Contango Operators, Inc. et al v. United States Army Corps Of Engineers et al
Filing
180
MEMORANDUM OPINION AND ORDER (Signed by Judge Sim Lake) Parties notified.(sclement, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CONTANGO OPERATORS, INC. and
CERTAIN UNDERWRITERS SEVERALLY
SUBSCRIBING TO COMBINED COVER
NOTE JHB-CJP-1718,
Plaintiffs,
v.
UNITED STATES OF AMERICA and
WEEKS MARINE, INC.,
Defendants.
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CIVIL ACTION NO. H-11-0532
MEMORANDUM OPINION AND ORDER
Contango Operators,
Inc.
and certain non-operating working
interest owners own a pipeline that runs along the floor of the
Gulf of Mexico and six wells that are attached to the pipeline.
February of
MarineR)
2010
a
dredge owned by Weeks Marine,
struck and ruptured the pipeline.
Inc.
In
("Weeks
Contango and Certain
Underwriters Severally Subscribing to Combined Cover Note JHB-CJP1718 filed this action against Weeks Marine and the United States
of America to recover for the ensuing damages. 1
The court has
subject matter jurisdiction over this action pursuant to 28 U.S.C.
§
1333.
lPlaintiffs' Second Amended Complaint filed on December 10,
2013 (Docket Entry No. 148), adds the working interest owners as
plaintiffs. The court will refer to the plaintiffs collectively as
"Contango. R
The parties tried the case to the court from December 9, 2013,
to December 16, 2013.
After carefully considering the evidence,
the stipulations of the parties, the parties' arguments, and their
post-trial submissions, the court makes the following findings of
fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a) (1).
Background2
I.
Under the Rivers and Harbors Act of 1899
§
("RHA"),
33 U.S.C.
403, no submarine structure may be built in the navigable waters
of the United States unless authorized by the United States Army
Corps of Engineers
(the "Corps").
Accordingly,
In September of
2007 Contango filed with the Regulatory Division of the Corps an
application for a permit to construct a natural gas pipeline in the
Gulf of Mexico off the coast of Louisiana. 3 The application stated
that the pipeline would cross the "Atchafalaya Pass Channel." 4
part
of
the
application
review
process
Regulatory Division cross-referenced a
an
employee
in
As
the
list of Corps-maintained
channels to determine whether the "Atchafalaya Pass Channel" was a
Corps-maintained channel.
Although the list did not explicitly
2The background is taken
the court's August 15, 2013,
Entry No. 96, pages 2-8) and
Pretrial Order (Docket Entry
largely from the Undisputed Facts in
Memorandum Opinion and Order (Docket
the Admissions of Fact in the Joint
No. 97, pages 15-17).
3August 27, 2007, letter from T. Baker Smith, Inc. regarding
Permit Application Submittal, Contango Exhibit 7.
-2-
refer to an "Atchafalaya Pass Channel,"
it did include an area
identified as the "Atchafalaya River, Bayous Chene, Boeuf & Black."
At all times relevant to this litigation the channel labeled in
Contango's permit application as the "Atchafalaya Pass Channel" was
included wi thin the
The
Black. "
"Atchafalaya River,
will
court
Bayous
area
its
to
the
generally
Boeuf
as
&
the
The Corps granted Contango a permit to
"Atchafalaya Channel."
construct
refer
Chene,
pipeline
ln
November
2007. 5
of
Information
concerning the proposed placement of the Contango pipeline across
the Atchafalaya Channel was not
forwarded
from the Regulatory
Division of the Corps to the Waterways Division of the Corps.6
The
Waterways Division provides the locations of submarine pipelines to
the engineers who prepare dredging contracts for Corps-maintained
channels. 7
After
completing
the
pipeline
in April
of
2008
Contango
provided as-built drawings that illustrated the intersection of the
pipeline and the Atchafalaya Channel to the Minerals Management
Service
("MMS"),
the
National
Ocean
Service
United States Coast Guard (the "Coast Guard")
("NOS"),
and
the
No division within
the Corps received the as-built drawings.
5Contango Exhibit 8 .
6Joint Pretrial
No. 97, p. 5.
Order,
Admission of
Fact
5,
Docket
Entry
7Joint Pretrial
No. 97, p. 5.
Order,
Admission of
Fact
6,
Docket
Entry
-3-
---
-
--------_._---
In April of 2009 the Corps began to solicit bids on a contract
to
dredge
the
Atchafalaya
Channel. B
Corps
engineers
prepared
project specifications that were provided to the bidders and would
ultimately become part of the dredging contract. 9
pipelines
located
in
or
near
the
Five submarine
Atchafalaya
Channel
identified in the specifications; the Contango pipeline
was not listed. 10
of 2009. 11
were
however
l
1
Weeks Marine was awarded the contract in August
The Contango pipeline was not identified in the dredging
contract.12
The National Oceanic and Atmospheric Administration ("NOAA II )
is
the
federal
charts.
Before November 25 1 2009 1 the relevant NOAA charts --
Electronic
Navigational
Channel
agency tasked with the publication of nautical
Navigational
Chart
without
Chart
("RNCII)
the
11351
Contango
( "ENCII )
US4LA21E
displayed
pipeline. 13
and
the
Raster
Atchafalaya
After
receiving
information from MMS about a new pipeline across the Atchafalaya
BJoint Pretrial
No. 97 1 p. 5.
Order 1 Admission of
Fact
71
Docket
Entry
9Joint Pretrial Order
Admission of
No. 97 1 p. 16; Contango Exhibit 21.
Fact
81
Docket
Entry
l°Joint Pretrial Order
Admission of Fact 8
Docket
No. 97 1 p. 16; Contango Exhibit 271 pages US 2278-79.
Entry
llJoint Pretrial
No. 97 1 p. 16.
Entry
l
1
Order
l
1
Admission of
Fact
91
Docket
12Id.
13Joint Pretrial Order
No. 97 1 p. 16.
l
Admission of Fact 10 1 Docket Entry
-4-
Channel, NOAA published on its website the updated ENC US4LA21E on
November 25, 2009, and the updated RNC 11351 on December 3, 2009. 14
Both
the
updated
ENC
and
the
updated
RNC
( collectively,
"updated NOAA charts") depicted the Contango pipeline. 15
the
The Coast
Guard also publishes nautical information to the public in the form
of a weekly Local Notice to Mariners
("LNM"). 16
On December 2,
2009, the Coast Guard published LNM 48/09, announcing the addition
of a submarine pipeline to the area displayed in the RNC.
The
updated NOAA charts and LNM 48/09 were published after Weeks Marine
had been awarded the contract and had commenced dredging. 17
On
February
24,
2010,
Weeks
Marine's
non-self-propelled
dredging barge, the G. D. MORGAN, struck the Contango pipeline.
The
pipeline was ruptured, and Contango incurred losses as a result. 1s
Contango's pipeline was shut-in for thirty-five days from the date
it was struck until it was repaired and placed back in service. 19
During this thirty-five-day period Contango was not able to produce
14Joint Pretrial Order,
No. 97, p. 17.
Admission of Fact 11,
Docket Entry
15Joint Pretrial Order,
No. 97, p. 17.
Admission of Fact 12,
Docket Entry
16Joint Pretrial Order,
No. 97, p. 17.
Admission of Fact
Docket Entry
13,
17Id.
18Joint Pretrial Order, Admissions of Fact 14 and 16, Docket
Entry No. 97, p. 17.
19Joint Pretrial Order,
No. 97, p. 17.
Admission of Fact
-5-
17,
Docket Entry
or
sell
gas
or
condensate
from
the
wells
connected
to
the
pipeline. 20
Contango alleges that the United States breached the duty to
ensure that dredging activities did not interfere with or endanger
the Contango pipeline.
Contango alleges that Weeks Marine breached
its duty to conduct dredging operations in a reasonable manner and
that Weeks Marine is presumed to be at fault because Weeks Marine's
moving vessel,
object,
the G. D.
MORGAN,
the Contango pipeline.
defendants
caused damage
to a
stationary
Contango also alleges that both
committed negligence per
se
based on violations
of
various federal maritime regulations governing the operation of the
Weeks Marine dredging barge.
II.
A.
Liability of the Parties
Applicable Law
To
establish
a
negligence
claim under
admiralty
law
the
plaintiff bears the burden to show that (1) the defendant owed the
plaintiff a duty; (2) the defendant breached that duty; and (3) the
breach caused the plaintiff's alleged injuries.
Canal Barge Co. v.
Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000)
The duty owed
i.e., the obligation to conform to a certain standard of care -- is
a question of law for the court.
F.3d 388, 400 (5th Cir. 1998).
2°Joint Pretrial Order,
No. 97 p. 17.
Theriot v. United States,
245
Whether that duty was breached is
Admission of Fact 18,
I
-6-
Docket Entry
a question of fact.
In an allision 21 case the standard
Id. at 394.
of care is reasonable care under the circumstances.
Id. at 400i
Southern Natural Gas Co. v. Pontchartrain Materials, Inc., 711 F.2d
1251, 1254 (5th Cir. 1983).
The duty owed by the United States in
a suit brought against it pursuant to the Suits in Admiralty Act is
'" equal
to
that
of
a
Southern Natural Gas,
(Bermuda)
Ltd.
v.
private
711
person
F.2d at
United States,
in
1254
like
circumstances.'"
(quoting Canadian Pac.
534 F.2d 1165,
1168
(5th Cir.
1976)) .
The
"existence
and
scope
of
a
duty"
depends
on
the
"'foreseeability of the harm suffered by the complaining party.'"
In re Great Lakes Dredge & Dock Co. LLC,
Cir.2010)
624 F.3d 201,
211
(5th
(quoting Consolidated Aluminum Corp. v. C.F. Bean Corp.,
833 F.2d 65, 67 (5th Cir. 1987))
The duty to use reasonable care
is "owed only with respect to the interest that is foreseeably
jeopardized" by the alleged conduct.
Great Lakes Dredge, 624 F.3d
at 211 (internal quotation marks omitted).
In the Fifth Circuit a
harm is considered
a foreseeable consequence of an act or omission if harm
of a general sort to persons of a general class might
have been anticipated by a reasonably thoughtful person,
as a probable result of the act or omission, considering
the interplay of natural forces and likely human
intervention.
Id.
(internal quotation marks omitted) .
21"An allision is a collision between a moving vessel and a
stationary object." 2 Thomas J. Schoenbaum, Admiralty & Maritime
Law § 14-2 (3d ed. 2001).
-7-
Two Fifth Circuit decisions involving damages to pipelines are
instructive in identifying the duties of the defendants in this
case.
945
Michigan Wisconsin Pipeline v. Williams-McWilliams, 551 F.2d
(5th Cir. 1977), involved an allision between a dredge and a
pipeline.
The pipeline had been constructed pursuant to a permit
from the Corps of Engineers, but the specifications attached to the
dredger's government contract did not show the pipeline crossing
the area to be dredged.
contained two
~site
to take steps
551 F.2d at
948.
The contract also
inspection clauses" in which the dredger agreed
~reasonably
necessary to ascertain the nature and
location of the work and the general and local conditions which can
affect the work and the cost thereof" and to
ha [d]
investigated and satisfied himself
complaint,
arguing
947.
that
the
The
(internal
conditions
After the accident the pipeline owner sued the dredger
at
949
the
omitted).
Id.
at
to
the
damages.
Id.
as
that he
affecting
for
work."
~acknowledge
dredger
United
quotation
filed
States
was
a
at
marks
third-party
fault
providing specifications that failed to show the pipeline.
for
Id. at
947.
The district court in Michigan Wisconsin found in favor of the
pipeline owner and against the dredger, and dismissed the dredger's
third-party complaint.
Id.
Affirming the judgment against the
dredger and reversing the dismissal of the complaint against the
United States, the Fifth Circuit held the United States may be held
liable where it has
~by
a prolonged course of conduct
-8-
[led]
a
contractor to expect that when certain kinds of material structures
are present in an area in which a contract is to be performed that
the structures will be shown on the specifications drawings."
at 951.
rd.
The court held that "the absence of a depiction" of a
pipeline amounted to a "positive assertion" or "representation" on
which a dredger-contractor was entitled to rely, "given a prolonged
course
of
conduct
justifying
contractor
reliance
on
the
[United States] providing this information one way or the other in
specifications drawings."
rd.
(internal quotation marks omitted) .
The court concluded that the Corps' regular practice of depicting
pipelines on the
specifications attached to dredging contracts
amounted to such a course of conduct.
rd. at 952-53.
Moreover,
the court held that "government contractors . .
are not obligated
to
the
make
an
independent
investigation"
into
"positive assertions" made by the United States.
accuracy
rd. at 953.
of
The
court summarily rejected the United States' attempt to exculpate
itself by virtue of the "site inspection clauses," reasoning that
such provisions do not shift the liability that flows
United States' representations.
from the
rd.
The facts of Southern Natural Gas are similar to those of
Michigan Wisconsin:
The Corps issued permits to a pipeline company
to construct several submarine pipelines;
dredging permits to several dredgers;
the Corps also issued
and the dredging permits
specifically prohibited dredging near some pipelines, but did not
make any specific mention of the plaintiff company's pipelines.
-9-
Southern Natural Gas, 711 F.2d at 1251.
struck one of the plaintiff's pipelines.
The dredger subsequently
Id. at 1254.
Affirming
the district court's judgment against the United States, the Fifth
Circuit held that "by specifically prohibiting dredging activities
in the vicinity of one gas company's pipelines,
the Corps was
obligated to prohibit dredging near other companies' pipelines in
the area./I
Id. at 1256.
The court further held that "[t]he Corps
knew that the dredging companies' activities would be incompatible
with the submarine gas pipelines, and that a great potential for an
accident existed.
The Corps had the power to prevent this danger.
Its failure to do so subjects it to liability under the
Id.
"duty
[SAA]./I
The Fifth Circuit characterized the United States' duty as a
to
warn,
/I
which
the
court
hypothetically
noted
may
be
satisfied by a "simple notice or warning of a particular hazard or
activity, or the prohibition of a certain activity./I
B.
Id.
Liability of the United States
The United States owed Contango a duty of reasonable care.
See Theriot,
1254.
245 F.3d at 400; Southern Natural Gas,
711 F.2d at
The scope of this duty depends on the foreseeability of the
harm suffered by Contango -- i.e., the damage to its pipeline as a
result of an allision.
See Great Lakes Dredge,
624 F.3d at 211.
The court concludes that the allision by the Weeks Marine dredge
and
the
resulting
damage
to
the
pipeline
were
foreseeable
consequences of the failure of the Corps to include the Contango
-10-
pipeline in the dredging contract specifications.
Natural Gas, 711 F.2d at 1256
See Southern
("The Corps knew that the dredging
companies' activities would be incompatible with the submarine gas
pipelines, and that a great potential for an accident existed.") .
Because the United States' duty arose out of the omission of the
pipeline in the dredging contract,
the court concludes that the
duty is properly characterized as a duty to warn or notify weeks
Marine of the Corps'
The United States was required to
error.
exercise reasonable care in carrying out that duty.
Michigan
Wisconsin
court's conclusion.
and
Southern
Natural
As in Michigan Wisconsin,
Gas
support
the
in this case the
United States made a "positive assertion" regarding the Contango
pipeline.
The evidence at trial, including the testimony of Corps'
employees,
established
contractors
such
as
that
Weeks
the
Corps
Marine
rely
knew
on
the
that
dredging
specifications
provided by the Corps in bidding on dredging contracts and that
Weeks Marine relied on the Corps' specifications that did not show
the Contango pipeline.
area,
that
By identifying five other pipelines in the
and omitting the Contango pipeline,
the
Contango pipeline was not
dredged by Weeks Marine.
the Corps represented
located in the
area to be
See Michigan Wisconsin, 551 F.2d at 951;
see also Southern Natural Gas, 711 F.2d at 1256 ("[B]y specifically
prohibiting
dredging
activities
in
the
vicinity
of
one
gas
company's pipelines, the Corps was obligated to prohibit dredging
near other companies' pipelines in the area.")
-11-
The court concludes that the United States breached its duty
of reasonable care by failing to include the Contango Pipeline in
the specifications provided to Weeks Marine when it bid on the
contract to dredge the Atchafalaya Channel and in failing to warn
or notify weeks Marine of the existence of the Contango Pipeline
before Weeks Marine's barge struck the pipeline on February 24,
2010.
The United States' breach of its duty to exercise reasonable
care was a cause of the allision between the Weeks Marine barge and
the Contango pipeline and of the damages suffered by Contango.
The United States argues that it discharged its duty to Weeks
Marine by the issuance of an updated NOAA chart and LNM 48/09.
evidence at trial does not support this argument.
Marine's
contract
with
the
Corps
required
The
Nothing in Weeks
Weeks
Marine
to
independently determine whether there were pipelines that crossed
the Atchafalaya Channel other than those identified in the Corps'
specifications.
The evidence at trial established that in issuing
dredging contracts the Corps does not require dredging contractors
to make independent investigations as to other possible pipelines
or obstructions.
The evidence also established that the custom and
practice in the dredging industry was not to rely on NOAA charts or
LNMs in order to identify pipelines,
but instead to rely on the
specifications provided by the Corps in identifying pipelines that
might be damaged by dredging, and that the Corps was aware of this
industry custom and practice.
The court therefore concludes that
-12-
the United States could not have reasonably relied on publication
of the updated NOAA charts or the LNM to satisfy its duty.22
c.
Liability of Weeks Marine
1.
Liability As a Dredger
Weeks Marine contends that it owed no duty to Contango under
the facts of this case.
Weeks Marine argues that it acted as a
reasonable dredger when it relied on the assertions from the Corps
that only five pipelines were implicated by the project.
Marine
argues
that
if
the
Corps
had
identified
the
Weeks
Contango
pipeline in its contract specifications r Weeks Marine would have
learned of the location of the pipeline and the allision would
never have occurred.
Weeks Marine argues that its barge r the G.D.
MORGAN r was not required under applicable maritime regulations or
customary industry practice to have a licensed mariner on board or
to utilize NOAA charts or LNMs while dredging the Atchafalaya
Channel.
Contango argues that Weeks Marine owed Contango a duty of care
to avoid striking the pipeline and that Weeks Mariners failure to
independently investigate the existence of pipelines in the area to
22The United States also contends that the failure of Contango
to provide the Corps with as-built drawings of the Contango
Pipeline eliminated the duty of the Corps to identify the pipelines
on the plans and specifications provided to Weeks Marine.
The
court is not persuaded by this argument.
There was no credible
evidence at trial that the absence of as-built drawings had any
effect on the failure of the Corps to list the Contango pipeline in
the specifications for the Atchafalaya Channel dredging contract.
-13-
be dredged constituted a breach of that duty.
Contango argues that
there was no justifiable reliance by Weeks Marine because Weeks
Marine undertook no independent investigation of pipelines in the
area
to be
dredged but
instead relied solely on
contract
alerts
"unidentified pipelines.
As
discussed
above
contract
Contango argues that the
specifications provided by the Corps.
dredging
the
Weeks
Marine
in Part
II.AI
to
the
possibility
of
n23
Weeks
Marine l s
duty to
Contango was one of reasonable carel and the scope of that duty is
defined by the foreseeability of the harm suffered by Contango.
An
allision with a submarine pipeline is a foreseeable consequence of
dredging when the dredger is not aware of the pipeline.
therefore concludes that Weeks Marine was under a
The court
duty to act
reasonably to avoid striking the Contango pipeline.
Whether this duty was breached is a question of fact.
Theriot
Part
I
I
245 F.3d at 394.
above
I
the
See
In addition to the facts recited in
evidence
at
trial
established
that
Jennifer Caldwell Price was the Weeks Marine project engineer for
the dredging contract.
Her primary duty was to ensure compliance
with the dredging contract documents.
Price relied on the Corps
I
identification of pipelines in the contract documents and only
verified the locations of pipelines identified by the Corps.
In
November of 2009 Price downloaded NOAA Chart 11351 to her personal
23See Contango Exhibit 27
I
~
3.2.4.
-14-
laptop computer to orient herself to areas where the barge would be
working.
Price was familiar with NOAA charts.
Although Price used
Chart 11351 to assist in the dredging operations, she did not use
the chart to determine the location of pipelines.
The Contango
pipeline did not appear on the NOAA chart when Price downloaded it.
Price uploaded Chart 11351 onto various computers on board the
dredge; and the chart was available for use by senior members of
the
crew
engineer.
including
the
dredge
captain,
leverman
and
project
The NOAA chart was updated on November 25, 2009, to show
that the Contango pipeline crossed the Atchafalaya Channel.
At trial Price acknowledged the known danger of dredging in an
area with underwater hazards such as pipelines containing highly
flammable pressurized natural gas, and that Weeks should use all
reasonably available resources to avoid striking a pipeline during
dredging operations.
access
and that
She acknowledged that the barge had internet
during dredging operations
she or other Weeks
Marine employees on the barge could have accessed the NOAA website
after November 25, 2009, and discovered the Contango pipeline.
The
captain of the barge, Jack Dunbar, testified that NOAA charts were
on board the G.D. MORGAN and that current NOAA charts could have
been used to identify pipelines, although it was not the custom and
practice
in
the
dredging
industry
to
do
so.
acknowledged that he had access to LNM 40/09,
Contango pipeline.
-15-
-------.--~
...
--...
. ..
_--_._......
_--
Dunbar
also
which showed the
Although Weeks Marine's witnesses testified that it was common
practice in the dredging industry to rely on pipeline information
provided by the Corps in dredging specifications and contracts and
that Weeks Marine followed the practice,
given the significant
damage that could result from striking a pipeline, the availability
of current pipeline data in NOAA charts and LNMs, and the ease of
accessing such data, the court concludes that it was unreasonable
for Weeks Marine to rely solely on pipeline information provided
earlier by the Corps in the contract specifications and dredging
contract.
Therefore, regardless of whether the Corps' practice of
identifying pipelines constituted a "prolonged course of conduct,"
see
Michigan Wisconsin,
551
F.2d
at
951,
Weeks
Marine's
sole
reliance on information provided by the Corps did not satisfy its
duty in this case to exercise reasonable care
operations.
Weeks
Marine's
breach
of
its
in its dredging
duty
to
exercise
reasonable care was a cause of the allision between its barge and
the Contango pipeline and of the damage suffered by Contango.
Contango also contends that a presumption of fault applies
against Weeks Marine because its dredge, the G.D. MORGAN, allided
with Contango's stationary pipeline.
the presumption does not apply and,
presumption has been rebutted.
Weeks Marine responds that
in the alternative, that the
Where a non-self-propelled vessel
and a stationary object allide, the rule of THE LOUISIANA, 3 Wall.
(70 U.S.)
164
(1865), creates a presumption of fault that shifts
the burden of proof to the party in control of the vessel.
-16-
Combo
Maritime, Inc. v. U.S. United Bulk Terminal, LLC, 615 F.3d 599, 604
(5th Cir.
In allisions
2010).
involving
a
sunken
stationary
object, the presumption only applies where the party in control of
the vessel "knew or should have known" of the existence of the
stationary object.
Delta Transload, Inc. v. Motor Vessel, Navios
Commander, 818 F.2d 445, 450 (5th Cir. 1987).
the presumption bears the burden to prove
The party invoking
knowledge.
Id.
at
450-51.
To
rebut
the
presumption,
the
party
against
whom
the
presumption applies bears the burden of disproving fault by a
preponderance of the evidence.
686
F.2d 1129,
1133
James v. River Parishes Co., Inc.,
(5th Cir.
1982).
The
Fifth Circuit
has
outlined three ways in which a defendant can rebut the presumption.
"The defendant can demonstrate that (1) the allision was the fault
of the stationary obj ect i
(3)
that the moving vessel acted with
reasonable
carei
accident."
Combo Maritime, 615 F.3d at 605 (quoting Fischer v. Sly
NERAIDA,
or
(2)
508 F.3d 586,
that
593
the
allision was
(11th Cir.
2007)
an unavoidable
(internal quotation
marks omitted) .
Because the court has concluded that Weeks Marine should have
discovered the Contango pipeline by referring to readily available
NOAA charts or LNMs, the court concludes that Weeks Marine should
have known of the existence of the pipeline and that THE LOUISIANA
rule
creates
a
presumption of
allision with the
fault.
Contango pipeline was
-17-
Because
not
the
Weeks
fault
Marine's
of
the
pipeline or an unavoidable accident, and because Weeks Marine has
failed to establish that it acted with reasonable care, the court
concludes that Weeks Marine is also liable to Contango for the
damages arising out of the allision under THE LOUISIANA rule.
2.
Liability Under Maritime Law
Contango and the United States argue that because the G.D.
MORGAN was a
vessel
in navigation,
Weeks Marine owed Contango
additional duties beyond the duty to act with reasonable care under
the circumstances. 24
They argue
that
the general maritime law
imposes an affirmative duty on the G.D. MORGAN to carry up-to-date
charts and LNMs and to have a crew of licensed mariners. 25
Contango
also argues that the G.D. MORGAN was required by regulation to do
SO.26
(a)
The
The regulations cited by Contango do not apply to
the G.D. MORGAN.
regulations
cited by Contango are part
of
a
detailed
regulatory framework in which vessels are classified by weight,
purpose, and method of propulsion.
See generally 46 C.F.R. ch. 1.
Method of propulsion is divided into four categories:
(1) motor,
24Plaintiffs' Post-Trial Brief on Weeks Marine's Liability as
Vessel Owner and Operator, Docket Entry No. 161; The United States
of America's Ultimate Findings of Fact, pp. 10-11.
25Id.
26Plaintiffs' Post-Trial Brief on Weeks Marine's Liability as
Vessel Owner and Operator, Docket Entry No. 161.
-18-
(2)
§
(3)
sail,
a
depends
and
(4)
tb1.25.05-1(a)i
24.05-1
Whether
steam,
vessel
upon
categories.
is
its
See 46 C.F.R.
non-self-propelled.
46
subject
C.F.R.
to
a
classification
90.05-1
§
particular
within
one
tbl. 90.05-1 (a) .
regulation often
of
those
four
In response to Weeks Marine's argument that the cited
regulations do not apply to non-self-propelled vessels, Contango
argues
that
distances
the
G.D.
through
MORGAN's
the
use
of
ability
its
to
spuds,
move
itself
anchors,
and
short
cables
constitutes self-propulsion.
Contango cites the Supreme Court's language in Stewart v.
Dutra,
125 S.
Ct.
1118
(2005),
describing a dredge's ability to
"navigate[] short distances by manipulating its anchors and cables"
as a "limited means of self-propulsion."
Id. at 1121.
The issue
in Stewart was whether the dredge was a vessel under 1 U.S.C.
§
3
for purposes of the Longshore and Harbor Workers Compensation Act.
Id. at 1129.
Because the dredge was used "to transport equipment
and workers over water,
vessel.
II
the Court held that the dredge was a
Id. at 1128-29.
Weeks Marine acknowledges that the G.D. MORGAN is a vessel
under Stewart, but argues that it should be classified as a nonself -propelled vessel
for purposes
of
the
regulations.
Weeks
Marine points to cases where similar dredges were referred to as
non-self-propelled.
See Warrior Energy Servs. Corp. v. ATP TITAN,
941 F. Supp. 2d 699, 704 (E.D. La. 2013), aff'd, No. 13-30587, 2014
-19-
WL 31410
(5th Cir. Jan.
6,
2014); Great Lakes Bus.
ORANGE SUN, 855 F. Supp. 2d 131, 136
Trust v. MIT
(S.D.N.Y. 2012), aff'd, 523
F. App'x 780 (2d Cir. 2013); see also Michigan Wisconsin, 551 F.2d
at 949; Andersen v. Olympian Dredging Co.,
57 F. Supp.
827,
828
(N.D. Cal. 1944).
Although none of these cases addressed self-propulsion in the
context of the regulations cited by Contango, the court agrees with
Weeks Marine that the G.D. MORGAN is a non-self-propelled vessel
for purposes of the regulations.
"The phrase nonself-propelled
vessel means a vessel without sufficient means for self-propulsion
and is required to be towed."
46 C.F.R.
§ 90.10-36.
The G.D.
MORGAN is required to be towed long distances and can only move
short distances using its spuds, anchors, and cables.
Contango does not contend that the G.D.
motor,
sail, or steam.
Accordingly,
Furthermore,
MORGAN is propelled by
if the G.D. MORGAN is to be
classified within the regulatory framework, it must be classified
as a non-self-propelled vessel.
The court will therefore address
the applicability of each regulation cited by Contango to the G.D.
MORGAN as a non-self-propelled vessel.
(i)
33 C.F.R. §§ 164.30 and 164.33
Contango contends that the G.D. MORGAN was required to carry
up-to-date charts and LNMs under 33 C.F.R.
§§ 164.30 and 164.33.
However, these regulations apply only to "self-propelled vessel[s]
of 1600 or more gross tons."
33 C.F.R.
-20-
§
164.0l.
As explained
above r the G.D. MORGAN is not a self-propelled vessel.
more than 1600 gross tons. 27
Nor is it
AccordinglYr these regulations do not
apply to the G.D. MORGAN.
(ii)
46 C.F.R. § 26.03-4
Contango contends that the G.D. MORGAN was required to carry
up-to-date charts and LNMs under 46 C.F.R.
regulation
applies
to
the
G.D.
§
26.03-4.
MORGAN
classification within Table 24.05-1(a).
Whether this
depends
46 C.F.R.
upon
24.05-1.
§
its
As
explained above r the G.D. MORGAN is a non-self-propelled vessel.
It is also over 100 gross tons r placing it in row
24.05-1(a).
r
which in row (4) corresponds to
"barges carrying passengers or passengers- for-hire.
24.05-1.
II
46 C.F.R.
Because the G.D. MORGAN does not carry passengers or
passengers - for-hire r
§
of Table
Section 26.03-4 applies only to vessels indicated in
column five of Table 24.05-1(a)
§
(4)
it
is
not
subj ect
to
the
requirements
of
26.03-4.
(iii)
46 C.F.R. § 97.05-5
Contango contends that the G.D. MORGAN was required to carry
up-to-date charts and LNMs under 46 C.F.R.
§
97.05-5.
Section
97.05-5 applies to "all vessels except barges r vessels operating
exclusively on rivers r and motorboats other than those certificated
for ocean or coastwise route.
II
46 C.F.R.
27Contango Exhibit 115 r page 9.
-21-
§
9.05-5.
The term
"barge"
C.F.R.
is defined to mean "any nonself -propelled vessel."
§
90.10-3.
As explained above, the G.D. MORGAN is a non-
self-propelled vessel
Accordingly,
46
and
therefore
a
barge
under
90.10-3.
§
97.05-5 does not apply to the G.D. MORGAN.
§
Contango argues that the G. D. MORGAN cannot be a barge because
it is an "industrial vessel" under 46 C.F.R.
90.10-16.
§
Weeks
Marine acknowledges that the G.D. MORGAN is an industrial vessel,
but argues that the terms are not exclusive and that it is also a
barge under 46 C.F.R.
Marine.
Vessels
§
falling
The court agrees with Weeks
90.10-3.
within the
definition of
"industrial
vessel" are subject to various requirements under the regulations.
See,
e.g.,
46
C.F.R.
superstructure,
§
92.07-10
(requiring
structural bulkheads,
decks,
that
"[tJhe hull,
and deckhouses"
certain industrial vessels "shall be constructed of steel").
of
It is
clear that these requirements are imposed on vessels meeting the
definition of industrial vessel in addition to any requirements
otherwise imposed due to their classification within the overall
regulatory
framework.
Indeed,
the
definition
of
"industrial
vessel" indicates that the term includes "drill rigs, missile range
ships,
dredges,
construction
cable layers,
and
wrecking
derrick barges,
barges."
pipe lay barges,
Accordingly,
the
court
concludes that the G.D. MORGAN is both an industrial vessel and a
barge for purposes of the regulations.
Furthermore, the term "vessel" as used in
§
97.05-5 is defined
to mean "all vessels indicated in Column [4] of Table 90.05-1(a)."
-22-
46
C.F.R.
§
90.10-37. 28
Table
90.05-1(a)
indicates
that
non-self-propelled vessels greater than 100 tons are only subject
to the requirements of Subchapter
they are "seagoing barges.
1I
which includes § 97.05-5, if
II
46 C.F.R.
90.05-1 tbl.90.05-1(a).
§
"Seagoing barge" is defined in 46 C.F.R.
§
90.10-36.
Contango has
not established that the G.D. MORGAN is a seagoing barge, nor does
it argue that the G.D. MORGAN is motor
Accordingly, the court concludes that
sail
l
or steam powered.
l
97.05-5 does not apply to
§
the G.D. MORGAN.
(iv) 46 C.F.R. § 15.701(b)
Contango contends that 46 C.F.R.
§
15.701(b) requires the G.D.
MORGAN to have licensed crew members.
not apply to barges.
46 C.F.R.
the G. D. MORGAN is a barge. 29
§
However,
15701(a) (3).
Furthermore
I
§
§
15.701(b) does
As explained above,
15.701 (b) only applies
28There is an error in § 90.10-37 indicating that the term
"vessel
means "all vessels indicated in Column 5 of Table
90.05-1(a).11
46 C.F.R. § 90.10-37. When § 90.10-37 was originally
published in 1965 1 Column 5 of Table 90.05-1(a) referred to
"Vessels inspected and certificated under Subchapter I-Cargo and
Miscellaneous Vessels."
Final Rule 30 Fed. Reg. 16970 1 16971 1
16973 (Dec. 30, 1965).
Table 90.05-1 (a) was revised in 2002.
Safety of Uninspected Passenger Vessels Under the Passenger Vessel
Safety Act of 1993 (PVSA)
67 Fed. Reg. 34756 1 34792-98 (May 15,
2002).
As revised, the classification of vessels inspected and
certificated under Subchapter I-Cargo and Miscellaneous Vessels
corresponds to Column 4 of Table 90.05-1(a).
Id.
Although 46
C. F. R. § 90.05-1 (a) was revised to indicate that Subchapter I
applies to "all U.S.-flag vessels indicated in Column 4 of Table
90.05-1(a)11I § 90.10-37 was not similarly updated.
See id.
A
similar error appears in 46 C.F.R. § 90.01-1.
ll
l
I
29Al though the term "barge"
Subchapter B,
which includes
is not defined for purposes of
§
15.701(b)
the regulations
(continued ... )
-23-
I
to vessels "navigating seaward of the Boundary Lines" established
in 46 C.F.R.
§§
7.1 to 7.180.
Id.
§
15701 (a) .
Contango has not
established that the G.D. MORGAN navigated seaward of the Boundary
Lines.
Accordingly, 46 C.F.R.
§
15.701(b) does not apply to the
G.D. MORGAN.
(b)
The general maritime law does not impose an
affirmative duty on the G.D. MORGAN to carry
up-to-date charts and LNMs or to have a crew of
licensed mariners.
Contango and the United States argue that even in the absence
of a regulatory requirement,
the general maritime law imposes a
duty on the G.D. MORGAN to carry up-to-date charts and LNMs and to
have a crew of licensed mariners.
They argue that this duty arises
from the duty to act as a reasonably prudent mariner. 30
Weeks
Marine argues that the duty to act as a reasonably prudent mariner
only applies "'where there is no applicable standard of statutory
conduct,'" quoting In re Luhr Bros.! Inc., 325 F.3d 681, 687 (5th
Cir.
2003),
and that the body of regulations cited by Contango
regulate the entire field of maritime shipping and navigation. 31
The court agrees with Weeks Marine.
29 ( • • • continued)
consistently define the term to mean a "non-self-propelled vessel."
See 46 C.F.R. §§ 24.10-1, 90.10-3, 188.10-5; see also 46 U.S.C.
§ 102 ("In this title, the term 'barge' means a non-self-propelled
vessel.") .
30Plaintiffs' Post-Trial Brief on Weeks Marine's Liability as
Vessel Owner and Operator, Docket Entry No. 161, pp. 5-7; The
United States of America's Ultimate Findings of Fact, pp. 10-11.
31Weeks Marine, Inc.'s Reply to Contango's Post-Trial Brief on
Weeks Marine's Liability as Vessel Owner and Operator, Docket Entry
No. 169, pp. 13-14.
-24-
The regulatory framework discussed above establishes in detail
whether a vessel is required to carry updated charts and LNMS or to
have a crew of licensed mariners.
navigator has
acted as
circumstances
a
To assess "whether the vessel's
reasonably prudent mariner under the
the navigator's conduct is measured against
accepted standards of navigation,"
which are
"derived from the
statutory rules of navigation, regulations having the full force of
law, proved local custom not contradicting statutory rules, and the
requirements -of due care and good seamanship."
Peoples Natural Gas
Co. v. Ashland Oil, Inc., 604 F. Supp. 1517, 1523 (W.D. Pa. 1985)
(citing Gilmore & Black, The Law of Admiralty
1975)) .
§
7-3, at 488 (2d ed.
The court has heard the evidence and concludes that the
general maritime law does not impose an affirmative duty on the
G.D. MORGAN to carry updated charts and LNMs or to have a crew of
licensed mariners because
the
tugs
that
towed the
G.D.
MORGAN
during the dredging project had updated charts and LNMS and were
manned by licensed mariners.
D.
Weeks Marine's Indemnity Argument
Weeks
Marine
contends
that
under
Michigan
Wisconsin
and
Hollerbach v. United States, 34 S. Ct. 553 (1914), it was obligated
to accept the government's representations in the dredging contract
as true and therefore had no duty to Contango to consult updated
charts prior to the date of the allision. 32
Weeks Marine argues
32Weeks Marine, Inc.' s Post Trial Brief on Liabil i ty, Docket
Entry No. 159, pp. 2-4.
-25-
------_ ___
..
..
....•.
that it is therefore entitled to indemnity from the United States
for any liability imposed on it because of its sole reliance on the
contract. 33
The court finds both Michigan Wisconsin and Hollerbach
to be distinguishable from the facts of this case.
Hollerbach involved a breach of contract claim by a contractor
34 S. Ct. at 554-55.
against the United States.
The plaintiff
contractor brought an action against the United States to recover
costs that it incurred removing material from behind a dam.
554.
The contract stated that the dam was backed with
stone, sawdust, and sediment."
by cribwork .
Id.
the
material
~broken
In fact, the dam "was backed
. consisting of sound logs filled with stones,"
which was more expensive to remove.
that
Id. at
Id. at 554-55.
government's
representation
backing
dam
the
specifications" and
~must
was
a
of
the
~positive
The Court held
character
statement
of
the
of
the
be taken as true and binding upon the
government, and that upon it, rather than upon the claimants, must
fall the loss resulting from such mistaken representations."
at 556.
The court further noted that
~[i]n
of the nature of this much of the work
Id.
its positive assertion
[the government]
made a
representation upon which the claimants had a right to rely without
an investigation to prove its falsity."
Unlike Hollerbach,
Id.
this is not a breach of contract case.
Indeed, the court has already determined that under the Contract
Disputes Act it lacks jurisdiction to hear a contract claim by
33Id. at 4-6.
-26-
Weeks Marine argues,
weeks Marine against the United States. 34
however,
that
"Michigan
Wisconsin
adopts
the
Hollerbach
principles"35 and that under Michigan Wisconsin it was "obliged by
the law to accept the [g]overnment's warranty regarding the number
of pipelines as true."36
Weeks Marine points to the Supreme Court's
language in Hollerbach that the government's representations "must
be taken as true and binding upon the government," 34 S. Ct. at
556, to argue that it was obliged by law to accept the government's
representations
in the contract as true. 37
The court does not
interpret this language to mean that Weeks Marine was required to
accept the contract specifications as true even when it had ready
access to contrary and more recent information from the government.
Cf. D.F.K. Enterprises, Inc. v. United States, 45 Fed. Cl. 280, 285
(Fed.
Cl.
conclusion
1999)
(e. g. ,
("Without
an
some
absence
valid
of
basis
for
detrimental
a
contrary
reliance
by
a
government contractor, or a failure to investigate sources which
would have
revealed the
truth),
the government
damage attributable to misstatements of fact
'is
(in a
liable
for
contract or
specifications) which are representations made to the contractor.'"
34Memorandum Opinion and Order, Docket Entry No. 34, pp. 4-11;
Memorandum Opinion and Order, Docket Entry No. 96, pp. 8-12.
35Weeks Marine, Inc.'s Post Trial Brief on Liability, Docket
Entry No. 159, p. 9; see also id. at 2-3.
36Id. at 3.
37Id.
-27-
(quoting Summit Timber Co. v. U. S.,
677 F.2d 852,
857
(Ct. Cl.
1982))).
The facts of Michigan Wisconsin are discussed in detail in
Part
Important
II.A above.
for purposes of
Wisconsin to this case is the fact
that
applying Michigan
in Michigan Wisconsin
neither NOAA nor the Coast Guard had issued charts or announcements
that identified the ruptured pipeline prior to the allision.
Here,
NOAA charts and LNMs identifying Contango's pipeline were readily
available to Weeks Marine employees before the allision.
The court
has already concluded that given the significant damage that could
result
from
pipeline
striking
data,
unreasonable
and
for
a
pipeline,
the
ease
Weeks
the
of
availability
accessing
Marine
to
rely
of
such
data,
solely
on
current
it
was
pipeline
information provided earlier in the contract specifications.
Penn Central Transportation Company v.
United States,
366
F. Supp. 1161 (D. Del. 1973), aff'd, 505 F.2d 730 (3d Cir. 1974),
cited in Michigan Wisconsin, 551 F.2d at 951, is illustrative.
In
Penn Central a dredger relied on the positive assertions of a Corps
representative
as
electrical cables.
to
the
location
Id. at 1163.
and depth
of
ten
submarine
The dredger contracted with the
United States to dredge the Chesapeake and Delaware Canal ("C & D
Canal") .
Id. at 1166.
The contract "specified the location and
elevation of a number of utility lines which crossed the C & D
Canal"
but
cables."
"made no mention of the existence of
the submarine
The dredger was alerted to the existence of the
-28-
submarine cables by a third party, but was not told where they were
located.
rd.
at
1167.
The
dredger
then asked the
identify the location and burial depth of the cables.
Corps
rd.
to
The
dredger met personally with a Corps representative who provided it
wi th
incorrect
The
information.
dredger
relied on this
information and "made no independent investigation to determine the
exact
location of
The court held that
the cables."
the
dredger "fulfilled the only duty which it owed to plaintiff or the
United States when, the dredging contract being silent as to the
existence or location of the cables, it reasonably inquired of the
Corps where the cables were located and thereafter dredged in a
reasonably prudent manner upon the basis of the information which
it had received."
rd. at 1169.
Like the contract in Penn Central, the contract specifications
here made no mention of the Contango pipeline.
Neither Weeks
Marine nor the dredger in Penn Central had a duty to independently
investigate the positive assertions in the contracts.
However,
once contrary information was made available to it, a reasonable
dredger could be expected to
D.F.K.
Enterprises,
established
that
45 Fed.
the
investigate their accuracy.
Cl.
at 285.
dredging proj ect
Cf.
The evidence at trial
was
to
take
several months in an area known to contain pipelines.
place
over
Although the
dredger in Penn Central was actually aware of the existence of the
submarine cables, a reasonable dredger in Weeks Marine's position
can
be
expected
to
utilize
readily
-29-
available
information,
particularly more recent information published by the government
pertaining to the subject matter of the contract,
to avoid the
foreseeable consequences of dredging with incomplete or inaccurate
information,
especially given the ease of accessing the correct
information and
the
significant
damage
that
could result
from
striking a pipeline.
Weeks Marine also characterizes its indemnity argument as one
for breach of warranty.
It argues that under Michigan Wisconsin
the government's positive assertion in the contract specifications
is a warranty that constitutes an implied promise to indemnify
Weeks Marine. 38
Arguing that Louisiana law applies, Weeks Marine
contends that "a promisor which breaches a warranty cannot use the
promisee's comparative negligence as a defense to its own breach. 1139
However,
this is not a breach of warranty case, and whether the
terms of the contract give rise to a
contract
issue.
Cf.
D.F.K.
claim for
Enterprises,
45
indemnity is a
Fed.
Cl.
at
285
(" [Plaintiff] argues that the alleged misrepresentation constitutes
a breach of contract because it violates the 'implied warranty of
the
accuracy
of
contract
documents.'
[Plaintiff's]
claim
lS
entirely dependent on the existence of a contract between it and
the Corps, and . . . is in substance a claim for breach of contract
by misrepresentation, or negligence, or both. ").
38Id. at 4-8.
39Id.
at 7.
-30-
As already noted,
the court lacks jurisdiction to consider a contract claim against
the United States by Weeks Marine. 40
Accordingly, the court will
not adjudicate Weeks Marine's indemnity claims under the contract
and concludes that Weeks Marine's argument that it was obligated to
rely solely on the representations in the contract despite having
ready access to more recent contrary information has no merit.
E.
Weeks Marine's Government Contractor Defense
Weeks Marine argues that" [t] he actions of Weeks [Marine] were
the actions of the [United States] and thus, Contango must look to
the [United States] for compensation. ,,41
Weeks Marine states that
the government contractor defense "is based on the premise that a
private contractor performing acts for the government should not be
liable for these acts if the federal government would be immune
from liability had it performed the acts directly.,,42
Contango
argues that Weeks Marine is not entitled to immunity because the
United States is not entitled to immunity in this case. 43
Contango,
40Memorandum Opinion and Order, Docket Entry No. 34, pp. 4-11;
Memorandum Opinion and Order, Docket Entry No. 96, pp. 8-12.
41Memorandum in Support of Motion for Summary Judgment on
Behalf of Weeks Marine, Inc.
Government Contractor Defense
("Memorandum in Support"), attached to Motion for Summary Judgment
on Behalf of Weeks Marine, Inc. - Government Contractor Defense,
Docket Entry No. 59-1, p. 9.
42Id. at 10.
43Contango's
Cross-Motion
for
Summary Judgment
on
Government Contractor Defense, Docket Entry No. 82, p. 3.
-31-
the
also argues that the government contractor defense does not apply
because Weeks Marine itself was negligent. 44
contractor
"Government
government's
immunity
discretionary
from
function
is
immunity
suit
at
Scientific Co.,
210 F.3d 431,
contractors are
therefore
is
where
the
performance
Kettsetter
issue."
435
from
derived
(5th Cir.
v.
of
a
Pacific
Government
2000).
"entitled to assert
the
the government's
sovereign immunity in suits arising from [discretionary function]
Bynum v.
activities."
1985) .
The
Suits
function exception.
in
FMC Corp.,
770 F. 2d 556,
Admiralty Act
contains
a
564
(5th Cir.
discretionary
Although the United States has waived its
immunity from tort suits under the Act, the exception bars suits
against the United States for discretionary actions based on policy
considerations.
Wiggins v. United States Through Dept. of Army,
799 F.2d 962, 965 (5th Cir. 1986)
The United States' failure to
include the Contango pipeline in the contract specifications and
subsequent failure to warn Weeks Marine of its error was not a
discretionary action based on policy considerations.
Therefore,
the exception does not apply, sovereign immunity has been waived,
and
the
government
will
be
liable
for
breaching
its
duty
to
Contango.
A defendant asserting the government contractor defense must
also establish that it did not exceed its authority in performing
44Id. at 3-4.
-32-
the contract.
In Yearsley v. W.A. Ross Constr. Co., 60 S. Ct. 413,
414 (1940), the Court held that if the "authority to carry out the
project was validly conferred" and the contractor has not "exceeded
his authority" in acting on behalf of the United States, "there is
no liability on the part of the contractor for
United States'] will."
executing
[the
Accordingly, under Yearsley a party acting
on behalf of the government will be liable for actions causing
injury to another if
was
not
validly
(1)
the authority to carry out the contract
conferred or
(2)
the
contractor
exceeded his
authority in performing the acts that caused the injury.
The Fifth
Circuit expanded upon the second prong in Ackerson v. Bean Dredging
LLC, 589 F.3d 196 (5th Cir. 2009).
that Yearsley barred a
In Ackerson the court concluded
suit against
the defendant - contractors,
finding that the contractors had not "exceeded their authority" as
a
matter of
law.
Id.
at
207.
The
court
reasoned
that
the
plaintiffs had alleged that the entire government project -- the
subject of the contract -- caused the plaintiffs' injuries,
"not
any separate act of negligence by the [c]ontractor- [d]efendants."
Id.
i
see
also
City of
Worcester v.
F. Supp. 31, 38 (D. Mass. 1990)
HCA Mgmt.
requires
a
Inc.,
753
(government contractor not entitled
to immunity where "the harm was caused by the
tortious conduct")
Co.,
[contractor's] own
The government contractor defense therefore
contractor
to
have
acted
performing actions pursuant to a contract.
-33-
without
negligence
in
Because the government contractor defense is an affirmative
one, Weeks Marine bore the burden of proof at trial.
McDonnell Douglas Corp.,
989 F.2d 794,
802
Bailey v.
(5th Cir. 1993).
The
court concludes that Weeks Marine has failed to establish that it
is entitled to assert the United States' sovereign immunity for two
reasons.
First, the United States owed a duty of care to Contango,
and the court has concluded that the United States breached that
duty.
the
Because the discretionary function exemption does not apply,
court
therefore
concludes
that
there
is
no
governmental
immunity from which an immunity may be derived for the benefit of
Weeks Marine.
Second, as explained above, Weeks Marine has failed
to establish that it acted without negligence.
F.
Contributory Negligence of Contango
The United States and Weeks Marine contend that Contango was
negligent because it failed to bury its pipeline to the proper
depth.
The General Criteria for Pipeline and Utility Line Burial
in Waterways
("Criteria"),
issued by the New Orleans District,
listed the required burial depths of pipelines in navigable waters
within the New Orleans District, which included the Atchafalaya Bar
Channel. 45
Under the Corps' Criteria pipelines buried in fairways
in water less than 200 feet deep were required to be buried at
least ten feet below the mud line.
Because the Atchafalaya Channel
45Contango Exhibit 125.
-34-
~-~---~--~-------
a
is
federally
maintained
dredged
however,
channel,
the
United States and weeks Marine argue that under the Corps' Criteria
the
burial
requirement
for
pipelines
crossing
the
Atchafalaya
Channel was eight feet below the authorized project depth, rather
than ten feet below the mud line.
Contango's consultants
concluded that
the
seafloor of the
Atchafalaya Channel varied between -16 to -18 feet deep relative to
Mean Low Gulf
diameter.
("MLG").
The
coated pipeline
was
two
feet
in
In order for the top of the pipeline to be buried eight
feet below the authorized project depth the United States argues
that the pipeline should therefore have been buried to -28 feet
MLG.
Contango's permit application stated that the pipeline be
buried at least ten feet below the mud line at the bottom of the
channel. 46
The
Corps
approved Contango's
application,
and the
permit issued by the Corps to Contango required that Contango bury
the pipeline at least ten feet below the mud line where it crossed
the Atchafalaya Channel and at least three feet below the mud line
outside the channel. 47
The
credible
evidence
at
trial
established
that
Contango
buried the pipeline at least ten feet below the mud line,48 and that
the pipeline was also buried below -28 feet MLG except in one small
46Contango Exhibit 7 at page PLTF 6521.
47Contango Exhibit 8 at page US 27,
48~,
11, and page US 37.
Contango Exhibit 75 at page PLTF 456.
-35-
------
~
_. __._------------
area at the western edge of the channel where it was buried to
-27.5 MLG,49 although even in that area the pipeline was buried at
least 10 feet below the mud line as required by the Corps' permit. 50
The court concludes that the burial depth of the Contango
pipeline complied with the permit issued by the Corps both within
and outside the Atchafalaya Channel.
Neither the United States nor
Weeks Marine has presented credible evidence that Contango violated
the Corps' permit or breached a duty of reasonable care as to the
buried depth of the pipeline.
Nor has the United States or Weeks
Marine presented any credible evidence that the failure of Contango
to bury the pipeline to -28 feet MLG at the western edge of the
channel
caused the Weeks Marine dredge
to
strike
the pipeline
approximately 15 feet beyond the western edge of the channel, where
it was
buried at
least
three
feet
below the
mud line. 51
The
United States and Weeks Marine have therefore failed to show that
Contango was contributorily negligent because it failed to bury the
pipeline deep enough.
G.
Allocation of Fault
Under general maritime law negligent defendants are jointly
and severally liable for the plaintiff's damages.
Drilling
Corp.,
61
F.3d
1113,
1129
(5th
Cir.
49~,
Contango Exhibit 80 at page PLTF 411.
50~,
Contango Exhibit 10.
51~,
Contango Exhibit 75 at page PLTF 456.
-36-
Coats v. Penrod
1995).
The
United States and Weeks Marine are both at fault for the allision
and Contango's damages, and neither is entitled to shift all blame
to the other because each owed independent duties to exercise
reasonable care to avoid damaging Contango's pipeline,
could
have
reasonable
prevented
the
See
care.
allision
Combo
through
Maritime,
the
615
and each
exercise
F.3d
at
of
608-09
(discussing the effect of THE LOUISIANA rule on apportionment of
liability); cf. Beene v. Terrebonne Wireline Servs., Inc., 990 F. 2d
627,
1993 WL 117984,
decision)
(discussing
at
*2
the
(5th Cir.
effect
of
1993)
THE
(unpublished table
PENNSYLVANIA
rule
on
apportionment of liability); Sheridan Transp. Co. v. United States,
834 F.2d 467, 478 (5th Cir. 1987)
(same).
Contango does not bear
any fault because it buried the pipeline in accordance with the
pipeline permit issued by the Corps.
Between the
two defendants,
the
court
concludes
that
the
United States is responsible for 60% of Contango's damages and that
Weeks Marine
is
responsible
for
40%.
Al though
the
court
has
concluded that Weeks Marine's sole reliance on pipeline locations
information provided by the Corps did not satisfy the duty of Weeks
Marine to exercise reasonable care in its dredging operations, the
credible evidence at
trial
established that
it was
the
common
practice in the dredging industry at the time of the allision to
rely on pipeline information provided by the Corps, and that the
Corps was aware of this practice.
-37-
The court therefore concludes
that
between
the
defendants,
the
Corps
the
has
greater
responsibility for the allision and Contango's damages.
H.
Damages
Contango seeks damages for the cost to repair its pipeline
(both insured and uninsured), for hydrocarbons lost because of the
allision, and for deferred production damages resulting from the
shut-in of the pipeline and wells for thirty-five days.
The court
finds that Contango suffered the following damages as a result of
defendants' negligent conduct.
1.
Repair Costs
The parties have stipulated that the plaintiff Underwriters
paid $2,920,528.80
to repair the pipel ine. 52
Contango incurred
$534,634.03 in uninsured costs to repair the pipeline. 53
Defendants
argue that $106,062.38 of this amount is not recoverable because
Contango "bettered" the pipeline by burying it deeper as part of
the
repairs.
concludes
The
that
court
Contango
rej ected
is
this
entitled to
argument
recover
at
trial
$534,634.03
and
in
uninsured repair costs.
2.
Lost Hydrocarbons
Although the United States initially argued that because the
working interest owners were not parties, they were not entitled to
52Joint
No.
Stipulation Regarding Actual
108.
53Id.
f1
II
2 .a & c.
-38-
Damages,
Docket
Entry
recover damages for lost hydrocarbons, that objection became moot
when the court allowed the plaintiffs to file a Second Amended
Complaint adding the working interest owners as plaintiffs.
The
court therefore concludes that Contango is entitled to $78,073.00
for lost hydrocarbons. 54
3.
Deferred Production Damages
The principal dispute concerning damages relates to Contango's
deferred production damages.
Using a discount rate of 8%, Contango
argues that it is entitled to recover $7,981,927.00 in deferred
production damages. 55
Conceptually,
deferred production damages
represent the difference between the value of gas and condensate
that Contango would have produced during the thirty-five days when
its wells were shut-in and the present value of that same product
when it is actually produced over the remaining life of the wells.
See Nerco Oil
669-70
(5th
&
Gas,
Cir.
Inc.
1996);
v.
Otto Candies,
Agip
Petroleum
Inc.,
Co.
v.
74
F. 3d 667,
Gulf
Island
Fabrication, Inc., 17 F. Supp. 2d 660, 661 (S.D. Tex. 1998)
practical
and economic
measure
of
an oil
company's
loss
("The
from
delayed production is the difference between the net revenue flow
54Id.
~
2. b. i .
55Contango contends that the court should apply a discount rate
of 10% based on the SEC standard for valuing oil and gas properties
for purposes of SEC reporting. However, both Contango's expert and
the government's expert testified that 8% is a proper discount rate
to apply in this case.
The court finds this testimony to be
credible and adopts an 8% discount rate.
-39-
with
and without
the
delay.")
.56
The
parties
agree
that
the
"incident v. no incident" methodology is the appropriate method for
calculating deferred production damages in this case.
ENSCO Offshore Co., No. H-09-2838,
(S.D. Tex. Jan. 7, 2014)
methodology)
i
2014 WL 49980,
See In re
at *3-4 & n.1
(discussing the incident v. no incident
Certain underwriters Subscribing to Burke Daniels
Policy No. BD-CJP-132 v. Commerce & Indus. Ins. Co., No. 97-0491,
2000
WL
98205,
at
*3
n.5
(E.D.
La.
Jan.
27,
2000),
amended,
56The court in Agip Petroleum distinguished between a method
of calculating deferred production damages as lost revenue during
the period of delay "less credit for the gas retained in the
reservoir, with the credit being the price of the gas discounted
from the end of the reservoir's productive life" and a method that
calculated "the difference between the net revenue flow with and
without delay," which it likened to the process of "pricing two
annuities," but noted that mathematically the result is the same
for each method.
17 F. Supp. 2d at 660-62.
Each method has
conceptual advantages. The first recognizes that if the reservoir
is unaffected by the delay, then before the wells go into decline
variations in production in any particular month are not
necessarily attributable to the fact that the wells were not
producing during the delay.
Once the wells go into decline,
however, the amount of product produced in any particular month is
assumed to be higher than it would have been absent the delay
because it is assumed that the well would have gone into decline
earlier had the delay not occurred. As explained at trial, a well
goes into decline when natural factors, such as pressures within
the reservoir, are no longer sufficient to support production at
the scheduled rate and production thereafter declines over time
until the reservoir is depleted or abandoned.
The second method
recognizes that the production of each molecule of product has been
delayed by some amount of time and seeks to quantify the cost of
this delay on each unit of product as it is produced. Both methods
are useful for understanding what deferred production damages are
meant to represent. And, as noted by the court in Agip Petroleum,
the result is the same so long as the credit for production at the
end of the reservoir's productive life is calculated on the change
in production caused by the delay over the entire period that the
wells are in decline. See id. at 662.
-40-
No.
97-0491,
2000 WL 256199
(E.D. La. Mar. 2,
2000),
aff'd,
273
F.3d 393 (5th Cir. 2001).
Each party presented its own expert on deferred production
damages at trial.
Contango's expert, Calvin Barnhill, a petroleum
engineer, utilized a decline curve model wherein he produced two
forecasts
hypothetical
one
for
the
no- incident
incident
scenario
For
scenario.
and
incident
the
one
for
the
scenario
Barnhill forecast production over the life of the well from the
date that the wells returned to production after the shut-in and
verified his projections against actual production data for the
period when
it
was
available.
For
the
no-incident
scenario
Barnhill forecast production from the date of the allision assuming
that the incident had never occurred.
Each forecast was discounted
to present value and compared to determine the amount of deferred
production damages.
Weeks Marine's expert, Michael Veazey, a petroleum engineer,
also produced two forecasts.
For the incident scenario, Veazey
used actual sales data derived from Contango's lease operating
statements from the date of the allision through December of 2011.
He then produced a production forecast for the remaining life of
the wells.
In order to produce his forecast, Veazey performed a
nodal analysis considering both bottom hole pressure and flowing
tubing pressure in each of Contango's wells.
Veazey utilized a
pressure-related
over
function
referred
to
as
"p
z"
and
the
material balance method to predict production over the remaining
-41-
life of the wells from December of 2011.
data from February 24,
2010,
data thereafter represents
The combination of actual
to December 31,
2011,
and forecast
the entirety of Veazey's production
forecast for the incident scenario.
For the no-incident scenario
Veazey moved his incident forecast backward in time by thirty-five
days.
Each forecast was discounted to present value and compared
to determine the amount of deferred production damages.
Contango argues that Veazey's model is unreliable because it
utilizes actual sales data derived from Contango's lease operating
statements for the period from February 24, 2010, to December 31,
2011, before switching to model proj ections thereafter. 57
contends
that
Veazey's
combination
of
actual
data
Contango
with
model
projections in his forecast is erroneous because the sales data
includes accounting adjustments that are not adequately taken into
consideration in Veazey's production forecast
2011. 58
after December of
Barnhill's model, Contango argues, is more reliable because
it utilizes model projections for the entirety of both the incident
and no-incident scenarios. 59
Contango also argues that Veazey's
model is unreliable because its projections deviate significantly
from the actual production data that is available. 60
57Plaintiffs' Post-Trial Brief on Deferred Production Damages,
Docket Entry No. 162, pp. 4-8.
58Id.
59Id.
at 3-4.
6oId.
at 7-8.
-42-
Weeks Marine argues that Barnhill's model fails to account for
the fact that the wells are producing from an abnormally pressured
depletion drive reservoir. 61
Weeks Marine contends that Barnhill's
use of a decline curve methodology based on production rather than
a methodology based on pressures is unreliable in the context of an
abnormally pressured reservoir because the rate of production can
be artificially manipulated by opening and closing the chokes on
the wells. 62
Weeks Marine further argues that the decline curve
method has the potential to over-estimate the life of the wells
because the rate of decrease in downhole pressures can indicate a
shorter well life than rates of production would predict. 63
focusing on downhole pressures and nodal
By
analysis Weeks Marine
argues that Veazey's model more accurately predicts the point at
which the wells will cease to be able to produce on their own
without artificial assistance. 64
Weeks also disputes Contango's
assertion that Veazey's utilization of actual
sales data for a
portion of his model makes it unreliable. 65
Well
life can be roughly described as
a
function of both
remaining reserves and the rate of production.
Even if reserves
61Defendant Weeks Marine, Inc.'s Post-Trial Brief Replying to
Plaintiffs' Post-Trial Brief on Deferred Production Damages Docket
Entry No. 166, pp. 1-4, 7-8.
I
62Id.
65Id.
at 6-7.
-43-
are lower than projected,
the well life may be longer if those
reserves are produced at a slower rate.
Generally, a longer well
life translates to larger deferred production damages.
if
the
experts
agreed
on
the
remaining
Thus, even
reserves,
they
might
disagree on how long it will take to produce them.
Weeks
Marine
argues
that
the
rate
of
production
unreliable indicator of the remaining life of the well.
is
an
However,
rate of production is the predominant factor in determining the
plaintiffs'
deferred
production
damages.
While
the
material
balance method may be an adequate method for determining the amount
of remaining reserves,
particular model
the court is not convinced that Veazey's
accurately proj ects
reserves will be produced.
the
at
which
those
If the remaining reserves are produced
over a relatively short period of time,
damages will be lower.
rate
the deferred production
If the rate of production for the remaining
reserves is slower, the remaining reserves will be produced over a
longer period of time and deferred production damages will
higher.
Thus,
be
accurately projecting the rate of production is
essential to determining the proper measure of Contango's deferred
production damages.
Of course, the wells cannot produce what the reservoirs do not
contain, and at some point the pressures within the reservoir will
no
longer
support
a
particular
rate
of
production.
Veazey's
estimate of remaining reserves was lower than Barnhill's estimate.
Weeks Marine argues that Veazey's estimate is more reliable because
-44-
it is based on an analysis of downhole pressures that cannot be
manipulated in the same way as rates of production -- by opening
and closing the chokes on the wells.
that he was aware that Contango s
I
abnormally
pressured
reservoir
1
66
However
Barnhill testified
I
wells are producing from an
that
considered
he
nodal
analysis 1 67 downhole pressures 1 68 material balance 1 69 and the p over
z factor
1
70
and concluded that his model was accurate. 71
The court
finds Barnhillls testimony to be credible.
EssentiallYI Weeks Marinels critique of Barnhillls model is
that it relies too heavily on production data.
the other hand
pressure
l
may rely too heavily on pressure data.
decline
acknowledges
I
Veazeyls model
to
however
predict
that
I
production
production
opening and closing the chokes on the wells. 72
be
Veazey
manipulated
Thus
on
Veazey used
decline.
can
I
I
by
production
cannot be predicted solely by assessing the pressures within the
reservoir
there may be economic or other factors
explain or predict
the rate
at which the wells are
that
can
likely to
produce.
66Trial Transcript l Vol. 11 pp. 121:21-122:20 1 133:20-134:18.
67Id.
at 125: 7-125: 21.
68Id.
69Id. at 122:12-:20i see also January 18 1 2013 1 Expert Report
of Calvin C. Barnhill Contango Exhibit 1221 p. 10.
I
7°Trial
Transcript
I
Vol.
11
pp.
39:23-40:7 1
86:17-87:10 1
122:2-:9.
71Id. at 122:2-:20 1 133:20-134:18.
72Trial Transcript
I
Vol. 21 pp. 219:24-220:3 1 229:10-230:16.
-45-
Veazey referred to the variations in production from month to
month as "chatter" in the rate of production. 73
However, Veazey
acknowledged that these variations can be attributed to the opening
and
closing
of
chokes
on
the
well
in
financial and operational concerns. 74
response
to
legitimate
Such concerns are relevant
to determining how the wells can be expected to produce in the
future.
Veazey's
model
potentially
fully
problematic
incorporates
accounting
this
"chatter"
adjustments)
into
(and
its
calculation of deferred production damages for the period before
December 31, 2011, which consists of data derived from Contango's
lease operating statements.
It is unclear to the court, however,
whether Veazey's model adequately accounts for those legitimate
factors unrelated to reservoir pressure that can be expected to
influence the rate of production over the remaining life of the
well
after
December
of
While
2011.
reservoir
pressure
is
undoubtedly a significant factor in a well's rate of production, it
is not the only factor.
Contango
may
have
economic
speeding or slowing production.
and
operational
reasons
for
These factors may be independent
of the particular characteristics of the reservoir.
Nonetheless,
they would affect the rate of production, and it is the rate of
73Id. at 229: 1-230: 16.
74Trial Transcript, Vol. 2, pp. 229:24-230:16.
-46-
production that will largely determine the amount of Contango's
deferred production damages.
Indeed, revenue from production over
the remaining life of the wells is what the models are intended to
See
predict.
Nerco
& Gas,
Oil
74
F.3d
at
669-70;
Certain
Underwriters Subscribing to Burke Daniels Policy No. BD-CJP-132,
2000 WL 98205, at *3 n.5; In re TT Boat Corp., No. 98-0494, 1999
WL 1276837, at *3-*4 (E.D. La. Dec. 21, 1999); Agip Petroleum, 17
F. Supp. 2d at 661-62.
Contango is not obligated to adjust its production schedule in
order to minimize its deferred production damages at the expense of
its legitimate economic and operational reasons for producing at a
particular
rate.
Contango
is
therefore
entitled
to
deferred
production damages in accordance with its reasonable and legitimate
management of the production rates of its wells.
Barnhill
testified
that
he
compared
his
projections
to
observed production as the data became available in order to verify
that
his
proj ections
necessary.75
were
accurate
and
adj ust
his
model
when
Because Barnhill verified his proj ections against
actual production data as it became available, the court can infer
that his model accounts for the factors
particular production profile.
relevant to Contango's
At trial, when Veazey was asked why
his projections for a particular well were lower than what the well
actually produced, Veazey replied that Contango "opened the choke,
75Trial Transcript,
131:23-133:5.
Vol.
I,
-47-
pp.
40:13-41:1,
90:16-96:24,
or they did something else to manipulate
the reservoir.
1176
l
artificially manipulate
The court can therefore infer that Veazeyl s model
may not account for the non-pressure-related factors relevant to
Contango/s production profile as accurately as Barnhill/s model
does.
Having found neither expert/s estimate of remaining reserves
to be more credible than the other1s and finding Barnhill/s model
more
reliable
in predicting the rate of production
l
the
court
therefore concludes that Barnhill/s model is more reliable than
Veazey/s model.
The government's expert
Ann Czerwonka, an expert in applied
1
financial and quantitative analysis
critique Barnhill's model.
used regression analysis to
l
Contango argues that Czerwonka is not
qualified to render opinions in this case because she is not a
petroleum engineer.
Czerwonka s analysis indicated that Contango s
1
1
wells began to decline immediately after the shut-in.
both petroleum engineers
VeazeYI
1
Barnhill and
disagreed with her assessment.
Even if Czerwonka is qualified as an expert on deferred production
damages,
the
court
finds
Barnhill
to
be
more
qualified
by
experience and his methodology to be more reliable.
Because the
court
than either
finds
Barnhill/s
model
to
be
more
reliable
Veazey/s or Czerwonka/s, using Barnhill's methodology and using an
8%
discount
rate,
$7,981 / 927.00.
Contango's
Contango
deferred production damages
will
be
awarded
deferred
were
production
damages in this amount.
76Trial Transcript 1 Vol. 21 pp. 259:7-260:8.
-48-
......
_._-_•._--
------~-
..-
..
--.-----
I.
Prejudgment Interest
The
general
rule
is
that
prej udgment
awarded in maritime collision cases.
Div.,
Nat.
Gypsum
Co.,
115
S.
interest
should be
City of Milwaukee v. Cement
Ct.
2091,
2095
"The
(1995).
essential rationale for awarding prejudgment interest is to ensure
that an inj ured party is fully compensated for its loss."
Id.
"Admiralty courts enjoy broad discretion in setting prejudgment
interest
Gator
rates."
Marine
Serv.
Towing,
Inc.
v.
McDermott & Co., 651 F.2d 1096, 1101 (5th Cir. 1981).
"may look to the
judgment creditor's actual
cost
J.
Ray
The court
of borrowing
money, to state law, or to other reasonable guideposts indicating
a fair level of compensation."
Id.
(citations omitted) .
Contango argues that the court should look to Texas law for
the prejudgment interest rate. 77
The prejudgment interest rate in
Texas is equal to the prime rate with a floor of 5% and a ceiling
of 15%.
See Tex. Fin. Code
§§
304.003, 340.103; Johnson & Higgins
of Tex.,
Inc. v. Kenneco Energy, Inc.,
1998) .
It
§
is
computed
304.104; Johnson
&
as
Higgins,
simple
962 S.W.2d 507, 532
interest.
Tex.
962 S.W.2d at 532.
Fin.
(Tex.
Code
Weeks Marine
argues that the court should award prejudgment interest at the rate
established by 28 U.S.C.
§
1961 for post-judgment interest, at the
77Plaintiffs' Post-Trial Brief in Support of Request for
Prej udgment Interest ("Plaintiffs' Post-Trial Brief"), Docket Entry
No. 171, pp. 6-8.
-49-
average prime lending rate of 3.25%, or at the Louisiana statutory
rates of 3.75% for 2010 and 4% for 2011. 78
The court concludes that 5% is an appropriate rate to fairly
compensate Contango "for the loss of use of money due as damages
from the time the claim accrue[d] until judgment is entered," and
to restore Contango "to the condition it enjoyed before the injury
City of
occurred."
omitted)
(internal
Milwaukee,
115
S.
Ct.
at
quotation marks omitted)
2096
(citations
Accordingly,
the
court will award prejudgment interest at the rate of 5% per year
from February 24,
2010,
judgment is entered.
until the date preceding the date that
Applying the prejudgment interest rate of 5%
per year for 1,491 days to Contango's damages
($11,515,162.83)
yields a prejudgment interest award of $2,351,932.57.
Under
46
U.S.C.
United States .
§
" [a]
for
against
the
. may include costs and interest at the rate of
4 percent per year until satisfied."
allowable
judgment
the
period
before
Furthermore, "interest is not
the
action
is
filed."
Id.
Accordingly, the court concludes that the United States' liability
for prejudment interest is limited to 4% from the date that suit
was filed on February 11, 2011, or $1,796,680.89.
78Defendant Weeks Marine, Inc.'s Response to Plaintiffs' PostTrial Brief in Support of Request for Prejudgment Interest, Docket
Entry No. 172, pp. 3-5.
-50-
Contango argues that it should be permitted to recover the
portion of the total
award of prej udgment
interest that
it
is
statutorily barred from recovering against the United States under
46 U.S.C.
§
30911 from Weeks Marine as a jointly-and-severally-
liable tortfeasor.79
SANTAY
MV,
92
The court agrees.
F.3d
361,
364-65
See Probo II London v. ISLA
(5th
Navigators Co., S.A. v. MiS SOUTHWIND,
Cir.
"In admiralty cases
1986)
Cir.
1996);
Transorient
788 F.2d 288, 293-94
'prejudgment
interest
(5th
is not
awarded as a penalty but as compensation for use of funds by the
defendant
to
which
the
plaintiff
Navigators, 788 F.2d at 294.
is
entitled."
Transorient
Furthermore, an admiralty plaintiff
"may recover his full damages from anyone of two or more joint
tortfeasors,
leaving
that
tort feasor
indemnity from its co-tortfeasors."
Id.
to
seek
contribution
or
Accordingly, Contango is
entitled to recover the entire award of prejudgment interest from
Weeks Marine, including the portion of prejudgment interest that it
is statutorily barred from collecting against the United States. so
79Plaintiffs' Post-Trial Brief, Docket Entry No. 171, pp. 8-10.
SaThe United States is not liable in contribution to Weeks
Marine for the amount of prejudgment interest it is statutorily
protected from paying.
See Transorient Navigators, 788 F.2d at
294-95.
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III.
Conclusion 81
If any finding of fact should more properly be characterized
as a conclusion of law,
law.
If
any
it is hereby adopted as a conclusion of
conclusion
characterized as a
of
law
finding of fact,
should
more
properly
be
it is hereby adopted as a
finding of fact.
On the basis of the above findings of fact and conclusions of
law, the court concludes that Weeks Marine and the United States
must compensate Contango in the amount of $2,920,528.80 for insured
repair costs,
for
lost
damages,
$534,634.03 for uninsured repair costs,
hydrocarbons,
$2,351,932.57
$7,981,927.00
for
prejudgment
for
deferred
interest,
$78,073.00
production
post-judgment
interest at a rate of 0.14% compounded annually on the sum of these
awards, and for Contango's costs allowed under 28 U.S.C.
§
1920.
All other relief not expressly granted is DENIED.
SIGNED at Houston,
Texas, on this 26th day of March, 2014.
SIM LAKE
UNITED STATES DISTRICT JUDGE
7
81The court has considered the parties' other arguments raised
in the pretrial order. The fact that the court has not expressly
addressed them in this Memorandum Opinion and Order reflects the
court's conclusion that they lacked merit and/or that the party
asserting the argument failed to prove it at trial.
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