# Appendix — S.S. Zoe Colocotroni v. Puerto Rico

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1981
- **Citation:** 450 U.S. 912

## Text

8 0 ~ @ 58 Supreme Court. U. S.
F LEO

10 1980
No. 80- Nov

MICHAFL RODAK, JR. CLERK

—— wee

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

Tue S.S. Zor Cotocorroni, Marsonanza CoMPANIA NAVIERA,
S.A., Cotocorron: Lrp., CoLocorroni Brotuers, 8.A., THE
West or Encianp Saip Owners Mutua ProrTEcTION AND
InpEMnity Association (LuxemBourG) and THe WEsT oF
Encuanp Saip Owners Mutua Insurance ASSOCIATION
(Lonpon) LimITep,

Petitioners,

-against-

Tue CoMMONWEALTH OF Puerto Rico and THE ENviron-
MENTAL QuaLity Boarp or THE COMMONWEALTH OF PUERTO

Rico,
Respondents.

APPENDIX TO THE PETITION FOR A WRIT OF
CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FIRST CIRCUIT

JoHn W. WALL
30 Rockefeller Plaza
New York, New York 10112
(212) 489-4100

Attorney for Petitioners

Of Counsel:
Owen McGIverRN
Peter S. DEALY
Donovan Leisure Newton & IRVINE
30 Rockefeller Plaza
New York, New York 10112

November 10, 1980

Ee Oe YF

a

INDEX TO APPENDIX

PAGE
Opinion of the Court of Appeals, filed August 12, 1980 la

Opinion of the Court of Appeals, filed July 10, 1979 .... 49a
Memorandum and Order of the Court of Appeals,

Plod Tame 11, 19 7D ncccsciecsareasncessrecesonssecensessssincssnsesesorsssesson 55a
Opinion of the District Court, filed August 16, 1978,

as amended by Order filed October 4, 1978 ...........-.-.- 57a
Opinion and Order of the District Court, filed

Coton Bh, BGT secinsecccsicnnconsassnnscoshsbasissannsnniimonannenevemssscsas 103a
Opinion and Order of the District Court, filed

Feary TO TGTT cvscranecsnsvncscsinssccsonmessnssotsnsccsapesnisneanetintet 109a

Order of the District Court, filed November 7, 1975 .... 119a
Order of the District Court, filed September 17, 1975 .. 121a

Order of the District Court, dated April 11, 1974.......... 122a
Order of the District Court, dated April 8, 1974 .......... 124a
Magistrate’s Report and Recommendation, dated

RIE Tig ROTO cveinsimcseranccbnvicsiatvecoennisanaspeaeahalaatainaninnan 126a
Memorandum Opinion and Order of the District Court,

Red Pema TI, FTG aise ceccsstcnkiniisieescrsrencccnecp eines 137a
Order of the District Court, filed July 3, 1978 .............. 152a
Order of the District Court, dated June 19, 1978 .......... 155a
Judgment entered August 12, 1980 .00.........eccceeeceeeeeees 159a
Constitutional and Statutory Provisions Involved ...... 160a

Amendment XIV to the Constitution of the
Unidad Bteton, Geen) cvcscsstccpeccncccesinccamneomet 160a

Section 11(29) of the Publie Policy Environ-
mental Act of the Commonwealth of Puerto
Rico, 12 L.P.R.A, § 11381(29) (1978)

Rule 4.7 of the Puerto Rico Rules of Civil Pro-
cedure (Puerto Rico Long-arm Statute),

26 LPB Ang Bp. Thy TR. Ge CIGD necriccvetenvceses 16la

Section 20.030 of the Puerto Rico Insurance Code
(Puerto Rico Direct Action Statute),

BS EaF dks: S Be IE D. sitsciresiierisetnsicetoaenadiaes 162a

Section 11.190 of the Puerto Rico Insurance Code,

OG Ta K. 8 TEED CR) aickncnesvcctasnne 163a

—

>

y

UNITED STATES COURT OF APPEALS

For tHe First Crrcuit

No. 78-1543 and No. 79-1468
> ee
CoMMONWEALTH OF Purrto Rico, et al.,
Plaintiff's, Appellees,

Vv.

Ture SS Zor Corocorront,
Her Encines, APPURTENANCES,
ete., et al.,
Defendants, Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

Argued: March 10, 1980
Filed: August 12, 1980

Before Corrin, Chief Judge,
CampseLL, Circuit Judge, and
Wyzansk1,* Senior District Judge.

Sr i

CaMpBELL, Circuit Judge. In the early morning hours of
March 18, 1973, the SS ZOE COLOCOTRONIT, a tramp oil
tanker, ran aground on a reef three and a half miles off the
south coast of Puerto Rico. To refloat the vessel, the cap-

* Of the District of Massachusetts, sitting by designation.

2a

tain ordered the dumping of more than 5,000 tons of crude
oil into the surrounding waters. An oil slick four miles
long, and a tenth of a mile wide, floated towards the coast
and came ashore at an isolated peninsula on the south-
western tip of the island—a place called Bahia Sucia. The
present appeal concerns an action in admiralty brought by
the Commonwealth of Puerto Rico and the local Environ-
mental Quality Board (EQB) to recover damages for harm
done to the coastal environment by the spilled oil.’
Defendants’ have raised numerous objections to the dis-
trict court’s judgment awarding plaintiffs $6,164,192.09 in
damages for cleanup costs and environmental harm, The
primary objections are that the district court: (1) abused its
discretion in striking defendants’ pleadings on the issue of
liability as a sanction for defendants’ conduct during the
discovery process; (2) erred in considering depositions of
the ship’s master and crew on the issue of liability and in
making findings as to liability after that issue had been
removed from the case; (3) lacked personal jurisdiction

1. Several other actions that were initially consolidated with this
one have been settled or adjudicated. The United States recovered
$840,366.01 in cleanup costs, interest and statutory penalties against
the owners of the oil tanker; we refused to enlarge this award by
adding attorney’s fees and additional prejudgment interest. United
States Vv. M/V Zoe Colocotroni, 602 F.2d 12 (1st Cir. 1979). Local
fishermen and owners of a nearby salt pond settled their claims for
property damage and lost income for $55,000 and $75,000 respec-
tively. A local hotel’s claim for riparian damages and loss of business
was also settled, for $13,500.

2. Defendants in this action are the SS ZOE COLOCOTRONI
(in rem); the owners—Marbonanza Compania Naviera, $.A., Colo-
cotroni, Ltd., and/or Colocotroni Brothers, S.A.; and the insurance
underwriters—the West of England Ship Owners Mutual Protection
and Indemnity Association (hereinafter West of England-Luxem-
bourg) and the West of England Ship Owners Mutual Insurance
Association (hereinafter West of England—London). The two West
of England firms (hereinafter collectively West of England) were
sued under Puerto Rico’s direct action statute, 26 L.P.R.A. § 2003,
as insurers of the ZOE COLOCOTRONI and her owners. West
of England's contention that the district court lacked personal juris-
diction over the two firms is discussed in Part IV infra.

3a

over the underwriters West of England-Luxembourg and
West of England-London; (4) erred in finding plaintiffs
had standing to sue for environmental damages; (5) ap-
plied the wrong standard in measuring damages ; (6) made
certain erroneous findings of fact on damages; and (7)
erred in denying defendants’ Rule 60 motion for relief from
judgment. The facts and circumstances of the oil spill and
its aftermath are set forth in detail in the district court’s
opinion, Commonwealth of Puerto Rico v. SS Zoe Colo-
cotroni, 456 F. Supp. 1327 (D.P.R. 1978). After a brief
review of these facts and of the trial testimony, we will
address defendants’ contentions in turn.

iL

The following facts found by the district court are not in
serious dispute. On March 15, 1973, the ZOEK COLO-
COTRONI departed La Salina, Venezuela, carrying
187,670 barrels of crude oil en route to Guayanilla, Puerto
Rico. For the first two days of the voyage, the vessel pro-

3. Defendants also argue that receipt by the Commonwealth of a
$162,194 grant from the Environmental Protection Agency (EPA)
for litigation expenses in connection with the Bahia Sucia oil spill
constituted “maintenance” in the common law sense. In the alter-
native, defendants argue the amount of the grant should be set off
against any recovery to which the plaintiffs may be entitled. These
arguments are specious. See generally Corbin on Contracts § 1423
(no illegality in assisting another to maintain a suit by advancing the
money to pay costs and expenses, even as a gift, if the advancement
is made for reasons of charity or friendship and not for profit). Sec-
tion 106 of the Federal Water Pollution Control Act, 33 U.S.C.
§ 1256(a), provides that EPA may grant funds to states “for the
prevention, reduction, and elimination of pollution, including en-
forcement directly or through appropriate State law enforcement
officers or agencies.” The regulations define “enforcement” to in-
clude “litigation support activities.” 40 C.F.R. § 35.1513-5(c) (8).
A statutorily authorized government grant intended to further the
purposes of a valid statute does not constitute “maintenance” by the
United States. Cf. Mitchell v. Mitchell Truck Line, Inc., 286 F.2d
721, 727 (Sth Cir. 1961) (Secretary of Labor’s solicitation or
minimum wage complaints pursuant to statutory scheme not “bar-
ratrous”’).

4a

ceeded by celestial navigation. The last star fix, however,
was taken at 1859 hours on March 17, For the next eight
hours, the ship proceeded by dead reckoning. As the vessel
approached the south coast of Puerto Rico, it was, the dis-
trict court stated, “hopelessly lost.” At 0300 hours on
March 18, the ship grounded on a reef. Efforts to free the
tanker by alternately running the engines in forward and
reverse were unsuccessful. After ten minutes, the captain
ordered the crew to lighten ship by emptying the cargo of
crude oil into the sea.*’ By the time the vessel refloated,
some 1.5 million gallons of crude oil—5,170.1 tons—had
poured into the surrounding waters.

The oil floated westward from the site of the spill
throughout the daylight hours of March 18, and began com-
ing ashore after nightfall. Bahia Sucia is a crescent-
shaped bay facing southeastward from the Cabo Rojo
peninsula, which forms the southwest tip of Puerto Rico.
The oil entered Bahia Sucia, washed onto the beaches, and
penetrated the mangrove forests that line the western edge
of the bay. The oil was particularly thick in three areas:
around the rocky tip of the peninsula, in a section of man-
groves known as West Mangrove between a point called
“Hermit One” and an inlet called “Dogman’s Cove,” * and on
the open beach area stretching along the northern edge of
the bay. In addition, as the tide ebbed and flowed, oil
entered the tidal flats behind the mangrove fringe, coating
the roots of mangroves growing deeper in the forest and
soaking into the sediments.

4. The captain was ultimately tried and convicted on a charge of
violating 33 U.S.C. § 1321(b) (5) in connection with the dumping of
the oil. 456 F. Supp. at 1333 n.9.

5. Two hermits—Hermit One and the Dogman—lived in the
West Mangrove area at the time of trial, the Dogman being so called
because of his large collection of canine acquaintances. Neither her-
mit claimed any legal interest in the property. Various local
topographical features were identified in court by reference to these
two eponymous individuals,

5a

A massive cleanup operation, coordinated by the United
States Coast Guard and several Commonwealth agencies,
commenced on the morning of March 19. Cleanup crews,
hampered to some extent by variable winds that blew oil
back and forth across the bay, used booms to attempt to
contain oil floating on the surface. Much of this oil was
pumped out, either directly from the water or from large
holes dug in the beach into which oil was channeled by the
cleanup crews. By March 29, approximately 755,000 gallons
of oil, or about half the amount spilled, had been recovered.
On several occasions during the cleanup, oil was driven by
winds and currents into the eastern edge of the bay in an
area known as East Mangrove. This thin layer of oil was
difficult to remove, but, according to the district court’s
findings, it caused little or no harm to the East Mangrove
forest.

By April, cleanup activities had switched from large-
scale removal of oil to small-scale activities such as manual
beach cleanup and bailing of oil from tidal pockets with
buckets and small boats. Large amounts of contaminated
sands—totaling about 4,500 cubic yards—were removed
from the beach area by bulldozer and by hand. At the end
of April, the major remaining cleanup efforts were halted,
and all further efforts were discontinued after September
24. Despite the cleanup, oil continued to be present in
Bahia Sucia, especially in the stand of mangroves on the
west side of the bay.

One of the plaintiffs’ expert witnesses, Dr. Ariel Lugo
Garces, a wetlands specialist, testified that the ecological
functions of a mangrove forest such as that at Bahia Sucia
included: (1) protecting the shoreline from erosion, storms,
tides, and high winds; (2) providing a habitat for wildlife,
especially birds; (3) providing a protected breeding ground
for fish and shellfish; and (4) acting as a food source for
aquatic creatures of all kinds. Dr. Roger D. Anderson, a
marine biologist who testified for defendants, agreed with

6a

Dr. Lugo that tropical mangroves are an important link in
the food chain that supports fisheries and other marine
resources.

The district court described the Bahia Sucia mangroves
as follows:

“The mangrove that borders on the ocean fringe
throughout Bahia Sucia is a species referred to as
red mangrove (Rhizophora mangle). This mangrove
has both main and prop roots, in which are located
lenticels or pores for gas exchange. These lenticels
facilitate root respiration. Various epibenthic
species such as tree oysters, snails, crabs, sponges
and molluses dwelled in these root systems. In the
waters surrounding these roots, communities of fish,
shrimp and similar floating or swimming organisms
throve. The bottom around the roots was inhabited
by various benthic infauna. The bottom near the red
mangrove was covered with both turtle grass .
and manatee grass... .

Further inland from the fringe, as the interstitial
salinity rises, the red mangrove is supplanted by the
black mangrove (Avecennia nitida). This mangrove
inhabits a zone systematically flooded by the tide,
and rather than prop roots, it has fingerlike breath-
ing tubes (called neumatafors) which rise from the
ground to above high water level. This area pro-
vided a habitat principally for crustaceans such as
crabs and barnacles, and algae grazing snails, bees
and reptiles. There were also benthic infaunal com-
munities similar in nature to those in the bottom
surrounding the red mangrove fringe.”

456 F. Supp. at 1338 (footnotes omitted). The district

6. In the district court, the terms “benthic infauna” and “infaunal
creatures” were used to describe creatures such as worms or clams
living in or under the sediment beneath the mangroves. The term

7a

court noted that the configuration of Bahia Sucia, together
with the prevailing winds and currents, made the bay a
natural trap for floating debris, including small quantities
of petroleum and tar.?’ Nevertheless, the court found that,
at the time of the ZOK COLOCOTRONT oil spill, “Bahia
Sucia was a healthy, functioning estuarial ecosystem, typi-
eal of those found in the Southern coast of Puerto Rico and
similar tropical environments.” 456 F. Supp. at 1339.

A.

The Commonwealth of Puerto Rico and the EQB insti-
tuted the present action on March 19, 1973, invoking the
admiralty jurisdiction of the district court. A six-week
trial, addressed solely to damages, commenced on Novem-
ber 7, 1977.8 Plaintiffs first introduced testimony by expert
witnesses on the impact of the oil spill on Bahia Sucia, the
toxic effects of the oil, and the extent to which oil was still
present four years after the spill. Other experts then pre-
sented proposals for restoring the area and testified to the
costs that would be involved. Rafael Cruz Perez, an engi-
neer, presented a proposal to remove and replace a total
of 164,600 square meters (approximately 40 acres) of oil-
contaminated sediments in the West Mangrove and Hast
Mangrove areas to a depth of one meter. While the details
of the Cruz Perez plan were somewhat sketchy, the geo-

“epibenthic” was used to describe creatures such as shrimp or crabs
that live just above the surface of the sediment, whether in or out
of the water. While defendants have questioned the accuracy of
this terminology on technical grounds, we believe the intended mean-
ing of these terms is clear enough in the record, and we will use
them in the same fashion as the district court.

7. Indeed, the literal English translation of Bahia Sucia is “dirty
bay.”

8. On the first day of trial, the district court judge and counsel
for the parties made an on-site visual inspection of the Bahia Sucia
shoreline.

8a

graphic areas to be affected by the plan apparently con-
sisted of the following. Of the 40 acres of contaminated
sediments to be removed, about 15 acres were on the west
side of the bay in the vicinity of West Mangrove and about
25 acres were on the east side in the vicinity of East Man-
grove. Of the 15 acres on the west side, about 3.5 acres
contained mangroves, approximately half of which were
alive notwithstanding the polluted sediments. Of the 25
acres to be removed on the east side, about 16.5 acres con-
tained mangroves. Cruz Perez thus estimated his plan for
removal of 40 acres of contaminated sediments would
necessarily entail the clearing of some 20 acres of existing
mangroves. Furthermore, Cruz Perez testified, three addi-
tional acres of mangroves in uncontaminated areas would
have to be cleared to provide access for heavy machinery.?
An engineering report submitted by Gabriel Fuentes, a
contractor, estimated the cost of removing the sediments
and mangroves to be $7,176,363.71. Charles Pennock, a
San Juan nurseryman, submitted an estimate of $559,500
for the replanting of 23 acres of mangroves from container-
grown plants (approximately 5,500 trees per acre) and a
five-year maintenance plan.

Dr. Roger J. Zimmerman, a marine biologist from the
University of Puerto Rico, testified concerning a study he
conducted in late 1976 and early 1977 comparing the num-
ber of living organisms found at Bahia Sucia with the
number found in a comparable control area. Dr. Zimmer-
man’s study established no significant differences in wwn-

9. Cruz Perez testified that he made his calculations working
from aerial photographs and from on-site observations. Cruz
Perez’s study showed the size of the various impacted areas in num-
bers of square meters. We have translated these figures into numbers
of acres for ease of reference. According to Cruz Perez's figures,
there were a total of about 12 acres of mangroves in the West Man-
grove area, of which about half were living mangroves in unaffected
sediments. The figures suggest there were also about 2.5 acres of
dead mangroves not impacted by oil. For a further discussion of
the significance of these numbers, see note 25 infra.

9a

ber or type of organisms—either plants or animals—in the
seagrass beds or on the prop roots of the mangroves. The
study did, however, show a substantial disparity in the
number of organisms living on or under the sediments. In
particular, Dr. Zimmerman stated that the number of
molluses (e.g¢., clams, snails) in the Bahia Sucia area was
very small in comparison to the control area. On the other
hand, samples taken in Bahia Sucia found a far larger
number of polychaete worms, especially a genus known as
capitella which often proliferates in areas of acute environ-
mental distress.

Dr. Zimmerman also testified that, subsequent to this
first survey, a second study was undertaken at the behest
of the Environmental Quality Board. This study, again
relying on core samples taken in Bahia Sucia and at a con-
trol site, concentrated on the sediments, where the first
survey had found the greatest impact from the oil. Dr. Zim-
merman stated that the surveyors took their samples
primarily from the vicinity of a small lagoon in the West
Mangrove area where previous studies and visual observa-
tion indicated the oil was heavily concentrated. This study
revealed a marked difference between the two sites in the
numbers of infaunal and epibenthic creatures, according
to Dr. Zimmerman.

Dr. Ariel Lugo Garces, the wetlands expert, testified to
studies he had made indicating the presence of oil in the
mangrove sediments correlated with dead or dying man-
grove trees. The mangroves would not grow back, Dr.
Lugo said, as long as the oil remained in the sediments.
Dr. Lugo also presented a compilation, prepared by him,
of the data gathered by the other Bahia Sucia surveyors,
summarizing the extent of damage to twelve different com-
ponents of the Bahia Sucia ecosystem. Dr. Lugo stated
that he considered his figures conservative, since little data
was available on many other environmental components.

10a

Finally, Dr. Philip E, Sorensen, an economist specializing
in natural resources, discussed the economic theory that
shippers of oil should be required to bear such external
social costs as oil spill damages in order to prevent under-
pricing of their product. “If the producers and consumers
of oil are able to conduct their affairs in such a way as to
transfer to soc-ety a large part of the real cost of producing
and consuming their product,” Dr. Sorensen said, “we'll be
in an inefficient economic situation: one in which the market
price of the commodity will be less than the full social cost
of producing it.” Dr. Sorensen also presented a summary
of plaintiff’s claims for damages, including inter alia the
Commonwealth’s uncontested claim for cleanup expenses
of $78,108.89, the $7.5 million for sediment removal and
mangrove replanting, and Dr, Sorensen’s own estimate of
$5,526,583 as the replacement value of the invertebrate
organisms killed by the oil spill.

Dr. Sorensen testified he arrived at the latter figure by
way of the following calculations. Dr, Lugo’s report had
compiled the results of earlier studies together with the
second Zimmerman survey to provide a table of environ-
mental harms. Concentrating only on the figures from the
Zimmerman study, Dr. Sorensen extrapolated the differ-
ences in number of organisms found in the ten-centimeter
core samples over a square meter area to determine the
net difference in creatures per square meter. Since six
samples were taken at each of the four “stations” in Bahia
Sucia and in the control area, he determined this involved
multiplying the results of each set of six samples by 21.22.
Results from one of the four stations, where more animals
were found at Bahia Sucia than at the control area, were
not included. The net difference was calculated to be
1,138 creatures per square meter. This figure in turn
yielded the sum of 4,605,486 creatures per acre, and a total
of 92,109,720 creatures for the 20 acres of mangroves
allegedly impacted by oil. Dr. Sorensen testified that he

lia

took the 20-acre figure from “the survey and the map
created by Mr. Cruz Perez” and that the 20 acres included
a substantial area in East Mangrove.

To arrive at an estimate of damages, Dr. Sorensen tes-
tified he consulted catalogs from biological supply houses.
From these catalogs he determined that “[m]Jany of these
species sell at prices ranging from $1 to $4.50” and “that
no animal on the list sold for less than 10 cents.” Dr.
Sorensen assigned an average replacement value to each
creature, regardless of species, of six cents. Multiplying
92,109,720 times .06 resulted in an estimate of $5,526,583
as the replacement value of the organisms “missing” from
the Bahia Sucia sediments. Dr. Sorensen also estimated
the cost of a ten-year scientific monitoring program at
$1,393,200. His total estimate of the damages was thus
$14,733,755.60, consisting of $7,176,363.71 for mangrove
and sediment removal, $559,500 for mangrove replanting,
$5,526,583 for the replacement value of organisms,
$1,393,200 for monitoring, and $78,108.89 for cleanup costs.

B.

Plaintiffs’ witnesses were thoroughly cross-examined by
defendants’ counsel. In addition, defendants presented con-
siderable expert testimony of their own, The primary
thrust of this testimony was that the oil originally present
in Bahia Sucia had “weathered” through the action of wind,
waves, sunlight and the elements and was no longer having
major toxic effects on the environment. Defendants’
experts also testified that some of the damaged mangroves
were victims of pre-existing high salinity in West Mangrove
rather than oil pollution. Further testimony indicated that,

10. Dr. Sorensen did not testify that the biological supply houses
actually procured specimens at Bahia Sucia or that the Bahia Sucia
animals were marketable through such outlets. He only stated that
creatures similar to those killed could be replaced by purchasing
them from the catalogs.

12a

in the opinion of defendants’ experts, there were substantial
signs of natural regeneration among the mangroves. Dr,
Edward §, Gilfillan testified, for example, that he expected
the area to be restored by natural processes within ten to
fifteen vears, if not less. He estimated the size of the area
of “continuing damage” in West Mangrove at two and a
half to three acres.

Defendants also offered alternative restoration or
reforestation programs of their own that were less exten-
sive or less costly than plaintiffs’ proposals. Dr. Howard
Teas, a biologist, testified that, in his opinion, it would be
possible, though not necessarily desirable, to remove oil
from the sediments without destroying existing vegetation
by using “an airlift or vacuum such as divers use in un-
earthing treasure ships.” A preferable alternative, Dr.
Teas said, would be to offset damage to the oil-impacted
mangroves by replanting trees at a nearby location where
the mangrove forest had existed several years before. This
proposal would not carry with it the same risk of totally
destroying the environment in the contaminated areas in
order to save it, Dr. Teas said. He suggested that construc-
tion of a canal system to provide sufficient “flushing” action
would permit reforestation of the area west of Bahia Sueia
and north of the Cabo Rojo lighthouse where excess salinity
had apparently killed the mangroves. Dr. Teas testified
that the cost of replanting 15 acres of mangroves through
methods with which he was familiar would he approximately
$75,000 ($5,000 per acre), and that the cost of a ten-year
monitoring program would be about $200,000.

Dr. Roger D. Anderson, a marine biologist testifying for
defendants, attacked Dr, Sorensen’s theory of replacement
value as the measure of damages for small, commercially
valueless invertebrate animals, Dr. Anderson offered as an
alternative his own methodology, based on studies conducted
in Georgia. Citing work done by some of plaintiffs’ ex-
perts as well as other scientists, Dr. Anderson estimated

18a

the value of an acre of tropical mangrove swamp to be
$50,000, based on a complex analysis of the potential signifi-
eance of such land to food supply, energy supply, fisheries,
wood products, aesthetics, recreation and similar factors.
From his analysis of other evidence produced at trial, Dr.
Anderson testified he considered about three acres of the
West Mangrove area to be a total loss, thus producing a
damage figure of $150,000. He stated, however, that his
estimate of $50,000 was a “yardstick” which could be applied
to any number of acres of mangroves that plaintiffs could
show had been substantially damaged. Dr. Anderson
pointed out that plaintiffs’ expert Dr. Lugo had written a
paper, on which Dr. Anderson partly relied, putting a more
conservative valuation of $35,000 to $40,000 per acre on the
mangroves of Bahia Sucia.

Dr. Anderson also offered to testify in behalf of defend-
ants’ proposal that, as an alternative to massive replanting
in the West Mangrove area, reforestation of the Cabo Rojo
peninsula could be attempted. He stated that he was
familiar with this technique of alternate-site restoration,
and that it had been used in several states as a condition for
permitting activities that would result in destruction of cer-
tain areas of marshland. Dr. Anderson’s testimony on this
point was excluded on grounds of irrelevancy. “I am in-
volved here, solely, with establishing a dollar amount of
damages,” the court said. “[W]hether as an alternate
remedy in the settlement, the restoration of other man-
groves, or of these mangroves... could be proposed is out-
side the scope of this case; unless I am shown something to
the contrary.”

Finally, defendants presented testimony by David R.
Stith, a marine contractor with experience in oil spill clean-
up operations, including the Bahia Sucia cleanup. Stith
testified he had prepared an estimate of the cost of remov-
ing the oil-econtaminated sediments from 2.6 to 2.9 acres of
the West Mangrove area using a suction device mounted on

14a

a floating barge. His estimate for this work totaled
$396,859. Stith also offered to testify he had estimated the
cost of constructing a channel system as proposed by Dr.
Teas for replanting at the Cabo Rojo lighthouse. This esti-
mate was $152,310. As with Dr. Anderson’s, the district
court excluded this testimony as irrelevant since it did not
concern the damaged area. The total of defendants’ pro-
posed remedial measures was just under $1 million.

C.

The district court made the following findings on the
issue of damages:

“1. Plaintiffs’ proven claim of damage to marine
organisms covers an approximate area of about 20
acres in and around the West Mangrove. The
surveys conducted by Plaintiffs reliably establish
that there was a decline of approximately 4,605,486
organisms per acre as a direct result of the oil spill.
This means that 92,109,720 marine animals were
killed by the COLOCOTRONT oil spill. The uncon-
tradicted evidence establishes that there is a ready
market with reference to biological supply labora-
tories, thus allowing a reliable calculation of the cost
of replacing these organisms.” The lowest possible
replacement cost figure is $.06 per animal, with many
species selling from $1.00 to $4.50 per individual.
Accepting the lowest replacement cost, and attaching
damages only to the lost marine animals in the West
Mangrove area, we find the damages caused by
Defendants to amount to $5,526,583.20.

2. The evidence is overwhelming to the effect that
the sediments in and around the West Mangrove
continue to be impregnated with oil. The solutions
proposed by Plaintiffs to this problem are unaccept-
able in that they would bring about the total destruc-
tion of this environment without any real guarantee
of ultimate success. Furthermore, there is substan-

15a

tial scientific evidence to the effect that much of the
undesirable effects of the oil in the sediments will be
corrected in time by the weathering processes of
nature. The most affected spots in the West Man-
grove cover an area of approximately 23 acres. It is
the Court’s opinion that these areas can best be re-
established by the intensive planting of mangrove
and restoration of this area to its condition before
the oil spill. The evidence shows that the planting
of mangrove runs at about $16,500 per acre, thus
bringing the cost of replanting 23 acres to $379,5U0.
The evidence further demonstrates that the planting
will require a five year monitoring and fertilizing
program which will cost $36,000 per year or $180,000
for the five years. The total damages thus suffered
by Plaintiffs by reason of the pollution of the man-
grove in the West Mangrove amount to $559,500.

3. Plaintiffs incurred in cleanup costs in the
amount of $78,108.89 which were not reimbursed
from any source, and they are entitled to recover
said damages from Defendants.

42. As explained previously, the affected flora and fauna
were part of a trust held for the people by the Common-
wealth of Puerto Rico. See, Lacoste v. Department of Con-
servation, 263 U.S. 545, 549, 44 S.Ct. 186, 68 L.Ed 437
(1924); Geer v. Connecticut, supra. Perforce, the Com-
monwealth must have the ability to have the corpus of said
public trust reimbursed for the diminution attributable to
the wrongdoers. State Dept. of Environmental Protection v.
Jersey Central Power & Light Co., supra, at 673-674. We
recognize that no market value, in the sense of loss of
market profits, can be ascribed to the biological compon-
ents of the Bahia Sucia ecosystem. The Court will thus
refer to market cost as the most reliable evidence of the
quantum of damages actually sustained, i.e., what is required
to make the Plaintiffs whole. This will compromise the cost
of restoring the affected areas to the condition in which they
were before the occurrences. See Feather River Lumber Co.
v. United States, 30 F.2d 642, 644 (C.A. 9, 1929).”

456 F. Supp. 1327, 1344-45 & n. 42 (D.P.R. 1978).

16a

The judgment of the district court was entered August
22, 1978. During the pendency of their appeal from this
judgment, defendants filed a motion for relief from judg-
ment pursuant to Fed, R. Civ. P. 60(b)" and for correction
of the record pursuant to Fed. R. Civ, P. 60(a). These
motions were denied in the district court by order dated
August 10, 1979. Defendants’ appeal from this order has
been consolidated with the pending appeal of the original
judgment."

TT,

Defendants first contend the district court abused its dis-
cretion by striking their pleadings on the issue of liability
and their petition for exoneration from and limitation of
liability.’ Defendants argue that this sanetion—which
amounted to a default judgment on liability and left open
only the question of damages—was an unreasonably harsh
penalty for any pretrial misconduct they may have en-
gaged in.

The district court acted pursuant to Fed. R. Civ. P. 37(b),
which provides that where a party has failed to obey a

11. See Commonwealth of Puerto Rico v. SS Zoe Colocotroni,
601 F.2d 39 (1st Cir. 1979).

12. In light of our disposition of this case, we do not reach de-
fendants’ appeal from the district court’s denial of their Rule 60
motions. On remand, defendants are free to resubmit to the district
court such of the evidence supporting their Rule 60 motions as is
relevant to the issues remaining to be decided.

13. The Limitation of Liability Act of 1851, 46 U.S.C. § 183,
provides that in the event of an accident “incurred without the privity
or knowledge” of the vessel owner, the liability of the owner for
property damage “shall not . . . exceed the amount or value of the
interest of such owner in such vessel, and her freight then pending.”
Defendants petitioned pursuant to 46 U.S.C. § 185 to have their
liability limited to $650,000—the amount deposited with the court
as security for the vessel. For a discussion of the Act as it relates to
oil pollution litigation, see Mendelsohn & Fidel, Liability for Oil
Pollution-United States Law, 10 J.Mar.L. & Com. 475, 475-477
(1979).

17a

discovery order, the court “may make such orders in regard
to the failure as are just, and among others the following:

“(A) An order that the matters regarding which the
order was made or any other designated facts shall
be taken to be established for the purposes of the
action in accordance with the claim of the party ob-
taining the order;

(B) An order refusing to allow the disohedient party
to support or oppose designated claims or defenses,
or prohibiting him from introducing designated mat-
ters in evidence;

(C) An order striking out pleadings or parts there-
of, or staying further proceedings until the order is
obeyed, or dismissing the action or proceeding or
any part thereof, or rendering a judgment by default
against the disobedient party ....” (Emphasis
added.)

The Supreme Court has stated that the appropriate stan-
dard of review for orders of this nature “is not whether
this Court, or whether the Court of Appeals, would as an
original matter have dismissed the action; it is whether the
District Court abused its discretion in so doing.” National
Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S.
639, 642 (1976) (per curiam); see also Luis C. Forteza e
Hijos, Inc. v. Mills, 534 F.2d 415, 410 (1st. Cir. 1976), The
question is whether the district court’s findings “are fully
supported by the record.” 427 U.S. at 642.

In the present case, the district court found that defend-
ants had exhibited “bad faith and a callous disregard of
their responsibilities in this litigation.” Defendants’ con-
duet, which the district court characterized as “an affront
to this Court’s dignity,” was found to have severely —pre-
judiced plaintiffs’ preparation of their case as well as the
court’s attempts to ensure that the trial proceeded as sche-

18a

duled. These conclusions were based on the following facts,
which appear in the record.

On June 7, 1977, the magistrate convened a status con-
ference at which it was agreed by all parties that discovery
in this long-pending case would be completed by August 1 in
contemplation of a September 7 pre-trial conference and a
November 7 trial date. Depositions of the defendant corpo-
rations were scheduled to be taken in Puerto Rico on July 5,
6and7. A further status conference was slated for August
17. The depositions were duly noticed on June 13.

On July 5, 1977, without prior notice, defendants’ corpo-
rate officials failed to appear for the scheduled deposition
sessions. At plaintiffs’ request, the magistrate convened an
in-chambers conference the same day to consider what re-
sponse to make. At that meeting, counsel for defendants
stated that, contrary to the earlier agreement, his clients
were only willing to be deposed in England in August. The
court ordered defendants’ counsel to ascertain by July 11
whether his clients would be amenable to appearing in
Puerto Rico for depositions during the week of July 26.
A second magistrate’s hearing was set for July 11, at which
time counsel for plaintiffs, if they so desired, were to move
for sanctions and attorneys’ fees."

On July 11, 1977, the court was informed that the parties
had agreed to reschedule the aborted depositions for Aug-
ust 3, 4 and 5, 1977, and that they would be conducted in
Puerto Rico. The magistrate’s hearing was cancelled and
two days later the district court extended the discovery
deadline to August 31, indicating that no further alterations
in the pre-trial schedule would he allowed. At the request
of the United States, the depositions scheduled for August
3, 4 and 5 were eventually moved, with the consent of all
parties, to August 17, 18 and 19. Appropriate notices were

14. Such a motion was in fact made, and on July 29, 1977 the
court ordered defendants to pay $467.25 to the United States and
$750 to the Commonwealth of Puerto Rico and the EQB. No appeal
was taken from that order.

19a

served August 10, and the court gave formal approval to
the change on August 15.

On August 16, counsel for defendants, A. Santiago Villa-
longa, phoned counsel for the Commonwealth of Puerto Rico
to inform him that defendants’ witnesses did not intend to
appear the next day. The witnesses’ appearances would be
superfluous, he said, because defendants intended to admit
liability. This concession was repeated to the magistrate
on the 17th of August by Francisco Bruno, who was sub-
stituting for Santiago as defendants’ counsel at the status
conference previously slated for that day. Like Santiago,
Bruno asserted that the admission of liability obviated the
need for taking further depositions.

At this time, counsel for the United States raised, among
others, the question whether defendants’ admission of
liability extended to a waiver of defendants’ petition to limit
liability to the value of the vessel and cargo. When defend-
ants’ substitute counsel was unable to provide a clear an-
swer, the magistrate ordered defendants to file a written
admission of liability within fifteen days. The magistrate
also agreed to reschedule the pre-trial conference from Sep-
tember 7 to October 25 and confirmed that the trial—now
thought to be limited to the damages issue—would still com-
mence on November 7.

Defendants did not file a written admission of liability
within fifteen days, as ordered, nor did they file any paper
explaining their behavior. When the magistrate learned
that no admission had been filed, he ordered a Some Dis-
position Conference for October 7, 1977 to determine the
present status of the matter. At the conference, defend-
ants’ counsel stated, for the first time, that the August 17
admission of liability was neither authorized by all the de-
fendant companies nor unlimited as to amount. Rather,
said Santiago, the admission was intended to extend only
to the amount of the bond for the vessel—$650,000. The
magistrate thereupon ordered each defendant either to ad-

20a

mit liability without limit as to amount—except for the
limits of applicable insurance policies—by October 14, or
to produce witnesses for deposition on October 17.'° De-
fendants were explicitly warned that failure to comply with
this order could result in the striking of their pleadings and
of the petition for limitation of liability.

On October 14, 1977, instead of admitting liability, defen-
dants moved for a postponement for one week of the deposi-
tions set for October 17, and a rescheduling of the pre-trial
conference slated for October 25. On October 17, plaintiffs
moved the court to strike defendants’ pleadings on liability,
and a hearing before the magistrate was held the same day.
After reviewing the facts recited above in detail,'’® the
magistrate recommended that defendants’ pleadings on

15. Defendants now contend they misunderstood this order and
believed the depositions were to be taken October 19. The record
contradicts this assertion, however, as defendants’ own contem-
poraneous submissions, with one exception, make reference to the
October 17 date, and this is the date which appears plainly in the
court’s written order.

16. Though the magistrate did not explicitly cite earlier conduct
of the defendants, plaintiffs assert that defendants’ earlier conduct
also evidenced their bad faith attitude toward the discovery process.
On June 20, 1973, at the outset of the litigation, the court denied a
motion by Vicente M. Ydrach, a San Juan attorney representing the
West of England firms, to quash a notice of deposition and subpoena
duces tecum issued June 5. Despite an order directing Ydrach to
comply with the subpoena by June 23, he appeared at his deposition
and refused to answer questions or produce documents on the ground
of attorney-client privilege. Defendant West of England-Luxembourg
was subsequently ordered to deposit all subpoenaed documents with
the court so that the magistrate could separate those that were discov-
erable from those that were privileged. The magistrate’s report was
issued March 21, 1974. West of England filed eight motions for
extension before finally submitting its objections to the magistrate’s
report on October 11, 1974. On September 17, 1975, the district
court, adopting the magistrate’s report, ordered West of England to
produce the discoverable documents. The order was not obeyed.
Plaintiffs moved for sanctions. After a hearing, the district court on
November 7 repeated its order to West of England, noting that failure
to comply within ten days would result in all pleadings and defenses
being stricken, all motions being denied, and a default judgment being
entered. This order apparently was obeyed.

2la

liability be stricken, or in the alternative that defendants
pay $21,000 to the affected parties plus $500 for each day
trial would be delayed by postponing the depositions, orig-
inally scheduled for July 5, to October 24. Following a
hearing on October 20, the district court adopted the magis-
trate’s recommendation that defendants’ pleadings, and
their petition for limitation of liability, be stricken.

We believe the record supports the district court’s find-
ing that defendants’ conduct was inexcusably recalcitrant
and that it materially prejudiced plaintiffs’ trial prepara-
tion and the court’s legitimate efforts to keep this pro-
tracted lawsuit moving forward. The fuleruin upon which
this course of conduct turned was defendants’ attempt at
the August 17 status conference to avert the scheduled
depositions by purporting to admit liability so as to make
the depositions unnecessary. Had plaintiffs known the ad-
inission of liability was not meant to exceed the $650,000
already deposited in court, they plainly would not have ac-
ceded to the cancelling of the depositions. All the parties
clearly understood that the “privity and knowledge” of the
owners would be a major issue when plaintiffs sought to
break defendants’ petition for limitation of liability. The
manifest purpose of the depositions scheduled for July 5,
and later for August 17, was to explore the question of priv-
ity, and to try to establish defendants’ knowledge of various
alleged defects in the ZOK COLOCOTRONT’s navigational!
and safety equipment, If defendants intended to admit
liability only within the limits of 46 U.S.C §183, even
though they did not so state, then their assertion that fur-
ther depositions would be unnecessary was highly mislead-
ing. It had the effect of lulling plaintiffs into a false
sense that the issue of liability was settled, at the same
time the approaching trial date made it increasingly un-
likely that sufficient time would be available later for full
discovery to be conducted.

22a

Nothing in defendants’ conduct subsequent to August 17
in any way cured or mitigated the misleading effect of
their purported admission of liability. Ordered to pro-
duce a written admission of liability, spelling out the details
of their concession, within fifteen days, defendants made
no formal response. Ordered again, following the Some
Disposition Conference, either to adinit liability in writing
or to produce witnesses for deposition, defendants did
neither, but instead at the last moment requested yet an-
other delay. As we said under similar circumstances in
affirming the dismissal of a case for want of prosecution,
“There comes a point when the question arises who is
running the court—counsel, or the judge. To this there
can be but one answer.” Higuera v. Pueblo International,
Inc., 585 F.2d 555, 557 (1st Cir. 1978).

Defendants insist the district court exceeded its disere-
tion in striking their pleadings and preventing their de-
fenses from being considered on the merits. They point
out that the enforcement of procedural rules through
punitive default judgments may offend the standards of
due process. See Societe Internationale y. Rogers, 357 U.S.
197 (1958) ; Hovey v. Elliott, 167 U.S. 409 (1897). But the
district court’s response here was not purely punitive—or
“mere punishment” in the words of Hammond Packing Co.
v. Arkansas, 212 U.S. 322, 351 (1909); its actions bore a
direct and reasonable relation to the prejudice defendants’
irresponsible conduct had already created. See 4A Moore’s
P -deral Practice J 37.03 [2.-1] at 37-56. Whether defend-
anis planned all along to limit their unqualified admission
of liability, or whether this idea arose as an afterthought,
they gained a considerable strategic advantage by their
misrepresentations. The district court could protect plain-
tiffs only by either further delaying trial or by holding
defendants to their counsel’s original unqualified admission
of liability. The latter course, which the court adopted,

23a

was somewhat analogous to the imposing of an equitable
estoppel. In the circumstances we see no violation of due
process nor any abuse of the court’s discretion. See Na-
tional Hockey League v. Metropolitan Hockey Club, 427
U.S. 639, 643 (1976); Hammond Packing Co v. Arkansas,
212 U.S. 322, 350-51 (1909) ; Luis C. Forteza e Hijos, Inc. v.
Mills, 584 F.2d 415, 419 (1st Cir. 1976); cf. Note, The
Emerging Deterrence Orientation in the Imposition of Dis-
covery Sanctions, 91 Harv. L. Rev. 1033, 1044-45 (1978).

III.

Defendants next argue that the district court’s attitude
toward them was “poisoned” by the court’s unwarranted
reliance on depositions of the crew and master of the ZOK
COLOCOTRONI to make unnecessary findings on the issue
of liability, see 456 F. Supp. at 1333-36. Defendants
contend that the depositions, which were taken immediately
after the vessel docked in Puerto Rico, were not properly
introduced as evidence, and that they represented an
attempt by the crew and captain to shift blame for the
accident from themselves to the owners. Moreover, defend-
ants argue, it was unnecessary for the court to make any
findings on liability once it had stricken defendants’ plead-
ings. The only purpose served by such findings, accord-
ing to defendants, was to prejudice the court on the issue
of damages.

We agree that the findings on liability were redundant.
It would have been enough if the allegations in the com-
plaint pertaining to liability had been taken as established.
The depositions, moreover, had been received only in sup-
port of plaintiffs’ claim for punitive damages, which was
thereafter abandoned. But we are not persuaded that the
court’s consideration of extraneous liability matters caused
undue prejudice or prevented it from fairly deciding the
damages issue. As we sustain the court’s striking of

24a

defendants’ pleadings, nothing more favorable to defend-
ants could have been found than was found on the issue
of liability, and we do not think the record displays a
judicial attitude that was “poisoned” against the defend-
ants with respect to the issues that remained.’”

IV.

The West of England defendants, insurers of the ZOE
COLOCOTRONI, argue the district court erred in assert-
ing personal jurisdiction over them. The insurers main-
tain they are outside the reach of the District Court for the
District of Puerto Rico because they have no office, sell no
insurance, and purportedly transact no business in Puerto
Rico. To sustain in personam jurisdiction over a foreign
corporation, the court must find both that personal juris-
diction is authorized by the local statute and that the exer-
cise of such jurisdiction does not violate the due process

17. Defendants challenge one further aspect of the district court’s
findings. Based on the depositions and other exhibits of the crew and
master, the court found that the owners knowingly and negligently
permitted the ZOE COLOCOTRONI to depart Venezuela in an
unseaworthy condition. In their brief, defendants assert that the
standard marine insurance contract exempts the insurer from the duty
to cover losses engendered by the owners’ knowing use of an unsea-
worthy vessel. Defendants apparently have reference to Rule 30 (b)
(ii) of the “Rules and List of Correspondents” of West of England,
which provides:

“Notwithstanding anything contained in Rule 15 or any other
agreement between the Association and an insured Owner the
insurance afforded by the Association shall not extend to lia-
bilities, costs or expenses attributable to the willful miscon-
— MY the insured Owner or his Managers.” (Emphasis
added. )

The insurers’ argument is that it is inconsistent to hold them liable in
light of the district court’s findings as to the owners’ degree of fault.

For purposes of this litigation, which involved no cross-claims
between the insurers and the owners, it is enough to say that all the
defendants’ pleadings on liability were stricken—including the
insurers’ defenses based on the terms and conditions of the insurance
contract. As we have herein upheld the striking of the pleadings,
defendant insurers were properly barred from raising this defense
against plaintiffs.

25a

requirement that the nonresident defendant will have cer-
tain “minimum contacts” with the forum state. See World-
Wide Volkswagen Corp. v. Woodson, 48 U.S.L.W. 4079,
4081 (1980); International Shoe Co, v. Washington, 326
U.S. 310, 316 (1945). These contacts must be such that the
assertion of jurisdiction comports with “traditional no-
tions of fair play and substantial justice.” Jd., quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940).

Plaintiffs advanced two theories in the district court to
justify in personam jurisdiction over West of England.
First, plaintiffs argued that documents obtained from West
of England’s local law firm—Hartzell, Ydrach, Mellado,
Santiago, Perez & Novas of San Juan, Puerto Rico (herein-
after Hartzell)—demonstrated that the Hartzell firm was
actually West of England’s “managing or general agent”
in Puerto Rico, such that the firm was impliedly authorized
to accept service of process on West of England’s behalf.
See Fed. R. Civ. P. 4 (d) (3); 2 Moore’s Federal Practice
1 4.12, 4.22 [1!. These documents consisted primarily of
files of matters handled for defendants by Hartzell, pamph-
lets listing Hartzell as “correspondent” for defendants, and
instructions issued to Hartzell on its duties as a correspon-
dent. The files showed that Hartzell had, among other
things, arranged on behalf of West of England and various
insured owners for the burial of a deceased Egyptian sailor
with appropriate religious observances, for the repatria-
tion by air of several &ther sailors, and for wumerous sur-
veys and other investigations in connection with possible
claims for damage or injury. The district court ruled, how-
ever, that these activities by Hartzell were so “substantially
intertwined with Hartzell’s primary professional func-
tions” as defendants’ retained law firm that it could not
hold Hartzell to be a “managing or general agent” for pur-
poses of accepting service of process on Hartzell’s client.

Plaintiffs’ second argument was related to the first, but
had a narrower focus. Federal Rule of Civil Procedure 4(e)

26a

provides that, constitutional limitations aside, personal
jurisdiction may be asserted over a nonresident defendant
in the district court to the extent permitted by the long-
arm statute of the state in which the court is sitting. See
2 Moore’s Federal Practice J 4.01 [1]. Puerto Rico’s long-
arm statute is expressed in Rule 4.7 of the Puerto Rico
Rules of Civil Procedure which provides, in pertinent part,

“(a) Where the person to be served is not within
Puerto Rico, the General Court of Justice of Puerto
Rico shall have personal jurisdiction over said non-
resident as if he were a resident of the Common-
wealth of Puerto Rico, if the action or claim arises
as a result of the following:

(1) Such person or his agent carries out business
transactions within Puerto Rico.”

32 L.P.R.A., App. II, R.4.7, Rule 4.7 “permits the exercise
of jurisdiction to the full extent of constitutional author-
ity,” limited only by the due process analysis of Interna-
tional Shoe and succeeding cases. Vencedor Manufactur-
ing Co., Inc. v. Gougler Industries, Inc., 557 F.2d 886, 889
(1st Cir. 1977). Plaintiffs argued below that West of
England’s business contacts with Puerto Rico—in par-
ticular, its regular writing of insurance covering vessels
like the ZOE COLOCOTRONI, which visited Puerto Rico
and operated within Puerto Rican waters—satisfied both
the statutory and constitutional tests. The district court
agreed.
We think this conclusion is correct. The essential con-
stitutional question is whether West of England “purpose-
fully avail[ed] itself of the privilege of conducting activ-
ities within the forum State. thus invoking the benefits and
protections of its laws.” Hanson v. Denckla, 357 U.S. 235,
253 (1958). The record makes clear that West of England
did precisely that. The Hartzell files revealed numerous

27a

instances in which ships insured by West of England were
involved in incidents giving rise to claims or potential
claims while the ships were present in Puerto Rican waters.
In each of these instances, West of England’s local corre-
spondent Hartzell was instructed to take actions to fore-
stall claims, to provide services for the shipowners, or to
prepare for any eventual litigation. West of England ad-
vertised to insured shipowners the fact that such services
would be available through its local Puerto Rican corre-
spondent. The contracts of insurance contained no pro-
vision preventing any ship from calling on Puerto Rico, or
limiting coverage in the event it did. Not only do we know
that vessels mentioned in the Hartzell files visited Puerto
Rico, it stands to reason that many other West-insured ves-
sels also did so, as the Hartzell files would name only
vessels on which claims or other noteworthy incidents
occurred. While West of England was not engaged in
selling insurance in Puerto Rico, its retention of the Hart-
zell law firm to perform services for insured owners and
vessels in Puerto Rico demonstrates that West of England
plainly expected its worldwide business of insuring mari-
time risks to embrace the territorial waters of Puerto Rico
with some regularity.

In certain ways, this case poses less difficulty than Amer-
ican & Foreign Insurance Association [AFIA] v. Common-
wealth Insurance Co., 575 F.2d 980 (1st Cir. 1978), where
we upheld the Puerto Rico district court’s jurisdiction over
two nonresident insurance companies operating out of
Colombia. The district court in AFITA found that the in-
surance policy in issue covered a large volume of bottles
regularly shipped from Colombia to Puerto Rico, and that
one of these bottles injured plaintiff when it exploded. As
the nonresident insurers knew from the terms of the policy
both the volume of bottles being shipped and their destina-
tion, we held that the “companies’ undertaking to insure
a substantial subject of insurance in Puerto Rico was

28a

‘voluntary in [a] meaningful sense.’” Jd, at 982, quoting
Vencedor Manufacturing Co., Inc. v. Gougler Industries,
Inc., 557 F.2d 886, 891 (1st Cir. 1977). There was no indi-
cation in AFTA that the insurance companies provided any
substantial services to the insured bottler in Puerto Rico
or that the insurers’ contacts with Puerto Rieo extended
hevond this one series of transactions.

To be sure, as West of England points out, the record in
the present case does not indicate any explicit undertaking
by West of England to insure vessels within Puerto Rican
waters. But this fact, standing alone, does not suffice to dis-
tinguish the American & Foreign Insurance case. West of
England plainly knew that vessels it insured would call on
Puerto Rico from time to time, and it made no apparent
effort to halt or limit this practice. In fact, by advertising
the name of its local correspondent in San Juan, West of
England affirmatively encouraged such commerce. This is
not a case of a single isolated and unpreventable appearance
of an insured vessel in Puerto Rican waters; the record
shows such appearances were a readily foreseeable part of
the normal course of business.

West of England contends, however, that its ability to
foresee that insured vessels would enter Puerto Rican ter-
ritorial waters does not, without more, satisfy the “mini-
mum contacts” test of jurisdiction. The Supreme Court ha:
recently stated that “ ‘foreseeahilitw’ alone has never been a
sufficient benchmark for personal jurisdiction under the Due
Process Clause,” World-Wide Volkswagen Corp. v. Wood-
son, 48 U.S LAW, 4079, 4082 (1980). In Woodson, plaintiffs
brought a products liability action in Oklahoma against the
regional distributor and the retailer of an automobile sold in
New York but involved in an Oklahoma accident. The Court
held Oklahoma’s assertion of jurisdiction over the two New
York corporations to be a violation of due process, since
their only connection with Oklahoma was the fortuity that

the car they sold passed through the state after it had left
their hands.

29a

“The foreseeability that is critical to due process analysis
is not the mere likelihood that a product will find its way
into the forum State,” the Court said. “Rather, it is tha
the defendant’s conduct and connection with the forum is
such that he should reasonably anticipate being haled into
court there.” Jd. at 4082. The reason for this distinction,
according to the Court, is the need to permit “potential
defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will
not render them liable to suit.” Id.

Woodson is distinguishable from the present case on two
grounds. First, this is not a case of mere foreseeability,
without more, that a single insured vessel would wander
into Puerto Rico by happenstance. Plaintiffs established
that vessels insured by West of england frequented Puerto
Rico regularly over a period of years, and that they were
provided with insurance-related services while there. West
of England was unavoidably aware that it was responsible
to cover losses arising from a substantial subject of insur-
ance regularly present in Puerto Rico, a direct action juris-
diction. Second, the seller of a product such as the auto-
mobile in Woodson ordinarily has no control over where
the buver takes the product after it is sold. If the mere
fortuity of the presence of the seller’s product in another
jurisdiction subjected the seller to suit in that forum, the
seller “would in effect appoint the chattel his agent for ser-
vice of process. His amenability to suit would travel with
the chattel.” Jd. at 4082. By contrast, an insurer such as
West of England has the power through its contracts of
insurance meaningfully to influence the course taken by
insured vessels. By limiting coverage to specified jurisdic-
tions, West of England could be reasonably certain it would
not be haled into court in an undesired forum. In other
words, an insurer is not at the mercy of the insured owners’
unilateral choice of destination in the same way a seller of
chattels is at the merey of the buyer.

30a

Where, as here, the insurer has the means available to
structure its primary conduct so as to control the area
within which it will be subject to direet action, where it
is undoubtedly aware that the objects of its policies are
regularly present in a particular jurisdiction, and where
it not only does not act to curtail such presence but actively
promotes it by providing contractual services in the juris-
diction, we hold that such an insurer is amenable to per-
sonal jurisdiction in the forum.'®

V.

We now turn from procedural matters to the extremely
difficult substantive issues concerning damages. Defend-
ants challenge: (A) the so-called “standing” of Puerto
Rico and the HQB to recover damages for euvironmental
injury; (B) the district court’s failure to limit damages
by commercial or market value standards; and (C) the
approach and data relied upon by the court in assessing
damages.

A.

We turn first to the issue of plaintiffs’ right to bring this
lawsuit. The district court held that the Commonwealth
had “standing” to recover for damages to natural re-
sources, namely the mangrove trees and the various species
of marine creatures living in and around them, on the
theory that the Commonwealth was the “trustee of the
public trust in these resources” and had an interest in them

18. The result we reach is further buttressed by the Supreme
Court’s occasional suggestions that the test for measuring minimum
contracts for insurance companies may be somewhat less stringent
than for other nonresident corporations because of the forum state’s
public policy interest in promoting effective redress for injuries. See
McGee v. International Life Insurance Co., 355 U.S. 220, 223
(1957) ; cf. Hanson v. Denckla, 357 U.S. 235, 252 (1958). Here the
maritime accident resulted in injury to Puerto Rico’s coastal environ-
ment, and plaintiffs represented this forum-related interest.

31a

as parens patriae. 456 F. Supp. at 1337; see M aryland v.
Amerada Hess Corp., 350 F. Supp. 1060 (D. Md. 1972) ;
Maine v. M/V Tamano, 357 F. Supp. 1097 (D. Me. 1978) ;
In re Steuart Transportation Co., No. 76-697-N (H.D. Va.
1980). The court also ruled that the Environmental Quality
Board had standing to proceed as co-plaintiff seeking
similar relief under a state statute authorizing the EQB
to bring damages actions for environmental injuries. 456
I’, Supp. at 1837; 12 L.P.R.A. $1131 (29).

While the parties and the district court speak in terms
of “standing,” we think the question is more properly
whether plaintiffs have stated a cognizable cause of
action.!? Defendants concede that Puerto Rico, as owner
of the real property primarily affected by the oil spill,
see 48 U.S.C. § 749, would, like any private landowner, have
a cause of action in admiralty to recover whatever damages
it could prove under conventional principles for its private
economic loss as measured by diminution of market value
in the coastal land. See 46 U.S.C. § 740. The Common-
wealth made no attempt to show such damages, however.
It seeks relief instead under an asserted right to recover
as a governmental entity on behalf of its people for the
loss of living natural resources on the land such as trees
and animals.”

19. Plaintiffs’ Article III standing is not challenged here, since,
assuming plaintiffs have a valid cause of action, they clearly are the

proper parties to raise it. See Davis v. Passman, 442 U.S. 228, 239
& n.18 (1979).

20. We note at this point several questions which are not pre-
sented in this case, and on which we express no opinion. First, since
the lands in question were all owned by Puerto Rico, we need not
decide whether or in what circumstances a state might have a cause
of action for environmental harm to privately owned land. Second,
since the living natural resources in issue here were all attached more
or less permanently to the land, we also do not decide whether any
cause of action would accrue, and if so what remedies would be
available, where more transitory forms of wildlife such as birds or
fish were damaged. Third, this case does not present the issue of
overlapping state and federal causes of action. While the Federal

32a

Defendants contend that Puerto Rico’s assertion of a
recoverable interest in wildlife and other living natural
resources is undercut by a line of Supreme Court cases
culminating in Hughes v. Oklahoma, 441 U.S. 322 (1979).
* See also Douglas v. Seacoast Products, Inc., 431 U.S. 265,
284 (1977); Toomer v. Witsell, 334 U.S. 385, 402 & n.37
(1948) ; Missouri v. Holland, 252 U.S. 416, 434 (1920) ; ef.
Geer v. Connecticut, 161 U.S. 519 (1896). In Hughes, the
Court formally overruled Geer v. Connecticut, invalidating
on Commerce Clause grounds a state ban on interstate
transportation of wildlife lawfully caught in the state and
completing the long erosion of Geer’s theory of state owner-
ship of wildlife. The court recognized, however, that states
retain an important interest in the regulation and conser-
vation of wildlife and natural resources. “[{T]he general
rule we adopt in this case makes ample allowance for pre-
serving, in ways not inconsistent with the Commerce Clause,
the legitimate state concerns for conservation and protec-
tion of wild animals underlying the 19th Century legal
fiction of state ownership.” 441 U.S. at 335-36. Later
the Court said, “We consider the States’ interests in con-
servation and protection of wild animals as legitimate local
purposes similar to the States’ interests in protecting the
health and safety of their citizens.” Id. at 337.

Plaintiffs argue that a state regulatory interest in wild-
life and other living resources, expressed metaphorically in
the state’s status as “public trustee” of its natural re-

Clean Water Act of 1977 specifically stated that it did not preempt
the imposition by a state of “any requirement or liability with respect
to the discharge of oil or hazardous substance into any waters within
such State,” 33 U.S.C. § 1321 (0) (2), a problem of double re-
covery might be raised under some circumstances. Here, however,
the United States made ao claim for environmental damage (at the
time this case arose there was no federal statute authorizing such an
action) and asserted no legal interest in the affected lands. The
interplay of the state cause of action asserted here with the federal
remedial legislation discussed infra is an issue we therefore leave for
another day.

33a

sources, is sufficient in itself to support an action for dam-
ages to those resources, See, ¢.9., Maryland v. Ame ‘ada
Hess Corp., 350 F. Supp. 1060, 1066-67 (D. Md. 1972).
Defendants reply that, absent a proprietary interest in the
resource actually damaged, a state’s unexercised regulatory
authority over wildlife will not support a proper cause of
action. See, e.g., Commonwealth v. Agway, Inc., 210 Pa.
Super. 150, 232 A.2d 69 (1967)). We see not need to decide
this difficult question in the present case. Here the Com-
monwealth of Puerto Rico, exercising its undisputed author-
ity to protect and conserve its natural environment, has
by statute authorized one of its agencies to maintain actions
of this sort. Under the statute, 12 L.P.R.A. $1131 (29),
co-plaintiff Environmental Quality Board has, among
others, the following duties, powers and functions :

“(29) To bring, represented by the Secretary of Jus-
tice, by the Board’s attorneys, or by a private at-
torney contracted for such purpose, civil actions for
damages in any court of Puerto Rico or the United
States of America to recover the total value of the
damages caused to the environment and/or natural
resources upon committing any violation of this
chapter and its regulations, The amount of any
judgment collected to such effect shall be covered
into the Special Account of the Board on Environ-
mental Quality.”

We read this statute both as creating a cause of action of
the type described by its terms and as designating the EQB
as the proper party to bring such an action. We see noth-
ing in Hughes v. Oklahoma or in the federal Constitu-
tion to prohibit such legislation. Whatever might be the
case in the absence of such a local statute, we think that
where the Commonwealth of Puerto Rico has thus legisla-
tively authorized the bringing of suits for environmental
damages, and has earmarked funds so recovered to a special!

34a

fund, such an action must be construed as taking the place
of any implied common law action the Commonwealth, as
trustee, might have brought. Any other construction would
invite the risk of double recovery and lead to confusion as
to the rights of the two state plaintiffs in their identical
or nearly identical actions. It is unnecessary, therefore,
for us to consider whether, had the legislature of Puerto
Rico not delegated to the EQB the right to maintain such
suits, the Commonwealth would have an inherent right to
bring them itself.

Defendants assert, as a sort of last ditch rebuttal to this
line of argument, that the present action is not authorized
under section 1131 (29), because plaintiff EQB failed to
allege in the complaint “any violation of this chapter and
its regulations.” This assertion is erroneous. In the third
amended complaint, plaintiff specifically alleged a violation
of 24 L.P.R.A. § 595, which provides:

“Tt shall be unlawful for any person, directly or indi-
rectly, to throw, discharge, pour or dump, or permit
to be thrown, discharged, poured or dumped into the
waters, any organic or inorganic matter capable of
polluting or of leading to the pollution of said waters
in such manner as to place them out of the minimum
standards of purity that the Secretary of Health
may establish under section 599 of this title.”

This statute is explicitly made a part of Title 12, chapter
121 by 12 L.P.R.A. § 1132 (b). The “minimum standards of
purity” referred to in section 595 have been promulgated,
and they make clear that any unauthorized discharge of
petroleum into the waters—including the territorial waters
—of Puerto Rico is considered unlawful. See P.R. Rules &
Regulations, Title 24, § 598-5. Defendants’ challenge to the
right of the EQB to maintain this action is thus without
merit.

{Da

Equally unavailing would be any argument that this state
statutory action is not cognizable in admiralty. An oil
spill on the navigable waters is a breach of federal mari-
time law. Maryland v. Amerada Hess Corp., 350 F. Supp.
1060, 1065 (D. Md. 1972); American Waterways Operators,
Inc. v. Askew, 335 F. Supp. 1241, 1247 (M.D. Fla. 1971)
(three-judge court), rev’d on other grounds, 411 U.S. 325
(1973); Califorma v. S.S. Bournemouth, 307 F. Supp. 922,
926 (D. Cal. 1969). Where the injury occurs in the terri-
torial waters of a state, the general rule is that admiralty
will give “broad recognition of the authority of the States
to create rights and liabilities with respect to conduct
within their borders, when the state action does not run
counter to federal laws or the essential features of an ex-
elusive federal jurisdiction.” Just vy. Chambers, 312 US.
383, 391 (1941). See also Romero v. International Termi-
nal Operating Co., 358 U.S. 354, 373-74 (1959). Defen-
dants do not argue, nor could they, that this action runs
counter to the essential features of federal jurisdiction.
See Askew v. American Waterways Operators, Inc., 411
U.S. 325 (1973).

Bb.

Defendants next argue the district court erred in failing
to apply the common law “diminution in value” rale in ¢cal-
culating damages. Under the traditional rule, the measure
of damages for tortius injury to real property is the differ-
ence in the commercial or market value of the property
before and after the event causing injury. See Restatement
(Second) of Torts § 929 (1) (a) (1979). Where the prop-
erty can be restored to its original condition for a sum less
than the diminution in value, however, the cost of restora-
tion may be substituted as a measure of damages. See, e.g.,
Big Rock Mountain Corp. v. Stearns-Roger Corp., 388 F.2d
165, 168-69 (8th Cir. 1968). Defendants introduced evi-
dence at trial tending to show that the market value of

36a

comparable property in the vicinity of Bahia Sucia was
less than $5,000 per acre, based on recent sales. Thus,
defendants contend, damages here could not have exceeded
$5,000 per affected acre even if the land were shown to have
lost all value.

We believe that defendants have misconceived the charac-
ter of the remedy created by section 1131. The EQB is not
concerned with any loss in the market or other commercial
value of the Commonwealth’s land. In point of fact, the
EQB concedes the land has no significant commercial or
market value. The claim, rather, is for the injury—broadly
eonceived—that has been caused to the natural environment
by the spilled oil. The question before us is not whether in
a typical land damage case a claim of this sort could be sue-
cessfully advanced—we assume it could not—but rather
whether Puerto Rico’s statute empowering the EQB to pro-
ceed in cases such as this envisions the awarding of dam-
ages on a different basis than would have been traditionally
allowed.

The district court found that the once flourishing natural
environment of the West Mangrove had heen seriously
damaged by the oil, to the point where some of the under-
lying sediments were no longer capable of supporting any
but the most primitive forms of organic life, such as worms.
The Puerto Rico statute aathorizing this action specifically
empowers the EQB to recover “the total value of the dam-
ages caused to the environment and/or natural resources”
upon a violation of the anti-pollution provisions. 12
L.P.R.A. § 1131 (29) (emphasis added). Implicit in this
choice of language, we think, is a determination not to re-
strict the state to ordinary market damages. Many un-
spoiled natural areas of considerable ecological value have
little or no commercial or market value. Indeed, to the ex-
tent such areas have a commercial value, it is logical to as-
sume they will not long remain unspoiled, absent some
governmental or philanthropic protection. A strict appli-

38a

Similarly, in the Outer Continental Shelf Laiids we hold that the owners of
the COLOCOTRONI are responsible for the damages re-
sulting from the dumping of oil undertaken to save the
stranded vessel.

THE STANDING OF PLAINTIFFS TO RECOVER

One of the issues in Civil Number 252-73 deals with the
standing of the Commonwealth and the E.Q.B. to sue for
damages.

As stated previously, the oil slick cane ashore at Bahia
Sucia, in Cabo Rojo, Puerto Rico. The Commonwealth and
E.Q.B. are claiming damages for the environmental dam-
age caused by this pollution te the natural resources of this
area.

22. It is our opinion that the likelihood that oil might have to
be jettisoned from the stranded vessel was one of the hazards in-
herent in her unseaworthiness. See 2 Restatement of the Law, Torts
2nd, § 449 (1965); Cf. The Maria, supra.

23. And also considering the procedural history of this litigation,
see n. 6, supra.

68a

The Commonwealth of Puerto Rico is a sovereign organ-
ized within the legal and political framework of the United
States (48 U.S.C. 731-916; 1 L.P.R.A. (Constitution of the
Commonwealth of Puerto Rico); Mora v. Mejias, 115 F.
Supp. 610 (D.C.P.R., 1953); aff’d 206 F.2d 377 (C.A. 1,
1953); Resolutions of the General Assembly of the United
Nations of November 3, 1953, A/C.4/ L 300, and Novem-
ber 27, 1953, A/PV 459), which possesses many of the
attributes of a State. Mora v. Mejias, supra, (C.A. 1,
1953) ; Ursulich v. P.R. National Guard, 384 F. Supp. 736
(D.C.P.R., 1974). As a sovereign it represents the collec-
tive interests of the People of this jurisdiction. The Com-
monwealth holds title in trust to the public property and
domain, and is charged with the protection of the People’s
interest in the same. 1 L.P.R.A., Const. P.R. Art. VI,
Sec. 8; 1 L.P.R.A. 2; see Geer v Connecticut, 16 U.S.
519, 529 (1859). In the execution of these endeavors the
Commonwealth may bring legal actions in court to protect
its property and to recover damages to the same. 3
L.P.R.A. 73.

The United States has transferred to the Commonwealth
all interest it had in the navigable waters of Puerto Rico
and their resources, and in the submerged lands and their
resources. See 48 U.S.C. 746, 747, 749. The Common-
wealth has title to all beaches and to the maritime ter-
restrial zone abutting the navigable waters, and in particu-
lar to the mangrove areas which are a part of the same.
Robert Armstrong v. Commonwealth, 97 P.R.R. 573 (1969).
The Commonwealth is thus the owner of both the living and
nonliving resources located in the navigable waters of the
Commonwealth and those on the bottom ands its subsoil,
as well as those located within the referred to maritime-
terrestrial zone. 12 L.P.R.A. 43, 44. See McCready v.
Virginia, 94 U.S. 391, 394 (1876); Toomer v. Witsell, 334
U.S. 385, 408 (1947); Manchester v. Massachusetts, 139

69a

U.S. 240 (1890); Skiriotes v. Florida, 313 U.S. 69 (1941).

The Commonwealth therefore has standing to sue to re-
cover for oil pollution harm to Bahia Sucia and related
resources because it has a proprietary interest in the same.
(State of Maine v. M/V Tamano, 357 F. Supp. 1097, 1098-
1099 (D.C. Me., 1973); State Department of Fish and
Game v. SS Bournemouth, 307 F. Supp. 922, 926-930 (C.D.
Cal. 1969) ), and because it is the trustee of the public trust
in these resources. Geer v. Connecticut, supra, at 534;
State of Maryland, Department of Natural Resources v.
Amerada Hess, supra, n. 20 at 1065-1067; State Dept. of
Environmental Protection v. Jersey Central Power & Light
Co., 308 A. 2d 671 (N.J., 1973) ; see “The Public Trust Doc-
trine in Natural Resource Law: Effective Judicial Inter-
action.”, 68 Mich. L. Rev. (1970); “Environmental Law—
Public Trust-Inquiry to Public Trust as Basis for Award
of Damages”, 5 Seton Hall L. Rev. 394 (1974). Addition-
ally, in its capacity as parens patriae, the Commonwealth
has a sovereign interest in the general welfare of its citi-
zens which transcends any injury which may be caused to
its proprietary interests or to the property of its individual
citizens. Particularly when a nuisance of disastrous pro-
portions occurs such as in the case of a maritime oil spill,
the special status of the body politic vis-a-vis its citizens
gives rise to a right to seek redress on behalf of the collec-
tive community which is not limited to the abatement of the
nuisance, but which can allow for recovery for damages by
the body politic. Missouri v. Illmois, 180 U.S. 208, 241
(1901) ; Lowsiana v. Texas, 176 U.S. 1 (1900); Georgia v.
Pa. R. Co., 324 U.S. 439, 447 (1945); Georgia v. Tenn.
Copper Co., 206 U.S. 230, 237 (1907) ; Maine v. M/V Tana-
mo, supra. See, “State Protection of Its Economy and En-
vironment, Parens Patriae Suits for Damages”, 6 Col. J of
L. & Soe. Prob. 411 (1970).

70a

The E.Q.B. is clearly granted standing to sue for envi-
ronmental damages by its enabling statute. 12 L.P.R.A.
1131 (29). It of course, does not recover damages separate
and apart from the Commonwealth.

PLAINTIFFS’ DAMAGES AND RELATED SUBJECTS
Bahia Sucia

The issue of the damages suffered by Plaintiffs and the
recovery to which they are entitled, which are the real
cruxes of the present cases, must necessarily begin with a
description of the impacted areas as wel! as of the various
flora and fauna within their confines, as they existed in
March, 1973, prior to the spill.

Bahia Sucia is a half-moon shaped bay which, as pre-
viously stated, is located in the extreme Southwestern part
of Puerto Rico. (See Appendix A). Its westernmost
point is Cabo Rojo and its eastern boundary is Punta
Molino. There is a distance of approximately 2 miles from
point to point across the mouth of the Bay, and of 4 miles
along the beach.

Bahia Sucia faces the southeast. The center of the half-
moon is about 4 miles to leeward of Arrecife Margarita,
and 8 miles to leeward from the site of the COLOCO-
TRONU’s grounding. The prevailing daytime winds and
the normal currents are generally from an easternly and
southeasternly direction, in line with the location of the
grounding, Arrecife Margarita and the mouth of Bahia
Sucia. During the nighttime the wind usually shifts to the
north or northeast. The average rainfall for this area is
50 inches a year, offset by an evaporation rate of 80 inches.
By reason of this high rate of evaporation, the area is
classified as semiarid.

The shoreline, commencing at the western extremity of
the Bay, is mostly composed of rocky limestone to the

71a

water’s edge, with some fringe coral. These characteristics
remain unaltered for approximately three quarters of a
mile until the shoreline begins to curve to the north.”
There a thin line of mangrove appears, increasing in
width as the shore curves to the north. About a quarter
mile from that point there is a small strip of sandy beach
referred to as “Dogman’s Cove.’”> Immediately thereafter
there exists a cove, which is formed in part by a peninsula
of mangrove, referred to as “Hermit One.’’° This cove
is entirely surrounded by mangrove which goes inland to
a width of several hundred yards in places, and whose total
area is in the vicinity of 50 acres. On the land side of this
mangrove area there is a large flat which borders on the
west with a dirt road. This flat, which was inhabited by
large numbers of crab, is flooded by the tide at high water.
Several scattered stands of dead mangrove stood on the
southern edge of this flat. Proceeding north from this
mangrove area, which is generally referred to as the “West
Mangrove”,”’ the shoreline becomes white calcareous sand
for the next mile and three quarters, and curves in a north-
easterly direction. This beach was inhabited mostly by
hermit and sand crab. Immediately inland of this portion
of the Bay, separated by a thin strip of brush covered
land, is a large salt water lagoon several hundred acres in
area, which is subdivided into evaporating ponds for the
nearby salt factory. Behind the extreme eastern end of
the beach there is another flat which is also flooded by the
tide and was inhabited by ghost crabs (Ocypode albican)

24. Inland of this location there is a large landlocked salt water
pond separated from the Bay by a thin strip of land. Considerable
dead mangrove was evident in the lagoon, unrelated to the present
case.

25. This is not an official name, but a label that was given by
the Court for easy reference to this location.

26. Id.

27. Id.

Bn

72a

and fiddler crabs (Uca sp.). At this end of the beach there
commences another area of mangrove which runs east for
about a mile. It stops short of Punta Molino. This man-
grove area is referred to as the “Kast Mangrove”,”® and
its width inland rarely reaches 50 yards from the shore.
Much of the landward side of this mangrove stand con-
tained patches of dead mangrove.

The mangrove that borders on the ocean fringe through-
out Bahia Sucia is a species referred to as red mangrove
(Rhizophora mangle). This mangrove has both main and
proproots, in which are located lenticels or pores for gas
exchange. These lenticels facilitate root respiration.
Various epibenthic species such as tree oysters, snails,
crabs, sponges and molluses dwelled in these roots sys-
tems.” In the waters surrounding these roots, communities
of fish, shrimp and floating or swimming organisms throve,
The hottom around the roots was inhabited by various
benthie infauna.” The bottom near the red mangrove
was covered with both turtle grass (Thalassia testudinum)
and manatee grass (Syringonium sp.).

Further inland from the fringe, as the interstitial salinity
rises, the red mangrove is supplanted by the black man-
grove (Avecennia nitida). This mangrove inhabits a zone
systematically flooded by the tide, and rather than prop
roots, it has fingerlike breathing tubes (called neumata-

28. Id.

29. Included were annelids (Polychaete families of several
types), arthropods (Amphipoda, Cirripedia, Decapods/Brachyr-
hyncha, Majidae and Caridea, Isopoda, Tanaidacea), coelenterates
(Hydrozoa), molluscs (Bivalvia, Gastropoda, and A spidobranchia) ,
sponges (Porifera, encrusting tan sponge), chordates (Tunicata,
colonial and solitary; and fish larvae), algae (Bostrichia sp., Fila-
mentous Types A, B and C, Caulerpa racemosa, Red Filamentous
Type C), roundworms (Nematode-Type A).

30. Included were annelids (Polychaete families of several
types) roundworms (Neimatoda), anthropods (Amphipoda, and Iso-
poda), coelenterates (Anthozoa), echinoderms (Ophuiroidea),
molluscs (Bivalvia, Gastropoda and Aspidobranchia), ribbonworms
(Nemertinea) and sponges (Porifera).

73a

fors) which rise from the ground to above high water level.
This area provided a habitat principally for crustaceans
such as crabs and barnacles, and algae grazing snails, bees
and reptiles. ‘There were also benthie infaunal communi-
ties similar in nature to those in the bottom surrounding
the red mangrove fringe.

The canopy of the mangrove forest was inhabited by
various bird species.

The configuration of the bottom of Bahia Sucia is of
some relevance. The average depth at the middle of the
mouth is about 4 fathoms, or 26 feet. From there the bot-
tom slopes gradually, paralleling the shore in half-moon
fashion until it reaches land. With the exception of one
small reef, Roea Ola, located about one mile due east of
Hermit One, the bottom was white caleareous sand covered
mostly by turtle grass. Both pelagie and neritie fish spe-
cies inhabited these waters. Additionally various epibenthie
species*®! such as starfish, sea urehins, brittlestars, snails,
limpets, hermit crabs, sea cucumbers, lobsters, helmet conch,
and sponges were found in the Thalassia heds, and again
substantial benthic infaunal communities” existed beneath
them. The Thalassia is a basic food source for sea turtles
and manatees.

As its name seems to imply, Bahia Sucia, because of its
location and configuration as well as by reason of the pre-
vailing winds and currents, collects and traps much debris

31. Included were annelids (Polychaete families of several
types), arthropods (Decapoda, Paguridae, Brachyrhyncha, Penaidea,
Scyllaridea, Majidae and Acarina), coelenterates (Anthozoa and
Zoanthidea), chordates (Tunicata) echinoderms (Crinoidea, Echi-
noidea /sea urchins/, Holothurioidea, Asteroidea, and Ophiuroidea,
molluscs (Bivalvia, eight Gastropoda genera, and Polyplacophora)
and, sponges (Porifera).

32. Included were annelids (Polychaete families of several
types), roundworms (Nematoda), arthropoda (Amphipoda, Deca-
poda, Pycnogonida and Isopoda), coelenterates (Anthozoa), chor-
dates (Tunicata), echinoderms (Ophiuroidea, Echinoidea and Holo-
thurioidea) and molluscs (Five Bivalvia genera, thirteen Gastropoda
genera, and Polyplacophora).

74a

along its shores. Among the matters that periodically caine
ashore were small amounts of petroleum products.*’ This
is mostly discernible to the eye in the form of tar balls,*
which can be best seen in the sandy areas of the shore.

Notwithstanding this, it is clear to us that at the time of
the casualty in question Bahia Sucia was a healthy, func-
tioning estuarial ecosystem, typical of those found in the
Southern coast of Puerto Rico and similar tropical! envi-
ronments. The function and interrelationship of such sys-
tems are scientifically well-established and understood.*
The mangrove components of these systems are of prime
importance. These areas are breeding, feeding and nur-
sery grounds for substantial populations of the specics
previously mentioned. Additionally the mangroves theim-
selves, and in particular the red mangrove, are the primary
food-producing agents of the organic materials available to
the aquatie food chain.

The Thalassia beds perform a similar but less prominent
function than do the mangrove, providing hoth habitat an/
an important component in the food chain of the various
species referred to previously.

The oil spill and the cleanup

As the oil slick started arriving in Bahia Sucia on March
18-19, 1973, its initial point of impact was the southwestern
third of the half-moon.

By 0755 hours of March 19, with the wind due east, three
separate pools of oi] had formed against the shore of Bahia

33. The apparent result of fortuitous bilge cleaning by ships at
sea.

_ 34. The sizes vary anywhere from almost microscopic to several
inches in diameter. How they form and their relevance, if any, to
this case are discussed later in this opinion.

35. Ex. see, Coastal Ecosystem Management, John R. Clark,
John Wiley & Sons, New York, in particular the contributed articles,
“Mangrove Swamps”, by Lawrence Burns, pp. 660-665, and “Sea
Grass Beds”, by Joseph Zieman, pp. 702-704.

75a

Sucia: one was located against the rocky shore at the west-
ern extremity of the Bay, the second was in the West Man-
erove, extending from Dogman’s Cove to and ineluding the
mangrove around Hermit One, and the third was along ap-
proximately 3,000 feet of the beach to the north of the
second oil pool. The oil was black and thick, particularly
in the West Mangrove and in the beach areas. In the West
Mangrove the oil was several inches thick and completely
enveloped all areas subject to tidal flow. The oil there
reached into all the recesses including Dogman’s Cove and
Hermit One, which were totally surrounded by oil. Be-
cause of the rise and fall of the tide, the intertidal portions
of the main and prop roots of the red mangrove, and the
roots and neumatafors of the black mangrove in this area
were covered by oil to a height of about one foot above their
low water level. At high tide, the oil also floated into the
flats hehind this area.*®

Meanwhile, early on the 19th of March, a large cleanup
force composed of members of the United States Coast
Guard and various Commonwealth Agencies which had been
alerted to the spill, began assembling in Bahia Sucia to-
gether with sundry cleanup gear. This force was under
the general supervision of the Coast Guard and so re-
mained throughout the cleanup operation.

At about 0830 hours the wind began shifting slightly to
the south. A boom was deployed north of the oil in the
beach area to keep the oil from moving further along the
beach. In view of the fact that the oil was several inches
thick, at about 0945 hours a sump was dug next to the shore

36. The Bahia Sucia area is subject to two tides per day. The
highest spring tide occurred on March 18, when it was full moon.
The following is the height of the spring tides on the relevant days:

RO Sie Te 0 vb acccdun 1.2 feet
Sy ere 1.3 feet
eS eee 1.3 feet
March 20, 1973 .......... 1.3 feet

as eee 1.2 feet

76a

allowing oil to flow from the sea into it. From here the oil
was pumped directly to a tank truck, while additional
equipment was rounded up. By 1210 hours” the pool in the
beach contained by the boom had become quite large, ex-
tending in some places 100 vards from shore. The wind
was steady from the south-southeast. Throughout the day
additional cleanup efforts continued, including the construc-
tion of more sumps on the beach. Large holding j.is were
built riext to two of the sumps to store oil and three pump-
ing stations were established.

On March 20 more tank trucks were put in operation. By
1800 hours on that day, 35,000 gallons of oil had been re-
moved from the water. By 1700 hours on March 23 this
had increased to 405,000 gallons. Throughout the pumping
operation oil purity averaged between 85% and 95%.

In the meantime, although most of the oil from the pool
at the entrance to the Bay had moved into the beach area,
the situation in the West Mangrove remained substantially
unaltered. The reasons for this were varied. The char-
acteristics of the terrain and vegetation made it extremely
difficult, if not impossible, to effectively carry out the re-
moval of oil. This, as well as the geographic configuration
of that area, prevented any flushing by wave and tide ac-
tion. Additionally, during the initial five and a half day
period, the trade winds blew from the east-northeast during
the night and south-southwest during the day at a steady
15-20 knots, thus keeping the oil contained within the man-
grove pocket.

To prevent a southerly wind shift from spreading the oil
north along the beach, another boom was placed perpendic-
ular to the beach and just north of the original boom. The
daily shift in wind created a slow current from north to

37. At about this time some of the cleanup personnel and equip-
ment had to be diverted to contend with a portion of the main body
of the slick, which had rounded Cabo Rojo and turned north in the
Mona Passage, and was threatening the beach at Punta Aguila. This
threat never materialized.

77a

south and vice versa. Meanwhile the o!i against the boom
reached 4 to 6 inches in thickness. This, together with the
current, caused various failures in the containment system
which had to be corrected by improved anchoring of the
boom.

During the early afternoon of March 24, the winds began
to veer past their usual southeasterly limit and moved to
west of south. This increased the pressure of the oil on
the booms already in place and these began to fail. Oil
from the West Mangrove started to move north into the
Bay, offshore and past the boom. By 1830 hours there was
a large slick extending from the West Mangrove to the
north, with about 50% passing the northernmost boom.
The work crews proceeded to close the sea water intake
channel of the salt works located just before the western
edge of East Mangrove. It was also discovered that oil was
touching the westernmost stand of East Mangrove. At this
point the wind died, resurging from the north at 2330 hours.
An additional 114 miles of beach were fouled by this
episode.

The wind remained northerly throughout the night and
at 0800 hours of Mareh 25 was still from the north-north-
east at 4 to 6 knots. The oil moved away from the East
Mangrove’s edge and a large black slick covered most of
Bahia Sucia, heading south-southwest. A large portion of
this slick went out to sea around Cabo Rojo, but the re-
mainder went back to the original areas at the rocky en-
trance and at the West Mangrove, accumulating there in
fairly heavy thickness. The length of shoreline now im-
pacted was nearly 3 miles. The Coast Guard established
a new pumping station in the rocky area, but could do noth-
ing about the oil remaining in the West Mangrove.

At 1300 hours the wind again backed to the south and
again threatened the East Mangrove. A boom was placed
to prevent this. That night some oil reached the boom. By
the morning of the 26th, the normal east-northeast trade

78a

wind had returned. Although only 25,000 gallons of oil
were removed from the scene during the 42 hours between
the various wind shifts, an overflight of the area at 1500
hours revealed that only about 10% of the original oil now
remained on the beach area. Of this, the great majority
was concentrated at the booms. The remainder was spread
along a thin band from the booms south to the original
sump.

It became apparent that the West Mangrove had lost at
least half of its oil during the wind shifts. Small amounts
of oil out of this mangrove began moving towards the orig-
inal sump area on the 27th. A limited pumping operation
was made feasible by this displacement.

The main pumping operations in the northeastern section
of the beach continued. By 2000 hours on the 26th of
March, 500,000 gallons had been removed by tank truck to
the consignee’s refinery. By 1900 hours on the 27th this
had reached 550,000 gallons, which had increased on the
28th to 590,000 gallons and to 630,000 gallons by March 29.
Tn addition to this amount there were 125,000 gallons stored
in reservoirs in the beach awaiting removal, which made a
total of 755,000 gallons of oil that had been physically re-
moved from the water in the beach area since the start of
operations.

Late during the 28th of March the wind veered to the
south and large slicks moved out of the mangroves and into
the beach area. Late that evening the wind went even fur-
ther west. On the morning of the 29th the wind was south-
west to west-southwest at 4 to 6 knots. There were black
slicks throughout the bay headed for the East Mangrove.
As the wind continued from southwest to west-southwest
during the entire day, oil impacted the entire shore, from
the westernmost point of the East Mangrove to Punta
Molino and around this point to the east, nearly to Punta
Pitahaya. The physical size of the area involved was tri-

79a

pled, although the new zone was not hit by heavy concen-
trations of oil.**

From the 29th of March until the 3rd of April the winds
remained variable and the oil slick moved back and forth in
Bahia Sucia. A ijarge slick rounded Cabo Rojo and brought
traces of oil into the Mona Passage.

By the 1st of April, the pumping operations were over.
Cleanup operations continued in the rocky entrance area
and in the beach area between the boom and the commence-
ment of the East Mangrove, an area where a thin layer of
oil was located away from the shore. An additional boom
was deployed to completely enclose the West Mangroves,
and this boom, which extended approximately 3500 feet, was
in place by April 3. When the trade winds returned, oil
started to move out of the East Mangrove and the mangrove
east of Punta Molino. An additional 500 feet of boom were
placed at the western end of the East Mangrove to contain
this oil.

By this time, the most important cleanup operations that
remained involved a manual beach cleanup. This consisted
principally of raking oil soaked sand and sea grasses above
the waterline for eventual removal by dump truck.

On April 5, core samples revealed that oil penetration of
the sand in the intertidal zone averaged 8 to 10 inches and
in some places was as much as 14 inches deep. Further
samples taken on April 12 disclosed that this thickness was
rapidly decreasing.

In the West Mangrove the cleanup was extremely labo-
rious. Heavy equipment became stuck in the soft ground.
The mangrove was so dense that in many places it was im-
possible to enter it without destroying it. Pockets were
cleaned several times, yet oil would leak out from under the
mangrove roots. Twelve aluminum boats were used as
floating containers for oily sorbents and debris. Free oil

38. This made the cleanup even more difficult because the oil
could not be quickly pumped out.

80a

was bailed up with buckets and oily sea grass forked di-
rectly into the boats. When filled, the boats were towed
back to an access point on shore and emptied. A dump or
tank truck would then remove the matter to the Mayaguez
publie sanitary land fill dump, about 20 miles away.

The surface of the tidal flat behind this mangrove was
covered by a thin layer of weathered oil which, as stated
previously had reached the area on the first night after the
spill. Because this is a breeding area for small crabs, it
was agreed that it was best to leave it undisturbed.

In the area of the beach, sumps and reservoirs were ap-
propriately cleaned and filled after emptying, and the con-
taminated sand removed by dump truck. Substantial oily
material was removed from the beach by bulldozer and
manual labor. In the shallow water, there were tar deposits
that were removed by hand. The heavy equipment opera-
tions destroyed considerable vegetation. It is estimated that
a total of 4500 cubic yards of contaminated sand were
removed during the entire operations.

The East Mangrove was not badly contaminated. The
wind aided in pushing most of this oil into the boom, as
previously described. Thereafter, the cleanup proceeded
manually which was more feasible in view of better footing
on the shore side of this mangrove.

The oil in the area east of Punta Molino was cleaned
by natural wind and sea action. This area was secure by
April 17.

By the 25th of April all cleanup operations were con-
cluded in the beach areas and East Mangrove, with the
exception of the area immediately adjacent to West Man-
grove, where operations ended on May 4. The entrance
area cleanup had ended on April 14.

Commencing on April 25, the boom encircling the East
Mangrove was taken out, and by May 3, only 750 feet were
left encircling some pockets in the mangrove, All opera-
tions were now concentrated in this area. A long suction

Sla

hose of some 400 feet was fabricated, which permitted a few
isolated pockets of oil to be vacuumed out. However, most
of the work was manual.

On May 1, the walls of the salt water works intake chan-
nel were sandblasted.

By June 1, the operations in the East Mangrove had been
reduced to once a week collections of oily sea grass and sor-
bent material and by June 6, this schedule was further re-
duced to once every two weeks. A storm on August 15
provided good flushing action for the mangrove roots.

By September 24, further cleanup operations were deem-
ed futile and thus were discontinued.

The chemistry of oil and its effects

It is impossible to properly evaluate the extent of dam-
ages caused by the oil spill previously deseribed without a
rudimentary understanding of the physical properties of
petroleum.

Petroleum, or as it is commonly referred to, crude oil is
a complex mixture of paraffin, naphthalene, and aromatic
hydrocarbons, containing small amounts of organic sulfur
and very small amounts of nitrogen and oxygen com-
pounds, as well as the traces of various metals. The total
analysis of all the chemical substances in oil has not yet
been performed. It is scientifically established, however,
that the composition of crude oil, as far as compounds con-
taining carbon and hydrogen, runs approximately 20-
30% paraffin or aliphatic hydrocarbons, 20-50% naphta-
lenes, and 15-40% asphalts, each of these compounds hav-
ing their own chemical and physical characteristics. The
variations in these percentages are reflected by the geo-
graphic location of the oil field due to the fact that different
vegetation and other organic life matter may go into the
original formation of the oil. This has more relevance to
this ease than just passing scientific interest. This composi-

82a

tion in large part has a relationship to the relative toxicity
of the oil, and more importantly, because the different
sources of petroleum have been catalogued, it permits the
identification through “fingerprinting” of petroleum found
in the field.

The paraffin or aliphatic hydrocarbons in oil are very
unreactive. Mineral oil and vaseline are examples of puri-
fied mixtures of paraffin. By virtue of their heavy molecu-
lar structure they are virtually nontoxic.

Naphthenes are very complex mixtures of hydrocarbons,
naphthenes and alkanes. They are lighter than the ali-
phaties and thus more toxic.

The aromatic compounds in oil are the most reactive and
toxic. Some of these, like benzene and naphthalene have a
low boiling point, and although highly poisonous to marine
life, evaporate with rapidity.

Hydrocarbons are ubiquituous in nature and are thus
found in the environment in many forms beside spilled oil.
All organisms whether plant or animal, produce hydrocar-
bons in their normal metabolisms. However, several things
distinguish petroleum from natural hydrocarbons. Be-
cause petroleum is formed under heat and pressure, its
hydrocarbens are “scrambled up.” Furthermore, petro-
leum hydrocarbons contain certain hydrocarbon com-
pounds called isprenoids, pristane (C,;) and phystane
(Cig), whose joint presence is found only in oil of petro-
leum origin.

By the use of gas chromatography and the determination
of the pristane-phytane ratio in the oil, it is possible to
identify its source. This is true even after the weathering
of the petroleum, because these ratios remain fairly con-
stant throughout its life.

The analysis of petroleum for positive identification is
also possible by the use of infrared spectrography and
atomic absorption spectrophotometry for a determination
of the vanadium-nickel, and sulfur-nitrogen ratios.

83a

The evidence in this case clearly establishes that the oil
found in Bahia Sucia and that carried aboard the
CoLocotroni were identical: Tia Juana crude, medium.
From this evidence as well as the evidence of the physical
coverage of the oil spill, it can not be doubted that the
source of the oil in Bahia Sucia was the CoLocorront.

In terms of affecting the environment, when oil is spilled
it generally exhibits the following pattern. The aromatic
fractions, which as stated previously are the most toxie,
evaporate within the first few hours or days. In the mean-
time, they have lethal effects on marine organisms that
come in contact with them. Particularly susceptible to this
phenomenon are the epibenthic and benthic communities in
shallow waters such as those of the Bahia Sucia estuary.
The heavier fractions of petroleum, specially in the initial
phases of a spill, operate more as a mechanical than a
chemical impediment. The oil, which is initially lighter
than water, floats on the surface. Its dark color causes a
rise in the temperature of the water below its surface, This
affects the flora and fauna, some of which are highly sensi-
tive to temperature changes. Additionally, the oxygen
exchange in the water and air are also impeded. As the
sun and air contact cause the lighter fractions to evaporate,
the remaining heavier fractions become more viscous.
These thicker portions kill the various marine organisms,
particularly in the intertidal zones, mainly by preventing
movement and by interfering with gas exchange. With
time, some oil settles into the sediment. There the process
of decomposition is very slow, being catalyzed only by
anaerobic bacteria, Although in this state the oil is prob-
ably neutral in its effect on the various epibenthic and
benthic infaunal communities, it allows a disproportionate
number of distress area organisms, such as capitella worms
and blue-green algae, to displace the normal communities.
Furthermore, for a prolonged period of time walking on
the affected bottoms brings forth a sheen of oil and coats

S4a

the contact surfaces with a black substance.*? With the
passage of time, the oil that coats the surface and is in
direct contact with oxygen and sunlight weathers to the
point of becoming tar and has no further ascertainable
effect on the environment.

Detail of damages caused by the oil spill

Bahia Sucia was heavily impacted by oil as a result of
the COLOCOTRONI incident. Most affected were the
West Mangrove and beach areas and consequently the flora
and fauna of that locale. Lmmediately after the spill, and
as a result thereof, the mangrove root communities in that
area were decimated, A similar result was experienced by
the sea grass communities in those impact areas and the
crab populations in the flats. Additionally, various areas
of red mangrove in the West Mangrove were affected by
the spill, and as a result the mangrove mortality in this
area was significantly increased.

Even at present the mangrove community in this impact
area shows a significant reduction in the number of species
of macrobiota, the number of molluses and crustaceans, the
epiflora cover, the number and frequeney of epiphyte
species, and the number of species and population density
of epibenthic and infaunal molluses and crustaceans. ‘he
seagrass community shows a significantly altered pattern
of plant biomass*® and in the number of species and popu-
lation density of macro biota. This community, however,
shows greater relative recovery than the West Mangrove
community.

39. The amount of time is the subject of much controversy. Suf-
fice it to say that 5 years after the spill oil was still much in evidence,
particularly in the West Mangrove areas visited by the Court.

' 40. As previously stated, of critical importance to the marine food
chain.

85a

In our opinion, the oil spill damages to the Kast Man-
grove are of minor significance to this case.*!

From the above, the following specific damage was
caused to the Commonwealth Plaintiffs:

1. Plaintiffs’ proven claim of damage to marine organ-
isMs Covers an approximate area of about 20 acres in and
around the West Mangrove. ‘The surveys conducted by
Plaintiffs reliably establish that there was a decline of
approximately 4,605,486 organisms per acre as a direct
result of the oil spill. This means that 92,109,720 marine
animals were killed by the COLOCOTRONTI oil spill.’ The
uncontradicted evidence establishes that there is a ready
market with reference to biological supply laboratories,
thus allowing a reliable cs'culation of the cost of replacing
these organisms.” The lowest possible replacement cost
figure is $.06 per animal, with many species sellin from
$1.00 to $4.50 per individual. Accepting the lowest replace-
ment cost, and attaching damages only to the lost marine
animals in the West Mangrove area, we find the damages
caused by Defendants to amount to $5,526,583.20,

2. The evidence is overwhelining to the effect that the

sediments in and around the West Mangrove continue to

41. More accurately stated, Plaintiffs have failed to support their
claims for damages in that area.

42. As explained previously, the affected flora and fauna were
part of a trust held for the people by the Commonwealth of Puerto
Rico, See, Lacoste v. Department of Conservation, 263 U.S. 545,
549 (1924); Geer v. Connecticut, supra. Perforce, the Common-
wealth must have the ability to have the corpus of said public trust
reimbursed for the diminution attributable to the wrongdoers. State
Dept. of Environmental Protection v. Jersey Central Power & Light
Co., — at 673-674. We recognize that no market value, in the
sense of loss of market profits, can be ascribed to the biological com-
ponent of the Bahia Sucia ecosystem. The Court will thus refer to
market cost as the most reliable evidence of the quantum of damages
actually sustained, i.e., what is required to make the Plaintiffs whole.
This will em en the cost of restoring the affected areas to the con-
dition in which they were before the occurrences. See Feather River
Lumber Co. v. United States, 30 F. 2d 642, 644 (C.A. 9, 1929),

86a

be impregnated with oil. The solutions proposed by Plain-
tiffs to this problem are inacceptable in that they would
bring about the total destruction of this environment with-
out any real guarantee of ultimate success. Furthermore,
there is substantial scientific evidence to the effect that
much of the undesirable effects of the oil in the sediments
will be corrected in time by the weathering processes of
nature. The most affected spots in the West Mangrove
cover an area of approximately 23 acres. It is the Court’s
opinion that these areas can best be reestablished by the
intensive planting of mangrove and restoration of this
area to its condition before the oil spill. The evidence
shows that the planting of mangrove runs at about $16,500
per acre, thus bringing the cost of replanting 23 acres to
$379,500. The evidence further demonstrates that the
planting will require a five year monitoring and fertilizing
program which will cost $36,000 per year or $180,000 for
the five years. The total damages thus suffered by Plain-
tiffs by reason of the pollution of the mangrove in the
West Mangrove amount to $559,500.

3. Plaintiffs incurred in cleanup costs in the amount of
$78,108.89 which were not reimbursed from any source and
they are entitled to recover said damages from Defendants.

UNITED STATES’ REQUEST FOR INTEREST,
PENALTIES AND ATTORNEYS’ FEES

On November 8, 1977, the second day of trial, the Defend-
ants moved for summary judgment in favor of the United
States in the full amount of the Government’s cleanup
claim, ie., $677,660.42. The Court granted Defendants’
Motion, whereupon the participation of the United States
was limited to the issues of interest, penalties and attor-
neys’ fees. We proceed to address these questions
separately.

87a

The question of prejudgment interest

We are called upon to decide whether the United States
is entitled to prejudgment interest on the amount awarded
to it for its total oil pollution cleanup expenses, and if so,
from what date and at what percent. A brief summary of
the relevant factual background is pertinent to this
endeavor.

Just as the oil slick from the COLOCOTRONI impacted
the shore at Bahia Sucia, the United States and the Com-
monwealth of Puerto Rico began to undertake the massive
and painstaking cleanup operations that have been de-
scribed in the present opinion. Those efforts to thwart and
ameliorate the devastating potential of the spill continued
until no further cleanup was feasible.

At the incipient stages of the operations, attempts were
being made by the Coast Guard in San Juan to identify and
contact the responsible party. At 0805 on March 19, a
Mobil Oil Company representative informed the Coast
Guard that he expected Mobil to assume full cleanup re-
sponsibility, but had not yet received confirmation from the
head office in New York. About an hour and a half later
said representative indicated that Mobil was trying to ob-
tain permission from the vessel’s owner to cleanup the oil
at the direct expense of the owner. Meanwhile, the Com-
monwealth Government moved to have the ship restrained
until the responsibility for the occurrences could be ascer-
tained and worked out.

Initially, the Public Works Department of Puerto Rico
assumed the responsibility of subcontracting equipment.
This department was given full assurance that the Coast
Guard would assume full financial responsibility should the
polluter refuse to accept the costs of the cleanup. An oil
pollution fund was then requested and granted by the Com-
mander, Seventh Coast Guard District at 1600.

At 1605 a call was received from the Mobil Office in New
York. Mobil informed that it would not accept the costs,

88a

but that they were attempting to contact the insurance un-
derwriters for the vessel’s Federal Maritime Commission
(FMC) bond. At 1932 the first call was received from this
P & I Club, which was identified as the West of England
Steamship Owners Protection and Indemnity Association,
Ltd.

The next contact between the Coast Guard and the P & I
Club occurred in the morning of March 20. The underwrit-
ers had appointed Captain William Coleman as their local
representative. On March 21, at 0800 hours a meeting was
held between Coast Guard representatives, members of the
Environmental Protection Agency, Region II Office, Cap-
tain Coleman and Mr. George Freehil, New York represen-
tative of the underwriters. The representatives stated that
the underwriters would assume all cleanup costs, commenc-
ing from the initial response. It was agreed that Common-
wealth personnel would continue working under Coast
Guard direction and that the underwriters would have per-
sonnel on the scene to handle finances.

The next meeting with the underwriters’ representatives
took place on March 30.*° In that meeting, the underwriters
stated that they were not sure of their legal responsibility
if the limits of their policy liability under the Federal
Water Pollution Control Act were exceeded. In view of
this hesitancy, the Coast Guard acted to accept full payment
responsibility for all costs incurred to insure rapid cleanup
of the oil before further damage was done. All the cleanup
operations were thus coordinated and paid for by the Coast
Guard until their conclusion.

The total oil pollution cleanup expenses incurred by the
United States Coast Guard amounted to $677,660.42" of

43. In the interim, great efforts were being made to pump out
and control the oil slick.

44. This precise figure was the subject of Defendants’ Motion for
Summary Judgment which was granted from the bench on November
8, 1977.

8Ya

which the last cost was incurred by the United States on
November 4, 1974. Thereafter, on November 12, 1974, a bill
for reimbursement of that amount was sent to Defendant
Marbonaunza, care of its attorneys in San Juan. That bill
had six recapitulation pages attached. No supporting docu-
ments were included.**

The United States’ cleanup costs were paid by the De-
fendants on April 27, 1978, nearly six months after they
moved for judgment in that amount. f

The United States contends that it is entitled to prejudg-
ment interest at a rate of eight percent. Respecting the
group of payments incurred on or before July 19, 1973, in-
terest is requested from that date up to the fifth of the
nearly six months its principal cleanup claim went unpaid
after the Court granted Defendants’ Motion for Summary
Judgment. As to the second group, which comprises pay-
ments made by November 4, 1974, the Government pays
for an eight percent interest to be computed from that date,
up to the fifth month after November 8, 1977.

The granting of prejudgment interest lies within the dis-
cretion of the Court. San Juan Trading Co. v. The Marmez,
107 F. Supp. 253 (D.C.P.R., 1952), aff’d 212 F. 2d 206 (C.A.
1, 1954), cert. denied 348 U.S. 822. However, admiralty
jurisprudence generally recognizes an injured party’s en-
titlement to prejudgment interest whenever damages law-
fully due are withheld, unless there are compelling factors
to justify its denial Grace Lines, Inc. v. Todd Shipyards
Corp., 500 F. 2d 361, 366 (C.A. 9, 1974); Ore Carriers of
Liberia, Inc. v. Navigen Co., 305 F. Supp. 895, 896 (S.D.N.Y.,
1969), aff’d 435 F. 2d 549 (C.A. 2, 1970) ; Illigan Int’l Corp.
v. S.S. John Weyerhauser, 372 F. Supp. 859, 869, (S.D.N.Y.,
1974), aff’d, remanded on other grounds 507 F. 2d 68 (C.A.
2, 1974), cert. den. 421 U.S. 965 (1975). This general rule
is grounded on compensatory considerations, in consonance

45. The supporting documents were mailed to counsel Santiago
on October 11, 1977 and received by him on October 13, 1977.

90a

with the general purpose of awarding damages, which is to
try to make the injured party “whole”. Rosa v. Ins. Co. of
State of Pennsylvamia, 421 F. 2d 390, 393 (C.A. 9, 1970) ;
Interstate Steel Corp. v. S.S. Crystal Gem, 317 F. Supp.
112, 122 (S.D.N.Y., 1970) ; also see, Rugo Const. Co. v. New
England Foundation Co., 172 F. 2d 964, 967 (C.A. 1, 1949).

Section 311(f)(1) of the Federal Water Pollution Con-
trol Act, 33 U.S.C. 1521(f)(1), provides in its pertinent
part:

“Except w

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0764%3A2. Public record. Not legal advice.