K Line is engaged in talks to settle a court battle over a collision between a VLGC and a tank barge and the resulting oil product spill that sparked thousands of claims from the seafood industry.
A US federal judge has placed a pause on trial deadlines in the lawsuit while the negotiations continue.
Type: VLGC
Owner: FPG Shipholding Panama
Manager: K Line Energy Ship Management, a subsidiary of K Line
Flag: Panama
Classification society: American Bureau of Shipping
The decision by US District Judge Jeffrey Vincent Brown comes more than five months after he ruled that the 82,400-cbm LPG carrier Genesis River (built 2018) bears full responsibility for a 2019 collision in the Houston Ship Channel that resulted in a spill.
In the 2019 incident, 11,000 barrels of the gasoline ingredient reformate poured from a Kirby-controlled tank barge after a collision with the K Line-controlled VLGC.
Court documents show that the Japanese shipping giant's K Line Energy Ship Management subsidiary and entities tied to ownership of the Genesis River have been locked in settlement discussions with a host of parties that filed claims under the US Oil Pollution Act, which allows people and businesses impacted by a spill to seek compensation.
Those talks continue after a mediation session on 13 December failed to reach an agreement, lawyers on both sides told the judge.
They agreed to pause court deadlines until 10 February.
If a settlement is not reached by then, lawyers will seek to set a date for a trial on a set of claims that will serve as a bellwether for the rest.
The Genesis River incident sparked a complex web of legal sparring at the US federal court in Galveston, Texas.
Houston-based Kirby sued K Line, which in turn blamed movements of a nearby BW LPG vessel. Add to that about 2,000 claimants under the Oil Pollution Act, including commercial fishermen and seafood companies that complained of the spill's impact on local shrimp and oyster industry.
An investigation by the National Transportation Safety Board and Brown's July judgment ultimately found the K Line ship fully at fault for violating navigation rules in the busy shipping channel and travelling too fast. The judge found the Genesis River interests liable to Kirby for $17.4m in collision and response damages, and he dismissed all claims against the barge owner and BW LPG.
But that left a battle over the mountain of claims pending against K Line's in-house management company and shipowning entities FPG Shipholding Panama and Genesis River Shipping.
The cases of 10 individuals and businesses involved in the seafood industry in Galveston Bay have been selected to have their claims heard in the bellwether trial.
Claimants have alleged that the reformate spill "decimated" local seafood populations and that the spill will hurt their income for years, the court records show.
A lawyer at Royston, Rayzor, Vickery & Williams, the law firm representing K Line and other vessel interests in the case, declined to comment for this story.
In recent weeks, lawyers have been sparring over experts that the opposing sides intend to use at trial to bolster their arguments over the impact of the reformate spill.
Ramboll senior managing consultant Benjamin Cord Harris, who was hired by Royston Rayzor, concluded that the product evaporated quickly, and only one fish kill was found.
"Given the limited impacts observed in proportion to the overall bay, it is unlikely that the spill had a significant impact on the shrimp, oyster and fish populations in the system," he wrote in his report.
But lawyers for the seafood industry claimants want his report thrown out.
"Dr Harris was deposed and acknowledged that he was unaware of specific data and information regarding the evaporation of reformate, the life cycles of aquatic life in Galveston Bay, the specific conditions which would harm aquatic life and the actual impacts of the reformate spill on aquatic life in Galveston Bay," they told the judge.
"Dr Harris’s report is void of any data or analysis regarding aquatic life in Galveston Bay."
Lawyers for K Line have also been critical of two experts for the claimants — marine ecologist Paul Montagna and biologist Gabriel Johnson.
"Despite their designated roles, neither Dr Montagna nor Mr Johnson made any effort to meaningfully analyse the alleged cause-and-effect relationship between the spill and its purported impact upon local seafood populations," they said.
The Genesis River settlement talks come as the US government proposes a $15.3m settlement for a 2014 spill of fuel oil from a different Kirby barge.
This article has been amended since publication to reflect that only one fish kill was found after the spill.
