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Reino de España v. American Bureau of Shipping

August 3, 2010


The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge



This action arises from the sinking of the M.T. PRESTIGE, an oil tanker (the "Prestige"), off the coast of Plaintiff Reino de España ("Plaintiff" or "Spain") on November 19, 2002. The Prestige discharged millions of gallons of oil into Plaintiff's territorial waters before sinking 140 miles from the Spanish coast, causing devastating environmental and economic effects. Plaintiff seeks compensatory damages in excess of $1,000,000,000 and punitive damages from Defendants American Bureau of Shipping, ABS Group of Companies, Inc., and ABSG Consulting, Inc. f/k/a ABS Marine Services, Inc. (collectively, "Defendants" or "ABS"), alleging principally that ABS was reckless in classifying the Prestige as fit to carry fuel cargoes. The Court has jurisdiction of the action pursuant to 28 U.S.C. §§ 1332 and 1333.

This case is now before the Court on the parties' respective motions for determination of the law governing the resolution of the claims asserted by Spain and ABS's motion for summary judgment in its favor on those claims. The Court heard oral argument on the motions and has considered thoroughly both the parties' voluminous submissions and the oral arguments of counsel. For the following reasons, the Court determines that the law of the United States governs the resolution of Spain's claims and that, under United States law, ABS is entitled to judgment as a matter of law pursuant to Federal Rule of Civil Procedure 56. Particularly given the significance of the damages for which Spain seeks recompense, the Court notes that this decision examines only whether the defendant ship classification society can be held liable to Spain for the damages arising from the casualty. This decision does not address the magnitude of the damage or the potential liability of any other actor therefor.


The parties have proffered a volume of factual material in support of their arguments that is consonant with the scale and complexity of the Prestige casualty. The Court assumes the parties' familiarity with the record and limits the following factual summary to matters that are material to the Court's legal conclusions.

The following facts are undisputed, except as otherwise indicated.*fn2 ABS is a notfor-profit classification society that maintains its headquarters in Houston, Texas. It is composed of entities organized under the laws of New York and previously maintained its headquarters in New York, New York. (Def.'s 56.1 Stmt. ¶ 1; Am. Compl. ¶¶ 3-5.) ABS establishes rules for the design, construction and periodic survey of numerous types of marine structures, including steel vessels such as the Prestige. (Def.'s 56.1 Stmt. ¶¶ 1, 4.) ABS performs classification surveys to determine whether a ship's structure and condition satisfy ABS's rules. If a ship meets the ABS requirements, ABS issues a classification certificate for the ship. ABS conducts further surveys of each classified ship on a five-year cycle subsequent to the issuance of the initial classification certificate to determine whether the ship remains in satisfactory condition. (Def.'s 56.1 Stmt. ¶¶ 7-8; Pl.'s 56.1 Stmt. ¶ 85.) ABS also conducts statutory surveys for the benefit of states that are parties to various international treaties that oblige them to regulate ships sailing under their flags. (Def.'s 56.1 Stmt. ¶ 16.) Statutory certificates certify that vessels comply with specific international treaties. (Pl.'s 56.1 Stmt. ¶ 86.)

ABS performs both classification and statutory surveys at its overseas offices, including its offices in Hong Kong and Guangzhou, China, and Dubai and Abu Dhabi, United Arab Emirates. (Def.'s 56.1 Stmt. ¶ 1.) The parties dispute the relative contributions of the surveyors at ABS's overseas offices versus ABS's headquarters personnel in determining the scope of any particular survey and whether certification of a ship should be granted or continued. (Def.'s 56.1 Stmt. ¶¶ 8-11.)

The Commonwealth of the Bahamas (the "Bahamas"), under whose flag the Prestige sailed at all relevant times, is a party to various international maritime conventions that require it to regulate ships sailing under its flag and permit it to delegate the inspection and survey of ships to a Recognized Organization ("RO"). (Def.'s 56.1 Stmt. ¶ 16.) ABS is an RO that, pursuant to a contract with the Bahamas, is authorized to carry out statutory classification surveys of Bahamian flag ships. The Prestige was registered in the Bahamas in 1994 and sailed under the flag of the Bahamas from that time until the casualty on November 19, 2002. (Def.'s Stmt. ¶ 24.) The Prestige was class certified by ABS upon its construction in 1976 and was surveyed and classed by ABS throughout its operational life. (Def.'s 56.1 Stmt. ¶¶ 23, 26.)

ABS conducted a special survey and statutory surveys of the Prestige in Guangzhou, China, commencing on April 2, 2001, and concluding on May 19, 2001. (Def.'s 56.1 Stmt. ¶ 29.) The parties dispute whether ABS's performance was adequate and compliant with ABS's rules. (Def.'s 56.1 Stmt. ¶ 29.) The parties also dispute whether the renewal of the Prestige's five-year classification certificate was based entirely on surveys, inspections, and recommendations made in China or, alternatively, whether the renewal was based in part on significant input from ABS's headquarters in Houston. (Def.'s 56.1 Stmt. ¶¶ 36, 38.) The five-year classification certificate was issued from ABS's Houston headquarters. (Pl.'s 56.1 Stmt. ¶ 84.)

ABS conducted annual class and statutory surveys of the Prestige in the United Arab Emirates from May 15-22, 2002, which were led by a surveyor from ABS's Dubai office. (Def.'s 56.1 Stmt. ¶ 44.) Following the survey, ABS's assigned surveyor endorsed the Prestige's classification certificates on May 27, 2002. (Def.'s 56.1 Stmt. ¶ 49.) The parties dispute whether ABS's performance was adequate and compliant with ABS's rules (Def.'s 56.1 Stmt. ¶¶ 46-48; Pl.'s Stmt. ¶¶ 108-09) and the role, if any, played by ABS personnel in the United States in determining to grant the endorsement. No further surveys were conducted before the November 19, 2002, casualty. (Def.'s 56.1 Stmt. ¶ 52.) Spain asserts that "the reckless actions in the United States caused the 2002 annual survey to fall short and permitted the Prestige to remain in class. ABS's Chief Executive Officer, President, Chief Surveyor, and other officials knowingly held back information, maintained obsolete rules and provided inadequate guidance with respect to the annual survey. These reckless actions caused the Prestige casualty." (Pl.'s Response to Def.'s 56.1 Stmt. ¶ 50(g).)

The classification certificate for the Prestige in effect at the time of the casualty included the following disclaimer:

[ABS] represents solely to the vessel Owner or client of [ABS] that when assigning class it will use due diligence... [ABS] further represents to the vessel Owner or other client of [ABS] that its certificates and reports evidence compliance only... in accordance with the terms of such certificate of report. Under no circumstances whatsoever are these representations to be deemed to relate to any third party. (Def.'s 56.1 Stmt. ¶¶ 14.) Both the issuance of the five-year classification certificate in Houston in 2001 and the endorsement in the UAE in 2002 were necessary predicates for the Prestige's ability to sail at the time of the casualty. There is no evidence that Spain communicated with ABS or reviewed any of the certifications prior to the casualty. (Def.'s 56.1 Stmt. ¶¶ 69-70.) Plaintiff alleges that, ...

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