spill oil, kill birds, go to jail: the new paradigm for mariners presentation to: san francisco...
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Spill Oil, Kill Birds, Go to Jail: The New Paradigm for Mariners
Presentation to: San Francisco Marine Insurance Seminar May 6-7, 2010
Jeffrey L. BornsteinK&L Gates LLP4 Embarcadero Center, Suite 1200San Francisco, CA 94111
Email: jeff.bornstein@klgates.com
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The “7 Seas” (or ‘Cs’ in this case)
Chain of Errors Accidents involve a Chain of Errors (but someone will be blamed)
Criminal If your client spills oil and there is environmental damage, assume there could
be Criminal liability Coverage
Insurance Coverage for criminal counsel and pollution events is essential – protect your clients – their liberty and assets are at risk
Consultation Before making statements to investigators, your client needs to Consult with
legal counsel Cooperation
The decision to Cooperate with the government (or not) may be different for a company vs. an individual
Compliance Rigorous Compliance (and training) is an important key to preventing accidents
Communication Effective Communication between maritime professionals is fundamental
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The Scene
November 7, 2007A very foggy morning…
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The Cosco Busan’s bridge was equipped with radars, electronic chart, and manned by the ship’s Master and two officers and an experienced San Francisco Bar Pilot.
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Cosco Busan
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Damage to the Cosco Busan
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Damage to the Bay Bridge Pier
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Oil Slick on SF Bay
53,500 gallons of oil spilled 2,500 birds killed
Also delayed opening crab season until after Thanksgiving
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What Happened
Timeline of Key Events 6:20 a.m. Pilot boarded the vessel 6:24 a.m. Initial exchange of information with the ship’s Master 6:37 a.m. Coast Guard Vessel Traffic Service (VTS) notified of
ship’s intended passage through the “Delta-Echo” opening of Bay Bridge
7:44 a.m. Cosco Busan leaves dock in heavy fog 8:30 a.m. Cosco Busan scrapes the Bay Bridge Pier and
begins to leak bunker fuel
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Reliance on Basic Assumptions
Pilot – The Master and his bridge officers know their ship and their equipment. They will follow the basic international standards relating to a ship leaving port in the fog
Master – The Pilot is the local expert who will take over and navigate us safely from the Oakland Port, through the Bay, and out to sea
Coast Guard VTS – There is an experienced pilot on board who knows what he is doing
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Chain of Errors
Lack of Compliance/Training Master/Crew not well-trained; did not know how to operate
ship’s equipment (including the electronic chart) There was no real pre-sailing voyage planning even though it
was otherwise required by law and company protocols The Master and his officers did not follow international
standards or ship’s procedures relating to lookouts, monitoring of ship’s position, and interactions with Pilot
Master and officers modified various ship records after the incident
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Chain of Errors (cont.)
Failure to Communicate Exchange of information between Pilot and Master incomplete Master and Pilot misunderstood key symbols on the ship’s electronic
chart Master “guessed” at their meaning He was wrong in his guess
Ship ultimately badly out of position to safely transit through the opening of the Bay Bridge span
No warning from ship’s Master or crew Coast Guard’s VTS failed to warn
Knew pilot’s intention to sail through “Delta – Echo” portion of Bay Bridge span
Actively monitored ship’s progress Timely warning – even in the last minute – could have avoided the accident.
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Ferries & Other Vessels on the S.F. Bay that Morning
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Electronic Chart (“Red Triangles” and “Center of Bridge”)
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The Investigation – The Critical Players
First Responders Coast Guard Fish & Game/OSPR Environmental Protection Agency Federal Bureau of Investigation
Federal and State Prosecutors United States Attorney’s Office Department of Justice Environmental Crimes Division Local District Attorney’s Office
National Transportation Safety Board Licensing Bodies Representatives of Ship Owners/Operators Public Opinion
Media Politicians
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The Media - Someone Must Be Held Accountable
Pilot
Bar Pilot on Errant Ship Had Several Mishaps in Past (San Francisco Chronicle, November 9, 2007)
State Charges Bay Spill Pilot with Misconduct (San Francisco Chronicle, December 7, 2007)
Role of Pilot’s Sleep Medication Probed (San Francisco Chronicle, January 19, 2008)
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The Media - Someone Must Be Held Accountable (cont.) Ship’s Master and Crew
Probe into Cargo Ship Bay Bridge Crash Focuses on Communication (San Jose Mercury News, November 9, 2007)
Federal Prosecutors Charge Shipping Company in Bay Oil Spill (San Jose Mercury News, July 23, 2008)
Felony Charges for Ship’s Management (San Francisco Chronicle, July 24, 2008)
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The Media - Someone Must Be Held Accountable (cont.) Coast Guard
Response to Fuel Spill under Bay Bridge Called ‘Unusually Slow’ (San Francisco Chronicle, November 9, 2007)
Coast Guard Monitors Didn’t Warn Ship’s Crew (San Francisco Chronicle, November 16, 2007)
Senators Blast Coast Guard Response to Bay Oil Spill (San Francisco Chronicle, November 15, 2007)
Coast Guard May Be Neglecting Its Maritime Mission (San Francisco Chronicle, November 16, 2007)
Oil Spill Report Berates Coast Guard (San Francisco Chronicle, January 28, 2008)
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The Law
Clean Water Act (33 U.S.C. § 1319(c)(1)(A); 33 U.S.C. § 1321(b)(3)) Elements
Defendant discharged a harmful quantity of oil into U.S. waters; Defendant was negligent; and Defendant’s negligence was a proximate cause of the discharge.
Ordinary Negligence (same as in any civil case) Can be sent to prison for up to one year Intentional conduct is a felony (deliberate oil spills or
dumping of other pollutants) Failure to report an oil spill is also a felony
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The Law (cont.)
United States v. Franklin Hill, et al. (D. Mass) Defendant was responsible for the navigation of the tugboat. Left
his post for 15 minutes without his hand-held radio. There was no one else on the bridge. Barge crashes upon the rocks that were clearly marked on the electronic and paper charts.
Defendant was sentenced to five months imprisonment. Hanousek v. United States (9th Cir.)
During rock removal operations a backhoe operator accidentally struck high pressure pipeline near the railroad tracks, spilling between 1,000 and 5,000 gallons of oil into the river.
Supervisor of the project was off duty and at home when the accident occurred. Nevertheless, he was convicted under the Clean Water Act for negligently discharging oil into the river. Sentenced to six months of imprisonment followed by six months in a halfway house.
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The Law (cont.)
Migratory Bird Act (16 U.S.C. §§ 703, 707(a)) On the books since 1918. Purpose = Regulating Hunting Elements
The killing of a migratory bird including Brown Pelicans (Pelecanus Occidentalis), Marbled Murrelets (Brachyramphus Marmoratus), and Western Grebes (Aechmophorus Occidentalis); and
Without permission or authority as required by law. Strict Liability – No need to prove negligence. Cases beginning to question applicability to pollution
events
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The Law (cont.)
Various State Laws Crime to negligently or intentionally spill oil or fail to report spills.
Seafarers’ Training, Certification and Watchkeeping Code (STCW) Navigation with pilot on board
The Master is always in charge of his ship. Presence of pilots on board does not relieve the master or ship’s
officers from their obligation to keep the ship safe. The master and pilot must have a meaningful exchange of information
before the ship leaves the dock. The master and his officers must cooperate closely with the pilot and
maintain an accurate check on the ship’s position and movement.
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The Allegations
12 specific negligent acts alleged in criminal indictment including: Ship’s Master and crew inadequately trained Pilot and ship’s Master/crew failed to navigate an accident free
course There was an inadequate review before departure of the ship’s
navigational charts and the proposed course The ship departed in heavy fog The ship’s Master failed to ensure that adequate lookouts were
posted The ship’s Master/crew failed to notify the Pilot that the ship was
off-course The ship’s operating company is vicariously liable for the acts
of the ship’s Master/crew
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How does a company defend itself?
Clean-up response is paramount Understanding key evidence – What happened?
Why? Who’s at fault? Drug/alcohol testing of key personnel Preserving paper and electronic evidence Interviewing key personnel Hiring lawyers to represent witnesses/subjects/
targets Managing the public relations nightmare
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Insurance Coverage – Make Sure the Policy Protects Your Client
Anyone who operates any seagoing vessel needs insurance coverage to protect against pollution-causing incidents Some policies may contain a Pollution Exclusion and Buyback
clause Make sure your client knows what this clause means and that the
exclusion is not unreasonable given the risks faced by normal operations
Important lesson from the Cosco Busan – Your clients’ liberty and assets are at risk if their vessel is involved in an accident, and fuel oil spills into the water and kills migratory birds – They deserve to be protected!
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Insurance Coverage – Make Sure the Policy Protects Your Clients (cont.)
Insurance companies tend to narrowly construe their obligations We have excellent coverage lawyers who can help Federal criminal investigations following a pollution incident
are and should be covered by standard liability policies If you are an insurance broker, make sure you are looking
out for the rights of your insured (and not the insurance company)
Get to know their business so you can appreciate their risks Remember, the Cosco Busan accident arose from what
otherwise would be considered “normal operations”
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How does an individual defend herself?
You need advice from competent counsel – preferably before you say anything.
Are you required to make any statements to anyone? If so, make it clear that you are requesting the right to consult with counsel first.
What does the Company expect you to do? Whatever you do, only tell the truth. Who is going to pay for your legal expenses? Are you going to be made the scapegoat?
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How does an individual defend herself? (cont.)
Regardless of whether you cooperate or assert your 5th Amendment rights, if you give any statements – Only tell the truth.\ Do not change or alter any electronic or paper charts or
documents even if you are asked/ordered to do so Don’t try to “get your story straight” with other members of the
crew Assume that oil spills in sensitive environmental areas will be
investigated as a crime Usually the United States Coast Guard is the lead investigative
agency Even a case that is initially civil can be criminal Coast Guard investigators may have varying degrees of training/
experience
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If you spill oil and kill birds, will you go to jail?
Sentencing Guidelines Standardized system designed to equalize
sentencing in all federal courts Intentional conduct treated more harshly than
negligence Applicable Sentencing Range – (as high as) 10-16
months (statutory maximum for negligence – 1 year) Intentional acts can be punished with up to 3-5 years
imprisonment
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If you spill oil and kill birds, will you go to jail? (cont.) Judge Illston’s Comments at Sentencing
“The Exxon Valdez was an object lesson to everyone.”
“…What happened [in the Cosco Busan case] is exactly what was meant to be protected against by the statutes. The consequences are just exactly as severe as you might expect….
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Lessons learned
Accidents usually involve a Chain of Errors Fault on behalf of many – Pilot, Ship’s Master and Officers, Ship’s operating
company, the United States Coast Guard (VTS and Captain of the Port) Only the Pilot and Ship’s operating company were charged with crimes
Lack of an effective Compliance and training program for the ship’s crew Volumes of written policies Most in English and almost all of the crew were not proficient in English Conflicting responsibilities made it impossible to follow all of the procedures Crew did not have time to review and absorb the procedures
Vessel Traffic Service (VTS) (failure to Communicate a clear warning) Inadequate exchange of information between maritime professionals can be
devastating
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Lessons learned (cont.)
Having to fight your own insurer for Coverage makes it difficult to defend yourself against the government Pilot had to initially fund his own defense Insurers at different levels fought about who was
responsible to pay for attorney’s fees. See e.g., California Harbors and Navigation Code,
Section 1198 – Pilot is entitled to indemnification
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Lessons learned (cont.)
Life is not fair Bad things can – and do – happen to good people The media wants a story and there is a tendency to look for a
scapegoat The government (and politicians) want to hold someone accountable Sometimes you can show up for work, make a mistake, lose your
profession, and even end up in prison
Good training, clear policies and procedures, rigorous Compliance, and good Communication are all keys to avoiding accidents
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So . . . if you spill oil and kill birds, will you go to jail?
IT DEPENDS
(but knowing your clients are protected by a comprehensive insurance policy and can consult with qualified criminal counsel will help)
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