In re: M/V Yochow

Filing 372

ADDITIONAL FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO INTEREST.(Signed by Judge Keith P Ellison) Parties notified. (aar4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN THE MATTER OF THE COMPLAINT §
OF GRAND FAMOUS SHIPPING LTD.
§
AND BEIKUN SHIPPING TIANJIN CO., §
LTD. AS OWNER AND OWNER PRO HAC §
VICE OF THE M/V YOCHOW FOR
§
EXONERATION FROM AND/OR
§
LIMITATION OF LIABILITY
§
§
Plaintiffs,
§
§
§

September 24, 2024
Nathan Ochsner, Clerk

CIVIL ACTION NO. 4:18-CV-4678

- consolidated with OSG 243 LLC and OVERSEAS
SHIPHOLDING GROUP, INC.

§
§
§
Plaintiffs,
§
§
VS.
§
§
M/V YOCHOW, her engines, tackle,
§
apparel, etc., in rem, GRAND FAMOUS
§
SHIPPING LTD.; and CHINA
§
NAVIGATION CO PTE LTD, in personam §

CIVIL ACTION NO. 4:18-CV-2046

Defendants.

ADDITIONAL FINDINGS OF FACT AND CONCLUSIONS OF LAW AS TO
INTEREST
Pursuant to Rule 52(a)(1) of the Federal Rules of Civil Procedure, the Court submits the
following additional Findings of Fact and Conclusions of Law as to prejudgment and postjudgment interest.
I.

BACKGROUND
At approximately 2:50 a.m. on June 13, 2018, the M/V YOCHOW (“the YOCHOW”), an

inbound bulk cargo vessel traversing the Houston Ship Channel, allided with an ocean-going
1

barge, the OSG 243, which was moored to TPC Group LLC’s A Dock (“the A Dock”), causing
damage to both the barge and the dock. This case arises out of that collision.
Limitation Petitioners are Grand Famous Shipping Ltd. (“Grand Famous”) and Beikun
Shipping Tianjin Co., Ltd. (“Beikun”). Grand Famous is the registered owner of the YOCHOW.
Beikun is a ship management company. The YOCHOW’s crew was supplied and managed by
Beikun.
Claimants are (1) OSG 243 LLC and Overseas Ship Management, Inc. (collectively
“OSG”), (2) TPC Group LLC and certain interested underwriters (collectively “TPC”), and (3)
the Port Authority of Houston (“POHA”). OSG owns and operates the tug and barge unit OSG
INDEPENDENCE and OSG 243. TPC is the exclusive lessee and operator of two docks: the A
Dock, a primary dock capable of servicing ocean-going vessels, and the B Dock, a smaller dock
capable of servicing non-ocean-going barges. POHA owns both docks and leases them to TPC.
This case proceeded to a bench trial which commenced on November 13, 2023, and
concluded on November 28, 2023. On August 1, 2024, the Court issued its Findings of Fact and
Conclusions of Law. ECF No. 367. The Court found that OSG was entitled to damages in the
amount of $3,600,000 plus any prejudgment and post-judgment interest the Court awarded
following the supplemental briefing period and that TPC was entitled to damages in the amount
of $9,068,718 plus any prejudgment and post-judgment interest the Court awarded following the
supplemental briefing period. Id. at 82. The Court also found that POHA was entitled to $0 in
damages. Id.
The Court left undecided the rate and calculation of prejudgment and post-judgment
interest. It requested further briefing on the issue of recoverable interest. Id. TPC, OSG, and

2

Limitation Petitioners submitted supplemental briefing on prejudgment and post-judgment
interest. ECF No. 369, 370, and 371.
Having considered the Parties’ briefing and the applicable law, the Court finds and holds
that prejudgment interest shall be set at a rate of 5.36% and post-judgment interest shall be set at
a rate of 3.95%.
II.

LEGAL ISSUES
A. Prejudgment Interest
“[A]n award for prejudgment interest in actions under the general maritime law is the rule

rather than the exception; prejudgment interest must be awarded unless unusual circumstances
make an award inequitable.” Ryan Walsh Stevedoring Co. v. James Marine Servs., Inc., 792 F.2d
489, 492 (5th Cir. 1986). “In admiralty cases, prejudgment interest is not awarded as a penalty
but as compensation for use of funds by the defendant to which the plaintiff is entitled.” Todd
Shipyards Corp. v. Auto Transp., S.A., 763 F.2d 745, 753 (5th Cir. 1985).
The Court has broad discretion in setting the appropriate prejudgment interest rate in an
admiralty case. Marine Overseas Servs., Inc. v. Crossocean Shipping Co., 791 F.2d 1227, 1236
(5th Cir. 1986). Courts may look to “state law or other reasonable guideposts indicating a fair
level of compensation.” Id. Such guideposts include the prejudgment interest rate of the state in
which the court sits, the rate established by 28 U.S.C. § 1961, or the injured party’s cost of
borrowing. See, e.g., Randolph v. Laeisz, 896 F.2d 964, 969 (5th Cir. 1990); Reeled Tubing, Inc.
v. M/V Chad G, 794 F.2d 1026, 1029 (5th Cir. 1986); Platoro Ltd., Inc. v. Unidentified Remains
of a Vessel, Her Cargo, Apparel, Tackle, & Furniture, in a Cause of Salvage, Civil & Mar., 695
F.2d 893, 907 (5th Cir. 1983). However, the Court is not required to use any particular interest
rate. See Platoro, 695 F.2d at 907 (“We cannot . . . instruct the district court to use any particular

3

rate; the decision in the first instance must lie with the district court after it evaluates the
circumstances of the case.”).
TPC and OSG both propose that the Court set the prejudgment interest rate based on the
average Federal Reserve prime rate during the prejudgment period. ECF No. 369 at 3; ECF No.
370 at 3. Limitation Petitioners argue that TPC is not entitled to prejudgment interest. ECF No.
371 at 3-4. Limitation Petitioners argue that, in the alternative to denying TPC prejudgment
interest, the Court should award TPC and OSG prejudgment interest at the average postjudgment interest rate during the prejudgment period. Id. at 5-6.
The Court will award prejudgment interest to OSG and TPC. The purpose of prejudgment
interest is “compensation for the use of funds to which the claimant was rightfully entitled.”
Marine Overseas, 791 F.2d at 1236. The Court finds that setting the interest rate based on the
approximate cost of borrowing, taken from the Federal Reserve prime rate, best accomplishes the
purpose of prejudgment interest. See Maya Special Mar. Enter. v. Crochet, No. 4:13-CV-01871,
at *2 (S.D. Tex. Sept. 22, 2016). The Court therefore finds the appropriate prejudgment interest
rate is 5.36% based on the average Federal Reserve prime rate during the majority of the
prejudgment period. 1
The rule in admiralty cases is that “interest on damages should be allowed uniformly
from the date of loss, unless for good reasons it is determined otherwise.” Esso Int’l, Inc. v. S.S.
CAPTAIN JOHN, 443 F.2d 1144, 1151 (5th Cir. 1971). Prejudgment interest on TPC’s
$9,068,718 damages will begin to run on June 13, 2018, the date of the allision. Prejudgment
interest on OSG’s $2,533,340 in physical damages will begin to run on June 13, 2018, and

See Federal Reserve, “H. 15 Selected Interest Rates,” http://www.federalreserve.gov/releases/h15/current/; Federal
Reserve, “Selected Interest Rates, Historical Data,” http://www.federalreserve.gov/releases/h15/data.htm.
1

4

prejudgment interest on OSG’s $1,066,660 in loss-of-hire damages will begin to run on August
16, 2018.
“As a general rule prejudgment interest awards are simple interest awards, not compound
interest.” Perez v. Bruister, 823 F.3d 250, 276 n.34 (5th Cir. 2016), citing Whitfield v.
Lindemann, 853 F.3d 1298, 1306 (5th Cir. 1988). Therefore, prejudgment interest will be
calculated on a simple interest basis.
B. Post-judgment Interest
Post-judgment interest “shall be calculated from the date of the entry of the judgment, at
a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the
Board of Governors of the Federal Reserve System, for the calendar week preceding the date of
the judgment.” 28 U.S.C.A. § 1961. The interest rate for the week of September 20, 2024, the
week preceding the judgment, is 3.95%.2 The Court therefore finds that TPC and OSG are
entitled to post-judgment interest at a 3.95% rate, to be compounded annually.
III.

CONCLUSION
For the foregoing reasons, the Court ORDERS that (1) TPC will be awarded

prejudgment interest at the rate of 5.36%, calculated on a simple basis, beginning from June 13,
2018; (2) OSG will be awarded prejudgment interest at the rate of 5.36%, calculated on a simple
basis, beginning from June 13, 2018 on physical damages and beginning from August 16, 2018
on loss-of-hire damages; and (3) TPC and OSG will be awarded post-judgment interest at the
rate of 3.95%, compounded annually, beginning from September 24, 2024, the date judgment is
entered.

See http://www.txs.uscourts.gov/page/post-judgment-interest-rates. The Court’s Memorandum and Order entered
on August 1, 2024 is not a final judgment. See Fed. R. Civ. P. 58(a); Ludgood v. Apex Marine Corp. Ship Mgmt.,
311 F.3d 364, 368 (5th Cir. 2002) (holding judgment is only effective when set forth in a separate document). The
Court uses the interest rate from the week before it releases its final judgment.
2

5

IT IS SO ORDERED.
SIGNED at Houston, Texas on this the 24th day of September, 2024.

________________________________
KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE

6