U.S. v. M/V Zoe Colocotroni

• Decision Date: 29 June 1979
• Docket Number: No. 78-1542,78-1542
• Citation: 602 F.2d 12
• Parties: UNITED STATES of America, Plaintiff, Appellant, v. The M/V ZOE COLOCOTRONI, etc., et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 12

602 F.2d 12

13 ERC 1378

UNITED STATES of America, Plaintiff, Appellant, v. The M/V ZOE COLOCOTRONI, etc., et al., Defendants, Appellees.

No. 78-1542.

United States Court of Appeals, First Circuit.

Argued May 9, 1979.

Decided June 29, 1979.

Allen P. van Emmerik, Atty., U. S. Dept. of Justice, Washington, D. C., with whom Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., Julio Morales Sanchez, U. S. Atty., San Juan, P. R., and Michael Kimmel, Atty., U. S. Dept. of Justice, Washington, D. C., were on brief, for appellant.

Owen McGivern, New York City, with whom John W. Wall, Peter S. Dealy, Gary B. Schmidt, Richard A. Booth, Donovan, Leisure, Newton & Irvine, Daniel J. Dougherty, Mary Louise Montgomery, and Kirlin, Campbell & Keating, New York City, were on brief, for appellees.

Before COFFIN, Chief Judge, CAMPBELL, Circuit Judge, WYZANSKI, Senior District Judge. ^*

COFFIN, Chief Judge.

This suit arises from an action brought by the United States to recover its costs of cleaning up an oil spill. The spill occurred when the defendants' oil tanker, the SS ZOE COLOCOTRONI ran aground about three miles off the southern coast of Puerto Rico and jettisoned more than 5000 tons of crude oil into the Caribbean in an attempt to refloat. The defendants moved for summary judgment in favor of the United States in the full amount of the government's claimed cleanup costs, $677,660.42, which judgment was granted. That left only three contested issues, the government's claims for interest, statutory penalties and attorney's fees. The court imposed full statutory penalties upon the defendants, awarded prejudgment interest at the rate of six per cent from the date the United States first notified defendants of the amount which was due, and denied the United States' requests for attorney's fees. The United States appeals from that judgment on two grounds. First, it argues that the prejudgment interest should have run from an earlier date, namely, when the United States first incurred its expenses and that it should have been computed at a higher rate. Second, it maintains that the court erred in denying its claims for fees. Not finding sufficient merit in either contention, we affirm the judgment below.

Little would be served by a detailed recitation of the events which transpired during the four and a half years that passed between the oil spill and the entry of judgment. In the context of the narrow legal issues raised by this appeal, we need not resolve the conflicting explanations the parties offer for that delay. The United States accuses the defendants of bad faith, "stonewalling", and "contumacious obstinacy"; the defendants attempt to shift responsibility for the delay to the United States. Suffice it to say that the court's findings show that the United States experienced considerable frustration in its attempts to secure the cooperation of the vessel owners and their insurers in the cleanup process.

1. Prejudgment Interest

Recognizing that the general rule in collision cases in admiralty is that interest is awarded from the date of the actual casualty or loss, See, e.g., Moore-McCormack Lines v. Amirault, 202 F.2d 893, 898 (1st Cir. 1953); Robinson on Admiralty § 114 at 850-51 & n.159 (1939), the court nonetheless concluded that "(t)he instant action cannot be blindly encased in the confines of a typical admiralty claim", and that "(p)rior to the date when the Government first sent a bill, the claims were unliquidated and unascertained." "Considering all the equities involved", the court found that the United States would be adequately compensated by an award of prejudgment interest running from November 12, 1974, the date when a bill was first sent to defendants. The United States vigorously disputes the court's power to depart from the strict admiralty rule in collision cases which, it claims, entitled it to interest from July 19, 1973, the date it incurred expenses in the cleanup.

Quite simply, we do not believe that this is the type of case in which the collision rule of prejudgment interest need apply. Unlike the numerous authorities cited to us by the United States, See, e.g., Socony Mobil Oil Co. v. Texas Coastal and International, Inc., 559 F.2d 1008 (5th Cir. 1977); Grace Line Inc. v. Todd Shipyards Corp., 500 F.2d 361 (9th Cir. 1974); Mid-America Transportation Co., Inc. v. Rose Barge Line, Inc., 477 F.2d 914 (8th Cir. 1973), this suit is not brought to recover damages for loss or injury to a vessel or cargo. See The President Madison, 91 F.2d 835, 846 (9th Cir. 1937) ("interest is necessary to make 'just compensation' for the loss of a vessel or the repairs, salvage expenditures, and the like caused by the tort of the colliding offender."). Indeed, the United States does not seek recompense for any loss of its property damaged in a collision. Instead it seeks reimbursement for the expenses it incurred in cleaning up the oil spill. The terms of the collision rule, if not its underlying logic, are clear, See Moore-McCormack Lines v. Amirault, supra, 202 F.2d at 898; In re Great Lakes Dredge & Dock Co., 250 F. 916 (D.Mass.1917), and we hold that the rule need not have been applied to this factually distinguishable context. Relying on the more general policy of admiralty law that "the award of interest (on claims unliquidated in nature) lies in the discretion of the admiralty court", Moore-McCormack Lines v. Amirault, supra, 202 F.2d at 898, we find no abuse in the allowance of prejudgment interest from the date the United States first presented a bill to the defendants. See generally Robinson v. Pocahontas, Inc., 477 F.2d 1048, 1052 (1st Cir. 1973); American Union Transport Co. Inc. v. Aguadilla Terminal, Inc., 302 F.2d 394, 396 (1st Cir. 1962).

We affirm as well the district court's decision to award interest at a rate of six per cent, the highest rate permissible under the laws of Puerto Rico, P.R.L.A. tit. 31, §§ 3025, 4591 (1968). While a federal court is not bound by the forum's local rate of interest, it is well established that it may use the law of the forum as its guide. Norris, The Law of Maritime Personal Injuries 3rd, § 173A (1979). The United States has not cited us to a single case in which a district court was reversed for refusing to award interest above the forum rate, and we decline to do so here. Its argument that a rate of...