Spain Precluded from Bringing Oil Spill Case in U.S. Court

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SandBar 7:2, July, 2008 Spain Precluded from Bringing Oil Spill Case in U.S. Court Reino de Espana v. American Bureau of Shipping, Inc., 528 F.Supp.2d 455 (S.D.N.Y. 2008). Sarah Spigener, 3L, University of Mississippi School of Law The District Court for the Southern District of New York held that Spain is precluded from bringing a negligence action in the United States against the American Bureau of Shipping, a classification society, as a result of the Convention on Civil Liability for Oil Pollution Damage that regulates which countries may hear such cases. Background In October 2002, the Prestige, an oil tanker, left Russia and Latvia fully laden for Gibraltar. During the voyage, the Prestige experienced structural failures which, in November 2002, resulted in the discharge of multiple tons of oil into the ocean off the northwestern Spanish coast. The disaster left a slick over 200 yards wide and 18 miles long, and as the Prestige sank, a second large oil slick formed.1 In total, approximately three million gallons of fuel was discharged into the environment. Reino de Espana (“Spain”) brought suit against the American Bureau of Shipping, Inc. (“ABS”) seeking damages as a result of the oil spill. Spain claimed that ABS negligently certified the Prestige as capable to carry fuel cargoes and, as a result, is subject to civil damages. ABS is engaged in the business of deter mining the fitness of vessels through a procedure called classification. ABS surveyors inspect the vessel, and if the vessel is in compliance with ABS standards, the vessel is issued classification documents. Classification by ABS is essential to the marketability of a vessel for commercial shipping. The Prestige was initially certified when it was built in 1973 and continued to be certified until it sank . Analysis When an oil shipping incident results in pollution damage in the territory of a signatory state, the Convention on Civil Liability for Oil Pollution Damage (CLC) imposes liability on the owner of a vessel which was carrying oil as cargo and exempts third parties unless they acted recklessly. ABS moved for summary judgment claiming that Spain could not prove the “reckless” conduct required to hold ABS liable. Secondly, ABS claimed that under the CLC, Spain can only seek damages in a country that is a signatory to the CLC; consequently, since the United States is not a signatory to the CLC, the U.S. does not have proper jurisdiction to hear this case. The court first looked at whether the CLC was applicable to the case. ABS is classified, under the CLC, as any “other person who…performed services” for the Prestige. Because ABS provided certification services to the Prestige, ABS argues that Spain is subject to the limitations imposed by the CLC. Spain argued in response that the CLC is only intended to cover individuals physically working on a vessel at the time of a pollution incident and thus is inapplicable to ABS. The court however rejected this argument by referring to the clear language of the CLC and held that the CLC does govern this situation. Next, the court turned to the issue of whether the CLC required Spain to bring its claim in a contracting state. The court explained that the CLC creates legal obligations analogous to contractual obligations on the states that are parties to it. Since Spain is a contracting state, it is subject to its limitations. The CLC expressly provides that “actions for compensation may only be brought in the Courts of any such Contracting State or States.” Since the U.S. is not a contracting state to the CLC, pursuing an action in the U.S. is a violation of the CLC. As a result, the court granted ABS’s motion for summary judgment because the court lacked jurisdiction to hear this case. Conclusion The Prestige sank and caused an international environmental disaster by discharging nearly three million gallons of oil into the ocean off the coast of Spain. ABS certified that the Prestige was capable of carrying oil cargoes, when the ship was not structurally sound. However, the court held that the U.S. may not hear the case, since Spain is subject to the terms and conditions of the CLC and the CLC mandates that civil suits may only be brought in signatory countries. Endnotes 1. The Prestige Oil Spill, Time, available at http: //www.time.com/time/photoessays/oilspill/index.html .
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SandBar 7:2, July, 2008

Reino de Espana v. American Bureau of Shipping, Inc., 528 F.Supp.2d 455 (S.D.N.Y. 2008).

Sarah Spigener, 3L, University of Mississippi School of Law

The District Court for the Southern District of New York held that Spain is precluded from bringing a negligence action in the United States against the American Bureau of Shipping, a classification society, as a result of the Convention on Civil Liability for Oil Pollution Damage that regulates which countries may hear such cases.

Background

In October 2002, the Prestige, an oil tanker, left Russia and Latvia fully laden for Gibraltar. During the voyage, the Prestige experienced structural failures which, in November 2002, resulted in the discharge of multiple tons of oil into the ocean off the northwestern Spanish coast. The disaster left a slick over 200 yards wide and 18 miles long, and as the Prestige sank, a second large oil slick formed.1 In total, approximately three million gallons of fuel was discharged into the environment.

Reino de Espana (“Spain”) brought suit against the American Bureau of Shipping, Inc. (“ABS”) seeking damages as a result of the oil spill. Spain claimed that ABS negligently certified the Prestige as capable to carry fuel cargoes and, as a result, is subject to civil damages.

ABS is engaged in the business of deter

mining the fitness of vessels through a procedure called classification. ABS surveyors inspect the vessel, and if the vessel is in compliance with ABS standards, the vessel is issued classification documents. Classification by ABS is essential to the marketability of a vessel for commercial shipping. The Prestige was initially certified when it was built in 1973 and continued to be certified until it sank
.

Analysis

When an oil shipping incident results in pollution damage in the territory of a signatory state, the Convention on Civil Liability for Oil Pollution Damage (CLC) imposes liability on the owner of a vessel which was carrying oil as cargo and exempts third parties unless they acted recklessly. ABS moved for summary judgment claiming that Spain could not prove the “reckless” conduct required to hold ABS liable. Secondly, ABS claimed that under the CLC, Spain can only seek damages in a country that is a signatory to the CLC; consequently, since the United States is not a signatory to the CLC, the U.S. does not have proper jurisdiction to hear this case.

The court first looked at whether the CLC was applicable to the case. ABS is classified, under the CLC, as any “other person who…performed services” for the Prestige. Because ABS provided certification services to the Prestige, ABS argues that Spain is subject to the limitations imposed by the CLC. Spain argued in response that the CLC is only intended to cover individuals physically working on a vessel at the time of a pollution incident and thus is inapplicable to ABS. The court however rejected this argument by referring to the clear language of the CLC and held that the CLC does govern this situation.

Next, the court turned to the issue of whether the CLC required Spain to bring its claim in a contracting state. The court explained that the CLC creates legal obligations analogous to contractual obligations on the states that are parties to it. Since Spain is a contracting state, it is subject to its limitations. The CLC expressly provides that “actions for compensation may only be brought in the Courts of any such Contracting State or States.” Since the U.S. is not a contracting state to the CLC, pursuing an action in the U.S. is a violation of the CLC. As a result, the court granted ABS’s motion for summary judgment because the court lacked jurisdiction to hear this case.

Conclusion

The Prestige sank and caused an international environmental disaster by discharging nearly three million gallons of oil into the ocean off the coast of Spain. ABS certified that the Prestige was capable of carrying oil cargoes, when the ship was not structurally sound. However, the court held that the U.S. may not hear the case, since Spain is subject to the terms and conditions of the CLC and the CLC mandates that civil suits may only be brought in signatory countries.

Endnotes

1. The Prestige Oil Spill, Time, available at http: //www.time.com/time/photoessays/oilspill/index.html .