CLAIM SUMMARY / DETERMINATION FORM 

Date : 6/30/2010 

Claim Number : N08057-056

Claimant : Koch Supply and Trading LP and Koch Shipping, Inc. 

Type of Claimant : Corporate 

Type of Claim : Loss of Profits and Earning Capacity 

Claim Manager : 

Amount Requested : $134,554.92 

I. Facts

On the morning of July 23, 2008, the tank barge DM 932 sank as a result of a collision and 

discharged oil into the Mississippi River, a navigable waterway of the United States. 

Approximately 282,828 gallons oil1 were released into the Mississippi River and the resulting 

spill response, coordinated by the FOSC Unified Command, initially closed the river to vessel 

traffic and later, when reopened, managed traffic. 

II. Responsible Party

American Commercial Lines LLC (ACL), the Responsible Party (RP), owned the barge at the 

time of the incident and is a responsible party under the Oil Pollution Act. 

III. The Claimant and the Claim

Koch Companies Public Sector, LLC (KPS) has submitted a claim into the National Pollution 

Funds Center (NPFC) for their client, Koch Supply and Trading LP and Koch Shipping, Inc. 

(KS&T). At the time of the collision, The M/T Eagle Otome was under charter by KS&T for a 

shipment of fuel oil for Valero Marketing and Supply Company (Valero), at Valero’s St. Charles 

Refinery (Mississippi River Mile Marker (MM) 125).2

 When the spill occurred, the Eagle 

Otome stopped at the Magnolia Anchorage (MM 45) and, to avoid the effects of the spill, 

returned to Southwest Pass (SWP) Anchorage (just outside of the Mississippi River). Due to the 

spill and the likelihood of vessels getting oiled in the immediate spill area, the USCG stopped 

operations of this and other vessels several times. KS&T was delayed a total of 4 days, 12 hours 

and 6 minutes. Therefore, KS&T is claiming a direct income loss totaling $88,447.91. 

Additionally, during the 4.5041667 days of delay, the Eagle Otome claims additional pilot, tug 

and bunker expenses, totaling $46,107.01. 

When combining KS&T’s claims of damage and additional expenses, the total claim for loss of 

profits due to the oil spill is $134,554.92. KPS did present these costs to the RP’s representatives, 

Worley Catastrophe Response (Worley); however, all costs were denied by the RP.3

IV. APPLICABLE LAW

 

1

 See House Subcommittee Hearing on DM 932 Oil Spill, dated 9/15/2008 

2

 See Claim submission forms, submitted by KPS to the NPFC on 9/03/2009 

3

 See Claim submission forms, submitted by KPS to the NPFC on 9/03/2009 

(b) (6)
Claims may be presented first to the Fund if the President or his delegated representative has 

advertised or notified claimants that the Fund is accepting claims resulting from an oil discharge. 

33 U.S.C. §2713(b)(1)(A). 

The uses of the OSLTF are described at 33 U.S.C. §2712. It provides in relevant part that: 

“(a) Uses generally

The Fund shall be available to the President for –

(4) [T]he payment of claims in accordance with section 2713 of this title for uncompensated 

removal costs determined by the President to be consistent with the National Contingency Plan 

or uncompensated damages; . . . 

(b) Defense to liability for Fund 

The Fund shall not be available to pay any claim for removal costs or damages to a particular 

claimant, to the extent that the incident, removal costs, or damages are caused by the gross 

negligence or willful misconduct of the claimant.”

Covered damages include damages for injury to natural resources, injury to or economic losses 

from the destruction of real or personal property, loss of subsistence use of natural resources, 

Government loss of revenues, loss of profits or earning capacity as a result of loss or destruction 

of real or personal property or natural resources, and net costs of providing increased public 

services. 33 U.S.C. §2702(b). Damages are further defined in OPA to include the costs of 

assessing the damages. 33 U.S.C. §2701(5). 

Damage claims must be presented within 3 years after the date on which the injury and its 

connection with the discharge in question were reasonably discoverable with the exercise of due 

care. 33 U.S.C. §2712(h)(2). 

In any case in which the President has paid an amount from the OSLTF for any removal costs or 

damages specified under 33 U.S.C. §2712(a), no other claim may be paid from the Fund for the 

same removal costs or damages. 33 U.S.C. §2712(i). 

Congress directed the President to promulgate regulations “for the presentation, filing, 

processing, settlement, and adjudication of claims...” 33 U.S.C. §2713(e). Those regulations are 

found at 33 CFR Part 136. 

Under 33 CFR 136.105(a) and 136.105(e)(6), the claimant bears the burden of providing all 

evidence, information, and documentation deemed necessary by the Director, NPFC, to support 

the claim. Further, a claim presented to the Fund should include, as applicable: 

“[T]he reasonable costs incurred by the claimant in assessing the damages claimed. This 

includes the reasonable costs of estimating the damages claimed, but not attorney’s fees or other 

administrative costs associated with preparation of the claim.” 33 CFR 136.105(e)(8).

With regard to claims for loss profits and impairment of earning capacity, the NPFC must 

independently determine that the proof criteria in OPA and the implementing regulations, at 33 

CFR Part 136, are met, including the general provisions of 33 CFR 136.105, and the specific 

requirements for loss of profits and earning capacity claims in Subpart C, 33 CFR 136.231, et 

seq. 

Pursuant to the provisions of 33 CFR 136.231, claims for loss of profits or impairment of earning 

capacity due to injury to, destruction of, or loss of real or personal property or natural resources 

may be presented to the Fund by the claimant sustaining the loss or impairment. 
“In addition to the requirements of Subparts A and B of this part, a claimant must establish the 

following—

(a) That real or personal property or natural resources have been injured, destroyed, or lost. 

(b) That the claimant’s income was reduced as a consequence of injury to, destruction of, or loss 

of the property or natural resources, and the amount of that reduction. 

(c) The amount of the claimant's profits or earnings in comparable periods and during the period 

when the claimed loss or impairment was suffered, as established by income tax returns, 

financial statements, and similar documents. In addition, comparative figures for profits or 

earnings for the same or similar activities outside of the area affected by the incident also must 

be established. 

(d) Whether alternative employment or business was available and undertaken and, if so, the 

amount of income received. All income that a claimant receives as a result of the incident must 

be clearly indicated and any saved overhead and other normal expenses not incurred as a result 

of the incident must be established.” 33 CFR 136.233 (a) – (d) 

If a third party claimant or an RP is able to establish an entitlement to lost profits, then 

compensation may be provided from the OSLTF. But the compensable amount is limited to the 

actual net reduction or loss of earnings and profits suffered. Calculations for net reductions or 

losses must clearly reflect adjustments for the following: all income resulting from the incident; 

all income from alternative employment or business undertaken; potential income from 

alternative employment or business not undertaken, but reasonably available; any saved 

overhead or normal business expenses not incurred as a result of the incident; and state, local, 

and Federal tax savings. 33 CFR 136.235 (a) – (e). 

Under 33 CFR 136.115(d), the Director, NPFC, will, upon written request of the claimant or the 

claimant's representative, reconsider any claim denied. The request for reconsideration must be 

in writing and include the factual or legal grounds for the relief requested, providing any 

additional support for the claim. The request for reconsideration must be received by the NPFC 

within 60 days after the date the denial was mailed to the claimant or within 30 days after receipt 

of the denial by the claimant, whichever date is earlier. 

V. DETERMINATION OF LOSS: 

A. Overview: 

1. FOSC coordination has been established under the Federal Project by way of 

Incident Action Plans and United States Coast Guard (USCG) Pollution Reports 

under Federal Project Number N08057. 

2. Real or personal property or natural resources have been injured, destroyed, or 

lost; specifically oil was released into and injured the Mississippi River, a natural 

resource of the United States.

3. The incident involved the discharge and continuing substantial threat of discharge 

of “oil” as defined in OPA 90, 33 U.S.C. § 2701(23), to navigable waters.

4. In accordance with 33 CFR § 136.105(e)(12), the claimant has certified no suit 

has been filed in court for the claimed uncompensated removal costs. 

5. The claim was submitted on time. 

6. The claimant seeks $134,554.92 in loss of profits, as a consequence of the M/T 

Eagle Otome’s additional time, pilots, tugs and fuel.

7. The claimant asserts that if not for the oil spill the voyage would not have resulted 

in additional time, pilots, tugs and fuel. 
8. Presentment of costs to the RP was made by KPS, representatives for KS&T, 

prior to the submission of the claim. The NPFC also made presentment of costs 

to the RP for which the RP responded denying responsibility for these costs. 

9. In the process of adjudicating this claim, the NPFC Claims Manager collected 

additional information from the claimant to document what took place at the time 

of the incident. 

B. Causation:

The Barge DM 932 oil spill did in fact release significant amounts of oil into and causing 

damage and injury to the Mississippi River, a natural resource of the United States. The 

resulting damage, injury and removal response disrupted shipping in and out of the Mississippi 

River.4 At the time of the spill, there were many large vessels in the area that were oiled due to 

the DM 932 oil spill. The Eagle Otome was detained in SWP, outside of the dirty zone awaiting 

USCG clearance to depart, which was granted on July 27, 2008.5

The Claimant provided a record of the incident by submitting Voyage Documents and 

“Statement of Facts,” which clearly demonstrate that the Mississippi River had closed and vessel 

traffic was redirected during the oil removal efforts.6 Additionally, the USCG provided 

POLREPS to substantiate that the Mississippi River was either closed to vessel traffic or open to 

limited traffic during the response period. 

C. Vessel Delay Time: 

KS&T is claiming that the oil spill directly caused them loss of profits because the Eagle Otome 

was sitting idle and the voyage was increased by 4.5041667 days. The Eagle Otome was stopped 

as follows: 

7/23/2008 @ 02:42 hours Arrival at SWP 

7/23/2008 @ 09:54 hours Anchor down at Magnolia Anchorage due to oil spill; 

Notice of Readiness tendered 

7/23/2008 @ 12:18 hours Anchor up at Magnolia Anchorage to move south 

7/23/2008 @ 18:00 hours Anchor down at SWP Anchorage 

7/27/2008 @ 14:48 hours Anchor up at SWP Anchorage 

7/28/2008 @ 06:24 hours Anchor down at AMA Anchorage, waiting instructions 

7/29/2008 @ 17:36 hours Anchor up at AMA Anchorage 

7/29/2008 @ 20:18 hours All fast 

7/30/2008 @ 21:30 hours Hose disconnection complete 

8/01/2008 @ 19:48 hours Dropped outward pilot (DOP) 

The total stoppage time claimed by Koch: 4 days, 12 hours and 6 minutes, or approximately 

4.5041667 days. 

 

4

 Polreps 1-18; documenting river closures and traffic management through August 8, 2008. 

5

 See Eagle Otome Voyage Time Sheet, submitted with the claim by KPS to the NPFC on 9/03/2009 and the Deck 

Log Book and internal email correspondence, in the submission supplement documents, submitted by KPS 

to the NPFC on 12/29/2009 

6

 See Eagle Otome Voyage Time Sheet, submitted with the claim by KPS to the NPFC on 9/03/2009 and the Deck 

Log Book and internal email correspondence, in the submission supplement documents, submitted by KPS 

to the NPFC on 12/29/2009 
Per the terms of the charter agreement between KS&T and American Eagle Tankers Inc, Limited 

(AET), AET charged a detention rate of $35,000 per day. $35,000 x 4.5041667 (KS&T’s claim) 

= $157,645.83 in freight damages due to the oil spill.7

 

Per the terms of the contract between KS&T and Valero, 8 Valero paid fifty percent of the 

damages starting six hours after the Notice of Readiness (7/23/2008 @ 15:54 hours until 

7/27/2008 @ 14:48 hours, when the Eagle Otome departed Southwest Pass), time which adds up 

to 94 hours and 54 minutes, or 3.95416667 days.9 When multiplying the 1.977083335 days by 

$35,000 per day (which is half the detention days of 3.95416667 multiplied by $35,000), the 

total amount Valero paid KS&T (pertaining to the spill) equals approximately $69,197.92. 

Subtracting what Valero paid ($69,197.92) from the initial damage claim ($157,645.83), KS&T 

is asking to be reimbursed the difference of $88,447.91.

D. Increased Bunkers 

KS&T asserts that the delay resulted in an increase in the consumption of bunkers. In their claim 

submission, KS&T shows the breakdown of the amount of bunkers consumed during the idle 

period (From initial arrival at SWP to Magnolia, and back to SWP):10

 

Times and Dates: IFO

 

 03:00 on 7/23/2008 through 1103.70 mt 

 03:57 on 7/23/2008 - 1083.20 mt 

 ---------- 

Total: 20.50 mt 

The top number represents the amount of oil (in tons) that were read at the time of entry into SWP, subtracting the 

amount of oil read at the time that the Eagle Otome arrived back at SWP Anchorage to find the difference. 

At a cost of $721.21/mt for the IFO, the additional bunkers consumed amount to $14,784.81

($721.21 x 20.50 mt = $14,784.81).11

E. Additional Costs 

KS&T is claiming additional costs due to increased pilots, tugs and launch fees: 

 Pilots:

Increased pilotage fees can be broken down in the following categories:12

 From SWP to Magnolia Anchorage:

 Crescent River Port Pilots’ Association:

 

7

 See Charter Party Addendum, Sub-Point F, Section x, dated November 6, 2006, submitted with the claim by KPS 

on 9/03/2009 

8

See Charter Party, “Discharge, Laytime, Demurrage, Ocean Tankers and Ocean Barges 16,000 DWT And Over,” 

dated June 30, 2008, submitted with the claim by KPS on 9/03/2009 

9

 See Eagle Otome Voyage Time Sheet, submitted with the claim by KPS to the NPFC on 9/03/2009 

10 See Oil Spill Invoice from AET to K&T, submitted with the claim by KPS to the NPFC on 9/03/2009 

11 See Chevron Marine Products fuel invoice, submitted with the claim by KPS to the NPFC on 9/03/2009 

12 See New Crescent River Port Pilots’ Association and Associated Branch Pilots, submitted with the claim by KPS 

to the NPFC on 9/03/2009 
 

MAGNOLIA ANCHORAGE: $1987.46 

 D.W.T.’S MIN (Of 21,000): $181.67

 D.W.T.’S CHARGE (21,000 TO 60,000): $861.90

 D.W.T.’S CHARGE (OVER 60,000): $938.00

 ZONE CHARGE (OVER 60,000 DWT): $1085.10

 COMMUNICATION: $4.50

 PENSION: $1718.11

VTS: $357.78

CAPITAL IMPROVEMENTS: $31.13

KATRINA RECOVERY: $245.00

 _______

 

Total: $7410.65

 Associated Branch Pilots: 

 

DEEPEST DRAFT: $1888.56 

 SUMMER DEADWEIGHT TONNAGE: $1879.54

 COMMUNICATIONS: $3.00

 CAPITAL SRUCHARGE: $75.00

 PENSION SURCHARGE: $469.71

KATRINA RELATED SURCHARGE: $29.00

PILOT FEE COMMISSION COLLECTION: $30.00

 _______

 

Total: $4374.81

From Magnolia Anchorage to SWP:

 Crescent River Port Pilots’ Association:

 

MAGNOLIA ANCHORAGE: $1987.46 

 D.W.T.’S MIN (Of 21,000): $181.67

 D.W.T.’S CHARGE (21,000 TO 60,000): $861.90

 D.W.T.’S CHARGE (OVER 60,000): $938.00

 ZONE CHARGE (OVER 60,000 DWT): $1085.10

 AWAIT BERTH: $343.68

COMMUNICATION: $4.50

 PENSION: $1718.11

VTS: $357.78

CAPITAL IMPROVEMENTS: $31.13

KATRINA RECOVERY: $245.00

 _______

 

Total: $7754.33

 Associated Branch Pilots: 

 

DEEPEST DRAFT: $1888.56 

 SUMMER DEADWEIGHT TONNAGE: $1879.54
 COMMUNICATIONS: $3.00

 CAPITAL SRUCHARGE: $75.00

 PENSION SURCHARGE: $469.71

KATRINA RELATED SURCHARGE: $29.00

PILOT FEE COMMISSION COLLECTION: $30.00

 _______

 

Total: $4374.81

Combined Total: $23,914.60

 Tugs:

 Increased tug fees can be broken down into the following categories:13

 Assistance fees, 2 @ $2350.00 $4700.00

 Fuel Surcharge: $1645.00 

 _________

Total: $6,345.00

 Launch:

 Increased launch fees can be broken down as follows:14

Ticket # 95710: $531.30

 Ticket # 95696: $531.30

 _______

Total: $1,062.60

Total increased expenses due to oil spill and resulting USCG relocation and delay of the 

vessel: $31,322.20 

F. Analysis: 

KPS submitted a claim—with requested addendums-- that was well-documented and easy to 

understand. They were able to demonstrate that KS&T was indeed negatively impacted and 

delayed by the DM 932 oil spill. However, while KS&T shows a correct time period of 9.71 days 

between the Eagle Otome’s arrival at SWP (at 2:42 hours on 7/23/2008) until DOP (drop off 

pilot outbound) at AMA Anchorage (at 19:48 on 8/01/2008), with a total difference in time of 

4.50 days (from a forecasted 5.21 day voyage without the spill and the actual voyage with the 

spill), the NPFC has determined only 4.2 days are fully compensable (Starting at the NOR at 

09:54 hours on July 23, 2008, not 02:42 hours as KS&T calculates in its claim). 

According to the Charter Party Addendum agreement between AET and KS&T,15 AET was to 

begin charging KS&T overtime at the rate of $35,000 per day in excess of the minimum period 

 

13 See Crescent Towing and Salvage Co. Inc., submitted with the claim by KPS to the NPFC on 9/03/2009 

14 See Delta Launch Services, LLC, Invoices, submitted with the claim by KPS to the NPFC on 9/03/2009 

15 See Charter Party Addendum, Sub-Point F, Section x, dated November 6, 2006, submitted with the claim by KPS 

on 9/03/2009 
of three cumulative Service Ship days, beginning with the Notice of Readiness (NOR). Koch 

shows, through its own “Calculation of Net Freight Damages” chart, as well as invoicing and 

internal email correspondence between AET and KS&T,16 that the Eagle Otome would have 

started to accrue delay charges after three days (Starting at approximately 18:00 hours on July 

23, 2008, three days after the NOR was tendered at 18:00 hours on 7/20/2008), regardless of the 

spill. In other words, the spill added to the delay and the resultant charges. Also, according to 

this same documentation, the actual time of delay directly related to the oil spill for the Eagle 

Otome did not begin until the NOR was issued at 09:54 hours on 7/23/2008. Therefore, when 

beginning with the NOR at 09:54 hours on 7/23/2008 and ending with the DOP at 19:48 hours 

on 8/01/2008, the actual voyage calculation time directly related to the DM 932 oil spill is 

approximately 9 days, 10 hours 34 minutes, or 9.44 days. Subtracting the 5.21 days that KS&T 

would have been delayed regardless of the spill, the actual time difference between the 

forecasted voyage without the spill and the actual voyage equals an approximate time difference 

of 4.23 days (9.44 actual days – 5.21 forecasted days = 4.23 days difference). 4.23 days 

multiplied by an overtime rate of $35,000 per day equals freight damages in the amount of 

$148,050.00. Subtracting the $69,197.92 that KS&T recovered previously from Valero, the 

compensable freight damages due KS&T equal $78,852.08. 

Additionally, KS&T does prove through documentation provided the NPFC that they did incur 

$46,107.01 of increased bunker consumption, pilots, tugs and launch fees as a direct result of the 

oil spill. These added costs (as explained in sub-points D and E above) are valid and are 

compensable. 

G. Determination: 

The NPFC hereby determines that the OSLTF will pay $124,959.09 as full compensation for the 

lost profits incurred by the Claimant as a result of the increased expenses incurred during the 

voyage charter of the EAGLE OTOME and submitted to the NPFC under claim # N08057-056. 

All increased expenses claimed are for charges paid for by the Claimant without mitigating or 

offsetting increases in revenues for the voyage in question. The lost profits determined are for 

damages as that term is defined in OPA and, are compensable damages, payable by the OSLTF 

as presented by the Claimant. 

VI. DETERMINED AMOUNT: $124,959.09

Claim Supervisor: Tom Morrison 

Date of Supervisor’s review: 

Supervisor Action: 

Supervisor Comments:

 

16 See AET Lightering Invoice # L04739C-US, dated 8/06/2008, submitted with the claim on 9/03/2009 and Email 

from Eagle Otome Captain Varun Kumar to AET, dated 8/01/2008, in the submission supplement 

documents, submitted by KPS to the NPFC on 12/29/2009