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Damages Increased in Citgo Delaware River Oil Spill

By George Khoury, Esq. on April 04, 2018 | Last updated on March 21, 2019

A unanimous three judge panel of the Third Circuit Court of Appeals affirmed the multimillion dollar award against Citgo, and even increased the damages, related to the 2004 Delaware River oil spill.

A prior ruling of the district court reduced the damages award against the oil company that were to be awarded to the United States. Although the U.S. sought $88 million in reimbursement for cleaning up the oil spill, the district court only wanted to let the government walk away with half. Interestingly, the ship's owners, which pay a significant portion of the cleanup costs immediately after the fact, did not have the damages award in their favor reduced.

Anchor Up or Down?

One of the more interesting facts of the case involves an abandoned anchor on the bottom of the Delaware River that experts believed pierced the hull of the oil tanker. In the decision is a fascinating discussion of whether or not the abandoned anchor on the river bed would have pierced the ship if it was "flukes up" or "flukes down," basically standing or on its side.

Because the anchor was found flukes down, it was posited that the ship did not hit the anchor, but rather broke open on something, or somewhere, else. However, this argument, as well as one claiming the ship's hull was a few inches (or feet) too deep and thus not protected by Citgo's berth's warranty, were unavailing to the appellate court.

Notably, the appellate court affirmed the judgment of the district court as to the contract claims, affirmed the full damages awards to the government and ship owner, plus prejudgment interest.

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