On April 9, in the case In re Petition of Frescati Shipping Company Ltd. Civil Action 05 civ. 305 (JHS), the U.S. District Court for the Eastern District of Pennsylvania denied Defendant CITGO Asphalt Refining Company ("CARCO") Motion for Partial Summary Judgment Granting Limitation of Liability under the Oil Pollution Act ("OPA")., Following the MV ATHOS I oil spill in the Delaware River on November 26, 2004, Plaintiffs, Frescati, the owner, and Tsakos Shipping & Trading , S.A. the manager of the vessel, both represented by the law firm of Montgomery McCracken Walker & Rhoads, LLP, and the United States commenced an action to recover a total of $133,305,668.00 in damages and cleanup costs from Defendant CARCO. Frescati had already successfully limited its liability under the OPA to $45,474,000.00 (i.e.,$1,200 per gross tons of the vessel) in damages and removal costs. Under the OPA, 33 U.S.C. § 2702(d), CARCO also sought to limit its liability to the same $45M amount as Frescati in its Motion for Partial Summary Judgment.
At the outset, the District Court held that CARCO had waived its OPA limitation of liability defense by failing to specifically plead it in its Answer to the Complaint back in 2005. Favoring the argument put forth by Frescati, the District Court further held that allowing the Defendant to assert a new defense after nearly 10 years of litigation would have "substantially" prejudiced Frescati and the United States.
Finally, even if CARCO's limitation of liability of defense was not waived, its motion would still be denied under the OPA. Citing In re Alex C Corp., 2011 A.M.C. 157, 2010 WL 4292328 (D. Mass. Nov. 1, 2010), the District Court held that the provisions of 33 U.S.C. § 2702(d) was limited to third parties who did not have a contractual relationship with the responsible party. In an earlier appeal in this case, the Third Circuit had already held that CARCO was contractually related party to Frescati (See In re Frescati Shipping Co., Ltd., 718 F. 3d 184 (3 Cir.2013), so CARCO did not get the benefit of the OPA limitation that would apply to an "non contractually related" thirdparty.
Therefore, CARCO's attempt "to limit its liability by assuming the position of the responsible party under section 2702(d)" fails. See In Re Petition of Frescati Shipping Company, Ltd., Civil Action No. 05cv305 (JHS), Doc 816 (E.D.Pa. April 9, 2015) Lastly, under the OPA, the United States is permitted to go forward as subrogee against Frescati and is further subrogated to all rights of Frescati.