Federal Government Sues Ship Owner, Pilot, Insurer over Bay Oil Spill

By Scott Lindlaw | December 3, 2007

The Justice Department filed a lawsuit accusing the pilot and the Hong Kong-based owners of the container ship Cosco Busan of breaking environmental laws when the ship struck a bridge support in San Francisco Bay, spilling 58,000 gallons of toxic oil.

The lawsuit, filed Friday in U.S. District Court, alleges that the Nov. 7 crash violated the National Marine Sanctuary Act, the Oil Pollution Act of 1990 and the Park System Resource Protection Act. It accused the defendants of “fault, negligence and breach of federal safety and operating regulations.”

It names as defendants Regal Stone Ltd. and Fleet Management Ltd., the listed owners, operators and managers of the Cosco Busan; Capt. John Cota, who was at the helm during the crash; and the Shipowners Insurance and Guaranty Co. Ltd., or Sigco, which insured the ship.

Regal Stone and Fleet Management are “believed to be headquartered in Hong Kong,” the suit states.

The lawsuit seeks unspecified damages to compensate taxpayers for the federal response to the spill. It said the sum of those damages “is not known and shall be established according to proof at the time of trial.”

The government said the oil spill had affected the Gulf of Farrallones National Marine Sanctuary, the Monterey Bay National Marine Sanctuary, the Golden Gate National Recreation Area, Point Reyes National Seashore and other protected federal waters.

Attorneys with Keesal Young & Logan, a law firm representing Regal Stone, did not return numerous phone calls and e-mail messages seeking comment. Jim Lawrence, a spokesman for Regal Stone, said the company hadn’t seen the lawsuit.

“We are committed to the investigation and are not speaking publicly about it or any pending legal matters out of respect for those processes,” Lawrence said.

John Meadows, an attorney for Cota, did not immediately return a phone call seeking comment; nor did Fleet Management, which, according to Lawrence, provides technical advice to the ship owners. Phones at Sigco’s Bermuda offices rang unanswered.

The ship is being repaired in San Francisco, and the government said in the lawsuit it had the right to “arrest” the Cosco Busan, which is a form of impoundment meant to ensure its owners pay the damages. But the Justice Department wanted to avoid that step, instead seeking a “letter of undertaking” as a form of “substitute security,” the court filing said.

Also, the state Board of Pilot Commissioners suspended Cota’s pilot license while several investigations into the crash are ongoing. It said the suspension “should not be viewed as a prejudgment of pilot error.”

State lawmakers sharply criticized the slow response to the oil spill, saying they are frustrated by the lack of answers about what went wrong.

The initial report was of a spill of about 140 gallons, “the size of a large fish tank,” in the first crucial hours after the container ship Cosco Busan struck the Bay Bridge Nov. 7, said Sen. Dean Florez, chair of the Government Organization Committee. It was “absolutely unconscionable” to confuse such a small spill with the nearly 60,000 gallons that actually were spreading across the bay, said Florez.

“I think it has shaken most people’s confidence in the (spill response) program itself,” Florez said at a joint hearing by two Senate committees.

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