j)(5)(D) (emphasis added).

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33 U.S.C. §1321(c)(2) (emphasis added). This authority includes issuing administrative orders 

to the Responsible Party to take removal actions. 33 U.S.C. § 1321(e)(1)(B). Failure by the 

Responsible Party to comply with an order from the FOSC can have significant adverse 

consequences, including denial by the Coast Guard of a Responsible Party’s request to limit its 

liability and assessment of civil penalties for up to three times the costs incurred by the Fund. 

33 U.S.C. § 1321(b)(7)(A) and (B). 

The FOSC is also required to ensure compliance with the National Contingency Plan, 

the federal government’s blueprint for responding to spills and other releases of oil or 

hazardous substances. 33 U.S.C. § 1321(d)(4). See generally, 40 C.F.R. 300 et seq. The 

National Contingency Plan provides the organizational structure and procedures for preparing 

for, and responding to, discharges of oil. 40 C.F.R. § 300.1. It reflects the Congressional 

concern for “efficient, coordinated, and effective action to minimize damage” from discharges 

of oil. 40 C.F.R. § 300.3(b). The National Contingency Plan establishes the oil spill response 

priorities in the following order: 

(a) safety of human life including the insurance of safety of response personnel; 

(b) stabilizing the situation to prevent additional oil spillage, and “reduc[ing] the need for 

follow-up response action, and to minimize adverse impact to the environment;” and

(c) ensuring that the response “must” use “all necessary containment and removal tactics in 

a coordinated manner to ensure a timely, effective response that minimizes adverse 

impact to the environment.” 

40 C.F.R. § 300.317(a)-(c). 

The National Contingency Plan also directs the FOSC to “not delay containment and 

removal decisions unnecessarily” and to “take actions to minimize adverse impact to the 

environment that begins as soon as a discharge occurs . . . .” 40 C.F.R. § 300.317(d)

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(emphasis added).ix These response priorities make sense given the potential for serious 

impacts to the environment, higher clean-up expenses due to delay, and significant costs to 

commercial shipping and private property from a spill not quickly addressed. Hence, these 

statutory and regulatory mandates make clear that cost of the cleanup is not the immediate 

concern of the FOSC. Rather, the FOSC focuses on rapid containment. Trial Day 18, October 

21, 2010, Laferriere at 8:18-9:4,12 11:11-17;13 Trial Day 33, December 1, 2010, Benson at 

138:10-55;14 Trial Day 20, October 26, 2010, Hellberg at 36:24 -37:5.15

For large or complex spills, the FOSC receives technical support from the Coast 

Guard’s National Strike Force, comprised of the Atlantic, Gulf, and Pacific Strike Teams. Each 

Team is staffed with skilled Coast Guard personnel who specialize in oil spills, chemical spills, 

and emergency response. 33 U.S.C. § 1321(d)(2)(C); 33 C.F.R. § 300.145. Trial Day 18,

October 21, 2010, Laferriere at 5:6-19.16 

C. OPA’S Liability Scheme Governs the Responsible Party’s Recovery of 

Removal Costs from the Fund

OPA also provides a framework to compensate individuals, businesses, and even 

governmental entities for cleanup costs as well as for specifically enumerated categories of 

damages. This framework also addresses payment of OPA compensable damages where the 

Responsible Party is unknown, refuses to pay, or is entitled to a liability limitation. 33 U.S.C. 

§§ 2712 and 2713. Under these latter circumstances, claimants are compensated by the Fund.

The Fund is administered by the Coast Guard’s National Pollution Funds Center (“NPFC”), and 

intended to ensure prompt and complete recovery for damages arising from an oil spill. Apex 

Oil Co. v. United States, 208 F. Supp. 2d 642, 651-52 (E.D. La. 2002). The Fund is financed 

by several sources of revenue including taxes on the petroleum industry, interest earned on 

 

ix The National Contingency Plan further enumerates the FOSC’s specific functions. 40 C.F.R. § 300.120.

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fund principal from United States Treasury investments and cost recoveries, fines, and civil 

penalties collected from Responsible Parties.x 26 U.S.C. § 9509(b). United States v. Conoco, 

Inc., 916 F. Supp. 581, 584 (E.D. La. 1996). 

OPA explicitly provides for circumstances where the Responsible Party may be a 

claimant to the Fund for removal costs. 33 U.S.C. §§ 2708(a) and 2712(a)(4); 33 C.F.R. § 

136.205. This is a two-step process. A Responsible Party must first prove it is entitled to a 

complete defense or, as in this case, to a right to limit its liability. 33 U.S.C. §§ 2708(a) and 

2712(a)(4); 33 C.F.R. § 136.205. To be eligible for limitation, the Responsible Party must 

demonstrate that the incident was not “proximately caused by (A) gross negligence or willful 

misconduct or, (B) violation of an applicable Federal safety, construction, or operating 

regulation by, the responsible party, an agent or employee of the responsible party, or a person 

acting pursuant to a contractual relationship . . . .” 33 U.S.C. § 2704(c). It must also show that 

it provided “all reasonable cooperation and assistance requested by a responsible official in 

connection with removal activities . . . .” Id. By failing to cooperate with the FOSC, the 

Responsible Party risks losing the right to limitation. Id. Trial Day 19, October 25, 2010,

Morrison at 174:23-175:4.17 OPA establishes limitation amounts based on vessel gross 

tonnage. The limitation amount for tank vessels such as the Athos I, at the time of the spill, was 

$1,200 per gross ton. 33 U.S.C. § 2704(a)(1)(A). 

If the NPFC grants limitation, then the Responsible Party can seek recovery of removal 

costs expended beyond the limitation amount. See 33 U.S.C. §§ 2708, 2712 and 2713. The 

process by which the Responsible Party, as well as other claimants, seek reimbursement from 

the Fund was established by Congress when it passed OPA. The President delegated authority 

 

x At the time of the Athos I spill, November 2004, the tax had expired and the Fund received its income from 

interest on principle as well as from recoveries from Responsible Parties and civil penalties.

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for administration of the Fund to the Coast Guard,xi which in turn, created the NPFC to execute 

those responsibilities. Congress, in OPA, also authorized the passage of regulations, 

promulgated at 33 C.F.R. Part 136, for the processing of claims. 33 U.S.C. § 2713(e). 

Under the regulations, costs are compensable provided the Responsible Party can 

demonstrate to the NPFC that: (1) the actions taken were necessary to prevent, minimize, or 

mitigate the effects of the incident; (2) removal costs were incurred as a result of these actions; 

(3) actions taken were determined by the FOSC to be consistent with the National Contingency 

Plan or were directed by the FOSC; and, (4) costs were reasonable as determined by the NPFC. 

33 C.F.R. §§ 136.105, 136.203 and 136.205. Hence, the Fund is directed to reimburse oil spill 

removal costs that are necessary, reasonable, and adhere to the relevant statutory and regulatory

criteria for Fund payments. 33 U.S.C. §§ 2712(a)(4), 2713; 33 C.F.R. § 136.1(a)(1); United 

States v. American Commercial Lines, L.L.C. 2014 U.S. App LEXIS 13592, at *5-6 (E.D. La. 

Mar. 21, 2013); Gatlin Oil Co. v. United States, 169 F.3d 207, 211 (4th Cir. 1999).

D. Pursuant to OPA, the United States is Subrogated to Frescati’s Rights

Once the Fund has paid compensation to a claimant, including the Responsible Party, it 

is subrogated to all rights the claimant has under any other law.xii 33 U.S.C. § 2715(a); 33 

C.F.R. §136.115. Upon payment of the Frescati’s cleanup costs of $87,789,147.31 from the 

Fund, the United States became subrogated to all rights, claims, and causes of action Frescati 

had under any other law for recovery of those amounts. American Commercial Lines, U.S. 

 

xi Executive Order No. 12,777, 56 Fed. Reg. 54,757 (October 18, 1991) delegates responsibility from the President 

of the United States to the Coast Guard.

xii Specially, “Any person, including the Fund, who pays compensation pursuant to this act to any claimant for 

removal costs or damages shall be subrogated to all rights, claims, and causes of action that the claimant has under 

any other law.” 33 U.S.C. § 2715(a). Further, the NPFC’s regulations provide that “[A]cceptance of any 

compensation also constitutes an agreement by the claimant to assign to the Fund any rights, claims, and causes of 

action the claimant has against any person for the costs and that damages are the subject of the compensated 

claims . . . .” 33 C.F.R. §136.115. 

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App LEXIS 13592, at *5. See also United States v. Inter-Bay Towing Co., No. H-03-5727, 

2005 U.S. Dist LEXIS 41974, at *22 (S.D. Tex. Aug. 8, 2005) (“[T]he law is clear, that under 

[33 U.S.C. § 2715(a)], USA is indeed subrogated to any cause of action that TGLO, the 

‘claimant’ had.”).

E. Preservation of Maritime Remedies

For other damages incurred by the Responsible Party, including hull damage and 

cleanup expenses not recovered from the Fund, OPA preserves the Responsible Party’s right of 

contribution against any person who is liable under OPA or any other law as well as rights and 

remedies under maritime law, except as otherwise provided by OPA. 33 U.S.C. §§ 2709, 2751. 

“Except as otherwise provided in this Act, this Act does not affect – (1) admiralty and maritime 

law; or (2) the jurisdiction of the district courts of the United States with respect to civil actions 

under admiralty and maritime jurisdiction, saving to suitors in all cases all other remedies to 

which they are otherwise entitled.” 33 U.S.C. § 2717(e). Here, Frescati availed itself of its 

right to assert admiralty contract and tort claims against CITGO, and the United States 

exercised its right of subrogation based on Frescati’s contract claims against CITGO.xiii

III. OIL SPILL RESPONSE, LIMITATION DETERMINATION AND 

DAMAGES DETERMINATION

A. The Athos I Oil Spill Response Complied with the Federal Oil Spill Statutory 

Scheme Including the National Contingency Plan

After the Athos I struck the anchor, Frescati and Tsakos were deemed Responsible 

Parties without regard to fault and required to clean up the spill under the direction and 

oversight of the Coast Guard’s FOSC. 33 U.S.C. §§ 2701(32), 2702, 1321(c)(1)-(d); 40 

C.F.R.§ 300.305(c)-(d). Trial Day 18, October 21, 2010, Laferriere at 9:13-22.18

 

xiii The United States’ claim lies in OPA’s subrogation provision and thus is contingent on successful prosecution 

by Frescati of its contractual third-party beneficiary claim. 33 U.S.C. § 2715.

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The Responsible Parties (also referred to as Frescati) had designated the National 

Response Corporation (“NRC”) as their OSRO and Mr. Courtney Benson of the O’Brien’s 

Group as the Qualified Individual in their pre-spill Vessel Response Plan.xiv Trial Day 19, 

October 25, 2010, Benson at 8:11-9:8,19 11:18-12:5;20 Trial Day 18, October 21, 2010, Ex. P1500 at ATHOS 001046 - 001047; Ex. P-1501; Ex. P-1502. The Responsible Parties activated 

their Plan and, within an hour after the incident, notified the Coast Guard’s National Response 

Center. 33 U.S.C. § 1321(j)(5); 40 C.F.R. § 300.125(a). Trial Day 19, October 25, 2010, 

Benson at 15:18-16:3;21 Ex. USA-157 at NPFC 00085. Coast Guard personnel from the 

Philadelphia Marine Safety Office were deployed on scene and, Capt. John Sarubbi,xv the Coast 

Guard’s FOSC, activated the Incident Command System (“ICS”) that evening. Trial Day 19,

October 25, 2010, Benson at 11:18-12:5;22 Ex. USA-157 at NPFC 000085.

The ICS is a command and control structure for responding to oil spills and other 

disasters that brings together hosts of resources including those of the Responsible Party and 

provides a common scheme for emergency response. The Athos I ICS was managed by the 

Unified Command, comprised of the FOSC, Frescati’s representative, and a designated official 

from each the three affected states. The Unified Command determined spill response priorities 

on a day by day basis. Trial Day 18, October 21, 2010, Laferriere at 13:25-14:23.23 While the 

spill response decisions were generally reached by consensus of the Unified Command, 

ultimate authority for the Athos I spill response rested with the FOSC. 33 U.S.C. §§ 

1321(c)(1)(B)(ii) and (d)(2)(K); 40 C.F.R. §§ 300.120(a), 300.135(a), 300.305(c) and (d).

 

xiv NRC is the largest OSRO in the United States and is called out on virtually every major spill, drawing on its 

extensive network of response subcontractors to provide manpower, equipment and expertise to respond to a major 

incident like this. The O’Brien’s Group managed the Responsible Parties’ spill response.

xv The FOSC is generally a Coast Guard Sector Commander who is also the Captain of the Port. Capt. Sarubbi 

was the Captain of the Port and Sector Commander for Delaware Bay.

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In light of the seriousness of the spill, the Coast Guard deployed its Atlantic Strike 

Team. 33 U.S.C. §§ 1321(d)(2)(c) and (j)(2). The Atlantic Strike Team was under the 

command of then-Commander Roger Laferriere,xvi who at the time of the Athos I spill, held a 

Type 1 Qualification for Incident Commander, the highest level qualification for emergency 

response. Trial Day 18, October 21, 2010, Laferriere at 4:17-22,24 15:15-16:8.25 Capt. 

Laferriere served as technical advisor to the FOSC and as the FOSC in Capt. Sarubbi’s 

absence. Trial Day 18, October 21, 2010, Laferriere at 6:1-10.26 

The spill response was driven by its sheer magnitude. The spill covered over 140 miles 

of shoreline in three states and, for effective management, the response was divided into 29 

different geographic zones. At the height of the response, the cleanup involved over 1800 

responders—1300 of which were contractors hired by the Responsible Parties and the 

remainder of which were personnel from the Coast Guard and other federal and state agencies. 

Trial Day 18, October 21, 2010, Laferriere at, 8:2-17;27 Trial Day 19, October 25, 2010 

Benson at 20:14-18.28

Response efforts were further complicated by conditions unique to the Athos I spill. 

Tides and currents transported the oil up and down a fast moving river system near a major 

metropolitan area, continually remobilizing oil that had been deposited on shore. Cold weather 

conditions, along with the physical characteristics of the oil, caused it to sink, confounding 

recovery. All of this created challenges forecasting where oil would be transported each day. 

Trial Day 18, October 21, 2010, Laferriere at 7:5-8:1,29 23:20-24:5;30 Trial Day 33, December

 

xvi At the time of his testimony, Commander Laferriere had been promoted to Captain and was serving as Sector 

Commander of the Port of Los Angeles. Prior to the Athos I spill, Mr. Laferriere, a two-time veteran of the 

Atlantic Strike Team, had been involved in a number of high profile, large oil spill responses including an 8.3 

million gallon spill released during Hurricane Katrina. Post Athos 1, he was detailed from his job as Sector 

Commander to help direct the 2010 response to the BP Gulf oil spill serving as the Coast Guard’s Incident 

Commander for two months. Trial Day 18, October 21, 2010, Laferriere at 4:17-22, 6:11-7:4.

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1, 2010, Bowman at 114:9-15.

31

 Hence, the FOSC directed Frescati to “stage” or place 

equipmentxvii such as boom at multiple onshore locations along the river, even before the arrival 

of the oil, to prevent contamination of shoreline, critical fish and wildlife habitats, and private 

property. Trial Day 18, October 21, 2010, Laferriere at 23:20-24:5.32 Additionally, the severe 

cold posed a safety issue for spill responders. To ensure their protection, and comply with 

regulations, the Coast Guard’s site safety plan required Frescati to provide workers hot meals 

on site and proper cold weather gear. 40 C.F.R. § 300.150; Trial Day 18, October 21, 2010,

Laferriere at 41:1-42:2;33 Trial Day 19, October 25, 2010, Benson at 29:6-15.34 

Spill response priorities were embodied in, and executed through, Incident Action Plans 

(“IAPs”). The IAPs included standard forms on which to identify the daily cleanup objectives 

and assignments of personnel, equipment, and supplies by location. Trial Day 18, October 21,

2010, Laferriere at 16:10-17:6,35 19:18-20:3.

36

 See Attachment 1, the IAP from December 7, 

2010 as a representative plan. Before an IAP could go into effect, it had to be approved and 

signed by the FOSC thereby certifying that the actions in the plans were in accordance with the 

requirements of OPA, FWPCA, and the National Contingency Plan, and comported with their 

priorities: 

 protection of human health and safety,

 effective and immediate removal of the oil, and 

 minimization of environmental and economic impacts. 

33 U.S.C. § 1321(c)(3); 33 C.F.R. § 300.317. Trial Day 18, October 21, 2010, Laferriere at

11:3-10,37 19:5-14,38 37:10-38:2.39 See, e.g., Ex. USA-117-147. 

 

xvii Staging boom required hauling it by tractor-trailer to different locations in anticipation of oil trajectories. Trial 

Day 18, October 21, 2010, Laferriere at 23:20-24:5.

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Capt. Laferriere testified that each IAP would be carefully developed to lay out the 

objectives and included assignments of contractor personnel and equipment in each of the 29 

zones across the three states for the next day. This information was included in standard ICS 

forms which covered organizational charts, response objectives, work assignments by location, 

communications plans, medical plans, and site safety plans. Trial Day 18, October 21, 2010,

Laferriere at 17:12-19:4.40 Attachment 2 includes, at CG IS 000437, an exemplar ICS Standard 

Form 204 Assignment List from December 7, 2004. This particular form provides the field 

assignments, by contractor, to the Waterborne Vessel and Pier Decontamination Team, 

including the type and amount of equipment it was to provide on that date. Trial Day 18,

October 21, 2010, Laferriere at 20:8-24:10;41 26:2-31:11,42 35:3-36:10.43 Signed IAPs were 

then provided to the Responsible Parties to carry out. Trial Day 18, October 21, 2010,

Laferriere at 37:3-24.44 

Capt. Laferriere also explained that members of his Strike Team were deployed in the 

field to verify that specific work assignments were executed by the Responsible Parties and that 

personnel and equipment were dispatched in accordance with the IAP for that day. The Strike 

Team members reported several times daily to Capt. Laferriere, functioning as a “quality 

control device” for both the Coast Guard and the Responsible Parties. Trial Day 18, October

21, 2010, Laferriere at 31:12 -32:12;45 34:3- 17;46 Ex. USA-127 at 06027-28. 

Failure by the Responsible Parties to implement actions in the IAPs could have had 

consequences. Had the Coast Guard assumed spill cleanup and financial responsibility, it could 

have charged Frescati not only for cleanup costs, but also for all Coast Guard costs including 

salaries and vessel and helicopter operational costs, thereby increasing the Responsible Parties’

liability dramatically. Trial Day 18, October 21, 2010, Laferriere at 37:25-39:15.47 Even more 

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significantly, as explained, under OPA, failure to cooperate with the FOSC could bar Frescati

from limiting its liability. Capt. Laferierre, however, testified that the Responsible Parties 

cooperated with the FOSC and properly implemented the IAPs. Trial Day 18, October 21,

2010, Laferriere at 39:16-18;48 Trial Day 19, October 25, 2010, Benson at 53:12-54:3.49

B. The Coast Guard Determined that Frescati was Entitled to Limit its Liability

Frescati petitioned the NPFC to limit its liability under OPA, to $45,474,000 – an 

amount calculated from the weight of the Athos I of 37,895 tons and the statutory limitation 

amount of $1,200 per gross ton (at the time of the incident). 33 U.S.C. § 2704(a)(1)(A). Trial

Day 19, October 25, 2010, Morrison at 165:9-166:2.50 By March, 2005, Frescati’s oil spill 

response expenditures had exceeded the limitation amount by approximately $90 million. 

On May 22, 2005, Frescati petitioned the NPFC to limit its liability and to recover 

removal costs in excess of the limitation amount. 33 U.S.C. §§ 2704, 2712 and 2713; 33 C.F.R.

§ 136.105(b). Ex. USA-1 at ATHOS 016636. The Responsible Parties submitted a claim and 

supporting documentation for $124,226,518.59 in removal costs, of which $45,474,000 

comprised the limitation amount and $78,752,518 represented the amount for which they 

sought reimbursement. Over time, the total claim was amended to $125,680,764. Trial Day 

20, October 26, 2010, Hellberg at 41:15-41:25;51 Ex. USA-1 at ATHOS 016636; Ex. USA-157 

at NPFC 000086. Thomas Morrison, chief of the Claims Adjudication Division of the NPFC, 

was responsible for adjudicating the limitation request.xviii Trial Day 19, October 25, 2010,

Morrison at 162:25-163:6,52 167:19-22.53 In arriving at his decision Mr. Morrison explained 

that he: 

 

xviii Mr. Morrison was well qualified to make this determination. Prior to becoming chief of the Claims 

Adjudication Division, he had a 20-year career as a Coast Guard officer culminating as the Commanding Officer 

of a cutter. He is a graduate of the Coast Guard Academy and received a Masters in Business from the College of 

William and Mary. Trial Day 19, October 25, 2010, Morrison at163:-164:12.

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(1) Reviewed thousands of pages produced by the Responsible Parties including, but 

not limited to, vessel, navigational, and operational documents and records. Trial

Day 19, October 25, 2010, Morrison at 171:1-8;54 Ex. USA-368 at ATHOS 021127-

021136; 

(2) Requested an objective analysis of the Athos I’s draft from a naval architect in the 

Coast Guard’s Marine Safety Office. Trial Day 19, October 25, 2010, Morrison at

173:9-24;55 Ex. D-1969 at MSC_DOCS 000001- 000011; 

(3) Requested additional information including nautical charts and tide tables from the 

National Oceanic and Atmospheric Administration. Trial Day 19, October 25, 2010,

Morrison at 172:16-173:7;56

(4) Contacted the Coast Guard Captain of the Port in Mobile, where the Athos I was 

dry-docked post incident, to verify her compliance with hull thickness regulations. 

Trial Day 19, October 25, 2010, Morrison at 173:25-174:16;57

(5) Reviewed other relevant safety, construction, or operation regulations. Trial Day 19,

October 25, 2010, Morrison at 174:9-16;58 and,

(6) Confirmed that the Responsible Parties had executed the directives of the FOSC. 

Trial Day 19, October 25, 2010, Morrison at 174:17-175:4.

59

 

Mr. Morrison determined on August 15, 2005 that Frescati had met its burden for

entitlement to a limitation on liability of $45,474,000 finding that it: (a) committed no gross 

negligence that proximately caused the release of oil; (b) committed no willful misconduct that 

proximately caused the release of oil; (c) violated no Federal safety, construction, or operating 

regulation that proximately caused the release of oil; and, (d) cooperated with the FOSC and 

complied with his orders. 33 U.S.C. § 2704(c). Trial Day 19, October 25, 2010, Morrison at 

167:19-168:10,60 170:17-22,61175:5-7;62 Ex. USA-367. 

C. Coast Guard’s Adjudication of the Responsible Party’s Removal Costs Claims

The NPFC next determined whether the Responsible Parties’ removal costs were 

compensable in order to determine the amount that should be reimbursed above the limitation 

amount. 26 U.S.C. § 9509; 33 U.S.C. § 2712. The task of adjudicating the initial and 

Case 2:05-cv-00305-JHS Document 785 Filed 02/17/15 Page 26 of 137
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supplemental claims, $80,206,764xix and $14,351,679.94, respectively, was assigned to Ms. 

Donna Hellberg, Chief of the Removal Claims Branch within the NPFC and an experienced 

claims adjudicator. Trial Day 20, October 26, 2010, Hellberg at 32:2-14,63 32:23-33:4;

64

41:15-41:25,65 42:1-6;66 Trial Day 19, October 25, 2010, Morrison at 178:13-19.

67 Ms. 

Hellberg testified that she reviewed over 60,000 pages of invoices, dailies, proofs of payments, 

and rate sheets submitted by Frescati for 88 different OSROs and vendors to assure herself that 

payment of each invoice was proper; that is, that the removal costs (1) arose from actions that 

were necessary to prevent, minimize, or mitigate the effects of the incident; (2) were incurred 

as a result of these actions; (3) arose from actions determined by the FOSC to be consistent 

with the National Contingency Plan or were directed by the FOSC; and, (4) were reasonable as 

determined by the NPFC. 33 C.F.R. §§ 136.203, 136.205; Trial Day 20, October 26, 2010,

Hellberg at 38:9-39:4,68 46:13-16.69 See e.g. Ex. P-1419 at ADAM 0000001, Ex. P-1419 at

ADAM 0020469. As will be explained, Ms. Hellberg determined that the Responsible Parties

were entitled to reimbursement of $87,989,157 beyond their $45,474,000 million OPA 

limitation.

First, with respect to the initial claim, Ms. Hellberg examined the cleanup costs charged 

by the primary OSROs and supply vendors and reimbursed by Frescati. For charges by the 

OSROs for manpower and equipment, she explained how she used “dailies” to corroborate 

invoices. Dailies were forms prepared in the field and signed by a member of the Unified 

Command which itemized personnel and equipment provided by an OSRO in a given cleanup 

zone and the rates charged. Ms. Hellberg explained that dailies served as a contemporaneous 

verification that the labor, equipment, and materials itemized on the form were at a given 

 

xix Initial total claim of $124,226,443 plus adjustment upward of $1,454,246 minus limitation amount of 

$45,474,000 = $80,206,764. 

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cleanup zone on a specific day. Trial Day 19, October 25, 2010, Benson at 34:3-35:11;70 Trial

Day 20, October 26, 2010, Hellberg at 39:5-12;

71 Ex. P- 1419 at ADAM 0020463. Ms. 

Hellberg then reviewed rate schedules for the prime OSROs to confirm that rates charged, as 

represented on invoices and where appropriate on dailies, were proper. Trial Day 20, October

26, 2010, Hellberg at 37:6-14;72 53:18-55:21;73 56:9-57:12;74 Ex. P-1419 at ADAM 0020318. 

When there were no dailies, or she had additional questions regarding the sufficiency of 

documentation, Ms. Hellberg reviewed the IAPs and other documents generated by the Unified 

Command and/or requested additional information from the Responsible Parties or the vendors. 

Trial Day 20, October 26, 2010, Hellberg at 38:22-39:4;75 85:8-25.76

To determine whether actions taken by Frescati were necessary to minimize or mitigate 

the effects of the spill and were directed by the FOSC or consistent with the NCP,

xx Ms. 

Hellberg compared the Responsible Parties’ documentation, described above, with Unified 

Command documentation which laid out the FOSC’s daily spill objectives by geographical 

location. 33 U.S.C. § 2712(a)(4); 33 C.F.R. § 136.203. Trial Day 20, October 26, 2010,

Hellberg at 34:17-35:14.77 

Ms. Hellberg then evaluated whether the costs of the oil removal actions were 

reasonable. Reasonableness, she explained, is not predicated on whatever is the least-cost 

cleanup but rather takes into account a number of factors. Trial Day 20, October 26, 2010,

Hellberg at 36:24-37:5.78 These factors include, but are not limited to:

Amount and type of oil. In this case, 264,000 gallons of Bachaquero crude was 

spilled. A heavy and viscous crude, the Bachaquero increased the cost of response. Ex. P-375.

 

xx As discussed elsewhere, the regulations require (a) “that the actions taken were necessary to prevent, minimize 

or mitigate the effects of the incident; (b) that the removal costs were incurred as a result of these actions; (c) that 

the actions taken were determined by the FOSC to be consistent with the National Contingency Plan or were 

directed by the FOSC. 33 C.F.R. § 136.203. 

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Geographical scope of the spill. For a large spill such as the Athos I, which impacted 

three states and a busy commercial port, cleanup required massive mobilization of personnel, 

materials, and equipment, including importing contractors from outside the region. Trial Day

20, October 26, 2010, Hellberg at 36:19-23,79 59:14-17.80

Weather and time of year. Winter weather and frigid water temperatures required 

additional expenditures for hot meals and cold weather gear to ensure the safety of spill 

responders. Trial Day 20, October 26, 2010, Hellberg at 36:14-18;81 Trial Day 18, October 

21, 2010, Laferriere at 41:1-24.82

FOSC’s response objectives for the day. These objectives were found in the daily

IAP, particularly ICS standard form 202 – Response Objectives. Trial Day 20, October 26,

2010, Hellberg at 34:17-35:14.83

Contractual rate schedules for Frescati’s prime OSROs. Ms. Hellberg explained 

that she relied on the contracts between the Responsible Party and its “prime” OSROs and the 

rates established in those contracts to help determine reasonableness because those contracts 

were negotiated pre-spill, were competitive with rates charged in other large spills (see below), 

and because the prime OSROs were responsible for the work performed by their subcontractors 

and the subcontractor’s personnel. Trial Day 20, October 26, 2010, Hellberg at 37:11-38:8,84

73:23-74:1;85 78:8-22.86

Rates charged by NRC and O’Brien’s at other spill locations. At trial, Ms. Hellberg 

demonstrated that the rates charged by NRC and O’Brien’s at several large spills including 

DBL152 spill in Texas (2005), Cosco Busan spill in California (2008), Dubai Star in California 

(2009), and Capeco in Puerto Rico (2009) were remarkably consistent with those charge for the 

Athos I. Trial Day 20, October 26, 2010, Hellberg at 60:17-61:23;87 62:11-64:19;88 66:2-9.89

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TABLE 1: Comparison of Key Labor and Equipment Rates Charged by NRC for Several 

Large Spills. Ex. USA - 366.

After a painstaking review, which with respect to the first claim, took Ms. Hellberg 6 

months, full time, she determined that Frescati had met its burden of proof, and that, except for 

a small portion that were not OPA-compensable, the costs were reasonable in light of the 

magnitude of the spill and customary industry rates. Ms. Hellberg testified that the burden of 

proof used by the NPFC is preponderance of the evidence or “more likely than not.” Trial Day

20, October 26, 2010, Hellberg at 33:5-34:12; 90 34:13-16.91

In August, 2006, the NPFC issued payment from the Fund to Frescati for 

$77,181,859.54xxi above the limitation amount. Trial Day 20, October 26, 2010, Hellberg at

43:8-11;92 Ex. USA-157 at NPFC 000085-000090. In June, 2008, Ms. Hellberg adjudicated 

 

xxi The Responsible Parties amended their initial claim $125,680,764.40 of which $80,206,764.40 was potentially 

eligible for reimbursement. The NPFC denied approximately $3 million of this claim.

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Frescati’s supplemental claim in the same manner as the initial claim and determined that 

$10,807,297.77 out of the $14,351,679.94xxii was reimbursable and issued payment from the 

Fund in that amount. Trial Day 20, October 26, 2010, Hellberg at 42:1-6;93 43:15-25.94

Reimbursement for the claim and supplemental claim totaled $87,989,147.31.xxiii This is the 

principle amount sought by the United States from CITGO. 

IV. CLEANUP COSTS WERE REASONABLE AS DETERMINED BY 

COAST GUARD’S ADJUDICATION

A. Reasonableness of Mitigation Based on Facts and Circumstances Unique to 

Case

In a breach of contract case, the injured party is entitled to recover damages that are a 

natural and probable consequence of the breach. APL Co. PTE Ltd. v. Blue Water Shipping 

U.S. Inc., 592 F.3d 108, 111 (2nd Cir. 2010); see also, Restatement (Second) of Contracts § 

347 (1981). The injured party is generally required to make reasonable efforts to mitigate 

damages.xxiv Dan B. Dobbs, Law of Remedies, Damages, Equity, Restitution, § 3.9, at 380

(2nd ed. 1993) (“The defendant is entitled to a credit against liability for any consequential 

damages the plaintiff could have avoided or minimized by reasonable effort and expense, 

whether or not the plaintiff actually avoided or minimized such damages.”); Restatement 

(Second) of Contracts § 350(2) (1981). Whether the injured party has discharged this 

obligation depends on the reasonableness of its conduct. Id. at 259; In re Kellet Aircraft Corp., 

186 F.2d 197, 198 (3d Cir. 1950). Reasonableness of its conduct “is determined from all the 

facts and circumstances of each case, and must be judged in the light of one viewing the 

 

xxii $3,544,382 was not compensable because they were not for cleanup or were unsubstantiated.

xxiii The U.S. and CITGO stipulated that interest is calculated pursuant to 33 U.S.C. § 2705. Doc. 492.

xxiv The concept of minimizing damages is common to contract, tort, and statutory rules. Dan B. Dobbs, Law of 

Remedies § 3.9, at 360 (2nd ed.). Courts often cite to tort cases on minimizing damages when analyzing contract 

claims and vice versa. 

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situation at the time the problem was presented. Id.; APL Co., 592 F.3d at 111; Prusky v. 

ReliaStar Life Ins. Co., 532 F.3d 252, 259 (3d Cir. 2008). Furthermore, when the injured party 

has adopted a reasonable course of action, “it is not fatal to recovery that one course of action, 

reasonably open but not followed would have avoided further injury whereas another, also 

reasonable and taken, produced it.” Ellerman Lines Ltd. v. President Harding, 288 F.2d. 288, 

290 (2d Cir. 1961). Courts do not permit the rule of mitigation of damages to be “invoked by a 

contract breaker as a basis for a hypercritical examination of the conduct of the injured party.” 

In re Kellet, 186 F.2d at 1981. See also, Fortis Corporate Ins., S.A. v. M/V Cielo Del Canada, 

320 F. Supp. 2d 95, 106 (S.D.N.Y 2004); Sunpride (Cape) (pty) Ltd., v. Mediterranean 

Shipping Co., Ltd., No. 01 Civ. 3493(CSH), 2003 WL 22682268 at *37 (S.D.N.Y Nov. 12, 

2003). Whether the injured party sufficiently mitigated the damages is an affirmative defense 

for which the breaching party bears the burden of proof. Prusky, 532 F3d at 258, citing 

Koppers Co., Inc v, Aetna Cas. & Sur. Co. 98 F.3d 1440, 1448 (3d Cir. 1996). 

B. Frescati’s Costs were Reasonable Based on the Magnitude of the Spill and the 

OPA Scheme

Facts and circumstances critical to any reasonableness calculus regarding cleanup costs

must include the spill’s magnitude, location, and time of year. The piercing of the Athos I

resulted in a spill of approximately 264,000 gallons of heavy crude into the Delaware River. 

Ex. USA-1 at ATHOS 016637, Ex. USA-157 at NPFC 000085; Trial Day 10, Oct. 6, 2010, 

Hall at 193:6-21.

95

 The spill covered over 140 miles of shoreline in three states, shut down the 

port of Philadelphia for multiple days, required a massive mobilization of 1800 responders, 

occurred in a tidal system which constantly remobilized oil, and required staging and 

deployment of miles of boom to protect critical fish and wildlife habitat, and commercial and 

private property. Some of the heavy, viscous crude sank, confounding recovery actions.

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Winter weather and frigid temperatures added difficulty to the response and created safety 

issues for responders. All these factors influenced the size of the response and, predictably, the 

cost. In re Kellet, 186 at 198; APL Co., 582 F.3d at 111. 

The reasonableness of costs will also be heavily influenced by any overarching statutory 

and regulatory scheme which prescribes responsibilities and liabilities on parties. Here, OPA is 

unambiguous – it imposes the primary duty of oil cleanup and corresponding financial liability 

on the Responsible Party, irrespective of fault.

xxv

 33 U.S.C. § 2702. 

The Fifth Circuit has addressed the reasonableness of damages, where another statutory 

scheme, the Rivers and Harbors Act (“RHA”), prescribed responsibilities on the owner of a 

barge that sunk in a navigable channel. Tennessee Valley Sand & Gravel Co. v. M/V Delta, 598 

F.2d 930, 934 (5th Cir. 1979), reh’g denied and op. amended by 604 F.2d 13 (5th Cir. 1979). 

Tennessee Valley’s barge sank where it had been tied off after being towed to that location by a 

towing company. Tennessee Valley salvaged the barge and sued the tower for the damages 

resulting from the sinking including the costs expended to raise the barge. The towing 

company argued that the barge sank as a result of the barge’s unseaworthiness. Tennessee 

Valley countered that the sinking resulted entirely from the towing company’s lack of care. 

The district court held in favor of Tennessee Valley but denied recovery for the expense of 

raising the barge, finding the plaintiff had failed to mitigate damages. Id. at 932. The Fifth 

Circuit reversed on the issue of damages.

In considering the reasonableness of Tennessee Valley’s decision to raise 

the barge, we must analyze its duties under section 15 of the Rivers and 

Harbors Act, 33 U.S.C. § 409. The statute imposes on the owner of the 

 

xxv § 2702. Elements of Liability. (a) In general. Notwithstanding any other provision or rule of law, and subject 

to the provisions of this Act, each responsible party for a vessel or 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 . . . is 

liable for the removal costs and damages specified in subsection (b) that result from such incident. 33 U.S.C. § 

2702.

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vessel sunk in a navigable channel the obligation ‘to commence the 

immediate removal of the same and prosecute such removal diligently . . . 

.’ If he fails to act to remove the obstruction, the government may 

undertake the task in the interest of navigational safety, and the owner will 

be held liable not only for this cost, . . .but for any damage caused by the 

wreck in the meantime. . . .The owner of a vessel sunk without any 

negligence on his part is still subject to the statutory obligation to remove 

the wreck. . . ..

Id. 

The Fifth Circuit concluded that while Tennessee Valley had always contended it was 

free of fault, “its vindication, if it came, would be several years away at the end of a court 

battle. If it were ultimately held responsible for the accident, it would be liable for expenses 

incurred and mishaps occurring in the meantime. Even if it then claimed that the barge was not 

an obstruction to navigation, the Corps of Engineers might disagree and subject Tennessee 

Valley to more lengthy litigation.” Id. Thus, given its obligations under the RHA, the court 

allowed Tennessee Valley recovery and further noted that its decision to “raise the barge 

immediately by private undertaking may have saved [the towing company] considerable 

expense in that a government salvage operation might have proved more expensive due to 

changing conditions caused by delay, . . . or due to the nature of governmental undertakings.” 

Id. at 935. (internal citations omitted). 

Like the RHA, OPA requires the vessel owner to take action or face consequences. 

Thus, from the inception of the Athos I spill, Frescati was required to follow the orders, 

directives, IAPs, and other plans approved by the FOSC. And as discussed elsewhere, the 

FOSC was required to prosecute the oil spill response so as to ensure safety of human life, 

prevention of further oil spillage, reduction in the need for additional response actions, and 

minimization of the adverse impact to the environment through the coordination of the 

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containment and removal tactics. These priorities, which conspicuously do not include cost, 

make clear the importance of deploying personnel and equipment as quickly as possible. 

Importantly, had Frescati failed to rapidly respond with sufficient personnel or 

equipment, the Coast Guard could have assumed control of the spill at potentially far higher 

cost. Similarly, had Frescati failed to “properly carry out removal” of the oil - that is failed to 

implement the spill response requirements as dictated by the FOSC - it could have been subject 

to civil penalties for as much as treble damages. 33 U.S.C. § 1321(b)(7)(A) & (B). As pointed 

out by Captain Laferriere, the statutory scheme is designed to be a disincentive to the 

Responsible Party to shirk its responsibilities and force the federal government to undertake the 

cleanup. Trial Day 18, Oct. 21, 2010, Laferriere at 38:20-39:15.

96

Rapid mobilization is also cost effective. Delay in responding forcefully to a spill only 

enlarges the area of impact, increasing impacts to shore-side personal and commercial property, 

tankers, freight ships, tugs, and private boats as well as natural resources and dramatically 

adding to the cost of cleanup. Trial Day 19, Oct. 25, 2010, Benson 19:21-20:13.

97

 This

underscores the critical importance of a strong Vessel Response Plan which engages capable 

and experienced oil spill response contractors such as NRC to “hit the spill hard” early, thereby 

reducing the zone of impact and mitigating damages.

Finally, any reasonableness determination must take into account OPA’s statutory and 

regulatory scheme for adjudication of claims for cleanup costs and other damages and which 

entrusts this responsibility to the Coast Guard. Pursuant to this scheme, the NPFC has 

adjudicated over $500 million in claims for removal costs. At the time of the Athos I claims 

adjudication, Ms. Hellberg had adjudicated the largest oil spill removal cost claims submitted 

to the NPFC, including the Julie N, Kiroshima, Sergo Zakariadze, Buffalo 292, and Buffalo 

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296 for hundreds of millions of dollars. Because of Ms. Hellberg’s deep experience in 

adjudicating oil spill cleanup cost recovery claims for large spills nationwide, she was aware of 

the customary charges by prime OSRO’s for resources and personnel as well as typical 

methods of billing by primes for equipment or personnel provided by their subcontractors. See, 

e.g., Sweet Pea Marine, Ltd. v. APJ Marine, Inc. 411 F.3d 1242, 1249 (11th Cir. 2005) (in the

context of a contract case, “ . . . [r]easonableness of charges, in the maritime context, is 

measured by whether they are “customary”); Jones v. Horton & Horton, Inc., 100 F.2d 345, 

346 (5th Cir. 1938) (plaintiff’s burden may be satisfied by testimony that charges were 

reasonably in accord with industry standards); Crescent Ship Serv. v. M/V Mitera Vassiliki, No. 

94-2391, 1995 U.S. Dist. LEXIS 9130 (E.D. La. June 28, 1995) (plaintiff must present some 

modicum of evidence regarding what competitors would have charged for similar work or 

material).

C. Reasonableness of Cleanup Costs in an Analogous Oil Spill Case 

Although no reported OPA cases have done so, a pre-OPA case, decided under the 

FWPCA, has addressed how to measure the reasonableness of oil spill removal costs incurred 

by a Responsible Party. Redwing Carriers, Inc. v. United States, No. 295-76, 1978 U.S. Ct. Cl. 

LEXIS 764 (Ct. Cl. June 29, 1978). In Redwing, the Responsible Party hired a reputable 

contractor who had been recommended by the EPA. The contractor cleaned up the spill to the 

satisfaction of the On-Scene-Coordinator and, because the spill was the sole fault of a third 

party, the Responsible Party sought recovery of costs paid to the contractor from the EPA. The 

EPA refused, arguing that the contractor’s costs were “padded” to the extent that “more 

sophisticated equipment and techniques were used than were required for the job” and therefore 

were not “reasonable” as required by the FWPCA. Id. at *15. The court reviewed the rate 

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sheets of several other oil spill contractors for categories such as labor, per diem, vessels, 

containment boom, and vehicles and found they were not sufficiently lower than those of the 

Responsible Party’s contractor to establish either that the “rates of others are maximums or that 

plaintiff’s rates were unreasonable.” Id. at *16-17. 

The Redwing court pragmatically recognized that numerous factors play into the rates 

set for oil cleanup work, including the amount of experience and equipment that a contractor 

could bring to bear:

It is not possible to compute with mathematical accuracy, what a 

reasonable rate is for any of the 20 to 30 items listed on the rate 

sheets of any of the oil spill cleanup contractors. Regional wage 

scales, nature, condition, and value of the equipment used and 

reputation or skill of the contractors are so lacking in uniformity 

that it is left to each contractor to set rates which are adequate to 

compensate him for his work, investment of capital, and business 

risks. While Clean River’s rates, in general, are on the high side, 

they are not unreasonable as compared with rates of others in the 

same business, most of whom were less experienced and owned 

less equipment than Clean River.

Id. (emphasis added). 

Likewise the court rejected after-the-fact arguments regarding the level of effort and 

amount of equipment, finding that the defendant failed to establish that equipment listed on the 

contractor’s bill was not brought to the site or that contractor personnel were not present at the 

site during the hours for which their time was charged. Id. at *19. The Court found 

unpersuasive the defendant’s use of expert witnesses who had made estimates of “reasonable” 

costs “about a year and a half after the fact based on hindsight as to the methods and equipment 

to be used and the type of labor to be employed.” Id. at *28. Rejecting this later second 

guessing, the court explained: to “find that [the claimed sum] was the reasonable cost 

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legitimately ‘incurred’ by Redwing, the court need only look to the invoice and the cancelled 

check in payment thereof.” Id.

The court explained: 

In the absence of a showing of fraud or collusion, and in the 

absence of a showing that the rates, per se, are unreasonable, it is 

virtually impossible, after the fact, to determine . . . whether the 

work actually done could have been done cheaper, or in a shorter 

period of time, or with less expensive equipment. When there is 

an oil spill, time is usually of the essence and shopping for the 

lowest estimate is impractical. If a reputable, experienced 

contractor is available, there should be no burden on the party 

responsible for removal of the discharge to go beyond the first 

available, qualified contractor in obtaining the necessary services 

to remove the discharged oil.

Id. at *26-27.

V. CITGO CANNOT MEET ITS BURDEN TO DEMONSTRATE THAT

FRESCTI’S CLEANUP COSTS, REIMBURSED BY THE NPFC, WERE

UNREASONABLE

It is CITGO’s burden to demonstrate that cleanup costs incurred by Frescati, and 

reimbursed by the NPFC, were unreasonable, or that in the totality of the circumstances, 

Frescati failed to effectively mitigate damages. Prusky, 532 F.3d at 258; Koppers 98 F.3d at 

1448. CITGO’s ten or so arguments that the cleanup costs were unreasonable can be lumped

into several categories. First, CITGO urges that Frescati, and thus the United States, should 

have only reimbursed cleanup costs which CITGO’s expert deemed least cost in light of 5 

yearsxxvi of hindsight. Second, CITGO argues that Frescati and the NPFC lacked sufficient 

documentation to support reimbursement of cleanup costs. Third, CITGO argues that the 

NPFC failed to follow either OPA’s regulations or “mandatory guidelines” in adjudicating 

Frescati’s claims. See Doc. 716 at 23-33. CITGO proffers these arguments through its expert, 

William McLellan, who has never served as an incident commander or qualified individual and

 

xxvi Mr. McLellan issued his first expert report nearly 5 years after the spill.

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never served in the finance section of a major spill. Trial Day 21, Nov. 3, 2010, McLellan 

at136:20-137:9,98 195:6-21.99 As will be briefly discussed, none of these arguments are 

persuasive, and CITGO fails to meet its burden. 

Category 1: CITGO’s Assertions that Cleanup Costs Were Too High.

Mr. McLellan puts forth several types of charges he believes to be too high. He 

criticizes Frescati, for example, for failing to renegotiate for lower rates with its prime OSROs

earlier than it did. He arbitrarily set day 6 rather than day 22 of the spill as the date Frescati 

should have renegotiated new rates and concludes that Frescati should not have paid costs “in 

excess” of those hypothetical new rates. Trial Day 21, Nov. 3, 2010, McLellan at 172:3-

173:7.

100 As a corollary, he argues that the United States should not have reimbursed Frescati 

for the presumed excess and thus is not entitled to reimbursement. Mr. McLellan’s position is 

wholly speculative and fails to recognize that contract renegotiations on the sixth day of a 

massive spill could have disrupted work, worsened spill conditions, and actually increased the 

cost of cleanup. Delay in prosecuting the response could have also precipitated a Coast Guard 

takeover at higher costs and civil penalties. Notably, Mr. McLellan could not point to one 

contractor who confirmed that he would have agreed to accept unspecified reduced contract 

rates at any date earlier. Trial Day 22, Nov. 4, 2010, McLellan at 97:4-98:7.101

In another example, Mr. McLellan believes that a prime OSRO should not charge for 

resources supplied by its subcontractors (referred to as third-party labor or equipment) at the 

prime’s rates. Again, he urges that Frescati should not have paid for, nor should the U.S. have 

reimbursed, these costs. Trial Day 21, Nov. 3, 2010, McLellan at 152:18-153:13,102 166:6-

167:6.

103 However, as explained by Ms. Hellberg, she reimbursed Frescati where (1) the 

contract between Frescati and a prime allowed the prime to charge for the resources of its 

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subcontractors at the rate of the prime; and (2) the rates charged were commensurate with 

prevailing industry rates. 

xxvii

McLellan’s arguments that the costs paid for labor, per diem, vessels, and containment 

were too high are virtually identical to those the Redwing court rejected. Redwing Carriers, 

No. 295-76, 1978 U.S. Ct Cl. LEXIS 764 at *16-17. Where, as here, the rates were not “per se 

unreasonable, whether the work could have been done cheaper or in a shorter period of time, or 

with less expensive equipment,” is irrelevant when time is of the essence. Id. at *26-27. The 

Third Circuit took a dim view of hypercritical second guessing, finding the argument that a 

plaintiff failed to mitigate damages 

. . . may not be invoked by a contract breaker as a basis for hypercritical 

examination of the conduct of the injured party, or merely for the purpose 

of showing that the injured person might have taken steps which seemed 

wiser or would have been more advantageous to the defaulter. One is not 

obligated to exalt the interests of the defaulter to his own probable 

detriment. 

In re Kellet, 186 F.2d at 198-199. Mr. McLellan’s opinions fail to reflect the exigency of an oil 

spill crisis, are arbitrary, and could have resulted in considerably greater costs. The injured 

plaintiff is “not required to undertake measures that would entail a risk of further economic 

damage.” Citizens Fed. Bank .v United States, 66 Fed Cl. 179, 186 (2005).

More importantly, nowhere does the OPA statutory or regulatory scheme mandate use 

of the least cost oil spill removal services in order to be reasonable or compensable. To 

interpret the scheme in this fashion would eviscerate a paramount purpose of the statute – to 

implement an emergency response scheme immediately after a discharge of oil to minimize the 

impacts on the environment and the damages incurred by businesses and individuals. This 

 

xxvii As discussed earlier, Ms. Hellberg also evaluated whether (1) the costs were incurred for cleanup tasks 

directed by the FOSC or consistent with the National Contingency Plan; (2) there was sufficient documentation to 

assure her that services were rendered and paid for Frescati; and (3) the costs were otherwise reasonable. 

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simply cannot happen without a vigorous and effective response scheme, which inevitably 

entails hiring skilled contractors and deploying sufficient equipment. In light of all the facts 

and circumstances, Mr. McLellan’s opinions should be given little weight.

Category 2: CITGO’s Assertions that Documentation was Insufficient.

Mr. McLellan contends, for example, that Frescati should have withheld payment of,

and the NPFC should have denied costs for, invoices without signed dailies. Trial Day 21, 

Nov. 3, 2010, McLellan at 176:25-179:14.104 As explained by Ms. Hellberg, a daily is not the 

only method to verify that resources were deployed and payment was proper. Assignment lists 

found in the IAPs or other Unified Command documents can confirm this information. 

xxviii

 

Furthermore, Ms. Hellberg pointed out that vendors who supply certain types of equipment and 

materials, such as Amquip and Aramsco, never produce dailies and, like Home Depot or 

Lowes, provide receipts only. Trial Day 20, October 26, 2010, Hellberg at 39:23-40:6.105

Irrespective, neither OPA nor the regulations require signed dailies as a requisite for 

reimbursement of oil spill cleanup costs and, in any event, McLellan’s arguments miss the 

point. The purpose of the scheme is not to deny payment when, more likely than not, services

were provided as part of a massive effort to stem the impact of the oil spill. Trial Day 20,

October 26, 2010, Hellberg at 32:15-20;106 90:3-20.107

Mr. McLellan’s opinion is undermined by his testimony on behalf of plaintiffs in a prior

oil spill case, Targa Midstream Services v. K-Sea Transportation Partners (“K-Sea”), who,

like Frescati, had hired the O’Brien’s Group to manage the spill response for the Responsible 

Party. In K-Sea, Mr. McLellan testified that insufficient documentation was not grounds to 

deny payment for a job done. 

 

xxviii As discussed earlier, ICS form 204 listed each contractor who provided personnel and equipment in a cleanup 

zone on a given day as well as the numbers of individuals and amount of equipment.

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[L]et me give you an example. Contractor, guy comes to me, says, I got this 

invoice. Where is your back-up? Don’t have any back-up . . . . I know I’ve got 

certain equipment out there. I know the job is done. I’m going to go to my 

client and say his back-up is minimal. We know he was out there. We know the 

job was done, so, what do you want to do and I said, you know, I think if we 

know he spent so many days out there and he says he has this equipment, we can 

- - we’ve got some manifests or we can try to piece together, as best we can, I’m 

going to make a recommendation based on that. If I don’t have everything, I’m 

not going to say, oh, you don’t have to pay him because he doesn’t have 

everything. 

Ex. P-1581 at 99:1-19. Mr. McLellan new position regarding signed dailies is inconsistent and 

should be disregarded. 

Category 3: CITGO’s Contention that the NPFC Failed to Follow OPA, the 

Regulations or “Guidance Documents” in Adjudicating Frescati’s Claims. 

As testified by Ms. Hellberg and Mr. Morrison, the criteria the NPFC relies on to 

adjudicate claims are those established in OPA and its implementing regulations. CITGO, 

however, urges that the NPFC adjudications must adhere to a document entitled “Claimant’s 

Guide” located on the NPFC’s website and asserts that the United States should not recover 

costs which CITGO deems were paid contrary to this and other guidance documents.

xxix

 Trial 

Day 21, Nov. 3, 2010, McLellan at 189:2-191:12.108 Both Ms. Hellberg and Mr. Morrison 

explained that the guidance documents on the website were intended to assist a claimant make 

a well supported claim. They are an aid to the adjudication process but are not binding on the 

claimants or the NPFC. Trial Day 19, October 25, 2010, Morrison at 179:15-180:7;109 Trial

Day 20, October 26, 2010, Hellberg at 90:25-91:19,110 94:17-95:3.111 Pointedly, the 

introduction to the Claimant’s Guide states:

This guide is intended to help claimants submit a claim against the OSLTF. IT 

IS NOT A LEGAL REFERENCE. . . . Claimants should consult the claims 

regulations in 33 CFR Part 136 to address legal and regulatory issues. If there is 

a conflict between this guide and OPA or the regulations at 33 CFR Part 136 the 

 

xxix The NPFC’s website includes a guidance document for Responsible Parties and for Oil Spill Response 

Organizations. These as well as the Claimant’s Guide are guidance only.

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statute and regulations prevail.” [The NPFC ] “created this guide to assist you in 

determining whether you have damages that may be covered, and if so, how to 

properly submit a claim. 

Ex. D-2136 at p.1 (emphasis in the original). 

Thus, only OPA and its regulations establish mandatory adjudication requirements. 

Trial Day 20, October 26, 2010, Hellberg at 32:15-20.112 See e.g., Nereus Shipping v. United 

States, 2014 WL 1096131 at *5 (E.D. Pa. March 20, 2014) (regulations state the evidence to 

support a claim); Murphy Oil USA v. United States 2014 WL 794134 at *2 (E.D. La. February 

27, 2014) (NPFC has promulgated regulations that prescribe the type of evidence required to 

make a claim). Mr. McLellan’s reliance on the Claimant’s Guide is myopic and exalts form 

over substance. 

VI. CITGO CANNOT AVAIL ITSELF OF THE THIRD-PARTY 

LIMITATION OF LIABILITY PARTIAL DEFENSE

 

CITGO belatedly argues that it is entitled under OPA to limit its liability as a third-party 

Responsible Party. Generally, only a Responsible Party is entitled to limit its liability under 

OPA. The only circumstance where OPA allows a third party to limit its liability is when the 

third party is treated as the Responsible Party under 33 U.S.C. § 2702(d). And the only time a 

third party can be treated as the Responsible Party under § 2702(d) is when the statutory 

Responsible Party can establish that the spill was caused solely by “an act or omission of a 

third party, other than . . . a third party whose act or omission occurs in connection with any 

contractual relationship with the responsible party . . . .” under the OPA defense at 33 U.S.C. § 

2703(a)(3). That cannot be the case here because CITGO’s alleged acts and omissions are in 

connection with its contractual relationship with Frescati. Its duties with respect to the 

approach to its berth are inextricably related to this contractual relationship. Further, the Third 

Circuit held that Frescati was a third-party beneficiary to the safe berth warranty and hence in a 

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contractual relationship with CITGO. CITGO, therefore, has no right to an OPA-based 

limitation on liability.

Moreover, even should CITGO be deemed a responsible party under § 2702(d), its 

limitation amount would be that of a facility owner/operator ($350,000,000), not the owner of 

the ATHOS I, because the acts or omissions at issue occurred in connection with CITGO’s 

operation of its own Paulsboro facility. Lastly, if CITGO was allowed the limitation, it would 

not affect CITGO’s obligation to indemnify Frescati (and the United States) under the safe 

berth warranty because OPA specifically preserves such indemnification agreements. As these 

arguments have been fully briefed in cross motions for partial summary judgment, the United 

States directs the Court to parties’ pleadings at Docs. 741-1,749, 771, 772, and 773.

VII. CITGO HAS NO VALID CLAIM FOR RECOUPMENT OR OTHER 

EQUITABLE DEFENSES AGAINST THE UNITED STATES

The original trial of this matter included a significant amount of evidence as to the role 

of the federal agencies in regulating the Delaware River and providing information about it to 

the public. The evidence was offered to address two issues. One was the geographical extent 

of CITGO’s duty to use reasonable care to make its berth, and the approaches to it, safe. 

CITGO has long pointed to the fact that the approach passed through a federally designated 

anchorage, with attendant monitoring of the anchorage depth by the Army Corps of Engineers, 

as evidence that its duty only extended to the waters immediately around its dock. 

This argument was rejected by the Third Circuit. The Court, after examining the 

government’s role, held that the area for which CITGO must exercise care includes “the berths 

themselves and the approaches to them.” In re Frescati Shipping Co., 718 F.3d at 207. While

this holding should obviate the need to look at the conduct of federal agencies with regard to 

the Delaware River, CITGO also maintains that it still possesses certain equitable defenses to 

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the United States’ claim based on these same activities. These defenses include the following

from Defendants’ Brief on Legal Issues Relating to Liability Following Remand:

 The doctrine of equitable recoupment bars the United States from recovery. Doc. 713 at 

136.

 “The Government assumed responsibility and control for maintaining the Anchorage.”

xxx

 Id. at 141. 

 “Equitable estoppel bars the Government’s claims against CARCO for hazards in the 

Government’s anchorage.” Id. at 143. 

 “The Government would be unjustly enriched by recovery of cleanup expenses caused 

by a hazard in the Government’s anchorage.” Id. at 148.

 “The responsibility for a loss equitably falls on the party who was best situated to have 

avoided the loss.” Id. at 154. 

 

It is noteworthy that the only equitable defense CITGO asserted in its answer to the 

United States’ complaint was “the equitable doctrine of recoupment.” Doc. 11 (08-cv-2928 

docket). It never pled any of the other equitable defenses nor sought leave to amend its 

complaint to include those defenses. At various times, CITGO included its equitable defenses 

under the rubric of recoupment and at other times argued them separately. As the United States 

has explained in prior briefing, recoupment is a means to bring separate claims only, not to 

raise unpled defenses. Nevertheless, no matter how framed, at the heart of the various

equitable defenses is CITGO’s allegation that the United States is an insurer of the safety of the 

Delaware River Navigation Project, including the designated anchorages, and required to keep 

them free from obstructions to navigation. According to CITGO, because the United States has 

such an obligation it would be inequitable to allow the United States to recover for any breach 

 

xxx CITGO asserts in its post-trial briefings and its Issues Brief on Liability, July 15, 2014, that the United States’ 

statutes and regulations, representations to the public, and “the maritime industry’s purported reliance on the 

Government’s jurisdiction responsibilities, dominion, control, course of conduct, practices, publications, 

representations, and assumed responsibilities concerning the status, condition, and safety of navigation” in the

Delaware River Navigation Project including the anchorages” makes inequitable a finding of liability by CITGO 

for damages to the United States.. Docs. 713 at 141-154 and 697 at 10-11. 

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of the safe berth warranty owed to Frescati. As will be shown, these defenses are neither 

legally valid nor do they reflect an accurate description of the United States’ regulatory role. 

A. CITGO has No Valid Claim for Recoupment

As noted, the only equitable defense actually pleaded was recoupment. Recoupment 

allows a defendant to defensively assert a claim that arises out of the same transaction as the 

plaintiff’s claim as an offset to the plaintiff’s recovery. United States v. U.S. Fidelity & Guar. 

Co., 309 U.S. 506 (1940). See also Livera v. First Nat’l State Bank, 879 F.3d 1186, 1195 (3d 

Cir. 1989) (“A recoupment claim against the United States government arises out of the same 

transaction or occurrence as the main suit. . . .”); Pension Benefit Guar. Corp. v. White Consol. 

Indus., 72 F. Supp. 2d 547, 550 (W.D. Pa. 1999) (“Recoupment is a common law, equitable 

doctrine that permits a defendant to assert a defensive claim aimed at reducing the amount of 

damages recoverable by a plaintiff.”). 

Recoupment is equitable in nature and thus allows a defendant to bring claims that 

would be barred if they were brought in a separate action. For example, a defendant may bring 

a claim by way of recoupment even if the statute of limitation has expired on that claim. See, 

e.g., Bull v. United States, 295 U.S. 247, 258-62 (1935). Similarly, some claims against the 

United States that would otherwise be barred by sovereign immunity or administrative 

exhaustion requirements can be asserted by way of recoupment even though those claims could 

not be asserted affirmatively. See, e.g., United States v. Slaey, Case No. 06-4930, 2008 U.S. 

Dist. LEXIS 55699, at *9 (E.D. Pa. July 23, 2008) (“Recoupment claims are equitable in 

nature, and to some extent, circumvent Government immunity.”); United States v. Am. Color & 

Chem. Corp., 858 F. Supp. 445, 451 (M.D. Pa. 1994).

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To recover on a claim of recoupment, a defendant must show that: 1) the claim arises 

from the same transaction or occurrence as the plaintiff’s claim; 2) the claim seeks relief of the 

same kind and nature as that sought by the plaintiff; and 3) the claim is defensive in nature and 

does not seek affirmative relief. Livera, 879 F.3d at 1195; Am. Color & Chem. Corp., 858 F. 

Supp. at 451. CITGO has no claim for its own loss here. It nonetheless maintains it can assert 

recoupment as a defense.

113

 Recoupment may certainly be pled as a defense.xxxi But this in no 

way alters the fundamental fact that recoupment is based on a quantifiable claim distinct from a 

mere contention that less is owed than the plaintiff seeks. Kamara v. Columbia Home Loans, 

LLC, Case No. 08-5998, 2009 U.S. Dist. LEXIS 66003, at *8 (E.D. Pa. July 24, 2009) (stating 

“recoupment is a defensive claim which can only be asserted in response to an independent 

action instituted by another party”).

Whether CITGO’s arguments are based on general maritime law, equitable estoppel, or 

unjust enrichment, none are quantifiable “claims” that can be raised against the United States to 

offset the United States’ recovery. Rather, they are mere arguments that the United States 

should not be permitted to recover fully in the first instance. None of the arguments involve 

setting one monetary claim amount against another, and thus, all the legal theories that CITGO

 

xxxi The better practice under the modern Federal Rules of Civil Procedure is to plead recoupment as a Rule 13(a) 

counterclaim. See 3 James Wm. Moore et al., Moore’s Federal Practice – Civil § 13.11, at 13-24 (3d ed. 2009); 

Ace Hardware Corp. v. Marn, Inc., Case No. 06-5335, 2008 U.S. Dist. LEXIS 84709, at *30 (N.D. Ill. Sept. 16, 

2008) (claim for recoupment is not technically a defense). CITGO argues recoupment need not be predicated on a 

claim. Yet, the very cases cited by CITGO, such as Bull v. United States, involve monetary claims. In Bull, a 

taxpayer argued that it had overpaid its taxes and filed a claim for a refund from the Commissioner of Revenue, 

which was denied. The Court of Claims held for the Commissioner. Subsequently, the United States sued the 

taxpayer for additional taxes arising from the same transaction as the previous litigation. The taxpayer sought

recoupment of the overpayment of taxes which was otherwise barred by the statute of limitations. The Supreme 

Court held that where the government’s new proceeding arose from the same transaction, the statute of limitations 

could not bar defendant’s defensive monetary claim for recoupment. Bull, 295 U.S. 247, 262 (1935). Likewise, 

CITGO relies on United States v. Shaw, 309 U.S. 495 (1940) and U.S. Fidelity, cases which involve specific 

monetary claims to be set off against a claim otherwise barred. In Shaw, the Supreme Court held that an 

administrator was entitled to assert a cross claim to “set-off” a monetary amount only up to the amount sought by 

the United States. Shaw, 309 U.S. at 502; U.S. Fidelity, 309 U.S. at 512 (“Defendant may, without statutory 

authority, recoup on a counter claim an amount equal the principal claim.”) (emphasis added).

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asserts by way of recoupment are merely defenses to liability. And a claim is required for 

there to be a recoupment. See, e.g., Livera, 879 F.3d at 1195-96 (“a defendant may assert by 

way of recoupment any claim arising out of the same transaction or occurrence . . . .”) 

(emphasis in original). As CITGO has no claims, it has no basis for recoupment. Further, as 

will be discussed below, apart from recoupment, none of the other unpled equitable defenses 

have merit.

B. Equitable Estoppel

At the outset, “[e]quitable estoppel will not lie against the Government as it lies against 

private litigants.” Office of Pers. Management v. Richmond, 496 U.S. 414, 419 (1990). The 

Supreme Court and the Third Circuit have left open the possibility that the government may be 

estopped in cases of “affirmative misconduct,” but have never found such an estoppel. Id. at 

421; Johnson v. Guhl, 357 F.3d 403, 409-10 (3d Cir. 2004).

To succeed, CITGO must not only show the traditional elements of equitable 

estoppel—that the government made a misrepresentation upon which it intended for CITGO to 

rely and upon which CITGO reasonably relied to its detriment—but also that the government 

engaged in affirmative misconduct. Johnson, 357 F.3d at 409-10; United States v. Boccanfuso, 

882 F.2d 666, 670 (2d Cir. 1989); Deltona Corp. v. Alexander, 682 F.2d 888, 891-92 (11th Cir. 

1982).

No evidence was presented at trial that the United States represented to the public or to 

CITGO that anchorages within the Delaware River Navigation Project are free of debris or 

even that they are maintained to the depth authorized by Congress. At no time did the federal

agencies represent to the public that they undertook regular surveys to search for obstructions 

to navigation. (See Section VII).

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Absent a misrepresentation, there can be no equitable estoppel. Nor is there credible 

evidence that anyone at CITGO actually relied on a misrepresentation. To the contrary, there 

was ample evidence of the government’s extensive efforts to keep the maritime community 

informed of its actual, more limited activities.114 There was also testimony of CITGO’s own 

port captain, William Rankine, that neither he, nor anyone else at CITGO, made any effort to 

determine the government’s role with respect to searching for obstructions to navigation. Trial 

Day 30, Nov. 22, 2010 Rankine at 9:2-6,

115 9:21-24,116 88:1-14.117

Further, CITGO has not introduced evidence of affirmative misconduct by the 

government’s representations of the scope of its activities in the Delaware River. CITGO 

argues that it need not show “affirmative misconduct” where the government acts in a 

proprietary, rather than a sovereign, capacity. Some courts, but not the Third Circuit, have 

made such a distinction. See, e.g., Portmann v. United States, 674 F.2d 1155, 1167 (7th Cir. 

1982). This Court need not decide whether to join the courts that recognize such a distinction, 

because it is not raised by this case. CITGO’s attempt to estop the government is based on 

alleged misrepresentation about the scope of the government’s activities in creating and 

maintaining federal projects in the waterways of the United States. Such projects are 

manifestly an exercise of the United States’ sovereign powers, not a proprietary undertaking. 

C. Unjust Enrichment

The remedy for a claim of unjust enrichment is restitution. Comments to the 

Restatement of Restitution and Unjust Enrichment explain that “[l]iability in restitution derives 

from the receipt of a benefit whose retention without payment would result in the unjust 

enrichment of the defendant at the expense of the claimant.” Restatement (Third) of 

Restitution and Unjust Enrichment § 1 cmt. a. (2011). CITGO argues that the United States 

would be unjustly enriched if it were allowed to recover oil spill cleanup costs it reimbursed 

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Frescati out of the Fund. CITGO reasons that because it paid to the Fund $103,000,000 over 

the years in taxes on oil, the United States’ recovery of the Athos I cleanup costs constitutes 

unjust enrichment. But there can be no unjust enrichment where the United States is carrying 

out its congressionally authorized mandate to recover money on behalf of the Fund. 

Congress provided income for the Fund in several ways. One way is through a portion 

of the per-barrel tax on oil. 26 U.S.C. § 9509(b)(1). Another way is through the amount 

recovered by the Fund pursuant to 33 U.S.C. § 2715 which authorizes the United States to 

pursue removal costs as subrogee of a claimant to the Fund. See 26 U.S.C. § 9509(b)(3). Here, 

CITGO has been previously taxed based upon its business activity. The United States now 

seeks to recover, as a statutory subrogee, for CITGO’s role in causing the ATHOS spill. Both 

are explicitly authorized by Congress. CITGO has no claim for restitution based on theories of 

unjust enrichment or otherwise. Under CITGO’s theory, any oil company that paid the tax on 

barrels of oil it produced would be immunized from suits by the United States arising out of 

pollution incidents. This is obviously not the law. 

D. CITGO’s Assertion that the United States was in a Better Position to Prevent the 

ATHOS Oil Spill is Incorrect and Irrelevant 

It seems obvious that a facility owner is in the best position to be aware of hazards to 

navigation within the approach to its berth. After all, it is the facility owner that invites deep 

draft oil tankers to its berth and has the ability to limit their size, draft, and times of approach. 

CITGO’S port captain, William Rankine was aware that debris was likely present in the 

Mantua Creek Anchorage, and that ships lose anchors in anchorages. Rankine Dep. Oct. 16, 

2007, at 248:23-249:12;

118 Trial Day 6. Sept. 29, 2010, Capone at 135:12-136:1.119

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E. United States Statutory Right to Subrogation May Not be Preempted by Equitable 

Theories

CITGO’s assertion that it can challenge the United States’ statutory right to subrogation 

based on some equitable grounds misconstrues the nature of statutory subrogation which, 

conferred by the legislature, displaces equitable subrogation principles.

120 OPA states:

Any person, including the Fund, who pays compensation pursuant to this act to 

any claimant for removal costs or damages shall be subrogated to all rights, 

claims, and causes of action that the claimant has under any other law.

33 U.S.C. § 2715(a). 

OPA provides no exception to the Fund’s right to subrogation, and CITGO’s 

reliance on OPA’s savings provision to preempt the government’s right to subrogation 

is in error. The savings provision states that “[e]xcept as otherwise provided in this Act, 

this Act does not affect - (1) admiralty and maritime law; or (2) the jurisdiction of the 

district courts of the United States with respect to civil actions under admiralty and 

maritime jurisdiction . . . .” 33 U.S.C. § 2751(e). The key here is the clause “except as 

otherwise provided in the Act.” OPA has “otherwise provided” for subrogation. 

Courts have readily understood the “except as otherwise provided in the Act” clause 

preempts

121 certain traditional maritime rights and defenses. Where, for example, petitioners 

sought to use the savings clause to limit the government’s OPA and Clean Water Act claims to 

the value of their vessel under the Limitation of Liability Act of 1851, 46 U.S.C. §§ 181 et seq., 

courts have held that the savings clause may not be used to limit rights established by OPA or 

the Clean Water Act. In re Oswego Barge Corp., 664 F.2d 327, 340 (2d Cir. 1981)

(“notwithstanding” clause means that remedies established by the Clean Water Act are not to 

be modified by preexisting law). Accord, In re Hokkaido Fisheries Co., 506 F. Supp. 631, 634 

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(D. Alaska 1981). Put squarely, there can be no equitable defense to congressionally mandated 

subrogation.

VIII. THE UNITED STATES HAS NO GENERAL OBLIGATION TO 

GUARANTEE SAFETY OF VESSELS IN THE NAVIGATION PROJECT

A. No General Obligation to Guarantee Safety of Vessels that Traverse 

Designated Anchorages

Not only are the various equitable defenses raised by CITGO legally untenable, they 

rely on facts which are simply incorrect, or for which there is no evidence. A federal 

anchorage ground is in no sense federal property. Rather, anchorages are areas designated to 

assist navigation.xxxii See 25 Op. Att’y Gen. 37, 38 (1903) (“Anchorage and anchorage grounds 

are matters relating to the movement of vessels [and] navigation.”). The United States

designates anchorage grounds because although it is not “lawful to tie up or anchor vessels or 

other craft in navigable channels in such a manner as to prevent or obstruct the passage of other 

vessels or craft,” 33 U.S.C. § 409, a ship may nonetheless need to anchor if bad weather, 

congestion in the shipping lanes, or some other difficulty prevents her from proceeding safely 

with her voyage. See e.g., The Southern Cross, 93 F.2d 297, 299 (2d Cir. 1937) (in dense fog, 

“good navigation required [the vessel] to anchor, but not in the channel, for she could have 

proceeded to an anchorage ground but a few hundred yards away”).

In anchorage grounds, anchored vessels, contrary to the usual navigational rules, have 

priority over other shipping. See generally, The Isaac T Mann, 63 F. Supp. 339, 341 (S.D.N.Y. 

1945) (“Anchorage grounds many not be used with the same freedom as unrestricted waters, 

and vessels should not embarrass a vessel properly using the grounds for purposes of 

navigation in connection with anchoring.”). Thus, in determining negligence when vessels 

collide, a relevant consideration may be whether one vessel was anchored inside or outside an 

 

xxxii The river bed is owned by the adjacent state, here New Jersey. 

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anchorage ground. See, e.g., United States v. St. Louis & Mississippi Valley Transp. Co., 184 

U.S. 247, 255 (1902) (“There was also culpable negligence in anchoring in an unusual and 

improper position.”); The Aller, 73 F. 875, 877 (2d Cir. 1896) (“A vessel which undertakes to 

navigate over anchorage ground takes the risk of determining whether other vessels which she 

finds there are navigating or at anchor (Steamship Co. v. Calderwood, 19 How. 241); and, when 

such other vessels are in no fault, she alone is responsible for the results of her mistakes in that 

particular.”). Simply by designating federal anchorage grounds, therefore, the United States 

does not guarantee the safety of vessels that might anchor in them, let alone the safety of 

vessels, like the Athos I, which had to cross through the anchorage to arrive at CITGO’s 

terminal, without ever anchoring within it. 

B. The United States Has No Statutory or Regulatory Duty to Search for Hidden 

Underwater Obstructions

None of the maritime agencies - the Army Corps of Engineers (“Corps”), the National 

Oceanic and Atmospheric Administration (“NOAA”), or the Coast Guard - have a statutory or 

regulatory duty to search for hidden underwater obstructions in the Delaware River. As 

recognized by the Third Circuit, “No Government entity, however is responsible for 

preemptively searching all federal waters for obstructions . . . .” In re Frescati, 718 F.3d at 

184. Further, the “primary responsibility for removal of wrecks or other obstructions lies with 

the owner, lessee, or operator ....” 33 C.F.R. § 145.10(b). See also 33 U.S.C. § 409 (“it shall 

be the duty of the owner, lessee, or operator of [a] sunken craft to commence the immediate 

removal of the same.”). While the Corps has authority to remove known obstructions, such as 

sunken vessels, no law or regulation requires the Corps to search for or remove a wreck or 

obstruction it knows nothing about. 33 U.S.C. §§ 414 and 415; 33 C.F.R. §§ 245.10(c), 245.15, 

245.25(b) and 245.50(a); In re Frescati., 718 F.3d at 194; See also, Wyandotte Transportation 

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v. United States, 389 U.S. 191, 207 (1967) (noting that these sections “are intended to protect 

the United States against liability for removing a sunken vessel if it chooses to do so.”) 

(emphasis added); Tew v. United States, 86 F.3d 1003, 1006 (10th Cir. 1996); Nunley v. M/V 

Dauntless Colocotronis, 727 F.2d 455, 461 (5th Cir. 1984), cert. denied, 469 U.S. 832 (1984)

(statute authorizes the U.S. to either mark or remove sunken vessels when owner fails to do so 

but it imposes no mandatory duty). Likewise, no statute or regulation requires either the Coast 

Guard or NOAA to search for unknown objects in the river. 

Indeed, CITGO’s own expert, John Barnes, formerly a Branch Chief in the Corps’ 

Engineering and Construction Division, Vicksburg, Tennessee who testified at trial by 

videotaped deposition, explained that neither the Army Corps, NOAA, or the Coast Guard have 

a mission to routinely search for obstructions to navigation. With respect to the Corps, “...we 

don’t routinely just go looking for [obstructions]. None of our districts do. It’s too expensive. 

We wait until we have a report that there is one, whether it be a report from us, the public, or 

whoever.” Further, “[n]one of the agencies routinely look for hazards to navigation in the 

federally-regulated waters because it would be senseless to scour the river bed in an area as vast 

as the Delaware River Project.”

122

 Barnes Dep. Aug. 12, 2009, at 25:8-15,

123 26:4-17,124 63:8-

21;

125 Trial Day 10, Oct. 6, 2010, DePasquale at 98:12-14.126

Though there is no mandate to preemptively search for obstructions, the Corps does 

initiate a series of response actions once it is notified of a suspected obstruction. Mr. 

DePasquale, Chief of Operations for the Corps’ Philadelphia District, testified that when the 

public or a government agency notifies the Corps of a suspected obstruction, the Corps 

mobilizes its survey crews and attempts to locate the obstruction using multi-beam or side-scan 

sonar.

127

 If it finds an object, the Corps determines, in conjunction with the Coast Guard, 

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whether the obstruction is a hazard to navigation using several factors. These include but are 

not limited to: (1) whether the object is within the boundaries of the Delaware River Navigation 

Project; (2) whether the object is projecting above the authorized depth;

128 (3) the location of 

that object; and, (4) the frequency of use of the area where the object was found. If the 

agencies conclude that the obstruction poses a hazard, either the Coast Guard marks it with an 

aid to navigation129 and issues a Notice to Mariners,

130 or the Corps will remove the obstruction 

if the obstruction’s owner cannot be found or cannot remove it. Trial Day 10, Oct. 6, 2010, 

DePasquale at 90:17-24,

131 98:15-100:5,132 130:21-131:3;133 33 C.F.R. § 245.25(b).

Thus, although the Corps and the Coast Guard have an obligation to act, as resources 

allow, once they learn of a potentially hazardous obstruction, they have no freestanding duty to 

undertake precautionary searches of any of the sixteen anchorages and the shipping channel in 

the Delaware River. See e.g. 33 C.F.R. § 245.20(a), 33 C.F.R. § 64.01. The uncontested 

evidence from trial shows that prior to the Athos I incident, the government had no notice of the 

anchor in the Mantua Creek Anchorage.134 Trial Day 29, Nov. 18, 2010, Denmark at 49:25-

50:4;

135 Trial Day 24, Nov. 9, 2010, Barnum at 10:17-21;136 Danley Dep. Aug. 4, 2009, at 

94:19-24,

137 Ex. D 1354 (nautical chart 12313 July 1 2004).

IX. THE UNITED STATES’ COURSE OF CONDUCT, PUBLICATIONS, 

SURVEYS AND DREDGING PRACTICES DO NOT CREATE 

INCHOATE DUTIES FROM WHICH CITGO CAN ASSERT 

EQUITABLE DEFENSES

CITGO would have the Court believe that the United States “exercises exclusive

dominion” over the Delaware River Project and ergo the United States is somehow responsible 

for the Athos I incident. As discussed in the previous section, however, no statute or regulation 

requires the federal agencies to guarantee safe navigation or preemptively search for objects in 

the Delaware River Navigation Project. As will now be discussed, no statute or regulation

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48

requires these agencies to dredge continuously to maintain the entire Project at its authorized 

depth, much less to mark and chart obstructions to navigation for which it has no knowledge. 

Hence, “federal legislation in the field of navigation is far from extensive.”138 Barber v. 

Hawai’i, 42 F.3d 1185, 1193 (9th Cir. 1994). Further, the government’s course of conduct,

whether through its dredging practices, its navigation related publications, or hydrographic

surveys, creates no mandatory duties that shift the liability for the Athos I incident to the United 

States. 

A. The Role of the Army Corps of Engineers with Respect to the Delaware River 

Navigation Project 

The Corps may undertake improvements to navigation as specifically authorized by 

Congress. Congress authorized improvements to the Delaware River, referred to as the 

“Delaware River Navigation Project,”

139 of which the Mantua Creek Anchorage (also known 

as Federal Anchorage No. 9) is a part and, in 1958, authorized the Project depth to 40 feet. The 

Corps’ responsibilities for the Delaware River Navigation Project principally relate to 

determining channel depth conditions and periodic dredging to maintain the Delaware River 

Navigation Project depth.

No statute or regulation requires the Corps to continuously maintain all parts of the 

Delaware River Navigation Project to the authorized depth. How the Corps determines whether 

to dredge a given stretch of river requires balancing specific considerations including 

shoaling140 patterns, complaints from users, amount and type of vessel traffic, and, above all, 

available appropriations. Without Congressional appropriations, the Corps cannot dredge to 

the authorized depth. As explained by Mr. DePasquale, “once [a project is] authorized, we

can’t begin dredging until we are appropriated the funds to do the dredging. So, we can't begin 

any kind of dredging until we have funds in hand, to be able to advertise the contract.” Mr. 

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49

DePasquale further amplified, “we never get enough to dredge the whole River and keep it at 

40 feet at all times.” Appropriately, the Corps targets its limited dredging resources towards 

problem areas in channel and anchorages. Trial Day 10, Oct. 6, 2010, DePasquale at 101:11-

102:3.

141

The Corps undertakes hydrographic surveys to determine the depth of the Delaware 

River Navigation Project including its anchorages in order to (1) assess future dredging needs 

and (2) to inform the maritime community regarding changes in depth conditions. The Corps 

regularly provides the depth survey results in the form of channel statements142 and survey 

charts to the Coast Guard, NOAA, the pilots, terminals, tug companies, and any other maritime 

users. Trial Day 10, Oct. 6, 2010, DePasquale 91:12-92:14;

143 Barnes Dep. Aug. 12, 2009, at 

65:2-18.

144

The Corps aims to survey the navigation channel and anchorages in the Delaware River 

annually. “But depending on funding, resources, conditions, shoaling patterns in the river and 

usage of that particular part of the channel, some areas get surveyed two, three, four times a 

year and other areas, because of the nature and location, might not get surveyed at all.” Trial

Day 10, Oct. 6, 2010, DePasquale at 96:15-25.145 

Through approximately 2006, the standard tool used by the Corps to determine depth in 

the Delaware Navigation Project was single beam sonar. Single beam sonar obtains depth 

readings at discrete points along parallel survey lines and uses a grid of point measurements to 

produce a chart.146 In an effort to evaluate dredging needs in as many stretches of the river as 

possible, survey lines are widely spaced, at 400 feet apart with depth measurements every ten 

to fifteen feet along the survey lines. Not surprisingly, depth surveys with single beam sonar 

do not provide comprehensive coverage of the river bottom nor are they intended to or capable 

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of locating submerged objects. Barnes Rep. at 4;147 Barnes Dep. Aug. 12, 2009, at 68:18-

69:15;

148 Trial Day 10, Oct. 6, 2010, DePasquale at 93:2-94:4,149 96:11-14.150

Mr. Barnes reviewed the Mantua Creek surveys conducted prior to the 2004 accident by 

the Philadelphia District of the Corps and found “they were performed ...exactly the same way 

we performed ours in the Vicksburg District and - - in accordance with the regulations” and the 

Corps’ Engineering Manual. Survey results from 1995 to 2004, show that the Mantua Creek 

Anchorage shoaling151 is minimal through time. The Corps’ most recent survey preceding the 

Athos I incident, conducted in June 2004, demonstrated that the Anchorage was mostly at its 

project depth of 40 feet, with some minor shoaling to the north, at the end of the Anchorage 

furthest from the CITGO refinery. The Corps received no complaints from other users of the 

Anchorage regarding depths either before or after the June 2004 survey. Accordingly, the 

Corps saw no need to dredge the shallow area of the Mantua Creek Anchorage identified in the 

survey. As explained by Mr. DePasquale, “because of the limited use of the anchorage” and 

the lack of any complaints or other evidence that “this was causing anybody any problems,” the 

Corps determined that “it wasn’t really effective or efficient for us to come up to this particular 

section of the river and dredge...1,000 foot of material.” The last time either the Corps, or 

contractors working on behalf of the Corps, dredged the Anchorage was in 1984. Barnes Dep. 

Aug. 12, 2009, at 68:18-69:15;

152 Trial Day 10, Oct. 6, 2010, DePasquale at 102:9-104:11,153

111:25-112:2,

154 117:23-118:4;155 Exs. D-1733-1738, D-1740, D-1174-1178. 

B. NOAA’s Role with Respect to the Delaware River

NOAA is charged with providing nautical charts and related navigational publications. 

Charts include, among other things, depths, locations of aids to navigation, and locations of 

navigational obstructions, for which NOAA has notice. NOAA also publishes the United 

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51

States’ Coast Pilot, a regional supplement to the nautical charts, which provides information 

not easily displayed on charts such as regulations and navigational services including pilotage, 

towing, and vessel traffic separation schemes. 33 U.S.C. §§ 883(a) and (b) and 892(a); Trial 

Day 24, Nov. 9, 2010 Barnum at 34:22-35:3.

156 See generally Ex. D-1108 at CARPROD 

23032-23039. 

NOAA is authorized to undertake hydrographic surveys in support of its charting 

mission. As explained by Captain Steven Barnum, former Director of NOAA’s Office of Coast 

Survey, NOAA’s charting mission encompasses 3.4 million square nautical miles. However, 

Congressional appropriations limit NOAA’s hydrographic surveys to approximately 3,000 

square nautical miles per year.157 33 U.S.C. §§ 883(a) and (b) and 892(a); Trial Day 24, Nov. 

9, 2010 Barnum at 42:1-13,

158 47:10-16.159

 

Due to budget constraints, NOAA does not typically survey the federally designated 

navigation channels or anchorages.160 Instead, NOAA uses annual depth data collected by the 

Corps in federal navigation projects including the Delaware River to support its charting 

mission. NOAA’s nautical charts also include data from other available sources such as port 

authorities and terminal managers. Trial Day 24, Nov. 9, 2010 Barnum at 42:19-43:5,

161 44:3-

8.162

Far from claiming its charts contain up-to-date depth data or identify all obstructions to 

navigation, NOAA provides the public warning:

“The chart reflects general conditions at the time of the surveys or reports and 

does not necessarily portray present conditions. Significant changes may have 

taken place since the last survey or report . . . Depth information on nautical 

charts is based on soundings from the latest available hydrographic surveys, 

which in many cases may be quite old. The age of the hydrographic surveys 

supporting nautical charts varies. Approximately 60 percent of inshore 

hydrography was acquired by lead-line (pre-1940) sounding technology.” 

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Ex. D-1108 at CARPROD 23034 (emphasis added); Trial Day 24, Nov. 9, 2010 Barnum

at 43:10-17.

163

NOAA conducted its last hydrographic survey of the Mantua Creek Anchorage in 1981

using single beam sonar. In 2002, NOAA was directed by the Navy to conduct a sidescan 

survey of the Delaware River Navigation Project but specifically excluding all Delaware River 

Anchorages including the Mantua Creek Anchorage. As explained by Captain Barnum, the 

impetus for the survey was the terrorist attacks of 9/11. The survey was intended to provide a 

baseline of the river bottom from which the Navy could use in the future to determine whether 

any mines might be deployed by terrorists. Trial Day 24, Nov. 9, 2010 Barnum at 15:10-17,

164

24:13-25:14;

165 Ex. D-1520.

C. The Coast Guard’s Role with Respect to the Delaware River 

The Coast Guard has authority to establish aids to navigation, such as buoys and lights, 

pursuant to 14 U.S.C. § 81 which states:

In order to aid navigation and to prevent disasters, collisions, and wrecks of 

vessels and aircraft, the Coast Guard may establish, maintain, and operate:

(1) aids to maritime navigation required to serve the needs of the armed forces 

or of the commerce of the United States;

(emphasis added). This system is not expected to be all encompassing or infallible. As the 

regulations warn: “[t]he aids to navigation system is not intended to identify every shoal or 

obstruction to navigation which exists in navigable waters of the United States, but rather 

provides for reasonable marking of marine features as resources permit.” 33 C.F.R. § 62.1(c)

(emphasis added). As with the Coast Guard’s authority to establish aids to navigation, its 

authority to mark obstructions does not create an obligation:

The Secretary may mark for the protection of navigation any sunken vessel or 

other obstruction existing on the navigable waters of the United States in such 

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manner and for so long as, in his judgment, the needs of maritime navigation 

require.

14 U.S.C. § 86 (emphasis added). See generally Tew v. United States, 86 F.3d 1003, 1005

and 1006 (10th Cir. 1996). 

The Coast Guard regulations further provide that the owner of an obstruction or hazard 

to navigation is responsible for marking its location. 33 C.F.R. § 64.11. If, however, the owner 

fails to properly mark the hazard, the Coast Guard may mark it after taking into account a 

variety of regulatory factors including, but not limited to, navigational traffic patterns, 

navigational difficulty in the vicinity of the obstruction, depth of water over the obstruction, 

physical characteristics of the obstruction, and the draft, type, and density of vessel traffic in 

the vicinity of the obstruction. 33 C.F.R. §§ 64.3, 64.33. The Coast Guard publishes Local 

Notices to Mariners and Broadcast Notices to Mariners to inform the public of changes to aids 

to navigation, report dangers to navigation, of which it is aware, as well as to correct nautical 

charts. 33 U.S.C. § 62.21(c)(3) and (5). As the Coast Guard has no hydrographic survey 

mission, it depends on the public, the Corps, and NOAA for information related to possible 

underwater obstructions to navigation to include in the Notices to Mariners.

The Coast Guard has authority to inspect various types of vessels and regulate certain 

activities. See, e.g. 46 U.S.C. §§ 3301 and 3302. However, this power, singularly or in concert 

with its other statutory authorities which include for example, marking channels with aids to 

navigation, hardly constitutes complete control over the safety of vessels navigating in the 

Delaware River Navigation Project. Where, for example, the Coast Guard was sued for failing 

to adopt steps to protect the public from vessels whose certifications were revoked by the Coast 

Guard, the First Circuit refused to impose liability. Gercey v. United States, 540 F. 2d 536, 

538-539 (1st Cir. 1976), cert denied, 430 U.S. 954 (1977).

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“Congress has mandated only that the Coast Guard periodically conduct certain types of 

inspections of passenger carrying vessels . . . [and] revoke the certificates of vessels 

which fail to meet federal requirements. . . . [I]t neither expressly nor by necessary 

implication imposed a duty upon the Coast Guard to devise, fund, staff and implement 

the kind of follow-up system which plaintiffs believe is required by ordinary prudence.”

Id. at 538. 

D. Japan Lines is Irrelevant

CITGO cites Japan Line Ltd v. United States, as its only authority for the proposition 

that the United States is responsible for ensuring the navigability of the Delaware River. Japan 

Line, Ltd. v. United States, 1976 A.M.C. 355, 364 (E.D. Pa. 1975), aff’d, 1977 A.M.C. (3d Cir. 

1976). See e.g., Doc. 749-1 at 16-17. In Japan Line, the Court found the Corps negligent for 

failing to publicly report a shoal after discovering its presence. 

The United States has established a comprehensive system providing for the

distribution of channel information by its agencies, i.e., the Corps of 

Engineers, the Coast Guard, and the Hydrographic Office at Washington. 

This elaborate plan for the distribution of this vital information establishes 

conclusively the importance which the United States attaches to the channel 

depth data obtained by the Corps of Engineers. The United States has 

assumed the duties of surveying the navigable channels of the Delaware River 

and advising mariners promptly of its findings.

Japan Line, 1976 A.M.C. at 366 (emphasis in the original for the word “promptly,”

emphasis added for other terms). See e.g. Docs 749-1 at 16 and 599 at 11. It is undisputed that 

the United States operates just such a comprehensive system to distribute known channel 

information and advise mariners promptly of shoaling when discovered. Testimony from

Messrs. DePasquale, and Denmark of the Corps, and Captain Barnum, on behalf of NOAA, 

explained this distribution and notification system. However, the facts in Japan Line materially 

differ from those in the case before this Court. It is undisputed that no government agency had 

notice of the abandoned anchor found in the approach to berth at CITGO’s Paulsboro facility, 

and thus obviously no duty to notify. Japan Line is simply inapposite.

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X. CITGO DID NOT – AND HAD NO BASIS - TO RELY ON 

GOVERNMENT TO GUARANTEE THE SAFETY OF VESSELS IN THE 

DELAWARE RIVER NAVIGATION PROJECT166

As discussed in previous sections, there is no justification for either the maritime

industry or CITGO to rely on the United States to keep the Delaware River Navigation Project 

free from hazards to navigation. Furthermore, interactions between the federal agencies and 

the local Marine Advisory Committee (“MAC”), made up of waterway users including CITGO,

make clear that neither the agencies nor the members of the MAC rely on agencies to ensure 

that the Delaware River Navigation Project is free from hazards to navigation. 

As explained by Mr. DePasquale, “...personnel from the pilots, the tug companies, ship 

owners, ship agents, facilities, different fuel terminals and refineries ....[T]he whole maritime 

industry shows up...” at the MAC’s quarterly meetings. The Corps, Coast Guard, and NOAA 

attend these meetings, and the Corps makes a presentation at each regarding the status of 

dredging and results of their hydrographic surveys with time for questions and answers. 

Captain Gregory Adams, former Coast Guard Captain of the Port, Philadelphia (1998 – 2002), 

was a member of the MAC from 1998 through the time of trial and testified that the MAC, 

among other things, makes recommendations to the (1) Corps regarding the extent and 

frequency of hydrographic surveys in the navigable channels, and (2) Coast Guard regarding 

the number, location, and type of navigational aids. At each meeting, the Corps and NOAA 

brief the MAC on the status of depth surveys and dredging activities. At no time have these 

agencies represented to the MAC or the general public that they routinely survey for 

obstructions without report of a hazard. Captain Adams explained that the MAC never relied 

on the Corps to conduct continuous hydrographic surveys to search for objects.167 Trial Day

10, Oct. 6, 2010, DePasquale 98:12-14;

168 106:24-107:25,169 108:14-23;170 Trial Day 3, Sept. 

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23, 2010, Adams at 64:4-20,

171 65:1-8;172 67:16-68:14,173 69:10-70:8,174 101:21-

102:7,

175102:19-103:3;176

 Ex. D-1271 at p.1.

XI. THERE IS NO EVIDENCE THAT THE ANCHOR WAS LEFT BY A 

GOVERNMENT CONTRACTOR

177

CITGO claims that the anchor was abandoned by a government dredging contractor and 

this alone makes the United States responsible for the oil cleanup costs under one of its 

equitable defenses.178 CITGO further argues that the United States failed to search for the 

anchor’s owner. This, too, is not only irrelevant but also incorrect. The Coast Guard contacted 

an anchor manufacturer for assistance in identifying the anchor’s owner.179 It also issued 

subpoenas to Norfolk Dredging and Weeks Marine, the only two dredging companies who 

dredge in the Delaware River. These dredging companies contract with both the Corps and 

private facilities. In response to the subpoenas, both companies averred no knowledge of a lost 

anchor fitting the description of the one that brought the ATHOS to grief. Trial Day 29, Nov. 

18, 2010, Denmark at 44:15-45:19;

180 Trial Day 10, Oct., 6 2010, DePasquale at 108:2-10,181

115:9-22.

182

 Prior to the incident, the last dredging in the vicinity of the Mantua Creek 

Anchorage near CITGO’s Paulsboro Marine Terminal was undertaken in 1991 by CITGO’s

predecessor. Given that the Corps last dredged Mantua Creek Anchorage in 1984, it is more 

probable that the anchor was abandoned or lost by CITGO’s contractor. All this, including 

whether the anchor was even dropped by a dredger, is conjecture. Assuming CITGO’s bald

assertion even met the basic requirements of an affirmative defense, there is simply no

evidence to support it. Doc. 594 at 44-50.183 Trial Day 10, Oct. 6, 2010, DePasquale 111:25-

112:2;

184 Ex. D-757 at CARPROD 048865-04873. 

 

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XII. NOTHING PREVENTS A PRIVATE PARTY FROM SURVEYING, 

REMOVING OBSTRUCTIONS, OR DREDGING WITHIN THE 

DELAWARE RIVER NAVIGATION PROJECT185

Private citizens are free to take actions within federal projects to enhance navigational 

safety. A facility owner, such as CITGO, concerned about safe access to its berth, may conduct 

hydrographic surveys of any conceivable nature in the Delaware River Navigation Project,

including anchorages, without a permit (or permission) from the United States. Mr. 

DePasquale noted that Conoco Phillips annually surveys the depths of its berthing area, 

including portions of the federal channel adjacent to its berth, and provides results to the Corps. 

A facility owner may also remove an obstruction from the Delaware River Navigation Project, 

including designated anchorages, or ask the Corps to do it. While a facility owner needs a 

permit to remove an obstruction, Mr. DePasquale explained that removal actions are covered 

by a “blanket permit” and are typically approved within a couple of days. Similarly, if a 

facility owner wishes to dredge within the Delaware River Navigation Project, it may do so as 

well upon application and receipt of a permit from the Corps.186 Trial Day 10, Oct. 6, 2010, 

DePasquale at 104:20-106:23;

187 Trial Day 10, Oct. 6, 2010, Olson at 148:5-14;188

CITGO seeks refuge in an unsubstantiated assertion that its ability to dredge is limited 

to the area designated on a Corps’ issued permit for its wharf.189 This is misleading. As 

explained by David Olson, Deputy Chief of Operations of the Corps’ Philadelphia District from 

1991 through 2008, it is the facility owner, not the Corps, which identifies on its permit 

application the area it seeks to dredge. 

In 1991, Seaview Petroleum, the predecessor owner of CITGO’s Paulsboro facility, 

requested a permit from the Corps to dredge a specific area depicted in a drawing submitted 

with its permit application. CITGO’s predecessor could have included, but chose not to, the 

area of the river bottom extending from its wharf into the approach to the facility’s berth that 

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58

lay within the boundary of the Mantua Creek Anchorage. The Corps granted the permit to 

dredge the area, which CITGO now refers to as its sole “area of responsibility.”190 Nothing 

prevented Seaview or CITGO from requesting a permit to dredge the approach to its berth in 

addition to the more limited area next to its wharf. Seaview or CITGO needed only to submit 

the drawings and a plan showing actual depths and a template describing the proposed dredging 

area. Trial Day 10, Oct. 6, 2010, Olson at 143:19-144:12;

191 Trial Day 10, Oct. 6, 2010, 

DePasquale at 106:10-19;

192 139:3-25.193

 CITGO’s Port Captain for the Paulsboro facility and 

CITGO’s representative to the MAC in 2004, William Rankine, was responsible for providing 

guidance to the terminal on marine safety at the berth. Mr. Rankine claimed: (1) his duties did 

not extend to anything outside of Seaview’s more narrowly crafted “area of responsibility;” (2) 

that he was not allowed to survey or dredge within the federal anchorage; and, (3) that the 

United States “guarantees safe access through federal waters” to CITGO’s berth. Mr. Rankine 

is incorrect and, frankly incredible. In any event, his mistaken beliefs are irrelevant and 

contradicted by all other evidence on these issues. Trial Day 10, Oct. 6, 2010, DePasquale at 

104:16-105:13;

194 Trial Day 24, Nov. 9, 2010 Barnum at 51:9-15.195 Trial Day 30, Nov. 22, 

2010, Rankin at 9:21-24;

196 10:17-23,197 52:20-53:4,198 96:18-20;199 Rankine Dep. Oct. 16 

2007, at 172:12-177:8.

200

 

XIII. CONCLUSION

The United States reimbursed the Responsible Parties $87,789,147.31 for actions they 

took to minimize or mitigate the impact of the oil. These actions were done at the direction of 

the FOSC, or consistent with the National Contingency Plan, and were reasonable in light of 

the unique circumstances associated with the spill and in the context of the OPA statutory 

scheme. Should this Court find that CITGO breached its safe berth warranty, the United States, 

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59

as the statutory subrogee to Frescati’s contract cause of action, is entitled to reimbursement of 

$87,789,147.31 plus interest. 

CITGO’s equitable defenses are pure distraction from the issues before this Court. The 

Third Circuit properly recognized that the United States has no general obligation to keep

federally-regulated waters free of hazards to navigation, and CITGO does not dispute that the 

U.S. had no knowledge of the anchor. No matter how CITGO constructs its innumerable 

arguments, all are predicated on the mistaken allegation of an affirmative duty by the United 

States to maintain the Delaware River Navigation Project, including designated anchorages,

free from obstructions to navigation. Further, as CITGO has no quantifiable claim to recoup, it 

has no valid recoupment defense or any of the other equitable defenses it asserts under the 

umbrella of recoupment.

Dated: February 13, 2015

Respectfully submitted,

JOYCE BRANDA

Acting Assistant Attorney General

ZANE DAVID MEMGER

United States Attorney

MARGARET L. HUTCHENSON

Chief, Civil Division

/s/ Sharon K. Shutler

SHARON K. SHUTLER

Trial Attorney

STEPHEN G. FLYNN

Assistant Director Admiralty

SARAH S. KEAST

Trial Attorney

Torts Branch, Civil Division

Department of Justice

Post Office Box 14271

Washington, D.C. 20044-4271

Telephone: (202) 616-4070

Facsimile: (202) 616-4002

Case 2:05-cv-00305-JHS Document 785 Filed 02/17/15 Page 67 of 137
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Stephen.Flynn@usdoj.gov

Sharon.Shutler@usdoj.gov

Sarah.Keast@usdoj.gov

Attorneys for Plaintiff United States

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ENDNOTES

 

1 Hall – Direct 193:6-21 (Trial Day 10, October 6, 2010)

Hall – Direct 193

6 Q And is this a letter that you wrote to the captain of the

7 port in Philadelphia?

8 A Yes.

9 Q And this letter was directed to the captain at his

10 request?

11 A Yes.

12 Q And does this letter reflect the penultimate number that

13 you determined was the loss cargo to the river?

14 A Yes, it was the best estimate that I could make.

15 MR. BERGERE: Could we bring up the final sentence

16 of the second paragraph, the final two sentences there?

17 (Pause.)

18 BY MR. BERGERE:

19 Q And can you point out for the Court what the final tally

20 was, the total estimate of the amount of oil was?

21 A The best estimate that I could make was 264,335 gallons.

2 OPA adopted the Federal Water Pollution Control Act’s standard of liability, which has been “determined 

repeatedly to be strict, joint, and several liability.” S. Rep. No. 101-94, at 11 (1991) as reprinted in 1990 

U.S.C.C.A.N. 772, 732-33; see also H.R. Rep. No. 101-653, at 102 (1990) as reprinted in 1990 U.S.C.C.A.N. 779, 

779-80.

3 Morrison – Direct 170:17-22 (Trial Day 19, Oct. 25, 2010)

Morrison-Direct 170

17 Q Did the National Pollution Funds Center adjudicate

18 whether the responsible parties for the ATHOS I incident were

19 entitled to limit their liability?

20 A Yes, we did adjudicate that and made a decision.

21 Q And what was that decision?

22 A We upheld their limit.

4 Morrison – Direct 175:5-7 (Trial Day 19, Oct. 25, 2010)

Morrison – Direct 175

5 Q Okay. And what was your determination, was the claimant

6 entitled to limit its liability?

7 A The claimant was entitled to limit their liability, yes.

5 Hellberg – Direct 41:15-42:6 (Trial Day 20, Oct. 26, 2010)

Hellberg – Direct 41

15 Q And how much did the ATHOS responsible parties initially

16 seek the NPFC to adjudicate?

17 A They initially requested approximately 124 million in

18 their initial submission.

19 Q And did this amount change?

20 A Yes, ma'am, it did.

21 Q And how did that change?

22 A It changed because throughout my adjudication, as I moved

23 through my adjudication, I had continuing communications with

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62

 

24 the responsible party and that final requested amount did

25 change and it did go up.

Hellberg – Direct 42

1 Q And did the ATHOS responsible parties later submit a

2 second or supplemental claim for adjudication?

3 A Yes, ma'am, they did.

4 Q For about how much?

5 A That supplemental claim was for approximately $14

6 million.

6 Hellberg – Direct 42:21-43:25 (Trial Day 20, Oct. 26, 2010)

Hellberg – Direct 42

21 MS. SHUTLER: Could we have Exhibit, U.S.A Exhibit

22 157, NPFC-000085?

23 BY MS. SHUTLER:

24 Q What is this document?

25 A This document is my claims summary determination form for

Hellberg – Direct 43

1 the RP's initial claim submission.

2 Q And for how much is that initial submission?

3 A The amount requested is approximately $80 million over

4 and above the limit of liability.

5 MS. SHUTLER: Could we have U.S.A. Exhibit 157 at

6 00090?

7 BY MS. SHUTLER:

8 Q And who drafted this letter here?

9 A I drafted this letter, ma'am, for Tom Morrison's

10 signature, he was Chief of Claims Adjudication Division,

11 making an offer to the RP of approximately 77.1 million.

12 Q And did you receive a supplemental claim from the ATHOS

13 responsible parties?

14 A Yes, ma'am, I did.

15 Q And did you make a recommendation for payment with

16 respect to the supplemental claim?

17 A Yes, ma'am, I did.

18 MS. SHUTLER: Could we have U.S.A. Exhibit 161 at

19 NPFC-00095?

20 (Pause.)

21 BY MS. SHUTLER:

22 Q Is this document your recommendation for how much to

23 reimburse the ATHOS responsible parties for their

24 supplemental claim?

25 A Yes, ma'am, it is.

7 Hellberg – Direct 49:25-50:16 (Trial Day 20, Oct. 26, 2010)

Hellberg – Direct 49

25 Q Did you make an offer to settle the ATHOS responsible

Hellberg – Direct 50

1 party's first claim?

2 A Yes, ma'am, I did.

3 MS. SHUTLER: Could we have U.S.A. Exhibit 154 at

4 NPFC-00002?

5 BY MS. SHUTLER:

6 Q Is this your offer letter?

7 A Yes, ma'am, it is.

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63

 

8 Q And did the ATHOS responsible parties accept this offer?

9 A Yes, ma'am, they did.

10 MS. SHUTLER: Can I have U.S.A. Exhibit 156 at

11 NPFC-00083?

12 (Pause.)

13 BY MS. SHUTLER:

14 Q And is this document the responsible party's acceptance

15 of the NPFC's offer of approximately $77 million?

16 A Yes, ma'am, it is.

8 Hellberg – Direct 51:19-52:7 (Trial Day 20, Oct. 26, 2010)

Hellberg – Direct 51

19 Q Is this a summary of vendors you prepared for Frescati's

20 supplemental claim?

21 A Yes, ma'am, it is.

22 MS. SHUTLER: Could we have U.S.A. Exhibit 162 NPFC23 000104?

24 BY MS. SHUTLER:

25 Q And is this a more detailed summary of vendors you

Hellberg – Direct 52

1 prepared for the supplemental claim?

2 A Yes, ma'am, it is.

3 MS. SHUTLER: U.S.A. Exhibit 160 at NPFC-00093?

4 BY MS. SHUTLER:

5 Q Is this the signed acceptance letter by the responsible

6 parties of the NPFC's offer to accept $10.8 million?

7 A Yes, ma'am, it is.

9 Laferriere – Direct 13:16-24 (Trial Day 18, October 21, 2010)

Laferriere – Direct 13

16 A Yes, vessel owners are required to have their own plan.

17 Q And what does that vessel -- what requirements are

18 included in that vessel response plan?

19 A In a vessel response plan, basically the vessel owner and

20 operator has to identify a worse case discharge for that

21 vessel. In addition to that, the vessel owner and operator

22 has to identify the equipment, containment equipment,

23 recovery equipment, and a number of resources to respond to

24 that spill.

10 Benson – Direct 9:22-10:5 (Trial Day 19, October 25, 2010)

Benson – Direct 9

22 THE WITNESS: Yes, sir. The Vessel Response Plan is

23 also born out of the Oil Pollution Act of 1990 requiring

24 every tank vessel to have an Emergency Response Plan in the

25 event of an oil spill, yes, sir.

Benson – Direct 10

1 THE COURT: Thank you.

2 BY MR. O'CONNOR:

3 Q Does that plan have to be approved by the Coast Guard?

4 A It is, it's vetted and inspected and approved by the

5 Coast Guard.

11 Benson - Direct 12:16-19 (Trial Day 19, October 25, 2010)

Benson – Direct 12

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16 Q Does the regulations implementing the Oil Pollution Act

17 also require that a Vessel Response Plan have a predesignated

18 oil-spill response organization?

19 A It does.

12 Laferriere – Direct 8:18-9:4 (Trial Day 17, October 21, 2010)

Laferriere – Direct 8

18 Q You mentioned that you were technical advisor to the

19 federal on-scene coordinator and for a time were also the

20 federal on-scene coordinator. Can you explain what the

21 functions of the federal on-scene coordinator include?

22 A Yeah, the federal on-scene coordinator is responsible for

23 insuring that the oil spill is cleaned up as quickly as

24 possible, effecting the immediate removal of the oil, and in

25 so doing, he has to insure that all the operations involved

Laferriere – Direct 9

1 in the oil spill, including salvage, oil removal from the

2 water surface, oil removal from the subsurface, wildlife

3 rehabilitation and recapture, all those things, all those

4 different functions have to be performed during a spill.

13 Laferriere - Direct 11:11-17 (Trial Day 18, October 21, 2010)

Laferriere – Direct 11

11 Q Is incurring the least possible cost a priority in the NCP

12 for oil spill response?

13 A No.

14 Q Why not?

15 A Because, again, the regulation requires effective and

16 immediate removal. Costs cannot get in the way of an oil

17 spill cleanup.

14 Benson – Cross 138:10-25 (Trial Day 33, December 1, 2010)

Benson – Cross 138

10 Q And your priorities, your priorities, as the qualified

11 individual on the project, was to get the spill cleaned up,

12 correct?

13 A Under Federal Law, it tells me that I must react very

14 quickly, I must activate resources, be knowledgeable of the

15 vessel response plan and make sure it's cleaned up.

15 Hellberg – Direct 36:24-37:5 (Trial Day 20, October 26, 2010)

Hellberg – Direct 36

24 Q Does reasonable cost require the least cost or cheapest

25 clean-up effort?

Hellberg – Direct 37

1 A No, ma'am.

2 Q Why not?

3 A Because it's what's needed, personnel, materials and

4 equipment-wise, to prevent -- mitigating and minimize the

5 effects of the spill on the environment.

16 Laferriere - Direct 5:6-19 (Trial Day 18, October 21, 2010)

Laferriere – Direct 5

6 Q Could you briefly explain what the Atlantic Strike Team

7 is?

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8 A Yes, the Atlantic Strike Team is one of three strike

9 teams in the Coast Guard. There's one in the Gulf. There's

10 also one in the Pacific. They compose the National Strike

11 Force. These are teams that are specialized oil pollution,

12 chemical, and weapons of mass destruction SWAT Teams,

13 basically .

14 Q Why does the Coast Guard organize Strike Teams?

15 A The oil spills, chemical spills, and weapons of mass

16 destruction incidences are very complex, so the Coast Guard

17 put these special teams together to advise and assist other

18 Coast Guard commanders in executing a response to these types

19 of incidents.

17 Morrison – Direct 174:23-175:4 (Trial Day 19, October 25, 2010)

Morrison – Direct 174

23 A Under OPA in addition to the gross negligence willful

24 misconduct if a – if a responsible party fails to cooperate

25 with the FOSC, Federal On scene Coordinator, they could

Morrison – Direct 175

1 jeopardize their limit of liability specifically by

2 regulation. Additionally, if they failed to comply with the

3 order given, certain orders given they could jeopardize their

4 limit of liability.

18 Laferriere – Direct 9:13-22 (Trial Day 18, October 21, 2010)

Laferriere – Direct 9

13 Q Who is designated as the responsible party for the ATHOS

14 spill?

15 A It was the owner of the vessel.

16 Q And is the operator also designated?

17 A The owner and operator of the vessel.

18 Q What is the responsible under the Oil Pollution Act?

19 A The responsible party is the owner and operator of the

20 vessel or facility from which the oil spilled.

21 Q Is that designation without regard to fault?

22 A Yes.

19 Benson – Direct 8:11-9:8 (Trial Day 19, October 25, 2010)

Benson – Direct 8

11 Q Okay. What's your connection with the ATHOS, this case

12 that we're here in court on today?

13 A I am the designated Qualified Individual for the vessel

14 and for Tsakos Shipping and Trading.

15 Q What's a Qualified Individual?

16 A Qualified Individual is a person that is basically born

17 out of the Oil Pollution Act of 1990. I am the designated

18 person for Tsakos Shipping and Trading, representing the

19 ATHOS at the time of the spill. I'm based in the United

20 States, I'm on call 24 hours a day. I liaison with the

21 owners back in Greece, and I'm also authorized to activate

22 resources and spend money on behalf of the owner.

23 Q Were you designated as the Qualified Individual in the

24 Vessel Response Plan for the ATHOS?

25 A I was.

Benson – Direct 9

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1 Q Okay. Did O'Brien's, meaning O'Brien's Oil Pollution

2 Services, have a contract with Tsakos at the time of the

3 ATHOS spill?

4 A They did.

5 Q And what services did that contract call for you to

6 provide?

7 A Qualified Individual services and Response Management

8 services, as per the Vessel Response Plan.

20 Benson - Direct 11:18-12:5 (Trial Day 19, October 25, 2010)

Benson – Direct 11

18 Q How did you come to learn about the ATHOS incident?

19 A Actually, I was on vacation and I received a call from

20 our 24-hour Command Center in Slidell, Louisiana.

21 Q When you got the call, what did you do?

22 A I immediately notified the Duty Incident Commander and

23 advised him to make Federal, state and local notifications,

24 which consisted of the National Response Center, the Marine

25 Inspection Office -- or the Marine Safety Office in

Benson – Direct 12

1 Philadelphia, the U.S. Coast Guard, the Tri-State

2 notifications for Pennsylvania, Delaware and New Jersey, and

3 available Local Emergency Preparedness Commission personnel,

4 fire departments and police departments in this local area.

5 Also, we activated the Duty Incident Commander as well.

21 Benson - Direct 15:18- 16:3 (Trial Day 19, October 25, 2010)

Benson – Direct 15

18 Q How did you go about mobilizing the necessary labor,

19 equipment and supplies needed to respond to the ATHOS spill?

20 A We activated the Vessel Response Plan. The National

21 Response Corporation is Tsakos' contracted oil-spill cleanup

22 organization or contractor. From that point, we activated

23 NRC, or National Response Corp., requesting labor, equipment,

24 materials and supplies to respond and mobilize into the

25 Philadelphia area. We also asked -- requested that the

Benson – Direct16

1 National Response Corp. activate their Incident Command

2 Network, which is pre-event agreements with other

3 subcontractors and cleanup organizations to respond as well.

22 Benson – Direct 11:18-12:5 (Trial Day 19, October 25, 2010)

Benson – Direct 11

18 Q How did you come to learn about the ATHOS incident?

19 A Actually, I was on vacation and I received a call from

20 our 24-hour Command Center in Slidell, Louisiana.

21 Q When you got the call, what did you do?

22 A I immediately notified the Duty Incident Commander and

23 advised him to make Federal, state and local notifications,

24 which consisted of the National Response Center, the Marine

25 Inspection Office -- or the Marine Safety Office in

Benson – Direct 12

1 Philadelphia, the U.S. Coast Guard, the Tri-State

2 notifications for Pennsylvania, Delaware and New Jersey, and

3 available Local Emergency Preparedness Commission personnel,

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4 fire departments and police departments in this local area.

5 Also, we activated the Duty Incident Commander as well.

23 Laferriere – Direct 13:25-14:23 (Trial Day 18, October 21, 2010)

Laferriere – Direct 13

25 Q What organizational structure does the federal on-scene

Laferriere – Direct 14

1 coordinator use to direct and manage an oil spill?

2 A That would be the incident command system.

3 Q What's the incident command system?

4 A The incident command system is a formalized structure,

5 command and control structure, designed to bring all these

6 different agencies and organizations, responsible party,

7 private organizations, and cleanup companies all in one room

8 to be able to work together, so it's a common system for how

9 to respond to emergencies.

10 Q Can you describe the components of the incident command

11 system?

12 A Yes, the main components of the incident command system

13 are at the top you have a unified command, which consists of

14 the Coast Guard federal on-scene coordinator, a state or a

15 number of state representatives, and a responsible party.

16 Beneath that unified command are four operational functions;

17 the operations section, planning section, logistic section,

18 and finance.

19 Operates executes the mission, gets the job done,

20 planning puts the plan together for operations to execute,

21 the finance section funds the operation, and logistics

22 provides all the resources necessary for operations to

23 execute the mission.

24 Laferriere - Direct 4:17-22 (Trial Day 18, October 21, 2010)

Laferriere – Direct 4

17 Q At the time of the ATHOS spill on November 26th, 2004,

18 what was your position?

19 A I was the commanding officer of the Coast Guard Atlantic

20 Strike Team.

21 Q Was the Atlantic Strike Team involved in the ATHOS spill?

22 A Yes.

25 Laferriere - Direct 15:15-16:8 (Trial Day 18, October 21, 2010)

Laferriere – Direct 15

15 Q What are your qualifications with respect to incident

16 command systems?

17 A Currently I hold a Type I Incident Commander

18 qualification and a Type I Operation Section Chief

19 qualification.

20 Q What is a Type I qualification?

21 A A Type I qualification is the highest level qualification

22 you can get for ICS. In this particular case, incident

23 commander.

24 Q And who issues these certifications?

25 THE COURT: That doesn't tell us very much to me. I

Laferriere – Direct 16

1 can only read one or two levels. How many --

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2 THE WITNESS: Okay, sir. Sorry about that, your

3 Honor.

4 There are five different levels of types actually,

5 and the Type I incident is the highest level, and that

6 consists of, for example, a Katrina-type incident, and a 9/11

7 attack. Those would be Type I incidences, so Type I is the

8 highest qualification.

26 Laferriere - Direct 6:1-10 (Trial Day 18, October 21, 2010)

Laferriere – Direct 6

1 Q In what other capacities were you involved in the ATHOS 1

2 spill?

3 A I served as the technical advisor to the Coast Guard

4 federal on-scene coordinator who was in charge. I also

5 provided salvage assistance, review of the salvage plans,

6 review of incident and action plans, technical advice on

7 cleanup methods and methodologies, how to remove the oil from

8 the water -- the surface of the water, subsurface.

9 Q Were you ever the federal on-scene coordinator?

10 A I was for a little over a few weeks.

27 Laferriere - Direct 8:2-17 (Trial Day 18, October 21, 2010)

Laferriere – Direct 8

2 Q How much area did the spill affect?

3 A During my period of service, it was about 70 miles of

4 shoreline on both sides of New Jersey, and also Pennsylvania,

5 and three states were involved, and over 29 -- I recollect

6 over 29 political subdivisions, geographic subdivisions.

7 Q And how many spill responders were involved?

8 A During my period, approximately 1800 folks.

9 Q What was the composition of the spill responders?

10 A The spill responders, it's -- they're made up of a whole

11 different amount of folks. It's like building a Fortune 500

12 company overnight literally. You bring in the Coast Guard,

13 you bring in a response party, a team, you also have several

14 oil spill contractors, you have state, local, and other

15 federal agencies such as the Environmental Protection Agency,

16 U.S. Fish & Wildlife, the National Oceanographic Atmosphere

17 Administration, so a lot of folks were involved.

28 Benson – Direct 20:14-18 (Trial Day 19, October 25, 2010) 

Benson – Direct 20

14 Q Can you estimate at its peak how many people were in the

15 field dealing with containment and cleanup on this oil spill?

16 A I think our -- we peaked at about 1200, 1300 workers in

17 the field.

18 Q And that's excluding the people in the Command Center –

29 Laferriere – Direct 7:5-8:1 (Trial Day 18, October 21, 2010)

Laferriere – Direct 7

5 Q How did the ATHOS spill response compare to the spill

6 responses for these others?

7 A The ATHOS oil spill was unique in that we were dealing

8 with a submerged oil issue. Because of the oil mixing with

9 the stand on both Pennsylvania and New Jersey sides, also on

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10 Tinnicum Island and some other areas, the oil was remobilized

11 by tides and currents, and actually sank below the surface of

12 the water. It also was on the bottom.

13 This is truly unique. We haven't had too many cases

14 where we've had to recover oil below the water surface.

15 Q How did the time of year affect the complexity of the oil

16 spill response?

17 A It was in the winter months. We had cold weather issues

18 to deal with, as far as protecting the workers, and making

19 sure they were safe. We had issues of the currents they have

20 to deal with in the river, which is not typical of, again,

21 large oil spills. We had current -- the tide influences,

22 which caused some of the oil to actually go north of the

23 source point itself.

24 So it became a real challenge in trying to fight

25 this spill, because every day was different where the oil was

Laferriere – Direct 8

1 migrating.

30 Laferriere – Direct 23:20-24:5 (Trial Day 18, October 21, 2010) 

Laferriere – Direct 23

20 But the other thing that's important here, too, to

21 realize is that it's very difficult to predict, especially

22 during the ATHOS incident, the way the oil was going to go

23 the next day, and primarily that was due to different

24 currents, river currents, wind, and the affects of the tide.

25 So we ended staging a lot of equipment down river of the

Laferriere – Direct 24

1 spill in anticipation of migration of the oil in that area.

2 And it's a good thing we did that, because we were

3 able to protect a lot of sensitive areas that were impacted

4 that otherwise, if we hadn't staged that boom, we wouldn't be

5 able to get there in time.

31 Bowman – Redirect 114:9-15 (Trial Day 33, December 1, 2010)

Bowman – Redirect 114

9 A Well, you have to understand at the advent of this event

10 is of a very major issue with a ship in distress at night and

11 very, very adverse weather conditions, unknown quantities of

12 oil, at the time, flowing down a fast river system, in a

13 major metropolitan and industrial area. There's many

14 complexities to this type or response, require immediate

15 activation. We absolutely follow the vessel response plan,

32 Laferriere - Direct 23:20-24:5 (Trial Day 18, October 21, 2010)

Laferriere – Direct 23

20 But the other thing that's important here, too, to

21 realize is that it's very difficult to predict, especially

22 during the ATHOS incident, the way the oil was going to go

23 the next day, and primarily that was due to different

24 currents, river currents, wind, and the affects of the tide.

25 So we ended staging a lot of equipment down river of the

Laferriere – Direct 24

1 spill in anticipation of migration of the oil in that area.

2 And it's a good thing we did that, because we were

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3 able to protect a lot of sensitive areas that were impacted

4 that otherwise, if we hadn't staged that boom, we wouldn't be

5 able to get there in time. 

33 Laferriere - Direct 41:1-42:2 (Trial Day 18, October 21, 2010)

Laferriere – Direct 41

1 Q Did the unified command ever require the development of

2 specific plans that would supplement the incident action

3 plans, the daily incident action plans?

4 A Yes.

5 Q Why?

6 A One example is the site safety plan. The site safety

7 plan, especially in this spill, is very critical because of

8 the water temperature and the frigid air temperatures. So we

9 developed a specific site safety plan again. It's developed

10 on a 24-hour basis for protecting the workers. That's an

11 example of one plan.

12 Q And what kind of requirements did you include in that

13 site safety plan to protect worker's safety?

14 A That would include things like protective equipment

15 against the oil itself. The oil posed a dermal hazard, so

16 they had to make sure that the workers were protected from

17 skin contact with the oil.

18 Additionally, warm weather gear was important. The

19 issuance of hot meals, and warm meals, and those kinds of

20 things were all critical to insuring the health and safety of

21 the workers.

22 THE COURT: Did you mean warm weather gear?

23 THE WITNESS: Yes, sir. Warm weather gear, right.

24 Winter gear primarily.

25 THE COURT: Well, that's not warm weather. 

Laferriere – Direct 42

1 THE WITNESS: Oh, cold weather gear. I'm sorry. My

2 apologies, sir.

34 Benson – Direct 29:6-15 (Trial Day 19, October 25, 2010)

Benson – Direct 29

6 Q Okay. Did O'Brien's pay for hot meals for the workers in

7 the field?

8 A Yes, we did.

9 Q Why?

10 A It was wintertime in Philadelphia and snow and cold and

11 subzero temperatures at some times. Worker safety is our

12 first priority, as I stated earlier. The Coast Guard

13 required us through the Incident Action Plan and through the

14 Site Safety Plan to provide our workers in the field one hot

15 meal a day. So, we were required to do that and we did.

35 Laferriere - Direct 16:10-17:6 (Trial Day 18, October 21, 2010)

Laferriere - Direct 16

10 Q How does the incident command structure, through the

11 unified command, decide what actions are necessary, where and

12 in what order?

13 A They create an incident action plan.

14 Q What is an incident action plan?

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15 A An incident action plan is basically a battle plan for

16 how the oil spill's going to proceed, and how the operation

17 section is going to carry out the mission of the cleanup.

18 Q And what type of work assignments are included in an

19 incident action plan?

20 A The incident action plan will address all of the

21 different field functions involved in an oil spill response.

22 As I mentioned earlier, salvaging the vessel, salvaging the

23 oil, on-water recovery, removing the oil from the water,

24 protective booming operations to protect sensitive areas from

25 getting impacted from the oil, wildlife recovery operations,

Laferriere - Direct 17

1 and also vessel facility decon operations. That's an example

2 of all the -- a few of the operations.

3 Q How often are incident action plans prepared particularly

4 at the beginning of an oil spill response?

5 A During the initial part of the oil spill, the plans were

6 done every 24 hours.

36 Laferriere - Direct 19:18-20:3

Laferriere - Direct 19

18 Q What was included in the typical incident accident plan

19 for the ATHOS?

20 A Okay. You saw the organization chart. Obviously you've

21 got to have that. It lets everybody know what the command

22 and control system is for the incident. You have also seen

23 the list of the response objectives that are developed by the

24 command, and the things that they want to get accomplished.

25 You have a list of various work assignments that's given to

Laferriere - Direct 20

1 each of the supervisors in the field to execute. There's a

2 communications plan, and a medical plan, and also a site

3 safety section as well.

37 Laferriere - Direct 11:3-10 (Trial Day 18, October 21, 2010)

Laferriere - Direct 11

3 Q Does the National Contingency Plan identify oil spill

4 priorities for cleanup?

5 A Yes.

6 Q What are those priorities?

7 A The priorities are prevent and mitigate a substantial

8 threat of a discharge, let human life, health and safety.

9 That's No. 1. The effective and immediate removal of an oil

10 spill and minimize environmental impacts, to my recollection.

38 Laferriere - Direct19:5-20:3 (Trial Day 18, October 21, 2010)

Laferriere – Direct 19

5 Q Who signs an incident action plan?

6 A The federal on-scene coordinator of the Coast Guard, the

7 responsible party representatives, and the representatives

8 from the states.

9 Q And were incident action plans used to contain and clean

10 up the ATHOS 1 spill?

11 A Yes, they were.

12 Q When you were the federal on-scene coordinator for the

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13 ATHOS 1 spill, did you ever sign an incident action plan?

14 A Yes, I did.

39 Laferriere – Direct 37:10-38:2 (Trial Day 18, October 21, 2010) 

Laferriere – Direct 37

10 Q What is the federal on-scene coordinator's main

11 consideration when reviewing the incident action plan prior

12 to signing?

13 A Here's where the Coast Guard differs from the Department

14 of Defense. The Coast Guard is held by law and required by

15 law to execute the oil spill cleanup in accordance with a

16 National Contingency Plan. So when I sign one of these

17 incident action plans, I'm basically saying that my operation

18 is consistent with the law and the regulations spelled out by

19 the Oil Pollution Act of 1990.

20 Q And what is the effect of the federal on-scene

21 coordinator's signature on the responsible party?

22 A This is also a document that communicates to the

23 responsible party that this is what the federal on-scene

24 coordinator wants accomplished.

25 Q Is it incumbent on the responsible party to take –

Laferriere – Direct 38

1 undertake these actions?

2 A Yes.

40 Laferriere – Direct 17:12-19:4 (Trial Day 18, October 21, 2010)

Laferriere – Direct 17

12 Q What is this document?

13 A This is the operation planning P cycle that we call.

14 Q And what information is contained in the stem?

15 MS. SHUTLER: If we could just hold off for a

16 second?

17 THE WITNESS: Okay. During the initial part of the

18 incident here, because this is the incident event, and you go

19 through the notifications, and the key part of this is the

20 initial getting the unified command together. This only

21 happens one time. Once you assemble the initial unified

22 command, then we go through a planning cycle for executing

23 the battle plan, which we refer to as the incident action

24 plan.

25 BY MS. SHUTLER:

Laferriere – Direct 18

1 Q Can you please explain what occurs in this daily

2 operational planning cycle?

3 A Yes. First and foremost, the unified command gets

4 together and they develop their objectives. These are very

5 broad and general directives on what needs to be

6 accomplished. Once they do that, they communicate those

7 objective to those four sections I mentioned earlier;

8 operations, planning, finance, and logistics.

9 From those general directives, the operation section

10 and the planning section get together and put -- have what's

11 called a tactics meeting. This tactics meeting is designed

12 to develop, you know, how are we going to actually execute

13 the directives provided by the unified command.

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14 Once those tactics are all assembled, they have a

15 planning meeting, they get back with the unified command,

16 they brief the unified command on what their tactics will be.

17 Again, this is for the following day, not for the actual day

18 of the incident.

19 And then once that's verbally approved by unified

20 command, the incident action plan is assembled, put together,

21 and then it's briefed to the people in the field.

22 Q And then it's executed the next day?

23 A Yeah, it's executed, and then the process repeats itself

24 on a daily basis. The key significance of this is that once

25 you accomplish your incident action plan for an incident,

Laferriere – Direct 19

1 you've from a reactive to a proactive phase. In other words,

2 you've gotten control of the incident. So it's very

3 important that you develop your incident action plan very

4 quickly.

41 Laferriere – Direct 20:8-24:10 (Trial Day 18, October 21, 2010)

Laferriere – Direct 20

8 BY MS. SHUTLER:

9 Q Do you recognize this document?

10 A Yes.

11 Q What is it?

12 A This is an incident action plan. This is the cover sheet

13 for an incident accident plan. Now, in this particular plan

14 you'll notice it covers the period from the 7th of December,

15 6:00 in the morning, till 6:00 in the morning on the 8th, the

16 next day, so that's a 24-hour period.

17 Q Thank you.

18 MS. SHUTLER: Can we have U.S.A. Exhibit 127, 06006,

19 the first top five lines?

20 (Pause.)

21 BY MS. SHUTLER:

22 Q What is this component of the incident action plan?

23 A This is, again, this is a standardize ICS form. We call

24 it ICS, Incident Command System Form 202, which is the

25 response objectives I mentioned earlier. This is the

Laferriere – Direct 21

1 objectives that the unified command wants to get accomplished

2 for the cleanup operation.

3 THE COURT: This is quite a while after the incident

4 itself, wasn't it?

5 THE WITNESS: Well, this particular incident action

6 plan is, sir, but early on we had incident action plans the

7 second and third day, right from the beginning.

8 BY MS. SHUTLER:

9 Q Okay. And what do these objectives provide?

10 A Again, these objectives provide direction to the

11 operations section chief -- operations section and planning

12 as far as what the unified command wants accomplished.

13 MS. SHUTLER: Can we take this down and call out the

14 top third of the objectives?

15 (Pause.)

16 BY MS. SHUTLER:

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17 Q Can you walk us through a few of the objectives for

18 December 7th, 2004?

19 A All right. The particular objective you see that's

20 highlighted is called expedite decon of vessels. That

21 particular objective is, as you can see, is very broad. What

22 we're referring to here is the commercial vessels that were

23 in the port. These are the freight ships, the tank vessels,

24 the cruise ships, other vessels that were oiled by the spill.

25 The unified command is telling the staff here that,

Laferriere – Direct 22

1 I want these cleaned and cleaned up quickly. The importance

2 of this objective is that this objective allows for the port

3 to restore -- be restored as quickly as possible. Once you

4 clean the vessels, you get the port back in operation.

5 Q Was the port ever shut down as a result of the spill?

6 A Yes, it was.

7 MS. SHUTLER: Can we scroll a little further?

8 (Pause.)

9 THE WITNESS: This next highlighted objective is a

10 -- is a more common objective you see for an oil spill. This

11 is a continued aggressive shoreline cleanup and disposal

12 operations. In every major oil spill you will have shoreline

13 contamination, and in this case we had -- with the ATHOS we

14 had it.

15 As you can see, this is very broad, but the key word

16 in the statement is the word "aggressive." That tells --

17 that's the unified command telling the operations section, I

18 want you to move out and step out on this and make sure this

19 jobs gets done quickly.

20 MS. SHUTLER: All right. Can we scroll down a

21 little farther?

22 (Pause.)

23 THE WITNESS: Okay. This particular example, again,

24 is another common objective. It's basically booming

25 operations, and a boom is floating protector barrier that we

Laferriere – Direct 23

1 use to contain the oil that spills on the water, and we also

2 use it to protect areas that may be impacted from the oil.

3 So this particular objective actually has two

4 components; one is monitor existing boom operation, existing

5 sensitive site booming strategies, and implement additional

6 strategies as appropriate. So it's telling planning to

7 identify additional sensitive areas that might be threatened

8 by the oil spill, and additionally telling operations to make

9 sure that we protect those areas.

10 BY MS. SHUTLER:

11 Q If you're planning for boom for areas that may need to be

12 protected, what do you do with that boom at the time?

13 A Well, what you do is, the first thing you do is you

14 obviously -- you identify your sensitive areas. Those are

15 pre-identified in the area contingency plan, okay? These are

16 a list of, like, for example, a best nesting area, okay? So

17 that will be pre-identified. And what we want to do with the

18 boom is make sure we put the boom in advance of that to

19 prevent the oil from impacting it.

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20 But the other thing that's important here, too, to

21 realize is that it's very difficult to predict, especially

22 during the ATHOS incident, the way the oil was going to go

23 the next day, and primarily that was due to different

24 currents, river currents, wind, and the affects of the tide.

25 So we ended staging a lot of equipment down river of the

Laferriere – Direct 24

1 spill in anticipation of migration of the oil in that area.

2 And it's a good thing we did that, because we were

3 able to protect a lot of sensitive areas that were impacted

4 that otherwise, if we hadn't staged that boom, we wouldn't be

5 able to get there in time.

6 Q What do you mean by "staging boom"?

7 A Well, this is a -- what you do basically is you take the

8 boom and you put them in specific land sites usually on a

9 tractor-trailer or something, so that you can mobilize it

10 when need to into a different area for protection.

42 Laferriere – Direct 26:2-31:11 (Trial Day 18, October 21, 2010)

Laferriere – Direct 26

2 This is the Incident Command System 42 -- Incident

3 Command System Form 204. It's called an assignment list.

4 That's the title of the form. So right away that tell us

5 that this is an assignment for a field group supervisor

6 that's in charge of this particular mission.

7 The mission as identified here in this particular

8 204 is waterborne vessel and pier decon. What I mean by pier

9 is facilities, because in addition to vessels getting

10 contaminated with oil, facilities got contaminated as well.

11 So this is the work assignment for this particular

12 group, and the way the groups are designed, you have a group

13 supervisor that's in charge, and he's going to have a number

14 of people, and equipment dedicated for him to accomplish this

15 particular mission of deconing vessels and piers.

16 BY MS. SHUTLER:

17 Q And is that for just this particular day?

18 A This is just for this particular day, so every day that

19 an incident action plan was developed, a new work assignment

20 would be issued.

21 Q And for approximately how many months were incident

22 actions plans developed?

23 A Incident action plans were developed through the entire

24 event, as far as my recollection is.

25 Q And about how many months was the cleanup, did the

Laferriere – Direct 27

1 cleanup last?

2 A I don't recall. I think the end of May.

3 Q I notice there's a signature. What is the significance

4 of the signature on this ICS 204 assignment list?

5 A That's the planning section chief. He, again, he puts

6 the incident action plan together and the work assignments,

7 so his signature means that he's reviewed this and approved

8 this work assignment.

9 THE COURT: But nobody else approves it?

10 THE WITNESS: But there's a missing signature here,

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11 sir, and that's an optional signature at the -- at the cover

12 page that we showed you earlier that had a list of all the

13 federal on-scene coordinators, they could either sign this

14 individual worksheet here, or they can sign the incident

15 action plan covering and that suffice for the final approval.

16 THE COURT: All right. Or refuse to sign either of

17 them, in which case they don't go into effect, is it?

18 THE WITNESS: Yes, sir. If the federal on-scene

19 coordinator doesn't sign that, that means he doesn't approve

20 it, yes, sir.

21 THE COURT: Thank you.

22 MS. SHUTLER: All right. Can we call out the top

23 table, or excuse me, the operations personnel section?

24 (Pause.)

25 BY MS. SHUTLER:

Laferriere – Direct 28

1 Q What is the purpose of this section in the ICS 204

2 assignment list?

3 A This is the -- this is basically the chain of command for

4 the work group that we identified earlier, and remembering

5 that work group was vessel decon. This is the vessel decon

6 work group, and these are the two individuals, a Coast Guard

7 member and it looks like a contractor, who were responsible

8 for executing this work assignment.

9 What it shows is the -- his basically chain of

10 command, so that he knows when he executes his mission, and

11 who he reports to.

12 Q At the time, were you the operations section deputy

13 chief?

14 A Yes, that's my name there, so I was a deputy section

15 chief at that time.

16 Q All right.

17 MS. SHUTLER: Can we call out the operations

18 personnel section -- or excuse me -- the incident resources

19 equipment table section?

20 (Pause.)

21 BY MS. SHUTLER:

22 Q What is --

23 A Okay. Oh, I'm sorry.

24 Q What does this table tell us?

25 A This table tells us that this is the list of equipment

Laferriere – Direct 29

1 that's available to those two individuals that are in charge

2 of the group.

3 Q And, again, only for this particular day, correct?

4 A For this particular day and for this particular mission.

5 What it shows you here on the left is these are all

6 the different suppliers, and you can see the various

7 different contractors that are involved in an oil spill.

8 It's not one contractor. That's why it's important to have

9 this incident command system and this process. Otherwise, it

10 would be difficult to organize all these folks.

11 This here is a general list of resource types. As I

12 mentioned, they use barges and vessels as well. A little bit

13 more detailed description of what those barges do and what

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14 they're for. This is the hot system here. This is the

15 pressure system I mentioned earlier. The quantities that's

16 available to the individual -- for each one of these

17 categories, and then their sizes. And assign means that

18 logistics was able to provide them that resource, so that

19 resource should be on hand for the response.

20 MS. SHUTLER: Can we call out the incident resources

21 manpower section?

22 (Pause.)

23 BY MS. SHUTLER:

24 Q Can you explain what this section provides us, what

25 information it provides us?

Laferriere – Direct 30

1 A Now that these guys have the equipment, they need to have

2 the people to execute the mission. So, again, here you see

3 listed the Coast Guard is involved from the National Strike

4 Force, which are the Strike Teams I mentioned earlier, and

5 then these are the other various spill contractors that are

6 all involved.

7 The key point here is the number of folks that will

8 be involved in each of the incidents, and you can see that

9 Clean Harbors and Miller Environmental Group were repeated

10 down here, because they are -- they are conducting night

11 operations.

12 In this particular operation, we were able to do

13 night operations, because we were able to stage lights on

14 board the barges or use lights on the vessels for the

15 cleanup.

16 Q So with respect to Clean Harbor's Coop, the night

17 response component, you would be assured that 30 people, in

18 fact, showed up; is that correct?

19 A This incident action -- according to the incident action

20 plan, yes, they should have 30 people that show up for the

21 incident.

22 MS. SHUTLER: Can we go to Page 2 of this ICS Form

23 204, 06028, and pull out the assignment section?

24 (Pause.)

25 BY MS. SHUTLER:

Laferriere – Direct 31

1 Q What's the significance of this section?

2 A Okay. This is Page 2 of the work order or the work

3 assignment for this vessel decon group again. What's listed

4 here is the specific missions that's required of the -- this

5 particular group. This is where the rubber meets the road.

6 What they're supposed to actually do.

7 And where it says, "Conduct decontamination

8 activities as directed," back at the command post, the

9 operations section chief will have a list of facilities and

10 vessels that need to be decontaminated, and will direct this

11 group to those facilities and vessels.

43 Laferriere – Direct 35:3-36:10 (Trial Day 18, October 21, 2010)

Laferriere – Direct 35

3 Q Is the location where they are deployed generally

4 included in this ICS 204 assignment sheet?

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5 A Yes, and that's another important thing is that you --

6 you have to have this -- again, these get briefed to the

7 people that morning, and said, All right. This is what

8 you're going to do, this is what your mission is, here's

9 where you're going to report to, and it's important that they

10 have a reporting location, so they show up for work in the

11 right place.

12 MS. SHUTLER: Can we pull up the map, please?

13 (Pause.)

14 And can we pull up the -- thank you.

15 BY MS. SHUTLER:

16 Q Now, what is this particular map?

17 A Okay. This map shows -- this is actually an overflight

18 map that was taken, but it shows how we divided the different

19 areas for fighting the oil spill. As you can see, we have

20 Pennsylvania 6, that's a division, Pennsylvania 8, and

21 various Delaware divisions, and then on the New Jersey side,

22 various divisions as well.

23 You need to do this so you can have a battlefield

24 that you can manage appropriately with the right resources.

25 In each one of the divisions, we have a commander that's in

Laferriere – Direct 36

1 charge of that division specifically, and make sure that the

2 mission gets executed for that.

3 These highlighted areas that you see, and these

4 colored areas, are all different areas responding to

5 different shoreline types. For example, the red is marsh.

6 Marsh is the most sensitive -- one of the most sensitive

7 areas to oil.

8 So what this map shows us is that these are the

9 areas that we need to protect and boom off to make sure that

10 none of the oil got into the marsh.

44 Laferriere – Direct 37:3-24 (Trial Day 18, October 21, 2010)

Laferriere – Direct 37

3 Q Now, you mentioned signatures earlier. What are the

4 signatures on this particular first page -- on this first

5 page of this particular ICS?

6 A Okay. Again, this is the Coast Guard signature here,

7 that's the federal on-scene coordinator, and then all three

8 states who were involved signed this plan, and, of course,

9 the responsible party representative.

10 Q What is the federal on-scene coordinator's main

11 consideration when reviewing the incident action plan prior

12 to signing?

13 A Here's where the Coast Guard differs from the Department

14 of Defense. The Coast Guard is held by law and required by

15 law to execute the oil spill cleanup in accordance with a

16 National Contingency Plan. So when I sign one of these

17 incident action plans, I'm basically saying that my operation

18 is consistent with the law and the regulations spelled out by

19 the Oil Pollution Act of 1990.

20 Q And what is the effect of the federal on-scene

21 coordinator's signature on the responsible party?

22 A This is also a document that communicates to the

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23 responsible party that this is what the federal on-scene

24 coordinator wants accomplished.

45 Laferriere – Direct 31:12-32:12 (Trial Day 18, October 21, 2010)

Laferriere – Direct 31

12 Q I notice that there's a line that states, "That NSF

13 supervisors will actively monitor and critique the

14 operations."

15 Just explain again who is the NSF supervisors are?

16 A Okay. Yes, those are the -- those are the members of the

17 Strike Team, and these are, again, the Coast Guard Special

18 Weapons and Tactics, sort of pollution SWAT Team guys, who

19 were specifically assigned to this mission, and their

20 specific role is to insure that this incident action plan

21 work assignment is carried out and executed.

22 Q Who do they report to?

23 A They reported to me in the operations section.

24 Q And that was because you were in the operations section.

25 Was it also because you were commander of the Atlantic Strike

Laferriere – Direct 32

1 Team?

2 A Yes.

3 Q How often would the report to you?

4 A They would report several times throughout the day.

5 Obviously, when they arrived on scene. Usually what I asked

6 them to do, or I asked them to do, period, was to call me

7 before the tactics meeting for the planning cycle for the

8 next day.

9 What this allowed me to do is get feedback from them

10 on what was needed for tomorrow's operations, so I go into

11 the tactics meeting, develop the tactics for the following

12 day.

46 Laferriere – Direct 34:3- 17 (Trial Day 18, October 21, 2010) 

Laferriere – Direct 34

3 Q How did the Strike Team supervisors use this particular

4 form in the field?

5 A Again, without this -- without this form, we wouldn't be

6 able to have an organized response, and wouldn't be able to

7 execute the Coast Guard's mission at the federal on-scene

8 coordinator's direction.

9 So what this actually becomes is a quality control

10 device for the Coast Guard. The supervisors will take this

11 -- the National Strike Force individuals -- the Coast Guard

12 will take this form out to the field, will make sure that the

13 equipment that's listed on here is actually on scene, they

14 will make sure that the personnel listed there is actually

15 available and operating. And last, but not least, make sure

16 that the mission is executed in accordance with the

17 assignment. That's the key thing.

47 Laferriere – Direct 37:25- 39:15 (Trial Day 18, October 21, 2010)

Laferriere – Direct 37

25 Q Is it incumbent on the responsible party to take --

Laferriere – Direct 38

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1 undertake these actions?

2 A Yes.

3 Q In the ATHOS spill, did the ship owner or operator pay

4 contractors to undertake actions directed by the federal

5 on-scene coordinator in these instant action plans?

6 A Yes.

7 Q What would happen if the ship owner did not cooperate

8 with the federal on-scene coordinator and refuse to implement

9 the actions identified in the incident action plans?

10 MR. O'DONOVAN: Objection, your Honor. This calls

11 for a legal conclusion.

12 THE COURT: Yes, but he might know it.

13 Objection overruled.

14 THE WITNESS: The answer to the question is this:

15 If the responsible -- let's assume that the responsible party

16 was not willing to execute their work assignment for vessel

17 decon, the Coast Guard federal on-scene coordinator can step

18 in and take action on his own.

19 BY MS. SHUTLER:

20 Q And what happens when the federal on-scene coordinator

21 takes action on his own?

22 A Basically what he's doing is he's now assuming financial

23 responsibility for the cleanup for that particular act, and

24 in some cases, he can do -- take over the entire incident.

25 THE COURT: But then does he then hold the

Laferriere – Direct 39

1 responsible party liable somehow?

2 THE WITNESS: The responsible party would be

3 responsible now for recovering -- for paying for all the

4 Coast Guard costs, which before he didn't have to, so this

5 would include salaries, the cost of our helicopters, the cost

6 of our boats, the cost of our parts, so it would be much more

7 expensive for him to do that.

8 BY MS. SHUTLER:

9 Q And how much more expensive would it be for a -- for a

10 typical -- in a typical spill response?

11 A On average between two and three times more expensive.

12 So it's designed to be a disincentive to have the Federal

13 Government do all the cleanup. The way the Oil Pollution Act

14 and National Contingency Plan is designed is that the spiller

15 cleans up the oil.

48 Laferriere – Direct 39:16-18 (Trial Day 18, October 21, 2010)

Laferriere – Direct 39

16 Q And did the owners and operators in the ATHOS 1 incident

17 comply with the directives in the incident action plans?

18 A Yes.

49 Benson – Direct 53:12-54:3 (Trial Day 19, October 25, 2010)

Benson – Direct 53

12 Q Did O'Brien's receive any kind of a commendation at the

13 end of this case for its response to the spill?

14 A Yes, yes, we did.

15 Q What was that, a commendation of Unified Command?

16 A Yes, it was a commendation presented to us by Captain

17 Sarubbi, who was the Coast Guard Federal On-Scene

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18 Coordinator. The citation was directed to the Unified

19 Command and the responders for the ATHOS oil-spill event.

20 Very complimentary, very much appreciated, and it was

21 extended to all the Spill Management Team members and I

22 expressed my -- my concerns for -- not concerns per se, but

23 my expression of thank you to all the contractors as well,

24 and this is a -- this is the citation as it reads.

25 Q So, to be clear, the citation was to the Unified Command?

Benson – Direct 54

1 A Yes.

2 Q Of which the RPU were one of the elements?

3 A That's correct.

50 Morrison – Direct 165:9-166:2 (Trial Day 19, October 25, 2010)

Morrison – Direct 165

9 Q Okay. And how does the Oil Pollution Act set the

10 limitation amount within that statutory scheme?

11 A Within that statutory scheme depending on the type of

12 vessel and the tonnage of that vessel you would have -- they

13 set the cap.

14 THE COURT: Based on the value of the ship?

15 THE WITNESS: No, sir, based on the gross tonnage of

16 the vessel. So in the case of the --

17 THE COURT: It does relate to the ship.

18 THE WITNESS: Yes, sir.

19 BY MR. FLYNN:

20 Q Unlike the Limitation of Liability Act but is based on

21 the value of the vessel, is that correct?

22 A Correct, yes, sir.

23 Q And what is the formula that the Oil Pollution Act uses

24 for a tank vessel the size of the ATHOS I?

25 A The ATHOS I in 2004 was $1,200 per gross ton which when

Morrison – Direct 166

1 figured out with the certificated gross tonnage resulted in

2 about a 45.4 million, $45.4 million limit of liability.

51 Hellberg - Direct 41:15-41:25 (Trial Day 20, October 26, 2010)

Hellberg – Direct 41

15 Q And how much did the ATHOS responsible parties initially

16 seek the NPFC to adjudicate?

17 A They initially requested approximately 124 million in

18 their initial submission.

19 Q And did this amount change?

20 A Yes, ma'am, it did.

21 Q And how did that change?

22 A It changed because throughout my adjudication, as I moved

23 through my adjudication, I had continuing communications with

24 the responsible party and that final requested amount did

25 change and it did go up.

52 Morrison – Direct 162:25-163:6 (Trial Day 19, October 25, 2010)

Morrison – Direct 162

25 Q And what is your title there?

Morrison – Direct 163

1 A I'm the chief of the Claims Adjudication Division.

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2 Q How long have you held that?

3 A I've been -- I've held that for over six years.

4 Q And so you were chief of the Claims Adjudication Division

5 at the time of the ATHOS spill?

6 A Yes, sir.

53 Morrison – Direct 167:19-22 (Trial Day 19, October 25, 2010)

Morrison – Direct 167

19 Q Okay. Who determines whether a responsible party is

20 entitled to this limitation of liability at the National

21 Pollution Funds Center?

22 A I make that determination.

54 Morrison - Direct 171:1-8 (Trial Day 19, October 25, 2010)

Morrison – Direct 171

1 Q And what did you base that decision on? And I do not

2 want your analysis but what did you consider in terms of

3 evidence?

4 A The claimant's submission package which was thousands of

5 pages which included vessel documentation, crew documentation

6 and post incident investigation information and I also did,

7 we did external research and then I had some assistance in

8 reports from a couple of Federal agencies. 

55 Morrison – Direct 173:9-24 (Trial Day 19, October 25, 2010)

Morrison – Direct 173

9 Q They give us the weather reports, that's right. And then

10 you said you also went to was it another part of the Coast

11 Guard to ask for assistance?

12 A Yes.

13 Q And who was that?

14 A Well, first was the Marine Safety Center which is in the

15 Washington, DC.

16 Q And what do they do?

17 A They're responsible, they are the Coast Guard command

18 that's responsible for the technical review of ship

19 standards, ship standards foreign and domestic U.S. for

20 evaluating regulations requirements.

21 Q And what did you -- what help did you seek from them?

22 A I wanted them to do an objective analysis of the data

23 that was provided by the responsible party regarding the

24 draft of the vessel.

56 Morrison - Direct 172:16-173:7 (Trial Day 19, October 25, 2010) 

Morrison – Direct 172

16 Q Now in order to ascertain whether the information

17 submitted to you by the claimant was correct what sources did

18 you look at outside of those materials in this case?

19 A I looked at the existing publications, existing charts on

20 navigation, Delaware Bay and River. I also contacted NOAA

21 and got additional information from them and I contacted a

22 couple of elements within the Coast Guard, the captain at

23 port down in Mobile, Alabama.

24 Q Well, let's slow down a little.

25 A Sorry.

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Morrison – Direct 173

1 Q Okay. Let's, first, you mentioned NOAA, what did you ask

2 NOAA for?

3 A I asked them for tidal, their tide tables basically

4 predicted and actual for the period leading up to the

5 incident and after the incident.

6 Q And NOAA is the National Oceanic and Atmospheric

7 Administration?

57 Morrison - Direct 173:25-175:4 (Trial Day 19, October 25, 2010)

Morrison – Direct 173

25 Q And did you ask any other component of the Coast Guard? 

Morrison – Direct 174

1 I think mentioned somebody in Mobile for information.

2 A Yes, sir. The ship was drydocked in Mobile and I wanted

3 to ensure that the hull was in compliance with the thickness,

4 the engineering requirements.

5 Q In other words, the minimum thickness for the hull

6 plating?

7 A Minimum thickness of hull plating on a single hull

8 tanker, single bottom tanker.

9 Q And were there any particular regulations that you

10 examined to ascertain whether the claimant had complied with?

11 A Yes, sir, there were several that related to depth of

12 vessel, draft of vessel, depth of water, specifically the

13 under keel clearance regulations which I think is 33 CFR 157.

14 And the 46 CFR on the engineering.

15 Q Okay.

16 A And construction issues.

58 Morrison - Direct 174:9-16 (Trial Day 19, October 25, 2010)

Morrison – Direct 174

9 Q And were there any particular regulations that you

10 examined to ascertain whether the claimant had complied with?

11 A Yes, sir, there were several that related to depth of

12 vessel, draft of vessel, depth of water, specifically the

13 under keel clearance regulations which I think is 33 CFR 157.

14 And the 46 CFR on the engineering.

15 Q Okay.

16 A And construction issues. 

59 Morrison - Direct 174:17-175:4 (Trial Day 19, October 25, 2010)

Morrison – Direct 174

17 Q Now did you also request from the -- any information from

18 the Federal on-scene commander?

19 A Yes, I did. I requested through the NPFC representatives

20 to the unified command that I have an assessment of the level

21 of cooperation.

22 Q Why is that important?

23 A Under OPA in addition to the gross negligence willful

24 misconduct if a -- if a responsible party fails to cooperate

25 with the FOSC, Federal On Scene Coordinator, they could

Morrison – Direct 175

1 jeopardize their limit of liability specifically by

2 regulation. Additionally, if they failed to comply with the

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3 order given, certain orders given they could jeopardize their

4 limit of liability. 

60 Morrison - Direct 167:19-168:10 (Trial Day 19, October 25, 2010)

Morrison – Direct 167

19 Q Okay. Who determines whether a responsible party is

20 entitled to this limitation of liability at the National

21 Pollution Funds Center?

22 A I make that determination.

23 THE COURT: Is there a procedure that's followed?

24 THE WITNESS: Yes, sir.

25 BY MR. FLYNN:

Morrison – Direct 168

1 Q Can you tell us about that procedure?

2 A Under OPA there's clear requirements and really there's

3 three determinations or three steps, three elements that are

4 done. The responsible party will have to come in and

5 demonstrate that they're -- that they by gross -- their gross

6 negligence did not proximately cause the release, that no

7 willful misconduct proximately caused the release and that no

8 violation of Federal safety construction or operating

9 regulation was violated, was violated to proximately cause

10 the release.

61 Morrison - Direct 170:17-22 (Trial Day 19, October 25, 2010)

Morrison – Direct 170

17 Q Did the National Pollution Funds Center adjudicate

18 whether the responsible parties for the ATHOS I incident were

19 entitled to limit their liability?

20 A Yes, we did adjudicate that and made a decision.

21 Q And what was that decision?

22 A We upheld their limit.

62 Morrison - Direct 175:5-7 (Trial Day 19, October 25, 2010)

Morrison – Direct 175

5 Q Okay. And what was your determination, was the claimant

6 entitled to limit its liability?

7 A The claimant was entitled to limit their liability, yes.

63 Hellberg – Direct 32:2-14 (Trial Day 20, October 26, 2010)

Hellberg – Direct 32

2 Q And what division or branch within the U.S. Coast Guard's

3 National Pollution Fund Center do you work within?

4 A I work within the Claims Adjudication Division.

5 Q What is your current position in the Claims Adjudication

6 Division?

7 A I'm currently the Lead Claims Manager.

8 Q Have you held any other positions at the National

9 Pollution Fund Center prior to this?

10 A Yes, ma'am. I have held the position of Claims Manager

11 and Removal Claims Branch Chief.

12 Q As Supervisor of Claims Managers, do you personally

13 adjudicate claims?

14 A Yes, ma'am, I do.

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64 Hellberg – Direct 32:23-33:4 (Trial Day 20, October 26, 2010)

Hellberg – Direct 32

23 Q Did you adjudicate the claims from the responsible

24 parties for the ATHOS spill?

25 A Yes, ma'am, I did.

Hellberg – Direct 33

1 Q Were you Supervisor of Claims Managers when the

2 responsible parties for the ATHOS spill submitted their

3 claims to the Oil Spill Liability Trust Fund?

4 A Yes, ma'am, I was.

65 Hellberg – Direct 41:15-41:25 (Trial Day 20, October 26, 2010)

Hellberg – Direct 41

15 Q And how much did the ATHOS responsible parties initially

16 seek the NPFC to adjudicate?

17 A They initially requested approximately 124 million in

18 their initial submission.

19 Q And did this amount change?

20 A Yes, ma'am, it did.

21 Q And how did that change?

22 A It changed because throughout my adjudication, as I moved

23 through my adjudication, I had continuing communications with

24 the responsible party and that final requested amount did

25 change and it did go up.

66 Hellberg – Direct 42:1-6 (Trial Day 20, October 26, 2010)

Hellberg – Direct 42

1 Q And did the ATHOS responsible parties later submit a

2 second or supplemental claim for adjudication?

3 A Yes, ma'am, they did.

4 Q For about how much?

5 A That supplemental claim was for approximately $14

6 million. 

67 Morrison – Direct 178:13-19 (Trial Day 19, October 25, 2010)

Morrison – Direct 178

13 Q And did you adjudicate those actual removal cost claims

14 yourself?

15 A No, sir, I did not. I directed Donna Helberg of my

16 staff, one of my claims managers actually, she was the chief

17 of the Removal Branch Section at that time, Removal Cost

18 Claim Branch Section at that time and I assigned the claim to

19 her.

68 Hellberg – Direct 38:9-39:4 (Trial Day 20, October 26, 2010)

Hellberg – Direct 38

9 Q What types of documents do you like to see when you're

10 reviewing a claim for removal costs?

11 A The type of documents I like to see, first of all, would

12 be a cover letter with an amount requested, or we do have an

13 Oil Spill Liability Trust Form -- Trust Fund Claim Form.

14 Along with that, I like to see the invoices, the dailies for

15 those invoices; I like to see any contracts or rate schedules

16 that would be applicable; I like to see photographs, disposal

17 manifests, or any other types of documentation available.

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18 Q Did the responsible parties for the ATHOS I spill provide

19 you with those types of documents to support their removal20 cost claims?

21 A Yes, ma'am, they did.

22 Q What did you do if you felt the documents submitted by

23 the ATHOS I responsible parties were not sufficient to

24 establish a claimed removal cost as reimbursable?

25 A I would either request additional information or I would

Hellberg – Direct 39

1 call the responsible party and request clarification of

2 whatever issue I needed clarification on, or I would speak to

3 people within the Unified Command, whether it be Coast Guard

4 or the Spill Management Team, or the contractors themselves.

69 Hellberg – Direct 46:13-16 (Trial Day 20, October 26, 2010)

Hellberg – Direct 46

13 Q Now, did you prepare more detailed vendors of the 50-

14 some-thousand pages of documents submitted for all 88

15 vendors?

16 A Yes, ma'am, I did.

70 Benson – Direct 34:3-35:11 (Trial Day 19, October 25, 2010)

Benson – Direct 34

3 Q Okay. Are you familiar with something called dailies?

4 A Daily supports, yes.

5 Q What are they?

6 A What they do is they calculate and account for the labor,

7 numbers of laborers, workers, equipment, materials that are

8 used in the oil spill and supplies to support the oil spill,

9 on a day-to-day basis in the geographical area that the

10 workers are working in. At the end of the day, the

11 contractor fills out his daily support sheet listing,

12 itemizing what was deployed that day, and that is presented

13 to our O'Brien's Division Supervisor.

14 THE COURT: Why couldn't O'Brien's do that itself?

15 THE WITNESS: Well, it's contractor equipment, it's

16 contractor labor, and they're primarily responsible for

17 that, they fill out the daily support sheets. Our division

18 supervisor looks at that daily support sheet and concurs that

19 the number of personnel, the number -- the quantity of boom

20 or equipment used for that date is on that daily support

21 sheet, and then they both sign it.

22 BY MR. O'CONNOR:

23 Q Now, when you say a Section Supervisor, that's your man

24 in the field on-site where the contractor in question has his

25 -- whatever his men, equipment and supplies are?

Benson – Direct 35

1 A That is correct, that's our Division Supervisor

2 responsible for that geographical area.

3 Q And he literally counts heads?

4 A He does.

5 Q And does he sign the daily that the contractor has

6 provided?

7 A That's affirmative, he does.

8 Q Is that his signification that he agrees that the number

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87

 

9 of men and equipment set forth in that particular day's daily

10 was in fact on the scene?

11 A That's the exact reason, yes.

71 Hellberg – Direct 39:5-12 (Trial Day 20, October 26, 2010)

Hellberg – Direct 39

5 Q Using the documents provided by the ATHOS responsible

6 parties, how did you satisfy yourself that contractors were

7 on scene and supplies and equipment were delivered on site

8 and the work was executed?

9 A I reviewed the documentation, such as the contractor

10 invoices, with their dailies, as well as looked at Unified

11 Command documents, such as the incident command -- I mean

12 incident-action plans, I'm sorry.

72 Hellberg – Direct 37:6-14 (Trial Day 20, October 26, 2010)

Hellberg – Direct 37

6 Q What additional metric did you use to determine the

7 reasonableness of the rates charged by the clean-up

8 contractors hired by the responsible party for the ATHOS

9 spill?

10 A I used the prime contractors' rate schedules.

11 Q What is a prime contractor?

12 A A prime contractor is a contractor that has a direct

13 contract relationship in this case with the responsible

14 party.

73 Hellberg – Direct 53:18-55:21 (Trial Day 20, October 26, 2010)

Hellberg – Direct 53

18 MS. SHUTLER: Could we have P Exhibit 1419 at ADAM19 0020462?

20 (Pause.)

21 BY MS. SHUTLER:

22 Q Ms. Hellberg, what is this document?

23 A This document is a summary sheet that was preceding the

24 invoices associated with Garner Environmental. This

25 particular summary is for Garner's Invoice 403791, the total

Hellberg – Direct 54

1 amount of that invoice was $307,350.

2 THE COURT: And 79 cents?

3 THE WITNESS: And 79 cents, yes, sir.

4 BY MS. SHUTLER:

5 Q Ms. Hellberg, how did you determine that the $307,350.79

6 should be paid?

7 A I would take the Garner Environmental invoice and compare

8 it to Garner Environmental's daily.

9 MS. SHUTLER: Could we have Plaintiffs' Exhibit 1419

10 at ADAM-0020463? Can you call out from December -- or --

11 right, yes, December 6th down through December 7th.

12 BY MS. SHUTLER:

13 Q Is this the invoice that corresponds with the $307,350

14 and some cents?

15 A Yes, ma'am, it is.

16 Q Okay. Can you tell me a little bit about this invoice?

17 A Yes, ma'am. At the top it indicates the number that I

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88

 

18 referenced from the summary sheet; it shows that the first

19 day of response for this particular invoice is Monday,

20 December 6th, 2004.

21 MS. SHUTLER: May I have Plaintiffs' Exhibit 1419 at

22 ADAM-0020469? And can you call out the first two tables?

23 BY MS. SHUTLER:

24 Q What document is this?

25 A This is the contemporaneous daily field log that the

Hellberg – Direct 55

1 invoice was generated from.

2 MS. SHUTLER: Now, can I have a side-by-side between

3 the -- for Plaintiffs' 1419?

4 BY MS. SHUTLER:

5 Q Can you explain -- can you compare these two documents

6 together?

7 A Yes, ma'am. Your Honor, the bottom is an excerpt from

8 that daily they just had up. In the first section here that

9 they are showing us is the labor section and it shows that we

10 have one supervisor who began work in the evening at 8:00

11 p.m., worked until midnight, which constitutes four hours of

12 overtime; it shows he worked at a rate of $75. Likewise, a

13 foreman came on that same night, same start time, same stop

14 time, for four hours at a rate of $60 an hour. So, then I

15 took that information and compared it to the invoice on the

16 top, which does demonstrate four hours supervisor overtime

17 with a corresponding same hourly rate, and the same four

18 hours overtime for a foreman at $60 an hour.

19 Q So that in this case you were able to use the dailies to

20 corroborate the invoices for the manpower?

21 A Yes, ma'am.

74 Hellberg – Direct 56:9-57:12 (Trial Day 20, October 26, 2010)

Hellberg – Direct 56

9 Q How did you verify that the rates were proper for

10 manpower and equipment?

11 A Because I compared the information from the daily and the

12 invoice to the Garner Environmental rate schedule that was

13 submitted with the claim for the responsible party.

14 MS. SHUTLER: Can I have P-1419 at ADAM-0020311?

15 BY MS. SHUTLER:

16 Q Is this the Garner's rate schedule that was submitted by

17 the ATHOS responsible parties?

18 A Yes, ma'am, it is.

19 MS. SHUTLER: Can I have P-1419 at ADAM-0020317?

20 And can we pull out the personnel section?

21 BY MS. SHUTLER:

22 Q Can you explain what this is?

23 A Yes. This is the second page of the Garner rate schedule

24 that begins with the personnel and the first highlighted item

25 shows that a supervisor's overtime rate is 75, it has the

Hellberg – Direct 57

1 foreman listed with an overtime rate of 60, which does

2 correlate to the daily as well as the Garner invoice.

3 MS. SHUTLER: Can I have P-1419 at ADAM-0020318?

4 (Pause.)

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5 BY MS. SHUTLER:

6 Q What's contained in this component of the Garner's rate

7 sheet?

8 A This shows the rates for automotive equipment and the

9 first highlighted line does demonstrate that the pickup truck

10 was billed out at $115 a day, and at the second-to-the-bottom

11 line here does show a utility trailer at $75 a day, which

12 does match with the daily and the invoice.

75 Hellberg – Direct 38:22-39:4 (Trial Day 20, October 26, 2010)

Hellberg – Direct 38

22 Q What did you do if you felt the documents submitted by

23 the ATHOS I responsible parties were not sufficient to

24 establish a claimed removal cost as reimbursable?

25 A I would either request additional information or I would

Hellberg – Direct 39

1 call the responsible party and request clarification of

2 whatever issue I needed clarification on, or I would speak to

3 people within the Unified Command, whether it be Coast Guard

4 or the Spill Management Team, or the contractors themselves.

76 Hellberg – Cross 85:8-25 (Trial Day 20, October 26, 2010)

Hellberg – Cross 85

8 Q That was my next question. There was absolutely no issue

9 during the six months of your review with respect to any item

10 that the on-scene command ordered, isn't that correct?

11 A No, that's actually not true.

12 Q Okay. Then what inquiries did you make and to whom and

13 on what basis?

14 A Well, I can't tell you exactly. What I can assure you is

15 that any time I had a question on level of effort or whether

16 something went on because maybe a daily wasn't signed, if I

17 couldn't get clarification through Unified Command documents,

18 then I might call the vendor themselves.

19 Q So, the first level would be the documents that you had

20 yourself to see if there was an explanation?

21 A Right. Or then I would ask the responsible party, I

22 would contact Mr. Chalos, or sometimes he would refer me to

23 Roussel. And then other times, if I needed an answer or felt

24 like they weren't working quick enough, I would call the

25 contractor.

77 Hellberg – Direct 34:17-35:19 (Trial Day 20, October 26, 2010)

Hellberg – Direct 34

17 Q How do you determine whether the actions undertaken by

18 the responsible party were consistent with the NCP, the

19 National Contingency Plan, or were directed by the Federal

20 On-Scene Coordinator?

21 A I review the documents submitted by the claimant, in this

22 case the responsible party, as well as documents generated by

23 the Unified Command.

24 Q And by -- excuse me.

25 A I'm sorry. In particular, documents such as the

Hellberg – Direct 35

1 incident-action plans or pollution reports.

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2 Q Is there anything particularly useful to you in an

3 incident-action plan when you're trying to make those

4 determinations?

5 A Yes, ma'am. Within the incident-action plan are ICS

6 Forms 204 and 209, and those forms are exclusive to the

7 assignment and summarization of resources on an oil spill.

8 Q And do those forms identify what location and on what day

9 those resources and supplies should be at -- on scene?

10 A Yes, ma'am. Each incident-action plan is for a

11 operational period and for specific locations.

12 Q And are operational periods, at least for the early

13 phases of a spill, on a 24-hour basis?

14 A Yes, ma'am, they are done every day.

78 Hellberg - Direct 36:24-37:5 (Trial Day 20, October 26, 2010)

Hellberg – Direct 36

24 Q Does reasonable cost require the least cost or cheapest

25 clean-up effort?

Hellberg – Direct 37

1 A No, ma'am.

2 Q Why not?

3 A Because it's what's needed, personnel, materials and

4 equipment-wise, to prevent -- mitigating and minimize the

5 effects of the spill on the environment.

79 Hellberg – Direct 36:19-23 (Trial Day 20, October 26, 2010) 

Hellberg – Direct 36

19 Q How did the size of the spill affect your determination

20 of the reasonableness of the cost of the cleanup?

21 A Because the ATHOS I spill was such a large spill, it

22 spanned three states, at the onset of the spill, it required

23 a massive mobilization of personnel, materials and equipment.

80 Hellberg – Direct 59:14-17 (Trial Day 20, October 26, 2010) 

Hellberg – Direct 59

14 Q For a large spill such as the ATHOS, did the Unified

15 Command need oil spill responders from outside the Northeast

16 region?

17 A Yes, ma'am, they did.

81 Hellberg – Direct 36:14-18 (Trial Day 20, October 26, 2010)

Hellberg – Direct 36

14 A The ATHOS I spill occurred November of '04, which is

15 obviously the winter; therefore, the weather and days were

16 cold, the water was frigid. It required hot meals to all the

17 responders, it required a much more frequent change of

18 personal protective equipment for the responders, and...

82 Laferriere – Direct 41:1-24 (Trial Day 18, October 21, 2010)

Laferriere – Direct 41

1 Q Did the unified command ever require the development of

2 specific plans that would supplement the incident action

3 plans, the daily incident action plans?

4 A Yes.

5 Q Why?

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6 A One example is the site safety plan. The site safety

7 plan, especially in this spill, is very critical because of

8 the water temperature and the frigid air temperatures. So we

9 developed a specific site safety plan again. It's developed

10 on a 24-hour basis for protecting the workers. That's an

11 example of one plan.

12 Q And what kind of requirements did you include in that

13 site safety plan to protect worker's safety?

14 A That would include things like protective equipment

15 against the oil itself. The oil posed a dermal hazard, so

16 they had to make sure that the workers were protected from

17 skin contact with the oil.

18 Additionally, warm weather gear was important. The

19 issuance of hot meals, and warm meals, and those kinds of

20 things were all critical to insuring the health and safety of

21 the workers.

22 THE COURT: Did you mean warm weather gear?

23 THE WITNESS: Yes, sir. Warm weather gear, right.

24 Winter gear primarily.

83 Hellberg – Direct 34:17-35:14 (Trial Day 20, October 26, 2010)

Hellberg – Direct 34

17 Q How do you determine whether the actions undertaken by

18 the responsible party were consistent with the NCP, the

19 National Contingency Plan, or were directed by the Federal

20 On-Scene Coordinator?

21 A I review the documents submitted by the claimant, in this

22 case the responsible party, as well as documents generated by

23 the Unified Command.

24 Q And by -- excuse me.

25 A I'm sorry. In particular, documents such as the

Hellberg – Direct 35

1 incident-action plans or pollution reports.

2 Q Is there anything particularly useful to you in an

3 incident-action plan when you're trying to make those

4 determinations?

5 A Yes, ma'am. Within the incident-action plan are ICS

6 Forms 204 and 209, and those forms are exclusive to the

7 assignment and summarization of resources on an oil spill.

8 Q And do those forms identify what location and on what day

9 those resources and supplies should be at -- on scene?

10 A Yes, ma'am. Each incident-action plan is for a

11 operational period and for specific locations.

12 Q And are operational periods, at least for the early

13 phases of a spill, on a 24-hour basis?

14 A Yes, ma'am, they are done every day.

84 Hellberg – Direct 37:11-38:8 (Trial Day 20, October 26, 2010) 

Hellberg – Direct 37

11 Q What is a prime contractor?

12 A A prime contractor is a contractor that has a direct

13 contract relationship in this case with the responsible

14 party.

15 Q And in the oil spill-response world, is a prime

16 contractor also known as an oil spill-response organization?

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17 A Yes, it is.

18 Q Why did you determine that the prime contractor's rate

19 schedules were reasonable?

20 A I determined that the prime contractor's rate schedules

21 were reasonable because they were commercially negotiated

22 prior to the spill.

23 Q Are the subcontractor rate schedules relevant to your

24 adjudication of a removal cost claim?

25 A No, ma'am, they are not.

Hellberg – Direct 38

1 Q Why not?

2 A They are not because, first of all, I use the prime

3 contractor's rate schedule, because they are the entity that

4 was under contract in this case with the responsible party.

5 Additionally, the prime contractors take on full

6 responsibility for their workers, i.e. their subcontractors;

7 therefore, that subcontractor's rate schedule is not

8 relevant.

85 Hellberg – Cross 73:23-74:10 (Trial Day 20, October 26, 2010) 

Hellberg – Cross 73

23 THE WITNESS: It depends on the contractor we're

24 talking about. This was a very big spill with a varied

25 amount of contractors. I stated in my direct that I used the

Hellberg – Cross 74

1 prime contractor's rate schedule and in doing so, while I

2 made a reasonableness determination of rates, I used the

3 prime contractor's rate schedule because it was commercially

4 negotiated prior to the spill. Therefore, I looked at those

5 rates in comparison to all of the rates that I had in-house

6 prior to the ATHOS spill, ongoing during the ATHOS spill, as

7 well as as demonstrated by my comparison chart after the

8 fact, and looked at those to look at the overall pricing

9 mechanism and consistency of prices, and took all of that

10 information and made a monetary determination.

86 Hellberg –Cross 78:8-22 (Trial Day 20, October 26, 2010)

Hellberg – Cross 78

8 Q To be clear with the Judge's question, if it was 200 on

9 the invoice and 200 on the rate sheets, you would have

10 assumed it was per se reasonable because that was the

11 negotiated contracted rate on the rate sheet, correct?

12 A No, you're misstating. I told you that I looked at the

13 prime contractors' rate schedules because they are the

14 contracts that were with the RP, but I looked at it on two --

15 four -- two-fold; I looked at it because the rates were

16 commercially negotiated in advance, well before the spill,

17 but I also looked at the rates and compared them to what I

18 know at that time were going prices in the oil spill response

19 industry and, if I felt comfortable those rates were

20 reasonable, which for a given case, if I didn't deny for

21 unreasonable, then I determined the rates to be reasonable

22 not just because a contract existed.

87 Hellberg – Direct 60:17-61:23 (Trial Day 20, October 26, 2010)

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Hellberg – Direct 60

17 Q And where did you get the rates charged by NRC that are

18 contained in this particular chart?

19 A I received them from claimants at the time claims came in

20 that I adjudicated for each of these incidents.

21 Q Okay. Can you discuss what you see on this page in more

22 detail now?

23 A Yes, ma'am. If we did take the project manager, for

24 instance, the first line item, sir, the highlighted column

25 indicates that NRC for ATHOS charged an hourly rate for a

Hellberg – Direct 61

1 project manager of $95. If you look at the next two columns,

2 that's the DBL-152 and NRC likewise charged the same hourly

3 rate for a project manager. Then if we go to the COSCO BUSON

4 spill that occurred in California in '08, we'll see that NRC

5 charged the same rate for a project manager at that spill.

6 And then the DUBAI STAR in California in 2009, they charged

7 $100 an hour, as did they in the KOPEKA (ph.) spill in Puerto

8 Rico in 2009.

9 Q What does this show you about the rates charged by NRC

10 for the ATHOS I?

11 A It shows me that the NRC rates for the Athos I are

12 consistent with what NRC charged in following years on

13 following spills, they are pretty much consistent. And it

14 does indicate that over many years prices do go up, but they

15 varied very minimally.

16 MS. SHUTLER: Could we have Exhibit 168 NPFC-000148?

17 BY MS. SHUTLER:

18 Q And is this the NRC rate contract submitted to the NPFC

19 as part of a request for adjudication of removal costs for

20 the DBL spill you were just referring to?

21 A Yes, ma'am, it is.

22 MS. SHUTLER: Could I have U.S.A. Exhibit 168 NPFC23 000153? And can we call out the first part of the document?

88 Hellberg – Direct 62:11-64:19 (Trial Day 20, October 26, 2010)

Hellberg – Direct 62

10 BY MS. SHUTLER:

11 Q Ms. Hellberg, is this where you got the rate information

12 for your comparison chart?

13 A Yes, ma'am. This is the second page of the NRC rate

14 schedule for the DBL spill. And if you look at the second

15 line item, sir, you can't see the gray area, but what that

16 demonstrates is that the project manager rate of $95 that I

17 put on my chart, I did receive it from this rate schedule.

18 Q All right. Please turn to Tab 14 of your binder.

19 MS. SHUTLER: Tab 14 contains U.S. Exhibits 167,

20 168, 171 and part of P-1419.

21 THE COURT: And therefore what?

22 BY MS. SHUTLER:

23 Q Are these the rate sheets you used to create this chart?

24 A Yes, ma'am, they are.

25 Q And were these rate sheets submitted to the NPFC as

Hellberg – Direct 63

1 documentation in support of adjudication for removal cost

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2 claims for the ATHOS, the COSCO BUSON, the DUBAI and the

3 KOPEKA spills?

4 A Yes, ma'am, they are.

5 Q And do you review these rate sheets as part of your

6 adjudication of these claims?

7 A Yes, ma'am.

8 Q Are these rate sheets maintained in NPFC's records?

9 A Yes, ma'am, they are.

10 Q Did you likewise compare -- create a comparison of rates

11 charged by the O'Brien's Group?

12 A Yes, ma'am, I did.

13 MS. SHUTLER: Could we have U.S.A. Exhibit 366,

14 Comparison Table Page 2?

15 BY MS. SHUTLER:

16 Q Why did you select the O'Brien's Group?

17 A I selected the O'Brien's Group because they are one of

18 the most -- the most frequently used spill management teams

19 on large spills.

20 Q Are the rates charged for labor or equipment in either

21 the ATHOS or the DBL spill one year later any different?

22 A No, ma'am, they're exactly the same with the exception of

23 the charge for mileage.

24 MS. SHUTLER: May I have U.S.A. Exhibit 169 at NPFC25 000159? And can you call out the first third?

Hellberg – Direct 64

1 BY MS. SHUTLER:

2 Q What is this document?

3 A This document is the O'Brien's Group contract with the

4 responsible party for the DBL-152 spill and its associated

5 rate schedule.

6 Q Okay. And if you turn to Tab 15 --

7 MS. SHUTLER: -- we can take this down --

8 BY MS. SHUTLER:

9 Q -- this contains the exhibits that include rate sheets

10 for TOG -- or the O'Brien's Group that were submitted for

11 both the ATHOS and the DBL spills?

12 A Yes, ma'am, that's correct.

13 Q And did you use the rate sheets that are contained in

14 this tab in putting together your comparison table for the

15 O'Brien's Group?

16 A Yes, ma'am, I did.

17 Q Did you get the O'Brien's Group information from claim

18 submissions to the NPFC for the ATHOS and DBL spills?

19 A Yes, ma'am, I did.

89 Hellberg – Direct 66:2-9 (Trial Day 20, October 26, 2010)

Hellberg – Direct 66

2 Q Why did you look at these rate sheets as well as those

3 for the O'Brien's Group and NRC?

4 A I'm sorry?

5 Q Why did you look at those rate sheets at Tab 16 as well

6 as those from the O'Brien's Group and the NRC?

7 A Because it gave me the opportunity to do a comparison of

8 reasonable rates and what is similar at any given point in

9 time.

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90 Hellberg – Direct 33:5-34:12 (Trial Day 20, October 26, 2010)

Hellberg – Direct 33

5 Q What was your final determination with respect to the

6 removal cost claims submitted by the ATHOS responsible

7 parties?

8 A My final determination was that Frescati was entitled to

9 a payment of approximately 88 million beyond their limit of

10 liability of 45.4 million.

11 Q Ms. Hellberg, what do you mean by an adjudication of a

12 claim for removal costs?

13 A An adjudication of a claim for removal costs is when I

14 review all of the documentation submitted by the claimant, as

15 well as governing regulations, and I make a determination of

16 whether the costs are compensable by the Oil Spill Liability

17 Trust Fund.

18 Q And when you say compensable, do you mean reimbursable?

19 A Yes, ma'am.

20 Q And what are removal costs?

21 A Removal costs are the costs for actions to remove oil.

22 Q When is a responsible party, such as Frescati or Tsakos,

23 entitled to recover their removal costs from the Oil Spill

24 Liability Trust Fund?

25 A An RP is entitled to recover their costs once the Coast

Hellberg – Direct 34

1 Guard has made a determination of entitlement to their limit

2 of liability.

3 Q What compensation is allowable once the Coast Guard's

4 National Pollution Fund Center has determined that a

5 responsible party may limit its liability?

6 A By regulation, it's the actions that were taken to

7 prevent, minimize and mitigate the effects of the spill on

8 the environment, those costs must be a result of those

9 actions and the actions must have been determined by the

10 Federal On-Scene Coordinator to be consistent with the

11 National Contingency Plan or were directed by the Federal On12 Scene Coordinator.

91 Hellberg - Direct 34:13-16 (Trial Day 20, October 26, 2010)

Hellberg Direct 34

13 Q What standard of proof do you employ to determine that

14 the claim for reimbursement meets the standards you just

15 listed?

16 A A preponderance of the evidence, more likely than not.

92 Hellberg - Direct 43:8-11 (Trial Day 20, October 26, 2010)

Hellberg – Direct 43

8 Q And who drafted this letter here?

9 A I drafted this letter, ma'am, for Tom Morrison's

10 signature, he was Chief of Claims Adjudication Division,

11 making an offer to the RP of approximately 77.1 million.

93 Hellberg – Direct 42:1-6 (Trial Day 20, October 26, 2010)

Hellberg – Direct 42

1 Q And did the ATHOS responsible parties later submit a

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2 second or supplemental claim for adjudication?

3 A Yes, ma'am, they did.

4 Q For about how much?

5 A That supplemental claim was for approximately $14

6 million.

94 Hellberg – Direct 43:15-25 (Trial Day 20, October 26, 2010)

Hellberg – Direct 43

15 Q And did you make a recommendation for payment with

16 respect to the supplemental claim?

17 A Yes, ma'am, I did.

18 MS. SHUTLER: Could we have U.S.A. Exhibit 161 at

19 NPFC-00095?

20 (Pause.)

21 BY MS. SHUTLER:

22 Q Is this document your recommendation for how much to

23 reimburse the ATHOS responsible parties for their

24 supplemental claim?

25 A Yes, ma'am, it is.

95 Hall – Direct 193:6-21 (Trial Day 10, October 6, 2010)

Hall – Direct 193

6 Q And is this a letter that you wrote to the captain of the

7 port in Philadelphia?

8 A Yes.

9 Q And this letter was directed to the captain at his

10 request?

11 A Yes.

12 Q And does this letter reflect the penultimate number that

13 you determined was the loss cargo to the river?

14 A Yes, it was the best estimate that I could make.

15 MR. BERGERE: Could we bring up the final sentence

16 of the second paragraph, the final two sentences there?

17 (Pause.)

18 BY MR. BERGERE:

19 Q And can you point out for the Court what the final tally

20 was, the total estimate of the amount of oil was?

21 A The best estimate that I could make was 264,335 gallons.

96 Laferriere – Direct38:20-39:15 (Trial Day 18, Oct. 21, 2010)

Laferriere – Direct 38

20 Q And what happens when the federal on-scene coordinator

21 takes action on his own?

22 A Basically what he's doing is he's now assuming financial

23 responsibility for the cleanup for that particular act, and

24 in some cases, he can do -- take over the entire incident.

25 THE COURT: But then does he then hold the

Laferriere – Direct 39

1 responsible party liable somehow?

2 THE WITNESS: The responsible party would be

3 responsible now for recovering -- for paying for all the

4 Coast Guard costs, which before he didn't have to, so this

5 would include salaries, the cost of our helicopters, the cost

6 of our boats, the cost of our parts, so it would be much more

7 expensive for him to do that.

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97

 

8 BY MS. SHUTLER:

9 Q And how much more expensive would it be for a -- for a

10 typical -- in a typical spill response?

11 A On average between two and three times more expensive.

12 So it's designed to be a disincentive to have the Federal

13 Government do all the cleanup. The way the Oil Pollution Act

14 and National Contingency Plan is designed is that the spiller

15 cleans up the oil.

97 Benson - Direct 19:21-20:13 (Trial Day 19, Oct. 25, 2010)

Benson – Direct 19

21 Q Is it true that the faster you get the spill contained

22 and cleaned up that, in the long run, the more money you're

23 going to save the client?

24 A Absolutely. In my end of the business, I refer to that

25 as the golden hour. We need to respond as fast as we can 

Benson – Direct 20

1 with available assets and resources that are closest to the

2 spill site. As information and intelligence flows into the

3 Command Center and we get a better handle on the extent of

4 the spill, we add to those assets and resources in an

5 encompassing fashion, starting locally, regionally, state,

6 East Coast, West Coast, Gulf Coast, and we respond

7 accordingly.

8 Q Is it easier to bring additional resources to a spill or

9 to send extra resources home?

10 A The way I calculate that is I would prefer to over

11 respond to a spill, that way I know I have the necessary

12 labor, the equipment and materials to combat the spill. I

13 can always send it home.

98 McLellan – Direct 136:20-137:9 (Trial Day 21, Nov. 3, 2010)

McLellan – Direct 136

20 Q What separates your company from spill on-site

21 management, who we have heard from in this trial, and finance

22 sections of spill-management teams?

23 A Unlike SOS, spill on-site management, MR & Associates has

24 never worked for a contractor, and we generally do not and

25 have not worked for a spill-management team. We think that

McLellan – Direct 137

1 can create a conflict of interest and so we haven't crossed

2 over. As a result of that, MR & Associates many times is not

3 per se sitting in the finance section chair of a spill4 management team, most times we're hired by the insurance

5 companies to observe and to do a separate audit to make sure

6 that the spill-management team and on-site cost-control

7 company is doing what they're doing, because based on their

8 history the insurance companies are not comfortable leaving

9 those companies to do that job themselves.

99 McLellan – Cross 195:6-21(Trial Day 21, Nov. 3, 2010)

McLellan – Cross 195

6 Q Now, at the outset of your testimony, you stated that

7 your firm does not sit in the finance section of spill

8 management teams under the unified command structure. Did I

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98

 

9 hear that correctly?

10 A What I stated was that normally, we don't sit in that

11 finance chair under a unified command structure. We do the

12 same function. We just don't sit in that same chair because

13 we don't align ourselves with a spill management team and

14 generally, my clients want me to audit the spill management

15 team. And so, I don't, like I say, we don't align ourselves,

16 we believe that's a conflict of interest.

17 THE COURT: Your role is to criticize what they do,

18 right?

19 THE WITNESS: That's correct, your Honor and if

20 we're not in that position or if we're aligned with the spill

21 management team, that makes it difficult.

100 McLellan – Direct 172:3-173:16 (Trial Day 21, Nov. 3, 2010)

McLellan – Direct 172

3 Q Your next category of adjustments, Mr. McLellan, relate

4 to standard rate adjustments. Explain what you mean by

5 overpayments relating to standard rate adjustments.

6 A In a spill response, a proactive cost-control unit, as

7 soon as they get on site, want to engage in negotiations with

8 the spill contractors. You have to understand that the

9 contracts that are in place generally are really for

10 emergency, short-duration contracts. And so the contractors

11 understand anything of a longer duration, they're going to be

12 subject to renegotiation. This particular case, as the cost13 control, SOS and the spill-management team testified, they do

14 not believe that you should attempt these types of

15 negotiations early on an event, they did not attempt them

16 until towards the middle of December; that's contrary to our

17 philosophy. Our philosophy is that and our experience has

18 been that the best time to get a rate adjustment is at the

19 outset of an event, that way both parties have an expectation

20 of what's going to happen and you meet with them and you try

21 to get those rate negotiations. And in this particular case

22 we believed that, based on everything that we saw, that --

23 that the spill-management team should have been able to

24 negotiate reduced rates off of the contracted rates as early

25 as day one, but we didn't do it at day one. We gave them a

McLellan – Direct 173

five-day window and we didn't make these adjustments until

2 day six. So, this adjustment reflects the difference from

3 day six until the spill-management team made their

4 adjustments, but it goes onward because what we found was,

5 even though they had made adjustments, there were errors in

6 applying those adjustments, and so they were put into this

7 category.

101 McLellan – Cross 97:4-98:7 (Trial Day 22, Nov. 4, 2010)

McLellan – Cross 97

4 Q Well, there were approximately, how many contractors and

5 Osrows, who were on the site as of December 17th or December

6 5th, when you would have had them out there reducing their

7 rates?

8 A I think it would be easier just to state that what we did

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9 with the rate adjustments for the contractors that SOS had

10 achieved the rate adjustments. In our opinion, those rate

11 adjustments could have been achieved earlier had they

12 initiated negotiations at the outset of the event, just like

13 we saw yesterday with NRC. And so, we took the same

14 contractors that they had negotiated and we just started

15 those rate adjustments on Day 6.

16 Q And did you speak to any of the Osrows or the

17 contractors, in this case, to find out whether they would be

18 amenable to any such adjustment?

19 A No, I did not speak to any of the contractors. I just

20 was looking at the evidence in the case and the evidence

21 established that the contractors were amenable to rate

22 reductions early on.

23 THE COURT: You've answered the question. Don't

24 make speeches.

25 Q What evidence did you have that they were amenable to

McLelland – Cross 98

1 taking rate reductions?

2 A The evidence that we showed yesterday.

3 Q That was the NRC and Clean Harbors negotiation in which

4 Clean Harbors agreed to take a ten percent discount on its

5 bills in exchange for NRC's agreement to make prompt payment

6 of 70 percent of its bills within 14 days and full payment

7 within 30?

102 McLellan – Direct 152:18-153:13 (Trial Day 21, Nov. 3, 2010)

McLellan – Direct 152

18 Q The first item in your chart of categories is, "Third19 Party Labor Rate Adjustments." Can you describe for the

20 Court what you mean by that category, Mr. McLellan?

21 A When you have a spill of this size, you understand that

22 the contractors that are going to respond to the spill are

23 not going to have the adequate manpower that you're going to

24 need. So, the spill-management team has to recognize this

25 fact and determine where he's going to get this manpower and

McLellan – Direct 153

1 how it's going to be billed. And so in this particular case

2 it involved temporary labor and these bill-management team,

3 instead of either going out and contracting with this laborer

4 directly, they allowed the contractors to bill the labor out

5 as their own employees, contrary to some of the contracts,

6 but contrary to good, sound cost-control practices overall.

7 Q Is it more expensive for these type of vendors to bill

8 out these temporary employees as if they were their own

9 employees as opposed to just applying an invoiced amount plus

10 a markup?

11 A Very much so, it can be several times the amount that

12 would result if you did it in accordance with their contract

13 or a renegotiated contract, a cost plus a markup.

103 McLellan – Direct 166:6-167:6(Trial Day 21, Nov. 3, 2010)

McLellan – Direct 166

6 Q The third category of your overpayments relates to third7 party rental equipment rate adjustment for $1,535,185.40.

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8 Please describe what falls into that category.

9 A That is very similar to the third-party labor. Again,

10 when these spill-management teams come on site, they're aware

11 of the resources that the contractors have, they're also

12 aware that they don't have all the resources they're going to

13 need. As Mr. Benson testified, they knew they were going to

14 need power washers. At that point, you have to make a

15 business decision. If you're the RP, responsible party,

16 excuse me, you're going to make a decision, is it cheaper for

17 me to go out and buy those machines and still have them

18 available for salvage after or is it more advantageous for me

19 to have the contractors rent them back to me? Generally, in

20 a spill of this size, of long duration, you know you're going

21 to need this equipment, it's going to be much, much more

22 advantageous to you financially to buy that equipment

23 yourself. At the very least, you would not want them to bill

24 it at their own rates, you would want it to be billed at cost

25 plus a markup.

McLellan – Direct 167

1 Q Do you have examples here where one of the oil-spill

2 response contractors actually rented equipment and then

3 billed that out to the responsible party at its own standard

4 rates, as if it was his own equipment, when in fact it had

5 leased that equipment from someone else?

6 A Yes, sir.

104 McLellan – Direct 176:25-179:14 (Trial Day 21, Nov. 3, 2010)

McLellan – Direct 176

25 Q The next item, Mr. McLellan, is "Missing and Unsigned

McLellan – Direct 177

1 Dailies."

2 First, dailies have been talked about a lot at this

3 trial; what are dailies?

4 A Dailies are a listing of the daily resources that a

5 contractor states he uses on a particular day, but to fully

6 understand a daily I'd like to just give you a brief history

7 on it, is that what was happening is that contractors would

8 give a daily several days after the fact to the responsible

9 party, and the responsible party had a complaint that how do

10 I know the resources are here. And so they said, well,

11 you've got to get them assigned. So, the problem was they

12 were still giving them several days after the facts, and

13 people were signing them and then the contractors were taking

14 that signed daily and using it as proof and going to court on

15 it to say you approved everything. Well, we -- back in 1997,

16 we began telling anyone on a spill response you have to put,

17 "Subject to Audit."

18 You have to understand also that, contrary to what

19 Mr. Benson testified to, he gave the vision of a contractor

20 that --

21 MR. BERGERE: Your Honor, can I object? This is --

22 there's not even a question, he's just going on ad hominem.

23 THE COURT: Your objection is overruled. It's

24 interesting.

25 THE WITNESS: Contrary to what Mr. Benson testified

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McLellan – Direct 178

1 to, he said that and he gave you the vision that you've got

2 the contractor standing there and you've got the RP -- or the

3 zone manager there and they're counting out each one. And

4 your Honor stated, well, why then doesn't the zone manager

5 make the daily? The truth of the matter is that daily

6 doesn't get made by that zone manager or by that contractor

7 in the field. Generally, that daily is produced in an office

8 someplace and that's why you don't get it that day, you get

9 it later on and, if you look at it, the dailies aren't signed

10 -- they're not dated and many times they are several days

11 after the fact. So, you still have the problem is that with

12 several hundred items on a daily, several hundred

13 individuals, how anyone without keeping independent notes --

14 and that's what we do on a spill, that's the only way that

15 you can capture those quantities is that zone manager -- he

16 has two functions: One, he has got to capture all of the

17 resources, because if you think about it, if the zone manager

18 was doing his job and there came in a daily that was

19 unsigned, there wouldn't be any question, he would just go

20 back to the zone manager and say, produce your notes. And I

21 would look at them and you could reconcile it, but that

22 didn't happen. I have worked with O'Brien's on several

23 spills, they don't do that. And so that's the issue with the

24 dailies is that you have dailies that don't get signed until

25 after the fact, and so it's not really a representative of

McLellan – Direct 179

1 what's actually out there -- or may not be.

2 BY MR. BLANCHARD:

3 Q Is there any way to confirm the work was done or

4 equipment supplied if you don't have a signed daily, Mr.

5 McLellan?

6 A Yes, if the zone manager would have kept independent

7 notes and he was able to do that. But in this case, you've

8 heard both Mr. Benson and Steve Calgiman, they both testified

9 during their depositions, they said, if you don't have a

10 signed daily, then the resources haven't been approved and

11 they both should be rejected. And so in this instance, if I

12 have two people working on the response and they both

13 testified that an unsigned daily or missing -- they should be

14 rejected, that's what I did, I rejected it.

105 Hellberg – Direct 39:23-40:6 (Trial Day 20, October 26, 2010)

Hellberg – Direct 39

23 Q Do all contractors or vendors even submit dailies?

24 A No, ma'am. There are -- off the top of my head, there

25 are a couple contractors in this particular incident, Amquip

Hellberg – Direct 40

1 and Aramsco, they are vendors that do not have daily field

2 logs, so to speak. They are what I would consider equivalent

3 to your local Home Depot or Lowes, where you obtain supplies;

4 therefore, dailies aren't generated.

5 Q So, they would simply have a receipt submitted?

6 A Yes, ma'am.

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106 Hellberg – Direct 32:15-20 (Trial Day 20, October 26, 2010)

Hellberg – Direct 32

15 Q What sources of the law do you rely upon in adjudicating

16 whether removal costs expended by a responsible party can be

17 recovered from the Oil Spill Liability Trust Fund?

18 A I use the Oil Pollution Act of 1990, the governing claims

19 regulations, which can be found at 33 CFR Part 136, and the

20 National Contingency Plan.

107 Hellberg – Cross 90:3-20 (Trial Day 20, October 26, 2010)

Hellberg – Cross 90

3 Q Whose signature did you expect on the dailies?

4 A I don't expect a signature on the daily; if there is one,

5 it's ideal and it's great, but it's a preponderance of the

6 evidence, sir. It's what was going on as ordered by the

7 Federal On-Scene Coordinator that the daily coincides with.

8 So, for instance, if Miller was out there and Miller didn't

9 sign it, but I go back to the FOSC documents and I can get

10 Coast Guard field notes that show Miller was in a given zone

11 on that day, and the response objective was being met and

12 that was articulated in the daily, I don't need a signature

13 on a daily, that's not a reason not to pay.

14 Q And you're aware of no criteria or guideline or

15 recommendation in the NPFC's requirements that in fact

16 require signed dailies?

17 A No. Actually, our only requirements for adjudication of

18 removal cost claims, sir, are found at 33 CFR 136-203 and

19 205, and neither of those citations say there has to be a

20 signed daily.

108 McLellan – Direct 189:2-191:12 (Trial Day 21, Nov. 3, 2010)

McLellan – Direct 189

2 Another important point about the NPFC is that when

3 the spill-management team, they have it in their guidebooks

4 that state that, you know, to determine this reasonableness

5 is that they wanted the spill-management team to submit any

6 audits that they had for costs that were denied, adjusted or

7 paid. We know in this case that SOS performed an audit, it

8 was a line-by-line-item audit. We also know that there was

9 communications going back and forth between the SOS and the

10 OSROs to say -- to say, hey, this is what we disagree with.

11 None of those audits, outside of the few that showed some

12 disallowances, were presented to the Fund Center and the Fund

13 Center did not ask for them. If we could just go to the

14 O'Brien's Group, it was over a $600,000 difference, the

15 responsible party hired an independent contractor to come in

16 and review O'Brien's invoices, and those invoices showed

17 there was over -- it was about 700,000 -- it was only on

18 about a few of the invoices, it wasn't even on all of them --

19 the NPFC did not request or ask to see what this independent

20 company found unreasonable. Now, we weren't provided with

21 that, so we can't comment on what it was, but it would seem

22 to beg the question that if somebody found something

23 unreasonable the NPFC, who is supposed to be guarding the

24 trust, the Fund, would have wanted those answers. Throughout

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25 the whole thing, there's -- this is a very voluminous case,

McLellan – Direct 190

1 it would entail -- I can just tell you from what we had to do

2 in our office to do all the calculations, there's absolutely

3 no way the NPFC did those calculations. I know they looked

4 at some rates; we didn't challenge the rates. Most of the

5 rates we used we accepted with what SOS had. So, it's not

6 the rates, it's making sure that you put in place a cost7 management structure that gives a cost-efficient response

8 from day one, not day 15. You are supposed to be

9 representing the RP. I have a -- I have a real big issue

10 right now, because based on --

11 MR. BERGERE: Your Honor, can I interpose an

12 objection? In the past the Court admonished --

13 THE COURT: Oh, go right ahead. Your objection is

14 sustained.

15 MR. BERGERE: Thank you.

16 THE COURT: He's not responding to any particular

17 question that I am aware of.

18 BY MR. BLANCHARD:

19 Q Mr. McLellan, just a few more questions.

20 You mentioned in your report that the NPFC should

21 have done a quantitative analysis. Can you briefly describe

22 what you mean by quantitative analysis?

23 A A quantitative analysis is simply looking and ensuring

24 that whatever was charged is accurate, you know, looking at

25 the rates.

McLellan – Direct 191

1 THE COURT: It means how much, in other words?

2 THE WITNESS: That's correct, your Honor.

3 BY MR. BLANCHARD:

4 Q And you also mentioned qualitative analysis; what do you

5 mean by that?

6 A Qualitative analysis is presented in the publications

7 that the NPFC that produces that tells the claimants that

8 they will do a qualitative analysis. A qualitative analysis,

9 as explained by the NPFC in their guidebooks, if you had a

10 five-gallon spill, it should have cost 50,000 to clean up.

11 And we did not see any evidence that they did a qualitative

12 analysis.

109 Morrison – Direct 179:15-180:7 (Trial Day 19, October 25, 2010)

Morrison – Direct 179

15 Q Okay. Can you tell us what this document was?

16 A Yes, sir. That was April 2003 is the date at the bottom

17 and that was a claimant's guide that was developed to assist

18 claimants in understanding what they need to submit to the

19 National Pollution Funds Center to help speed the process in

20 the evaluation of their claims.

21 Q Thank you.

22 MR. FLYNN: And can we pull up Morrison-57?

23 BY MR. FLYNN:

24 Q And what is this document?

25 A This is a 2005 version of the frequently asked questions

Morrison – Direct 180

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1 for oil spill response organizations. Specifically this type

2 of claimant only dealing with removal costs has more specific

3 issues that this document was intended to supplement the

4 document you previously showed in order to help the oil spill

5 response organizations streamline their claims process and

6 make sure they have the information we need so we can move

7 faster and this is guidance.

110 Hellberg – Cross 90:25-91:19 (Trial Day 20, October 26, 2010)

Hellberg – Cross 90

25 MR. WALKER: Hellberg Exhibit 8?

Hellberg – Cross 91

1 BY MR. WALKER:

2 Q You're familiar with this?

3 A I have seen it, yes, sir.

4 Q You saw it for the first time in your deposition?

5 A I don't know if that's the first time I've seen it, no,

6 but I have seen it.

7 Q And is it your testimony that nothing in this document

8 applies to the Claims Managers and their adjudication

9 process?

10 A No. This document was created as a helpful hint, it was

11 put on the Coast Guard's Web site for potential claim OSROs

12 if they had questions of what might be helpful for them to

13 submit to the Fund in support of their claim; that is by no

14 means a regulation of what I need to do to adjudicate a

15 claim.

16 Q Right. So, there's nothing in this document that you

17 consider to be guidelines or recommendations for Claims

18 Managers adjudicating claims, correct?

19 A Correct.

111 Hellberg – Cross 94:17-95:3 (Trial Day 20, October 26, 2010)

Hellberg – Cross 94

17 Q So, what you're saying is that the NPFC disseminates to

18 the general public on its Web site what we have seen on the

19 front page, which is the NPFC claims process, and expects the

20 claimants to abide by it, but that you do not?

21 A No, sir --

22 THE COURT: It's a recommendation to the claimant?

23 THE WITNESS: Right. It's not a requirement, sir,

24 this is guidance, helpful hints for somebody submitting a

25 claim. This does not mean a claim has to come in any

Hellberg – Cross 95

1 particular way. A claimant can submit a claim and submit

2 whatever they want, the burden is on them. This is just to

3 help them.

112 Hellberg – Direct 32:15-20 (Trial Day 20, October 26, 2010)

Hellberg – Direct 32

15 Q What sources of the law do you rely upon in adjudicating

16 whether removal costs expended by a responsible party can be

17 recovered from the Oil Spill Liability Trust Fund?

18 A I use the Oil Pollution Act of 1990, the governing claims

19 regulations, which can be found at 33 CFR Part 136, and the

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20 National Contingency Plan.

113 The better practice under the modern Federal Rules of Civil Procedure is to plead recoupment as a Rule 13(a) 

counterclaim. See 3 James Wm. Moore et al., Moore’s Federal Practice – Civil § 13.11, at 13-24 (3d ed. 2009); 

Ace Hardware Corp. v. Marn, Inc., Case No. 06-5335, 2008 U.S. Dist. LEXIS 84709, at *30 (N.D. Ill. Sept. 16, 

2008) (claim for recoupment is not technically a defense). CARCO argues recoupment need not be predicated on 

a claim. However, the very cases cited in its post trial briefs involve monetary claims. CARCO cited Bull v. 

United States for the proposition that “recoupment is in the nature of a defense arising out of the same feature of 

the transaction upon which the plaintiff’s action is grounded.” CARCO, however, takes this quote out of context. 

In Bull, a taxpayer argued that it had overpaid its taxes and filed a claim for a refund from the Commissioner of 

Revenue, which was denied. The taxpayer litigated his claim in the Court of Claims which held for the 

Commissioner. Subsequently, the United States filed suit against the taxpayer for additional taxes arising from the 

same transaction as the previous litigation. Defendant taxpayer “made a counter demand for recoupment of the 

previous overpayment of taxes” by way of a defense, which was otherwise barred by the statute of limitations. 

The Supreme Court held that where the government’s new proceeding arose from the same transaction, the statute 

of limitations could not bar defendant’s defensive monetary claim for recoupment. Bull, 295 U.S. 247, 262 

(1935). Likewise, CARCO cites United States v. Shaw, 309 U.S. 495 (1940) and U.S. Fidelity, 309 U.S. 506 for 

the proposition that a defendant may assert a recoupment defense against the United States to the extent of the 

amount of the government’s claim. CITGO Post Tr. Br., Doc. 594 at 191. But in Shaw, the administrator of an 

estate asserted a cross claim for a specific amount against the United States in excess of the amount that the United 

States sought against the administrator. The Supreme Court held that the administrator was entitled to assert a 

cross claim to “set-off” a monetary amount only up to the amount sought by the United States. Shaw, 309 U.S. at 

502;9 U.S. Fidelity, 309 U.S. at 512 (“Defendant may, without statutory authority, recoup on a counter claim an 

amount equal the principal claim.”) (emphasis added).

114 Notwithstanding CITGO’s assertions to the contrary, Captain Gregory Adams, former Coast Guard Captain of 

the Port, Philadelphia (1998 - 2002), and member of the Mariner’s Advisory Committee from 1998 through the 

present, testified that the Mariner’s Advisory Committee never relied on the Corps to conduct continuous 

hydrographic surveys to search for objects

115 Rankine – Direct 9:2-6 (Trial Day 30, Nov. 22, 2010)

Rankine – Direct 9

2 Q All right. Since 2002, you have been employed by CITGO?

3 A I have, yes.

4 Q And when you joined CITGO, did you join as a Port

5 Captain?

6 A I joined as a Senior Port Captain, yes.

116 Rankine – Direct 9:21-24 (Trial Day 30, Nov. 22, 2010)

Rankine – Direct 21

21 Q And who would be responsible for providing guidance to

22 the terminal on issues relating to marine safety at the

23 berth?

24 A That was my job, marine safety, marine guidance.

117 Rankine – Cross 88:1-14 (Trial Day 30, Nov. 22, 2010)

Rankine – Cross 88

Q Did you gain any such experience in hydrographic surveys

2 that would look for obstructions at any time between the time

3 you started in January of 2002 and before the date of the

4 accident, November 26th, 2004?

5 MR. WALKER: Objection, beyond the scope.

6 THE COURT: It is indeed.

7 THE WITNESS: No.

8 THE COURT: Objection overruled.

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9 BY MR. LEVY:

10 Q In November of 2004, did you have any knowledge or

11 experience as to what the Army Corps of Engineers was doing

12 to check the Federal anchorage for obstructions and debris?

13 A Not my area of responsibility, so I didn't pay any

14 attention to what they were doing.

118 Rankine Dep. 248:23-249:12 (Oct. 16, 2007)

Rankine 248

23 Q Before that time, actually, before

24 the ATHOS 1 incident on November 26, 2004, did you

25 assume that there was no obstruction to navigation

Rankine 249

1 in the federal anchorage, Anchorage No. 99?

2 MR LEBLANC:

3 Object to the form of the

4 question.

5 THE WITNESS:

6 No.

7 BY MR. LEVY:

8 Q Do you believe there were

9 obstructions out there?

10 A It wouldn’t have surprised me.

11 Q Why wouldn’t that surprise you?

12 A Because ships lose anchors. 

119 Capone – Direct 135:12-136:1 (Trial Day 6. Sept. 29, 2010)

Capone – Direct 135

12 Did you also form an opinion as to whether it was

13 common, in November of 2004, to find debris on the Delaware

14 Riverbed including in anchorages?

15 A Yes.

16 Q And what's your opinion?

17 A My opinion is that debris was very common.

18 Q And how did you form that opinion?

19 A Well, there were actually three facets of forming that

20 opinion. The first was personal experience and --

21 Q What was your personal experience?

22 A I have conducted over 75 side scan surveys on the various

23 parts of the river and anchorages, the second was examining

24 other people's data from some other reports, and the third

25 was just a very general internet search in looking for news

Capone – Direct 136

1 articles.

120 Where the statutory or regulatory language is clear, courts must give effect to that language. Hughes Aircraft 

Co. v. Jacobson, 525 U.S. 432, 447 (1999) (citing Guidry v. Sheet Metal Workers Nat’l Pension Fund, 493 U.S. 

365, 376 (1990)). Courts have applied this maxim where statutes, such as OPA, have explicitly provided 

subrogation. Thompson v. Workers Comp. Appeal Bd., 781 A.2d 1146 (Pa. 2001); U.S. Fid. & Guar. Co. v. 

McAuliffe, No. 94-4431, 1996 U.S. Dist. LEXIS 433, at *10 (E.D. Pa. 1996) (“[T]he courts are cautious about 

denying subrogation rights on [equitable] grounds, insisting that any allegation of wrongdoing by the employer 

must be weighed against the plain wording of the statute which gives the employer an unqualified right to 

subrogation.”); Winfree v. Phila. Elec. Co., 554 A.2d 485, 487 (Pa. 1989) (“as a general principle of law, the 

employer’s subrogation rights are statutorily absolute and can be abrogated only by choice”) (emphasis added).

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121 In fact, “OPA explicitly supercedes the Limitations Act’s liability limits with respect to cleanup costs and 

damages from oil.” Bouchard Transp. Co. v. Updegraff, 147 F.3d 1344, 1347 (11th Cir. 1998); In re Lloyd’s 

Leasing, Ltd., 764 F. Supp. 1114, 1137 (S.D. Tex. 1990). Likewise, OPA’s subrogation provision supercedes 

CARCO’s equitable subrogation theory.

122 While briefly considered post ATHOS, Congress never provided the Corps with appropriations to 

prophylactically search for obstructions to navigation in the Delaware River Project. See, e.g., Hearing before the

Subcomm. on Coast Guard and Maritime Transportation of the Comm. on Transportation and Infrastructure, 109th

Cong. 5 (1st Sess. Jan. 18, 2005) (statement of Rep. Andrews); Trial Day 10, Oct. 6, 2010, DePasquale at 98:12-14.

123 Barnes Dep. 25:8-15 (Aug. 12, 2009)

Barnes 25

8 And - - and I didn’t see any criticisms of

9 NOAA or of the U.S. Coast Guard in your report, is

10 that correct?

11 A That is correct.

124 Barnes Dep. 26:4-17 (Aug. 12, 2009)

Barnes 26

4 Q What - - what exactly was your assignment in

5 that case?

6 A I was to look at, based on my expertise in

7 hydrographic survey and - - how the Corps and Coast

8 Guard and NOAA functioned interactively amongst the

9 different agencies, to look at all of the data that

10 was available and determine how they function in

11 this area, and did they function according to the

12 rules and regulations that - - that governed the

13 agencies.

14 Q And you found that they did function in

15 accordance with the rules and regulations that govern

16 those agencies?

17 A I did.

125 Barnes Dep. 63:8-21 (Aug. 12, 2009)

Barnes 63

8 Absent notice from any source of a hazard

9 to navigation in a federal project area, what’s your

10 understanding of what the Army Corps does on the

11 Delaware River prior to November 26, 2004 with respect

12 to looking for potential obstructions to navigation?

13 A None of the agencies routinely look for

14 hazards to navigation. It’s kind of like chasing a

15 needle in a haystack that may not even be in the

16 haystack. What it requires to normally find those

17 hazards is very expensive and fruitless if there’s no

18 thought that there may be a hazard in that area

19 So they don’t.

20 Q They don’t routinely look?

21 No.

126 DePasquale – Direct 98:12-14 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 98

12 Q Does the Philadelphia District of the Corp have a mission

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108

 

13 to search for debris in the Delaware River project?

14 A No.

127 According to the Corps’ Engineering Manual, applicable to all districts, the Corps may use multibeam or 

sidescan sonar as well as divers to try to locate the object. However, as discussed, the Corps does not, nor is it 

required to, routinely look for objects without notice. Trial Day 10, Oct. 6, 2010, DePasquale at 92:16-22,

1 1 6 : 9 - 1 2 , 122:19-24; Barnes Dep. 67:13-69:11, Aug.12, 2009; see, e.g., Ex. D-1733.

128 Authorized depth refers the depth at which Congress has authorized the Corps to conduct dredging. To dredge, 

however, the Corps also must have Congressionally appropriated funds.

129 The Coast Guard’s aids to navigation “are designed to assist the prudent mariner in the process of navigation. 

The aids to navigation system is not intended to identify every shoal or obstruction to navigation which exists in 

the navigable waters of the United States, but rather provides for reasonable marking of marine features as 

resources permit.” 33 C.F.R. § 62.1 (c). 

130 Notice to Mariners warn mariners of any changes to aids to navigation, reported dangers, scheduled 

construction or other disruptions, chart corrections and similar useful marine information. 33 C.F.R § 62.21(c)(3).

131 DePasquale – Direct 90:17-21 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 90

17 BY MS. SHUTLER:

18 Q Mr. DePasquale, who do you work for?

19 A I work for the U.S. Army Corp of Engineers in

20 Philadelphia.

21 Q And what's your position with the Army Corp?

22 A I'm the Chief of Operations Division.

23 Q Are hydrographic surveys part of your division?

24 A Yes.

132 DePasquale – Direct 98:15-100:5 Trial Day 10, Oct. 6, 2010)

DePasquale –Direct 98

15 Q What is your mission with respect to obstructions in the

16 Delaware River project?

17 A When the corp is notified of an object or an obstruction,

18 by an outside party, at that point, we mobilize our survey

19 crews and attempt to travel to the location and report it to

20 us and determine if the object or obstruction is a hazard to

21 navigation.

22 THE COURT: And if it is, do you remove it?

23 THE WITNESS: If it is a hazard to navigation and we

24 aren't able to determine who the owner of that object or the

25 cause of that is, we get together with the Coast Guard and

DePasquale – Direct 99

1 determine a joint -- in a joint decision, that it is a hazard

2 and we'll move to contract that work and remove the object.

3 Q You mentioned that you get together with the Coast Guard

4 to determine whether or not it is, in fact, a hazard to

5 navigation. What factors do you use to make that decision?

6 A The first thing we do is to determine whether it's within

7 the federal project boundaries. If it is within the federal

8 project boundaries, we then make a determination whether or

9 not the object is sticking up above the authorized project

10 depth of the particular project. If that is the case and the

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11 area is being used frequently by the maritime industry, we

12 will then, with the Coast Guard, jointly determine that it is

13 a hazard to navigation.

14 And if that's the case, the first thing we'll do is

15 mark the object with a buoy and send a diver down to try and

16 determine who the owner of that object is, if possible. At

17 that point, if we haven't ascertained who the owner is, we

18 will do a contracting action and we'll get somebody out there

19 to remove the object.

20 Q Do you notify anyone that there's an obstruction to

21 navigation, once you've made that determination?

22 A We'll notify the Coast Guard, but they're normally in on

23 the whole action. But we will notify the Coast Guard and we

24 will tend to give the pilots a call, also.

25 Q Why do you notify the Coast Guard?

DePasquale – Direct 100

1 A They're responsible for broadcasting the notice to

2 mariners, that would warn the maritime community of the

3 hazard.

4 Q And was this your practice in 2004?

5 A Yes.

133 DePasquale – Cross 130:21-131:3 (Trial Day 10, Oct. 6, 2010)

DePasquale - Cross 130

21 Q Now, there are other instances where the Army Corp has

22 searched for a particular object in the river, made a

23 determination as to whether it's a hazard to navigation and

24 then decided whether or not to remove the object, right?

25 A Well, we didn't actually search for the object. It would

DePasquale – Cross 131

1 be reported to us and then we would go out and locate it. We

2 didn't perform a random search. It was only if we're

3 notified.

134 None of the Army Corps of Engineers’ hydrographic surveys of the Mantua Creek Anchorage prior to the 

incident showed any hazards to navigation.

135 Denmark – Cross 49:25-50:4 (Trial Day 29, Nov. 18, 2010)

Denmark – Cross 49

25 Q Okay. Did the Corps of Engineers have any prior notice

Denmark – Cross 50

1 that there was an anchor, a concrete block, or a pump casing

2 in the Mantua Creek Anchorage prior to the ATHOS incident in

3 2004?

4 A No, we did not.

136 Barnum – Direct 10:17-21 (Trial Day 24, Nov. 9, 2010)

Barnum – Direct 10

17 Q You had talked a little bit, earlier you had mentioned

18 that NOAA charts would include sometimes obstructions to

19 navigation. Do you see any obstructions to navigation marked

20 within Anchorage No. 9?

21 A No.

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137 Danley Dep. 94:19-24 (Aug. 4, 2009)

Danley 94

19 There are no obstructions or

20 hazards to navigation shown within

21 federal anchorage number 9 in chart

22 12313, are there?

23 A There are none marked with

24 the dotted circle and the blue tint.

138 The United States Army Corps of Engineers regulates public and private activity affecting the Delaware River. 

See generally 33 C.F.R. § 320.1(b). The Corps’ “regulatory jurisdiction * * * extend[s] laterally to the entire water 

surface and bed” of the river, and includes “all the land and waters below the ordinary high water mark.” 33 C.F.R. 

§ 329.11(a). The Coast Guard has concurrent responsibility for matters affecting navigation safety. See id. § 1.01-1 

(Coast Guard’s responsibilities include “safeguarding navigation on the high seas and navigable waters of the 

United States”)

139 See Pub. L. No. 61-425, 36 State. 933, 936 (1911) and H. Doc. 61-733 (1910). Subsequent amendments

authorized the creation of Federal Anchorage No. 9 (Pub. L. No. 71- 520, 46 Stat. 918, 921 (1930) and H. Doc. 

No. 71-304 (1930)) and in 1958 deepening of channels and anchorages to 40 feet (Pub. L. No. 85-500, 72 Stat. 297 

(1958) and H. Doc. 85-185(1957)).

140 Shoaling refers to the deposition of mud or sand on the river bottom making the bottom more shallow. See, 

Trial Day 10, Oct. 6, 2010, DePasquale at 109:5-9; 102:4-8

141 DePasquale – Direct 101:11-102:3 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 101

11 Q Once Congress has identified or authorized a project

12 depth, when do you dredge to that depth?

13 A Well, once it's authorized, we can't begin dredging until

14 we are appropriated the funds to do the dredging. So, we

15 can't begin any kind of dredging until we have funds in hand,

16 to be able to advertise the contract.

17 Q What other considerations does the corp take into account

18 when it makes decisions as to whether to dredge in the

19 project area?

20 A We take into account, as I said previously, the shoaling

21 patterns, how much material has actually deposited, on the

22 bottom of the river, in a particular area. We look at the

23 usage of that particular area and whether or not we are

24 getting inquiries or complaints about navigation. And then

25 we take, you know, the existing funding that we're provided

DePasquale – Direct 102

1 and prioritize the different areas that we have to dredge.

2 But we never get enough to dredge the whole river and keep it

3 at 40 feet, at all times.

142 Channel statements identify the shallowest depth in a particular portion of the river or anchorage. Trial Day

10, Oct. 6, 2010, DePasquale at 109:5-9; 110:5-12.

143 DePasquale – Direct 91:12-92:15 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 91

12 Q What is the principal mission of a hydrographic surveys

13 group within the Philadelphia District of the Corp?

14 THE COURT: Conduct hydrographic surveys.

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15 A That's correct, conduct hydrographic surveys within the

16 district, projects within the district boundaries and report

17 the results of those surveys to the maritime community. In

18 addition, we use the results of those surveys to make

19 decisions on dredging and dredging practices.

20 Q And when you say results of the surveys, what are you

21 referring to?

22 A The depths in those surveys.

23 Q You also mentioned the Delaware River or federal

24 waterways. Are you referring to the navigational channels or

25 designated anchorages that were established pursuant to

DePasquale – Direct 92

1 congressional authorization?

2 A Yes.

3 Q For what purposes does the corp report the depths?

4 A We report the depths for the maritime community, for

5 their use and we also use them in dredging practices.

6 Q And who receives this information about depths? Who in

7 the community?

8 A Basically, whoever asks for it. We typically provide the

9 information to the Coast Guard, NOAA, the pilots, terminal

10 users, tug companies, any maritime people along the river

11 that it would be of interest to.

12 Q In 2004, in what form did you provide depth information

13 to those who requested it?

14 A We would provide survey drawings, hydrographic exams and

15 we would also provide channel statements.

144 Barnes Dep. 65:2-18 (Aug. 12, 2009)

Barnes 65

2 Q Okay. The very last sentence of that

3 paragraph, “Survey frequency is based on project

4 conditions and survey information is provided to the

5 shipping industry.”

6 What survey information, to your knowledge,

7 is provided to the shipping industry with respect to

8 the Delaware River?

9 A Anytime any Corps district or, for that

10 matter, any other federal agency does any kind of

11 survey works, it’s available to the public, period.

12 It’s available to anyone that wants the information,

13 free of charge, except for production costs.

14 So any time we do reconnaissance surveys on

15 a federally authorized project so we can determine

16 when and if dredging is needed to maintain that

17 channel, that information is there and made available

18 to anyone that wants it.

145 DePasquale – Direct 96:15-25 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 96

15 Q We can take the exhibit down. How often does the corp

16 survey depths of the various segments within the Delaware

17 River project?

18 A Our goal is to survey each part of the project area once

19 per year. But depending on funding, resources, conditions,

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20 shoaling patterns in the river and the usage of that

21 particular part of the channel, some areas get surveyed two,

22 three, four times a year and other areas, because of the

23 nature of the history of that location, might not get

24 surveyed at all. The goal is to get everything surveyed once

25 per year.

146 The single beam echo sounder records the bottom of the water body by recording a single echo return from the 

bottom of the river. Barns Rep. at 4.

147 The single beam echo sounder is designed for determining depth and “is not intended to find submerged objects 

since it would be virtually impossible for one of those beams to hit a relatively small object.” Barnes Rep. at 4.

148 Barnes Dep. 68:18-69:15 (Aug. 12, 2009)

Barnes 68

18 Q What were the types of surveys that the Army

19 Corps of Engineers was doing along the Delaware River

20 on a routine basis before November 26th, 2004

21 A The Copies of all of the survey data that was

22 given to me to review indicates that they do it th

23 same way we did it in Vicksburg, using a single beam

24 echo sounder to run cross-sectional data or

Barnes 69

1longitudinal data in the channel as was specified in

2 the engineering manual.

3 Q Okay.

4 A They - - they performed it exactly the same way

5 we performed ours in Vicksburg and - - and in

6 accordance with the regulation

7 Q And was that true, also, with respect to the

8 Mantua Creek Anchorage before November 26, 2004?

9 A Yes

10 Q And the single beam hydrographic surveys that

11 were being done by the Army Corps of Engineers in - -

12 Engineers in the Mantua Creek Anchorage were not

13 designed to search for obstructions to navigation; is

14 that correct?

15 A That is correct.

149 DePasquale – Direct 93:2-94:4 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 93

2 A It's the Mantua Creek anchorage exam.

3 Q Could we please highlight the date? When was the depth

4 survey conducted?

5 A June 23, 2004.

6 Q And why was it conducted?

7 A As part of our regular operations for surveying in our

8 project areas.

9 Q And was this to also report depth conditions?

10 A Yes.

11 Q You can remove the date panel. Mr. DePasquale, there are

12 a number -- there are tiny numbers which we're going to zoom

13 into in just a moment. And if we could, zoom into the berth

14 area, I'd appreciate it. Can you point with your laser,

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15 there, to those numbers and can you tell me what those

16 numbers represent?

17 A Each line of numbers here represents the path of the

18 survey vessel and it would travel back and forth across the

19 anchorage and those numbers represent the depth at that exact

20 location, represented by the decimal point and the numbers,

21 the actual exact location of the depth.

22 Q And how far apart are these lines?

23 A The lines are approximately 400 feet apart.

24 Q And how often is the sonar taking a depth reading, as it

25 travels back and forth across these lines?

DePasquale – Direct 94

1 A Typically, about one per second, which amounts to about

2 every ten to fifteen feet with the speed of the boat. So,

3 about every ten to fifteen feet, we're getting a shot on the

4 bottom.

150 DePasquale – Direct 96:11-14 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 96

11 Q So, in undertaking the depth surveys in 2004, the Corp

12 did not survey the entire bottom of the Delaware anchorage at

13 Mantua Creek?

14 A That's right.

151 Shallow areas are only to be expected in a river like the Delaware, which is prone to shoaling. They are marked 

on government-issued nautical charts to give notice of any potential hazard to navigation.. In practice, tankers 

navigating the Delaware River calculate under-keel clearance using the “controlling depth” – the “least depth that 

a vessel is going to encounter from port of departure to port of arrival,” – rather than the “project depth” 

authorized by Congress. “When the Corps of Engineers dredges a channel, it’s to a certain project depth, but over 

the years, due to silting, or other deposits, there may be shoaling, and that then will become the controlling depth.” 

Trial Day 10, Oct. 6, 2010, DePasquale at 109-110; Trial Day 24, Nov. 9,2010 Grenier at 84:17-20,85:1-4.

152 Barnes Dep. 68:18-69:15 (Aug. 12, 2009)

Barnes 68

18 Q What were the types of surveys that the Army

19 Corps of Engineers was doing along the Delaware River

20 on a routine basis before November 26th, 2004

21 A The Copies of all of the survey data that was

22 given to me to review indicates that they do it the

23 same way we did it in Vicksburg, using a single beam

24 echo sounder to run cross-sectional data or

Barnes 69

1longitudinal data in the channel as was specified in

2 the engineering manual.

3 Q Okay.

4 A They - - they performed it exactly the same way

5 we performed ours in Vicksburg and - - and in

6 accordance with the regulation

7 Q And was that true, also, with respect to the

8 Mantua Creek Anchorage before November 26, 2004?

9 A Yes

10 Q And the single beam hydrographic surveys that

11 were being done by the Army Corps of Engineers in - -

12 Engineers in the Mantua Creek Anchorage were not

13 designed to search for obstructions to navigation; is

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14 that correct?

15 A That is correct.

153 DePasquale – Direct 102:9 – 104:11 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 102

9 Q I'd like to bring back, on the screen, the June 23, 2004

10 survey, with the highlighting? Okay, Mr. DePasquale, can you

11 use your pointer just to identify where the Citgo facility is

12 on this?

13 A It's down here in this corner.

14 Q Okay. And are there depths that are less than 40 feet in

15 this survey of the Mantua Creek anchorage?

16 A Yes.

17 Q And generally, where are they in the anchorage?

18 A Principally, up in this norther part, there a -- that's

19 the 40-foot contour and everything within that is shallower

20 than 40 feet.

21 Q All right, can we back back out of this?

22 A There are a couple other spots up here, one there and one

23 there, they're just one -- I think they might be just one

24 reading or two readings that are less than 40 feet.

25 Q And how close -- is this area anywhere near the Citgo

DePasquale – Direct 103

1 terminal?

2 A No.

3 Q Was this survey provided to maritime users?

4 A Yes.

5 Q Did any waterway users come to you and ask to have the

6 anchorage dredged after the survey came out?

7 A No.

8 Q Do users usually make requests to the corp when they feel

9 deepening in their given area and the given areas necessary

10 for their use?

11 A Yes.

12 Q Do any users of the river notify the corp of any concerns

13 with the Mantua Creek anchorage in 2004?

14 A No, no, we didn't get any inquiries about it.

15 Q And how do you know that?

16 A Well, I was Chief of Technical Support Branch and

17 normally, any kind of outside inquiries that require us to

18 dredge, would then require -- the first step would be to go

19 out with the survey vessels and they were under my direction,

20 under my supervision, so, during that time period, we did not

21 get any calls about Mantua Creek.

22 Q Was Mantua Creek anchorage dredged as a result of this

23 survey?

24 A No.

25 Q Why not?

DePasquale – Direct 104

1 A Well, there was only this small area that would actually

2 require dredging and because of the limited use of the

3 anchorage, in the northern area and the fact that we did not

4 get any inquiries as to, you know, that this was causing

5 anybody any problems. It wasn't really effective or

6 efficient for us to come up to this particular section of the

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7 river and dredge this, you know, 1,000 foot of material. So,

8 we had higher priorities in the river and that's kind of what

9 I was explaining before. This would be an area where no one

10 was asking or came to us and said that that was a problem,

11 even though it wasn't at the project depth.

154 DePasquale – Direct 111:25-112:2 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 111

25 Q When did the corp last dredge the Mantua Creek anchorage?

DePasquale – Direct 112

1 A The last time we dredged it, well, we did a portion of it

2 in 2009, but before that, the last time was 1984.

155 DePasquale – Cross 117:23-118:4 (Trial Day 10, Oct. 6, 2010)

DePasquale – Cross 117

23 Q And so, it's correct to conclude that the Army Corp did

24 not receive any complaints about the depth in Mantua Creek

25 anchorage during that same time frame, correct?

DePasquale – Cross 118

1 A I don't recall there being any complaints, although,

2 sometimes, users will complain and we don't actually act on

3 their complaints and dredge. But we, during that time frame,

4 no.

156 Barnum – Direct 34:22-35:3 (Trial Day 24, Nov. 9, 2010)

Barnum – Direct 34

22 Q And what is the purpose of the Coast Pilot?

23 A The purpose of the Coast Pilot is a compendium to the

24 nautical chart. It's a book that portrays information that's

25 not easily graphically displayed on the nautical chart. So

Barnum – Direct 35

1 that could be the Code of Federal Regulations, it could be

2 tides, currents, it could be weather conditions that a

3 mariner should be aware of when he's making port.

157 Given NOAA’s budgetary constraints, it would take 160 years to survey 500,000 of the 3.4 million square 

nautical miles deemed the most navigationally significant. Trial Day 24, Nov. 9, 2010 Barnum at 47:10-16.

158 Barnum – Cross 42:1-13 (Trial Day 24, Nov. 9, 2010)

Barnum – Cross 42

1 Q Mr. Barnum, how large of an area does the Office of Coast

2 Survey's charting mission encompass?

3 A About 3.4 million square nautical miles.

4 Q And approximately how much area can NOAA survey each

5 year?

6 A About 3,000 square nautical miles.

7 Q Does that include both the surveys NOAA conducts with its

8 own vessels and the contract surveys that NOAA contracts to

9 private parties?

10 A Yes.

11 Q Why doesn't NOAA survey more area?

12 A We'd like to survey more area, but we -- that's all the

13 resources that are provided by Congress.

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159 Barnum – Cross 47:10-16 (Trial Day 24, Nov. 9, 2010)

Barnum – Cross 47

10 Q Is NOAA able to address all of its survey priorities in

11 any given year?

12 A No. Again, we only survey about 3,000 square nautical

13 miles a year, and I've mentioned we have 3.4 million square

14 nautical miles of which 500,000 is significant,

15 navigationally significant, so at that rate it's about 160

16 years before we can even get to that.

160 NOAA determines which areas to survey each year based on priorities identified in its National Survey Plan, 

developed from constituent input from the Mariner’s Advisory Committee and local Harbor Safety Committees, 

which bring together the concerns of the pilots, port authorities, terminal managers, the Coast Guard, the Corp and 

others interested in making the waterway safer for navigation. Trial Day 24, Nov. 9, 2010 Barnum at 44:16-45:19, 

46:25-47:15. 

161 Barnum – Cross 42:19-43:5 (Trial Day 24, Nov. 9, 2010)

Barnum – Cross 42

19 Q And where does NOAA typically get the water depth

20 information it publishes for the federally-designated

21 channels and anchorages?

22 A From the U.S. Army Corps of Engineers, because they much

23 more, and have the ability to much more frequently survey

24 these waters than NOAA does.

25 Q And roughly what percentage of the updates to NOAA charts

Barnum – Cross 43

1 each year come from the Corps of Engineers?

2 A A large portion. NOAA gets about 10,000 documents that

3 they apply to their nautical charts every year, and a

4 significant portion of those is Army Corps of Engineers'

5 surveys.

162 Barnum – Cross 44:3-8 (Trial Day 24, Nov. 9, 2010)

Barnum – Cross 44

3 Q Okay. And where does NOAA get the information for the

4 obstructions it notes on its charts?

5 A From a large array of -- of maritime users, from our own

6 units, from port authorities, from terminal managers, from

7 the Coast Guard, from maritime shipping. It can be just

8 about anybody.

163 Barnum – Cross 43:10-17 (Trial Day 24, Nov. 9, 2010)

Barnum – Cross 43

10 Q And are the areas that have been surveyed, surveyed with

11 modern sonar techniques?

12 A No. About half of them -- half of the soundings on our

13 nautical charts predate 1940, which mean they're lead line

14 soundings.

15 Q And does NOAA publicize how many of the charted soundings

16 are still lead line soundings?

17 A Yes.

164 Barnum – Direct 15:10-17 (Trial Day 24, Nov. 9, 2010)

Barnum – Direct 15

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10 Q Do you know whether any of NOAA's hydrographic surveys on

11 the Delaware River included sections of Mantua Creek

12 Anchorage?

13 A Yes.

14 Q Okay.

15 THE COURT: You do know, did they?

16 THE WITNESS: There were surveys performed in the

17 early '80s of that region, sir, by NOAA.

165 Barnum – Direct 24:13-25:14 (Trial Day 24, Nov. 9, 2010)

Barnum – Direct 24

13 Q Okay. Did NOAA also undertake a survey in the Delaware

14 River in 2002, using its hydrographic survey vessel, the

15 RUDE?

16 A Yes.

17 Q And that's R-U-D-E, correct?

18 A Correct.

19 Q All right. Now, you were not on board the RUDE during

20 that survey?

21 A I was not.

22 Q Do you know the purpose of the RUDE's hydrographic survey

23 of the Delaware River?

24 A Yes, it was a corridor survey that was done at the

25 request of the United States Navy. This was a request post

Barnum – Direct 25

1 9/11, September 11th, 2001. The Navy was concerned. They

2 wanted imagery of the ship channel bottom, so that if

3 somebody put something in the water, or said they put

4 something in the water, the Navy mine hunters could come and

5 take another picture, and they would compare the picture the

6 RUDE took to the picture that the mine hunters took, and look

7 for differences. So that allowed the Navy to greatly

8 increase or decrease the amount of time a port or shipping

9 channel would be closed.

10 Q As part of the RUDE survey, were they looking to find

11 objects on the bottom of the river?

12 A That was not their primary purpose. The purpose was to

13 image the bottom. However, if they found an object, those

14 objects were identified and charted.

166 CARCO Issues C.1.d and C.1.e. The maritime industry and CARCO rely on “the government’s jurisdiction, 

responsibilities, dominion, control course of conduct, publications, representations and assumed responsibilities 

concerning the status, condition and safety of navigation” in Delaware River and the Mantua Creek anchorage” 

thereby shifting liability for the ATHOS incident to the United States. Doc. 697 at 11.

167 CITGO insinuates that because the Corps had multibeam sonar, the Philadelphia District should have used it to 

search for objects irrespective of whether it had notice of a potential obstruction. As explained, however, the 

Corps’ hydrographic survey mission is to determine depth in order to inform its dredging decisions and to notify 

the public of changes in Project depth. The Philadelphia District had no manpower or fiscal resources to 

undertake prophylactic searches for obstructions. (US F/F 18, 23)

168 DePasquale – Direct 98:12-14 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 98

12 Q Does the Philadelphia District of the Corp have a mission

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13 to search for debris in the Delaware River project?

14 A No.

169 DePasquale – Direct 106:24-107:25 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 106

24 Q Are you familiar with the Mariners Advisory Committee,

25 also known as the MAC?

DePasquale – Direct 107

1 A Yes.

2 Q Does the corp attend the quarterly MAC meetings?

3 A Yes, we do.

4 Q Have you personally attended quarterly MAC meetings on

5 behalf of the corp?

6 A Yes, I have.

7 Q Who else typically attends those MAC meetings?

8 A Well, they're attended by the Corp of Engineers, the

9 Coast Guard and NOAA. And then there's a lot of -- a lot of

10 other personnel from the pilots, the tug companies, ship

11 owners, ship agents, facilities, different fuel terminals and

12 refineries. Sometimes, the Navy is there, but rarely. But

13 there's, you know, the whole maritime industry shows up,

14 pretty much, at these meetings.

15 Q What does the corp present at the MAC meetings?

16 A We present our dredging that we've completed and our

17 dredging schedule for the immediate future and we'll report

18 on how much material we're removing and how long the dredge

19 is going to be out in the river. That poses, you know, when

20 the dredge is out there, it actually poses a problem for

21 ships, because we get in the way a lot, so, we want to let

22 the industry know that we're going to be out there and that

23 we're going to be out there, let's say, from October to

24 December, what area of the river we're going to be in and any

25 other details of the dredging contract.

170 DePasquale – Direct 108:14-23 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 108

14 Q Is there an opportunity for dialogue between the corp and

15 users of the river at the MAC, regarding dredging and any

16 other need, for that matter?

17 A Yes, after our presentation, typically, there's a

18 question and answer period. And then we're at the meeting

19 for two to three hours, so, during that period, there is the

20 opportunity for us to discuss dredging and issues on the

21 Delaware River, with whoever wants to talk to us.

22 Q Was this true in 2004?

23 A Yes.

171 Adams – Direct 64:4-20, (Trial Day 3, Sept. 23, 2010)

Adams – Direct 64

4 Q All right. And, Captain, in that -- in your capacity as

5 Captain of the Port, were you a member of the Mariners

6 Advisory Committee?

7 A Yes, I was.

8 Q All right. And when did you assume that membership?

9 A When I assumed command of the Port of Philadelphia in

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10 July -- June or July of 1998.

11 Q All right. Do you remain a member today?

12 A I do, sir.

13 THE COURT: Excuse me a moment. How do you occupy

14 your time now that you're retired?

15 THE WITNESS: I'm a maritime consultant, your Honor.

16 BY MR. KUFFLER:

17 Q Captain, before we go on with a discussion about the MAC,

18 would --

19 MR. KUFFLER: -- Pam, would you put up Exhibit

20 P-763, please?

172 Adams – Direct 65:1-8 (Trial Day 3, Sept. 23, 2010)

Adams – Direct 65

1 BY MR. KUFFLER:

2 Q Captain, is this your current CV?

3 A This is the CV I provided you with.

4 THE COURT: So, yes.

5 BY MR. KUFFLER:

6 Q Now, a couple of questions about Page 2. As you see

7 there it says, 1998 to 2002 where you're Captain of the Port?

8 A Yes, I see that.

173 Adams – Direct 67:16-68:14 (Trial Day 3, Sept. 23, 2010)

Adams – Direct 67

16 Is the purpose of the MAC -- is the MAC concerned

17 with the safety of navigation?

18 A Primarily, yes.

19 Q Safe navigation of large vessels?

20 A Yes.

21 Q And is it explicitly charged with making recommendations

22 for safe drafts?

23 A Yes, it is.

24 Q All right. Now, does it make those recommendations to

25 the Corps of Engineers?

Adams – Direct 68

1 A It does.

2 Q The Coast Guard?

3 A Yes.

4 Q The National Oceanographic and Atmospheric

5 Administration?

6 A Yes.

7 Q Local bridge authorities?

8 A Yes.

9 Q Channel users?

10 A Yes.

11 Q What in the MAC parlance are channel users?

12 A Channel users would be the deep-draft traffic, as well as

13 other tug and towing operations, in commercial traffic

14 predominantly.

174 Adams – Direct 69:10-70:8 (Trial Day 3, Sept. 23, 2010)

Adams – Direct 69

10 Q All right. Now, would you tell us by category what the

11 membership of the MAC consists of?

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12 A Yes. The MAC was convened and initially started by the

13 (inaudible) Association in 1964 and its charter was twofold,

14 two interests was to direct its efforts at the navigation

15 safety of large oceangoing ships upon the Delaware River and,

16 secondly, to have its membership comprised of professional

17 mariners within the region, as well as Coast Guard Port

18 Engineers.

19 Q And does membership in the shipping community you

20 mentioned include the local shipping operators?

21 A It does.

22 Q And terminal operators?

23 A Yes, it does.

24 Q Now, during your tenure as Captain of the Port, did the

25 Coast Guard initiate a program to encourage the nationwide

Adams – Direct 70

1 formation of harbor safety committees?

2 A Yes, they did.

3 Q And was the MAC utilized in that effort in any way?

4 A Yes. As I assumed command in 1998, the Coast Guard, in

5 response to the Oil Pollution Act of 1990, was working to

6 develop national -- national harbor safety committees in all

7 the U.S. ports and the MAC that had been in existence since

8 1964 was used as a model to follow in that process.

175 Adams – Cross 101:21-102:7 (Trial Day 3, Sept. 23, 2010)

Adams – Cross 101

21 Q And did the MAC rely on the Corps of Engineers and NOAA

22 and the United States Coast Guard to identify and remove

23 obstructions to navigation -- identify or remove obstructions

24 to navigation?

25 A I wouldn't say identify as I would say that the MAC

Adams – Cross 102

1 looked to those entities as obstructions were identified, as

2 you put up with the Marcus Hook situation with the pinnacles

3 of rock and the rock cut there, then the MAC would look to

4 the Corps of Engineers and NOAA and the Coast Guard to

5 address those obstructions. The MAC did not look to the

6 Corps to conduct continuous surveys or -- other than their

7 normal dredging and annual dredging program.

176 Adams- Redirect 102:19-103:3 (Trial Day 3, Sept. 23, 2010)

Adams – Redirect 102

19 BY MR. KUFFLER:

20 Q Captain, in your time as a member of the Mariners

21 Advisory Committee, was it your understanding that the Army

22 Corps of Engineers as a matter of course was not looking at

23 the Federal waterways, channels, anchorages for obstructions?

24 MR. WHELAN: Objection, leading.

25 THE COURT: Objection overruled.

Adams – Redirect 103

1 THE WITNESS: Yes. The major involvement of the

2 Corps was involved in dredging operations, not -- it was not

3 dealing with surveys and soundings and foreign objects.

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177 CARCO Issue C.1.h. “The Government’s conduct and admissions after the oil spill and in the administrative 

proceedings before the National Pollution Funds Center concerning the sole fault of the anchor dropper and the 

absence of any inquiry or claim against CARCO.” Doc. 697 at 11.

178 CARCO alleges that the government erred in failing to search for the anchor owner. While this is irrelevant, 

CARCO fails to acknowledge the government’s subpoena to Weeks Marine in attempt to determine.. 

179 D Ex. 2142 at NPFC Corr. 014644.

180 Denmark – Cross 44:15-45:19 (Trial Day 29, Nov. 18, 2010)

Denmark – Cross 44

15 Q And does the Army Corps contract with the same private

16 dredging companies as facility owners in the Delaware River?

17 A Yes, we do. There's about three dredging contractors

18 that do almost all the work on the East Coast; Weeks Norfolk

19 Dredging, and Great Lakes Dredging, and everybody uses the

20 same dredging companies.

21 Q And these dredging companies often use clamshell bucket

22 dredges when dredging adjacent to private facilities; is that

23 correct?

24 A That is correct.

25 Q Are there any instances where bucket dredge operations

Denmark – Cross 45

1 need to use heavy weights?

2 A Yes, yes, it is.

3 Q Could you explain when?

4 A Yes, when the -- a bucket dredge is actually working on a

5 project site, they will have -- it is on a barge, it's on a

6 platform, and next to it is a barge the dredged material is

7 placed in. They want to have a continuous operation going

8 on, so they will have a number of other empty barges nearby.

9 So those barges have to be held in place so they use heavy

10 weights, attach those to buoys, and attach the barges to that

11 so that they will remain stationary in position. And the

12 whole idea is when that barge next to the dredge is full and

13 it leaves, they immediately move the barge back in -- a new

14 barge then is empty and then begin filling that one up again,

15 so they have to have the heavy weights to keep the anchors --

16 keep the buoys in place to hold the empty barges.

17 Q And these heavy weights could also be anchors; is that

18 correct?

19 A They could be anchors, correct.

181 DePasquale – Direct 108:2-10 (Trial Day 10, Oct., 6 2010)

DePasquale – Direct 108

2 THE COURT: Excuse me, you mentioned bucket

3 dredging, is there any other kind of dredging that's used?

4 THE WITNESS: Primarily, on the Delaware River, in

5 the federal channel, we normally do hydraulic dredging,

6 hydraulic pipeline dredging, which is a little bit different

7 than bucket. We have a larger dredge that is sucking mud off

8 the bottom and pumping it out through a pipe to a land-based

9 facility, as opposed to digging it off the bottom and

10 dropping it into barges and shipping it somewhere.

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182 DePasquale – Direct 115:9-22 (Trial Day 10, Oct., 6 2010)

DePasquale – Direct 115

9 THE COURT: They use them as anchors, is that what

10 you're saying?

11 THE WITNESS: They're actually using old anchors as

12 anchors, but not in the same way. They take pieces of it,

13 depending on the operation that they're doing. Sometimes,

14 they'll have full anchors, regular anchors, but other times,

15 they'll use pieces of anchors and cut off anchors.

16 THE COURT: And what are they using, what are they

17 anchoring with those pieces?

18 THE WITNESS: They may be anchoring a barge

19 associated with the dredging process or a lot of times,

20 they'll use them to anchor their pull lines, which actually

21 pull the dredge back and forth in a hydraulic dredging

22 operation.

183 Frescati issued its first subpoena on Mar. 6, 2006. Arguing that the subpoena was overbroad, Weeks filed a 

Motion to Quash on Mar. 20, 2006 which was granted by this Court on Apr. 6, 2006. Docs. 91 and 101. On Apr. 

7, 2007, Frescati filed its second subpoena to Weeks. Even though the time period was reduced from 35 to 14 

years, Weeks filed another Motion to Quash on the basis that the subpoena was overbroad. Doc. 103. This too 

was granted on June 14, 2006. Doc. 110.

184 DePasquale – Direct 111:25-112:2 (Trial Day 10, Oct. 6, 2010)

DePasquale – Direct 111

25 Q When did the corp last dredge the Mantua Creek anchorage?

DePasquale – Direct 112

1 A The last time we dredged it, well, we did a portion of it

2 in 2009, but before that, the last time was 1984.

185 CARCO issue C.1.f.: “The Practical and Legal Limitations Restricting Private Parties from Taking Actions 

with Respect to the Federal Project Waters Including Federal Anchorage No. 9. Doc. 697 at 11..

186 This was the case in 1997 when the Philadelphia Airport Authority was granted permission by the Corps to 

dredge the northern portion of the Mantua Creek Anchorage in order to use dredge materials as fill for the airport’s 

expansion. Trial 10, Oct. 6, 2010, Olson at 148:5-14;

187 DePasquale – Direct 104:20-106:23 (Trial Day 10, Oct. 6, 2010) 

DePasquale – Direct 104

20 Q Can you give me an example of any organizations or

21 facilities that have done hydrographic surveying within the

22 bounds of the Delaware River project?

23 MR. O'DONOVAN: Objection, your Honor, it calls for

24 hearsay.

25 THE COURT: No, it doesn't.

DePasquale – Direct 105

1 BY MS. SHUTLER:

2 Q You can answer.

3 A Well, first, I know that NOAA always overlaps our surveys

4 in the channel. Second of all, facilities often do their own

5 surveying. Conoco Phillips, at this time, on an annual

6 basis, is surveying their berthing area and they are

7 requesting to use Corp of Engineers disposal areas for dredge

8 material disposal. So, they're providing us with their

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9 survey, along with the survey of the federal channel in front

10 of their berthing areas. It's not the whole channel that

11 they're surveying, but they're surveying their berthing areas

12 and then they're overlapping and surveying the federal

13 channel and kind of indicating that both areas need dredging.

14 Q May a riverfront facility owner remove an object from the

15 river bottom?

16 A Yes.

17 Q Does it make any difference as to whether the object is

18 inside or outside the federal project area?

19 A No.

20 Q In either circumstance, would the facility owner need a

21 permit from the corp?

22 A Yeah, they need a permit, but it's covered under a

23 blanket permit that exists so a facility only has to write a

24 letter and request permission under the blanket permit to

25 remove an object.

DePasquale – Direct 106

1 Q And how long does that take?

2 A That usually should -- the approval of the kind of,

3 probably, takes a couple days.

4 Q Does a private company need a permit to dredge in the

5 Delaware River project?

6 A Yes.

7 Q Does it matter whether the dredging is inside or outside

8 the project area?

9 A No.

10 Q Can a private party obtain a permit to dredge within the

11 boundaries of a project?

12 A Yes.

13 Q How does a facility owner apply for such a permit?

14 A He would have to go through the normal permit process.

15 In an application, he's provide where he wanted to dredge,

16 the depth he wanted to dredge, what he was going to do with

17 the material, he'd have to provide test results and he's have

18 to just indicate the general process that he would be taking

19 to do the dredging.

20 Q Would he have to include some kind of plan?

21 A Yeah, there would have to be drawings and plan indicating

22 the depths that existed, at that time and indicating a

23 template as to what he wanted to dredge to.

188 Olson – Cross 148:5-14 (Trial Day 10, Oct. 6, 2010)

Olson – Cross 148

5 Q Okay. The last time any portion of Mantua Creek

6 Anchorage was actually dredged was prior to November of 2004,

7 was in April and August of 1990 -- sorry -- 1997, correct?

8 A I believe so, yes.

9 Q And that was part of the Runway Extension Project for the

10 Philadelphia Airport, right?

11 A Yes.

12 Q Okay. And at that time only the northern-most section of

13 the anchorage was dredged, right?

14 A Yes.

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189 Dredging in federal anchorage grounds is no different from dredging in other areas of the river. While

private dredging may often as a practical matter be coordinated with government dredging within federal

projects, see generally 33 C.F.R. § 322.5(c), aprivate partymaydredge in an anchorage ground underthe same

conditions as the government. Dredging must be authorized in advance, by permit. See 33 U.S.C. § 403; 33 C.F.R.

§ 322.3(a) (permit required for “work in or affecting navigable waters of the United States”); id. § 322.2(c) (“work”

includes dredging); id. § 322.3(c) (federal agencies must obtain the necessary permits). The Corps will evaluate

a private party’s request under its general permitting policies, see id. §322.5(c),whichconsider“thefull

publicinterestbybalancingthefavorableimpacts against the detrimental impacts” of the dredging, id. §

320.1(a). In 1997, the Philadelphia Airport Authority obtained a permit and dredged in the Mantua Creek

Anchorage. Trial Day 10, Oct 6, 2010, Olson at 148:5-14].

190 Mr. Olson testified he never heard of the phrase “area of responsibility” talismanically invoked by CARCO for 

the proposition that private parties are prevented from surveying, removing obstructions, or dredging in a federal 

anchorage. Trial Day 10, Oct 6, 2010 Olson at 144:13-19.

191 Olson – Direct 143:19-144:12 (Trial Day 10, Oct. 6, 2010)

Olson – Direct 143

19 Q Now, is this drawing something the Corps of Engineers

20 prepares?

21 A No, it is not. This is something that the applicant

22 submits.

23 Q Okay. So what does the cross-hatch area in this drawing

24 represent?

25 A This is the area that the –

Olson – Direct 144

1 THE COURT: It's not cross-hatched. It's only

2 hatched in one direction.

3 BY MS. SHUTLER:

4 Q The single hatched, the lines, in this drawing represent?

5 A This represents the area that they're requesting to

6 dredge.

7 Q And when you say "they're requesting to dredge," in this

8 case this was Seaview Petroleum?

9 A Yes, the applicant.

10 Q So Seaview, not the Corps of Engineers, chose this

11 particular area to dredge?

12 A Correct.

192 DePasquale – Direct 106:10-19 (Trial Day 10, Oct. 6, 2010) 

DePasquale – Direct 106

10 Q Can a private party obtain a permit to dredge within the

11 boundaries of a project?

12 A Yes.

13 Q How does a facility owner apply for such a permit?

14 A He would have to go through the normal permit process.

15 In an application, he's provide where he wanted to dredge,

16 the depth he wanted to dredge, what he was going to do with

17 the material, he'd have to provide test results and he's have

18 to just indicate the general process that he would be taking

19 to do the dredging.

193 DePasquale – Cross 139:3-25 (Trial Day 10, Oct. 6, 2010)

DePasquale – Cross 139

3 Q In order for a terminal, such as Citgo, to perform

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4 maintenance dredging in the vicinity of its berth, Citgo

5 would have to obtain a permit from the Army Corp, correct?

6 A Yes.

7 Q And permits issued by the Army Corp, include conditions

8 such as the depth to which an area can be dredged, right?

9 A Yeah, whatever the applicant requests is what's in the

10 permit.

11 Q Well, the Army --

12 THE COURT: Assuming that's a reasonable request.

13 THE WITNESS: Assuming it's reasonable, right. We

14 don't set the depth, the applicant does.

15 Q But it's not granted whatever depth they request, the

16 Army Corp is authorized to limit the depth to which something

17 can be dredged, correct?

18 A No, not in a private berth. They can, if they wanted to,

19 they could put a permit to dig it to 100.

20 Q And the Army Corp would grant that?

21 A I can't say that we would grant it or not, they have to

22 consider all the conditions. But there's no, there's no

23 limit to what --

24 THE COURT: What they can request.

25 THE WITNESS: -- request.

194 DePasquale – Direct 104:16-105:13 (Trial Day 10, Oct. 6, 2010)

DePasquale - Direct 104

16 Q Would a private company need any kind of permit from the

17 Corp of Engineers to do a hydrographic survey in the federal

18 area?

19 A No.

20 Q Can you give me an example of any organizations or

21 facilities that have done hydrographic surveying within the

22 bounds of the Delaware River project?

23 MR. O'DONOVAN: Objection, your Honor, it calls for

24 hearsay.

25 THE COURT: No, it doesn't.

DePasquale – Direct 105

1 BY MS. SHUTLER:

2 Q You can answer.

3 A Well, first, I know that NOAA always overlaps our surveys

4 in the channel. Second of all, facilities often do their own

5 surveying. Conoco Phillips, at this time, on an annual

6 basis, is surveying their berthing area and they are

7 requesting to use Corp of Engineers disposal areas for dredge

8 material disposal. So, they're providing us with their

9 survey, along with the survey of the federal channel in front

10 of their berthing areas. It's not the whole channel that

11 they're surveying, but they're surveying their berthing areas

12 and then they're overlapping and surveying the federal

13 channel and kind of indicating that both areas need dredging.

195 Barnum - Cross 51:9-15 (Trial Day 24, Nov. 9, 2010)

Barnum- Cross 51

9 Q Did a private entity need to get a permit in order to

10 conduct a hydrographic survey in the Delaware River?

11 A No.

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12 Q Is that answer the same, that they did not have to get a

13 permit, even if the survey was going to include the federal

14 channel or a designated anchorage?

15 A Yes.

196 Rankin – Direct 9:21-24 (Trial Day 30, Nov. 22, 2010)

Rankine - Direct 9

21 Q And who would be responsible for providing guidance to

22 the terminal on issues relating to marine safety at the

23 berth?

24 A That was my job, marine safety, marine guidance.

197 Rankin - Direct 10:17-23 (Trial Day 30, Nov. 22, 2010)

Rankine – Direct 10

17 Q Did any of your duties extend to any area outside the

18 berth?

19 A No, not at all.

20 Q Specifically, did your duties extend out into the Federal

21 anchorage?

22 A No, not at all; that was the responsibility of the Corps

23 of Engineers.

198 Rankin – Direct 52:20-53:4 (Trial Day 30, Nov. 22, 2010)

Rankine – Direct 52

20 Q Where were the depth surveys to be obtained that this

21 refers to?

22 A What we call the permitted dredge area for our dock or

23 the area of responsibility.

24 Q Okay. Did the draft standards say anything about

25 searching for obstructions?

Rankine – Direct 53

1 A No.

2 Q Did they say anything about surveying the anchorage?

3 A Absolutely not. The anchorage is the responsibility of

4 the Corps of Engineers, not us.

199 Rankin – Cross 96:18-23 (Trial Day 30, Nov. 22, 2010)

Rankine- Cross 96

18 Q Now, you sat on the Mariners Advisory Committee on behalf

19 of CITGO in 2004, didn't you?

20 A I attended the meetings, yes.

200 Rankine Dep. 172:12-177:8 (Oct. 16, 2007)

Rankine 172

12 Q I—I’m looking at it from a little

13 bit of a different way. Is it – was it the policy

14 in 2004, and I’m not looking away anything from what

15 you’ve said, was it the policy in 2004 not

16 survey federal waterways?

17 A We have no responsibility for the

18 federal waterways, so we—we—out policy, to

19 use your word, is to obtain hydrographic surveys

20 only for our area of responsibility for dredging

21 because we have no responsibility for anything

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22 outside that area.

23 Q Okay. I’m not asking you what you

24 think your responsibility is or what you think the

25 company’s responsibility is, I’m asking you if the

Rankine 173

1 policy in 2004 was not to survey federal waters for

2 depth?

3 A We did not survey federal waters

4 because we had no responsibility for federal

5 waters.

6 Q And that was the policy in 2004?

7 A That is correct

8 Q And 2003 and 2002?

9 A As long as this document’s been in

10 place.

11 Q And I assume that if you are not

12 surveying federal waterways for depth, you’re

13 certainly not surveying them for anything else; is

14 that correct?

15 A That is correct.

16 Q And that was the policy in 2004?

17 A We—we are not permitted to survey

18 federal waterways, those are federal waterways,

19 we’re not allowed to survey federal waterways, the

20 Army Corps of Engineers surveys federal waterways.

21 We cannot willingly go out and survey federal

22 waterways.

23 Q What makes you think that you cant

23 survey federal waterways?

25 A We were told not to survey federal

Rankine 174

1 waterways. We were told during the ATHOS not to

2 survey federal waterways. We’ve been told in other

3 ports that’s not our responsibility and we are not

4 to survey federal waterways, the federal government

5 surveys federal waterways.

6 Q All right. Let’s just focus on the

7 Delaware River, Paulsboro facility.

8 A Okay.

9 Q Were you personally told by anyone,

10 at the U.S. Coast Guard or the Army Corps of

11 Engineers that prior to November 26, 2004, that you

12 could not survey the federal anchorage.

13 A I was not personally told because

14 it’s an established fact that we’re not allowed to

15 survey federal waterways, to I didn’t ask the

16 question.

17 Q And did you think it’s established

18 fact because you’ve – you’ve read that somewhere?

19 A I know its an established fact

20 because that’s what I’ve been told by other people

21 within CITGO

22 Q What other people within CITGO told

23 you that before November 26, 2004?

24 A At one point in time, I believe it

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25 came up in a discussion on the Lake Charles

Rankine 175

1 Calcasieu River

2 Q And who told you what?

3 A I believe it was the legal department

4 told us that we were not to survey federal waters

5 because we had a concern over depth of the

6 water.

7 Q And where was that?

8 A On the Calcasieu River.

9 MR. LEBANC:

10 Lake Charles.

11 THE WITNESS:

12 Lake Charles.

13 BY MR. LEVY:

14 Q And who in the legal department told

15 you what?

16 A I don’t know. The subject came up

17 and I don’t know who said it. It may have come at

18 one of our staff meetings, but I can’t recall

19 exactly.

20 Q When you were port captain for the

21 Paulsboro facility of CITGO Petroleum or CIT – or

22 CARCO, did you believe at that time that you had no

23 right to conduct any type of survey in federal

24 waterways?

25 A That is correct.

Rankine 176

1 Q Was your belief at that time based

2 upon anything other than what somebody in the law

3 department may have told you?

4 MR. LEBANC:

5 Object to the form of the

6 question. It’s not properly stating

7 what he previously testified to.

8 BY MR. LEVY:

9 Q You may answer.

10 A Okay. Based on a conversation, as I

11 recall, there was a discussion as to whether we

12 could legally, without the permission of the Army

13 Corps of Engineers or the Coast Guard, survey a

14 federal channel. I don’t know who said it, I don’t

15 know when it took place, but that was my

16 understanding at the time.

17 Q Well, now you—you said in your

18 answer there, doing it without permission, didn’t

19 you?

20 A Yes.

21 Q Now, my question was: Did you think

22 you could not do it, so let me rephrase my

23 question.

24 In November—in 2004, before the

25 ATHOS 1 incident, did you believe that you needed

Rankine 177

1 permission to do any type of surveying in federal

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2 waterways off the Paulsboro facility?

3 A If we had any responsibility for

4 surveying the federal waterways, then that subject

5 might have come up, but for Paulsboro, it never

6 came up here because I believed we could not do it

7 without any permission, but we wouldn’t have asked

8 because it’s not our responsibility.

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