Supreme Court Holds CITGO Liable for 2004 Delaware River Oil Spill

Venezuela-based CITGO and others who contracted for a cargo tanker delivery of crude oil to New Jersey in 2004 are liable for $120 million in damages related to a massive oil spill, the U.S. Supreme Court ruled Monday in a 7-2 decision.

While navigating the Delaware River and nearing the Paulsboro refinery the tanker struck an abandoned anchor, spilling nearly 264,000 gallons. The owner of the tanker, Frescati Shipping, paid $143 million in cleanup costs, subsequently being reimbursed $88 million by the federal government under the Oil Pollution Act of 1990.

In turn, Frescati and the government filed a lawsuit against CITGO and the others who contracted for the delivery, charging that they also were responsible for clean-up costs. At issue was a “safe-berth” clause in the contract that the Supreme Court interpreted as making CITGO and the others responsible for the tanker docking safely.

Disagreeing with the majority were Justices Clarence Thomas and Samuel Alito. In a dissenting opinion Thomas argued that the safe-berth clause as written did not constitute a guarantee.

CITGO President and CEO Carlos Jordá said the company would abide by the decision.