Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

As the tanker Athos neared Paulsboro, New Jersey, an abandoned anchor in the Delaware River punctured its hull and caused 263,000 gallons of crude oil to spill. The owner of the tanker, Frescati, paid $180 million in cleanup costs and ship damages, but was reimbursed for nearly $88 million by the U.S. government under the Oil Pollution Act, 33 U.S.C. 2701. Frescati made claims against CARCO, which ordered the oil and owned the terminal where the Athos was to unload, claiming breach of the safe port/safe berth warranty made to an intermediary responsible for chartering the Athos and negligence and negligent misrepresentation. The government, as a statutory subrogee for the $88 million reimbursement reached a limited settlement agreement. The district court held that CARCO was not liable for the accident, but made no findings of fact and conclusions of law, required by FRCP 52(a)(1). The Third Circuit remanded for findings, but stated that the Athos and Frescati were implied beneficiaries of CARCO‘s safe berth warranty; that the warranty is an express assurance of safety; and that the named port exception to that warranty does not apply to hazards that are unknown and not reasonably foreseeable. The court noted that it is not clear that the warranty was actually breached, absent findings as to the Athos‘s actual draft or the clearance provided. The court further stated that CARCO could be liable in negligence for hazards outside the approach to CARCO‘s terminal. View "United States v. Citgo Asphalt Ref. Co." on Justia Law

Mala entered Crown Bay Marina, tied the boat to a fueling station and began filling his tank with an automatic gas pump. Before walking to the register to buy oil, Mala asked an attendant to watch his boat. When Mala returned, the tank was overflowing and fuel was spilling into the boat and the water. The attendant shut off the pump and acknowledged that it was malfunctioning. Mala began cleaning up; the attendant provided soap and water. Mala departed; the engine caught fire and exploded. Mala was thrown into the water and was severely burned. Mala sued, claiming negligent training and supervision and negligent maintenance. At the time Mala was imprisoned; he has filed at least 20 pro se lawsuits. The district court concluded that his history of filing frivolous lawsuits precluded in forma pauperis status, 28 U.S.C. 1915; rejected Mala’s jury demand; dismissed certain defendants; held a bench trial at which Mala represented himself; and ruled in favor of Crown Bay, although an advisory jury returned a verdict of $460,000 for Mala. The Third Circuit affirmed, rejecting arguments that the court should have provided additional assistance, wrongfully denied a jury trial, and improperly ruled on post-trial motions. View "Mala v. Crown Bay Marina, Inc." on Justia Law

From the 1930s through the 1970s, Skinner manufactured ship engines and parts, allegedly containing asbestos. Merchant mariners began bringing injury claims in the 1980s. In 1998, AC acquired all of Skinner’s common stock. Based on lack of cash flow to maintain operations or service secured debt, Skinner and AC filed petitions for Chapter 11 bankruptcy in 2001; more than 29,000 asbestos claims were pending against Skinner. The Bankruptcy Court converted to Chapter 7 on the basis that the plan was patently unconfirmable. Insurers, legal representative for future asbestos claimants, Maritime Asbestosis Legal Clinic, and the Trustee, joined an appeal. The Third Circuit affirmed. The court properly found, based on the disclosure statement hearing, that the fifth plan was patently unconfirmable under 11 U.S.C. 1129(a)(3) because its success is entirely contingent on speculative future litigation, and because it asks third-party asbestos claimants, who were not a cause of the bankruptcy, to serve as the sole funding source for attorneys and other creditors, under circumstances involving inherent conflict of interest and inequitable procedural provisions. Given the futility of pursuit of a Chapter 11 plan and mounting liabilities, the court acted within its discretion by converting the case. View "In Re: Am. Capital" on Justia Law

The federal government has maintained navigation in the Delaware River for more than 100 years. In 1992, the Army Corps of Engineers published an Environmental Impact Statement, recommending deepening of five feet along 102-miles. The EIS identified potential adverse impacts, but concluded these would be minimal and were outweighed by benefits of reduced shipping costs. In 1997, after engineering, the Corps published a Supplemental EIS. The project stalled until 2008, when the Philadelphia River Port Authority agreed to share costs. Improved technology reduced the amount of sediment; wetlands restoration was deferred. An oil spill had increased sediment toxicity. Expected expansion of sturgeon, potentially increased blasting risks. A 2009 Environmental Assessment recommended the project proceed. The district court rejected state challenges under the Coastal Zone Management Act, which requires a “consistency determination” for any state whose coastal zone will be affected, 16 U.S.C. 1456(c)(1); the Clean Water Act, which requires compliance with state water pollution law, 33 U.S.C. 1323(a); and the National Environmental Policy Act, 42 U.S.C. 4321. The states had attempted to revoke CZMA clearances. The Third Circuit affirmed, noting that dredging has begun. The 2009 EA was not arbitrary. CWA’s “congressionally authorized” exception to state approvals applies. The Corps reasonably concluded that it need not provide supplemental CZMA consistency determinations to states. View "State of DE v. U.S. Army Corps of Eng'rs" on Justia Law