On final approach to the berth – M/V ATHOS I update

Types : Alerts

Attorneys involved with the ATHOS I litigation, a case venued in federal court in Philadelphia, are anxiously awaiting a decision from the Court after giving closing arguments last September.  This anticipated decision is expected to address several topics of interest to marine terminal operators and ship owners in the U.S., one of which is the standard of care a terminal operator should follow to ascertain whether the berth and approaches are safe for the ships invited to its dock.

The case arose in 2004 when the oil tanker ATHOS I struck a large abandoned anchor that was lying on the riverbed of the Delaware River directly in the approach to the dock a marine terminal that was operated by the ship’s charterer. The anchor punctured the ship’s hull resulting in one of the worst oil spills in US history. Clean-up costs and other damages exceeded $200M. The case came to a head with a 41 day bench trial in 2010, but that decision was reversed by the Court of Appeals when trial judge, who retired shortly after issuing his decision, was found to have made errors of law and also failed to make necessary findings of fact. On remand, the new judge was left with the enormous task of reviewing the entire record from the original trial, and then rehearing much of the evidence, which he did over six weeks last spring. Over 100 years ago, the US Supreme Court in Smith v. Burnett, 173 U.S. 430 (1899) held that marine terminal operators have a duty to ascertain the conditions in the berth and approaches, and to remove or warn of any dangers lurking there.  The rationale for the decision was that terminal operators were in the best position to discover and remove hazards to the ships invited to their docks.

In the ATHOS I case, the terminal operator was inviting deep draft oil tankers to its berth, knew that there could be hazards in the approach (which was through a federal anchorage), and had worked to open the docking window so that ships could dock near low water.  The terminal operator did nothing check the riverbed conditions where the casualty occurred, apparently believing that it had no legal obligation to check there. The Third Circuit Court of Appeals, following Smith v. Burnett, held that the ship was squarely in the approach, that simply the approach passed through a federal anchorage, which the Army Corps of Engineers maintains, did not lessen the terminal operator’s duty, and that the new trial judge must decide, among other things, just what a reasonable terminal operator should have done under these circumstances.

At hearings last spring, the ship owner presented evidence that side-scan sonar technology was an effective and inexpensive means to look for potential hazards, and was an appropriate standard of care for the court to impose on the terminal operator in this case.  The terminal operator argued that using side-scan to pro-actively search for obstructions was not the custom and practice of terminal operators on the Delaware River and hence no search should be required, notwithstanding the rule of Smith v. Burnett.

The ATHOS I case is also noteworthy because the U.S. Government, on behalf of the National Pollution Funds Center which reimbursed the ship owners about $88 million for cleanup expenses, exercised its right of subrogation against the charterer and joined the case as a co-plaintiff.  This joinder was unprecedented in the annals of the Justice Department.

A decision by the District Court is expected this year.

The ship owner is represented by Montgomery, McCracken, Walker & Rhoads, LLP’s trial team of Alfred J. Kuffler, Eugene J. O’Connor, John J. Levy, Timothy J. Bergère, Tricia J. Sadd, and Melanie A. Leney.