U.S. Supreme Court Oral Arguments: Maritime Charters and the Specter of a New Permitting Regime

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The Supreme Court heard oral arguments in two important environmental cases.

February 24, 2020
Anthony B. Cavender - Gravel2Gavel

Earlier this month, the Supreme Court heard oral arguments in two important environmental cases—one that could change the approach to routine maritime charters and another that could introduce a potentially punishing permitting regime via a CWA citizen suit.

Cleaning the Delaware: CITGO Asphalt Refining Company v. Frescati Shipping Company

The CITGO case involves a large oil spill into the Delaware River, and who bears financial responsibility for the cleanup. CITGO chartered an oil tanker to bring Venezuelan crude oil to CITGO’s New Jersey refinery located on the Delaware River. The tanker struck a submerged and abandoned anchor within yards of the refinery, and a large and expensive oil spill resulted. In accordance with the Oil Pollution Act, both the shipper, Frescati Shipping Company, and the United States, paid for the immediate oil spill response, and CITGO was later sued for a large share of these costs based on the fact that it entered into a charter with Frescati, which obliged CITGO to provide a “safe berth.” The U.S. Court of Appeals for the Third Circuit held that CITGO was liable under the principles of maritime law, meaning that CITGO was strictly liable for the spill even if no one knew that the anchor was present on the floor of the river or lurking in the waters of the Delaware River. CITGO has argued that this result is unfair and poses a threat to the maritime shipping industry if it is held to be strictly liable for this spill. It appears that this is may well be the majority rule that is applied when interpreting these routinely entered maritime charters. The Court’s decision will be immensely important to the shipping industry.

Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com



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