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Ironshore’s negligence charges against Navy in pollution case reinstated

Posted On: Sep. 18, 2017 2:30 PM CST

A federal appeals court has reinstated negligence charges filed by Ironshore Specialty Insurance Co. against the U.S. government in connection with a Navy ship’s oil spill.

New York-based Ironshore Specialty filed suit against Wollaston, Massachusetts-based American Overseas Marine Company L.L.C. and the United States under the Oil Pollution Act of 1990, general admiralty and maritime law in connection with a 2010 oil spill that occurred at a Boston dock owned by its policyholder, Boston-based Northeast Ship Repair Inc., according to Friday’s ruling by the 1st U.S. Circuit Court of Appeals in Boston in Ironshore Specialty Insurance Co. et al. v. United States of America; American Overseas Marine Corp.

American Overseas had a contract with the Navy under which it had agreed to crew, maintain and make routine repairs to the Fisher, a transport vessel and vehicle cargo ship, according to the ruling.

Northeast unit Boston Ship Repair incurred nearly $3 million in costs associated with cleaning up the more than 11,000 gallons of fuel that were spilled, according to the ruling.

Ironshore filed suit against the United States and American Marine as Boston Ship Repair’s subrogee. The U.S. District Court in Boston dismissed all charges against the defendants.

On appeal, a three-judge appeals court panel unanimously reinstated the negligence charges against the United States. The panel agreed with the District Court that the ship was a public vessel and therefore exempt from liability under the Oil Pollution Act.

However, it says a subsection of the law states that it does not affect admiralty and maritime law. “Hence, because public vessels lie outside the sweep of OPA liability, any pre-existing admiralty and maritime law that applied to public vessels before the OPA’s passage survives its enactment.

“The District Court erroneously dismissed Ironshore’s negligence claims against the United States,” said the ruling, in reinstating the negligence charges.

The case was remanded for further proceedings.