Herrera Secures $2 Million Initial Payment for Catastrophic Oil Spill in S.F. Bay

Payment Compensates San Francisco for Significant Costs Incurred in Incident that Fouled Bay with 54,000 Gallons of Bunker Fuel

SAN FRANCISCO (March 2, 2008)-City Attorney Dennis Herrera today announced an agreement for the receipt of a $2 million payment to The City and County of San Francisco to initiate compensation for costs of investigating and responding to the November 7, 2007 oil spill incident in the San Francisco Bay. The agreement for the advance payment was reached between the City and Hudson Marine Management Services (Hudson), the agent of P&I insurance carrier Steamship Mutual Underwriting Association, which has promptly sought to adjust the City’s loss. On behalf of Regal Stone Limited, Hudson has wired these funds to the City to begin paying for the damage incurred when the 65,131-ton, 900-foot long container ship M/V Cosco Busan collided into the San Francisco – Oakland Bay Bridge spilling more than 54,000 gallons of bunker fuel into the San Francisco Bay. The City has not yet determined the full extent of the damage or the complete economic ramifications caused by the spill.

While the initial payment will partially resolve claims that Herrera asserted in his complaint filed on December 10th, 2007, the agreement reached by San Francisco and Hudson is not a final settlement and does not preclude the City from further recovering damages that exceed the $2 million amount. The original complaint against the owners and operators of the Cosco Busan sought compensation on behalf of San Francisco for all costs associated with the response and investigation of the incident and requested injunctive relief requiring defendants to implement a plan to assess, monitor and remediate all damages caused by the catastrophic event. The City will be able to use the $2 million payment to compensate for the taxpayer dollars already spent in managing the clean-up effort in the days following the spill, including response activities; committing the time and labor of city employees to clean up and assess damage to property; and recruiting, training and supervising volunteers to perform cleanup efforts to save natural resources, including beaches and wildlife. The City may also recover additional dollars for the loss of recreational opportunities caused by the spill, which resulted in the closure of numerous beaches, parks and facilities surrounding the San Francisco Bay.

“We are pleased that the responsible parties have stepped forward in an attempt to relieve San Francisco of the heavy burden it faced following this tragic incident,” said Herrera. “By making this initial payment we will begin to recoup the losses we suffered in immediately responding to the disaster so that we could begin the healing process for San Francisco Bay as quickly as possible. We look forward to continuing to work with Hudson and the responsible parties on the resolution of the City’s claim.”

The toxic fuel spill has so far killed and injured at least 2,200 birds, as well as marine mammals, fish and other sea animals that sustain the Bay’s ecosystem, and has caused significant damage to San Francisco’s bay front properties. The spill has also adversely affected the livelihoods of hundreds of career fishermen who depend on healthy waters in order to fish for crab and other marine species. The immediate need to respond to the incident placed an undue onus on San Francisco and other Bay Area cities and their residents to expend their tax dollars for costs relating to the clean up and monitoring of the jeopardized waters and the adjacent coastlines.

Herrera, a former maritime attorney, and appointee to the U.S. Maritime Administration in Washington, D.C., during President Clinton’s Administration, alleged in his lawsuit that at 8:30 a.m. on November, 7, 2007 the pilot of the Cosco Busan negligently attempted to make the routine passage from the Port of Oakland toward the open sea beyond the Golden Gate Bridge on its voyage to South Korea. While navigating the ship through two towers of the San Francisco-Oakland Bay Bridge set at a distance of 2,200 feet apart, the pilot failed to clear one of the towers and collided with it causing a gash in the hull of the ship, allowing the bunker fuel to gush into the waters of the Bay. As a result of the incident, numerous beaches, including Baker Beach, China Beach and Crissy Field, were deemed unsafe, and San Francisco residents and visitors were subsequently unable to visit and enjoy these public recreational areas. Waters within and around the Bay were closed to swimmers, and crabbing and fishing restricted during a season that is traditionally one of the most profitable times of the year.

The City alleged in its suit that parties responsible for the spill were negligent in operating the Cosco Busan, by neglecting to follow normal procedures that would have prevented the incident. By attempting to sail the ship in the Bay in very foggy conditions; proceeding on a course in the Bay with insufficient information about the level of visibility; proceeding at a speed that was excessive for the circumstances; not using the available resources to ensure safety and minimize the risk of accident, including a tugboat, the Vessel Traffic Service of the Coast Guard, and the ship’s lookout; and failing to be fully acquainted with and able to operate the ship’s navigation system, the owners and operators of the ship put San Francisco in grave danger. Herrera alleged that the ship owners and operators violated the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act, under which they are absolutely liable.

The case is CCSF vs.Regal Stone, Ltd; Fleet Management Ltd; Hanjin Shipping Co., Ltd; Synergy Management Services; Synergy Marine Limited; John J. Cota, an individual, and Does One Through 100.