People of the Municipality of Gilman ex rel Tamagken v Woodman Easternline SDN BHDn [2012] FMSC 6; 18 FSM Intrm. 165 (Yap 2012) (7 February 2012)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2007-3009

THE PEOPLE OF THE MUNICIPALITY OF GILMAN, YAP STATE, by and through CHIEF GEORGE TAMAGKEN and CHIEF OTTO BOWOO,
Plaintiffs,

vs.

WOODMAN EASTERNLINE SDN. BHD.,
Defendant.
_______________________________________________

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Dennis K. Yamase
Associate Justice

Trial: December 1-7, 2009, June 4-5, 2010
Decided: February 7, 2012

APPEARANCES:

For the Plaintiffs: Daniel J. Berman, Esq.

Berman O'Connor & Mann

111 Chalan Santo Papa, Suite 503

Hagatna, Guam 96910

Joseph C. Razzano, Esq. (pro hac vice)

Joshua D. Walsh, Esq. (pro hac vice)

Teker Torres & Teker, P.C.

Suite 2A, 130 Aspinall Avenue

Hagatna, Guam 96910

For the Defendant: David Ledger, Esq. (pro hac vice)

Cabot Mantanona LLP

Edge Building, Second Floor

929 South Marine Corps Drive

Tamuning, Guam 96913

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HEADNOTES

Admiralty; Torts - Negligence
FSM admiralty law recognizes a cause of action for damages to coral reefs and marine resources caused by marine vessels. The elements of maritime negligence are: 1) the existence of a duty requiring conformance to a certain standard of conduct in order to protect others against unreasonable risks; 2) a breach of that duty by engaging in conduct that falls below the standard of conduct (usually called "negligence"); 3) a reasonably close causal connection between the unreasonable conduct and any resulting injury (often called "proximate cause"); and 4) an actual loss or injury to another party. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 174 (Yap 2012).

Torts - Duty of Care
Vessels had a duty not to cause any damage to the reef and marine resources in Yap waters, which was breached by the vessels' failure to maintain a position off of Yap without causing damage to Yap's fringing reef and its attendant marine resources. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 174 (Yap 2012).

Evidence; Torts - Causation
The circumstantial evidence proves proximate cause even though exactly how the reef was damaged - whether anchors and/or chains were dragged on the reef; or whether a detached or slack cable or chain used to connect the barge to the tugboat struck the reef; or whether one or both of the vessels struck the reef; or whether some combination of these was responsible - is undetermined since the damages occurred while the two vessels were on the site (or while just the barge was there) and since no other vessels were present at the time and the damage was of the type that must have been caused by one or more of the methods described. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 174-75 (Yap 2012).

Administrative Law - Judicial Review; Evidence
The court will not attach any deference to a state agency's findings of fact when the defendant was never a party to any proceeding in that agency and was not even aware of the proceeding and no state agency ever initiated any action against the defendant or imposed any fines or penalties on it and when this court case is not a judicial review of an adversarial agency action so the agency report is not entitled to the judicial deference given such agency action. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 175 (Yap 2012).

Judgments - Interest; Torts - Damages
Injured parties in maritime tort cases are typically awarded prejudgment interest. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 175 (Yap 2012).

Judgments - Interest; Torts - Damages
While the FSM statute, 6 F.S.M.C. 1401, by its terms, applies solely to judgments from the date of entry, the court has judicially adopted 9% simple interest per annum as the legal interest rate to be applied when prejudgment interest is awarded and the interest rate has not been otherwise designated by statute or contract. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 176 (Yap 2012).

Admiralty; Property - Tidelands; Torts - Nuisance
FSM admiralty law recognizes a cause of action for nuisance. The Yapese interest in exclusive use and exploitation of their submerged lands on and within the fringing reef is analogous to interests in dry land. A nuisance is a substantial interference with the use and enjoyment of another's land (either dry or submerged in Yap) resulting from intentional and unreasonable conduct or caused unintentionally by negligent or reckless conduct. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 176 (Yap 2012).

Admiralty; Torts - Nuisance
The owners were liable under a nuisance cause of action when its vessels substantially interfered with the plaintiffs' use and enjoyment of the affected reef both when the vessels were present and afterward because of the resulting damage. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 176 (Yap 2012).

Admiralty; Torts - Damages; Torts - Nuisance
When the nuisance damages are the same (or lesser portion of) those awarded for maritime negligence, no further damages will be awarded for the nuisance cause of action. People of Gilman ex rel. Tamagken v. Woodman Easternline Sdn. Bhd., [2012] FMSC 6; 18 FSM Intrm. 165, 176 (Yap 2012).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

I. Background

On July 23, 2008, the plaintiff class, defined as those Gilman municipality residents whose tabinaw membership gives them exclusive rights in common with other tabinaw members to use or exploit the natural resources affected by the alleged negligent anchoring of the M/V Easternline I and the barge Nationwide II on a portion of the Anoth village outer reef on May 22-25, 2006, was certified and traditional Chiefs George Tamagken and Otto Bowoo were certified as adequate and typical class representatives. People of Gilman ex rel. Tamagken v. M/V Nationwide I, [2008] FMSC 48; 16 FSM Intrm. 34, 40-41 (Yap 2008).

This class action went to trial on December 1 to 7, 2009, and June 4-5, 2010, in Colonia, Yap. The trial was recessed in December, 2009 to allow the parties time to gather additional evidence by way of video deposition of several witnesses. This additional evidence was presented at the continuation of the trial on June 4-5, 2010. Closing arguments were presented on June 5, 2010. Proposed findings of fact and conclusions of law were submitted by the plaintiffs People of Gilman, through Chiefs Tamagken and Bowoo (Gilman) on July 12, 2010 and by the defendant Woodman Easternline Sdn. Bhd. (Woodman) on July 14, 2010.

The plaintiffs Gilman are represented by Daniel J. Berman, Esq. and Joseph C. Razzano, Esq. appearing pro hac vice. The defendant Woodman was represented by David P. Ledger, Esq. appearing pro hac vice. All defendants other than Woodman Easternline Sdn. Bhd., the vessels' owner, were dismissed because the court had never acquired personal or, in the case of the vessels, in rem jurisdiction over them. People of Gilman ex rel. Tamagken v. M/V Easternline I, [2010] FMSC 11; 17 FSM Intrm. 81, 84-85 (Yap 2010).

In this admiralty case, the plaintiffs Gilman seek monetary damages for loss and injury to their interest in Yap's natural resources allegedly caused by the barge Nationwide II and/or the tugboat Easternline I's collision with the reef at Gilman. Gilman also seeks litigation costs and pre-judgment interest from the date of the incident on or around May 25, 2006, until the date of judgment.

The court having heard the testimony of the witnesses, having reviewed all of the submitted exhibits, having considered the arguments of counsel, and having reviewed the parties' proposed findings of fact and conclusions of law, now finds and concludes as follows.

II. Findings of Fact

A. The Vessels and the Incident

1. The Easternline I is a tugboat and the Nationwide II is a barge, which at the time of the incident were owned by defendant Woodman Easternline Sdn. Bhd. and were in the waters of the State of Yap, Federated States of Micronesia (FSM) to deliver a cargo of sand and gravel. The tugboat Easternline I towed the barge Nationwide II to its various destinations.

2. The unloading of the cargo was completed and the vessels left port on or about May 22, 2006, but the vessels did not depart Yap waters on that day. The departure was delayed due to changes needed to port departure documents to correctly state the vessels' next destination and port of arrival.

3. During the time the vessels waited for these documents they took up a position off the southwest coast, off the Municipality of Gilman, Yap Island.

4. John Malaang, a long time resident of the Municipality of Gilman, observed a tugboat and barge on the edge of the reef off Gilman in May, 2006. He was fishing and observed that the tugboat and barge stayed in one place. He observed the tugboat and barge in the same location for two consecutive days. He had never seen a tugboat and barge at this location before. At trial, he marked the location of the vessels on a map of Yap Island. Ex. S-100.

5. Elias Lam also observed the tugboat and barge off the reef of Gilman municipality in May, 2006. At trial, Lam identified the location of the tugboat and barge on the map of Yap Island. Ex. S-100.

6. After waiting for around three days with no documents obtained, on the morning of May 25, 2006, the captain of the Easternline I, Alexander Makaluas, detached the barge Nationwide II so the tugboat could go back around the southern tip of Yap and north along the coast to the commercial port at Colonia without having to tow the barge. The captain's purpose was to obtain the proper departure documents back in Colonia.

7. Rophino Yarowe, Chief of Sea-Air Transportation, sent a warning to Yap State officials, including the Yap State Attorney General (AG), the Yap State Marine Resources Management Division (MRMD), and Yap State Environmental Protection Agency (EPA), because of Easternline I's return and early morning arrival outside of Colonia port without its barge the Nationwide II. Ex. S-1 (Sea Trans. Rept.).

8. Yarowe's radio call to the Easternline I kept the vessel out of the Colonia port because of its lack of a new port entry permit. Yarowe checked with the agent for the defendant Woodman, Jesse Gadjusek, who responded that he did not know why the Easternline I returned to Colonia port. Yarowe reminded the Easternline I's captain that it was his responsibility as master to know about his requirements for provisions, freshwater, and fuel before he had sailed on May 22, 2006.

9. Gadjusek was never told that the vessels intended to wait and anchor off Gilman municipality. He was not informed that the Easternline I wished to return to Colonia port on May 25, 2006. Gadjusek did not have any port clearance documents ready for Easternline I to pick-up at the Colonia po rt on May 25, 2006. He had never sent any message to the Easternline I's captain to return to Colonia port to pick-up any port clearance documents. Gadjusek knew nothing about any arrangements being made for more water, food, provisions, fuel or documents.

10. Yarowe instructed the Easternline I to leave and look for its barge, the Nationwide II and then proceed on to the Republic of Palau. Yarowe never received an explanation of why the tugboat Easternline I and the barge Nationwide II had remained in Yap State waters for the approximately three days before its May 25, 2006 return to the Colonia port without its barge.

11. Eric Chien Choon Ho, was Woodman's designated representative as the person most knowledgeable of the Easternline I and the Nationwide II's trip to Yap from on or around May 16 to 25, 2006. He had been promoted to Woodman's Shipping Manager in 2005. Ho Depo. at 8. Ho suggested that the vessels' purpose for remaining in Yap waters was to wait for a change in port clearance documents. Id. at 59.

12. Ho had no idea why the Easternline I's captain decided to return to the Colonia port from his position off the reef at Gilman. Id. at 66, 115. Only after the Easternline I entered the harbor at Colonia did Woodman's Shipping Manager in its Malaysian headquarters learn that the Easternline I had cast off its barge the Nationwide II and returned to Colonia port. Id. at 70, 72. Woodman did not approve the captain's conduct and deemed it unsatisfactory. Id. at 73.

13. Sia Pik Ann, a Woodman's representative, was on board the Easternline I and made the daily reports and radio calls from the vessel to Woodman's corporate office in Malaysia. Sia Depo. at 7. The Easternline I's captain was present for the daily reports to the company office made at approximately 7:00 a.m. each morning. Id. at 8. Sia confirmed that the captain was the source of information in the daily reports made on May 23 to 25, 2006, which stated that the vessels were "Anchor Waiting Document", "Anchor Yap Island", "Complete discharging Anchor Yap Island". Id. at 13. Because Sia could not speak English, he never spoke to the local pilot Steve Memai. Id. at 17. Sia could not remember any place on the map that pilot Memai had pointed out with a pencil. Id. at 23.

14. Steve Memai, served as the local pilot for the vessels and testified by deposition taken on May 25, 2009. Trans. Ex. S-106. Memai stated that as the pilot he did not advise the captain to take his tugboat and barge to an anchorage off the coastline of the Municipality of Gilman near the Magic Kingdom dive site. Depo. Trans. at 30-31. Yap State has only one anchorage at the port of Colonia with its concrete dock. Depo. Trans. at 18-19.

15. No other port clearance documents were given to the Easternline I. As a result, a decision was made to depart to the next destination without the proper documents. On May 25, 2006, the tugboat Easternline I reunited with its barge the Nationwide II and set course for Papua New Guinea.

B. The Vessels and the Gilman Reef

16. On May 25, 2006, when the Easternline I was at Colonia trying to obtain departure documents, someone telephoned the Yap State authorities to report that the barge Nationwide II was floating in the ocean near Gilman. As a result, the Yap State MRMD sent a team to investigate. The team consisted of both Yap State MRMD and EPA personnel.

17. Lisa J. Cohen (then known as Lisa Johnson) of the EPA was the primary investigator and principal author of an EPA report, dated May 25, 2006, on the incident. EPA Rept; Ex. S-111 or S-131. Cohen has a Master's Degree in Biology from the University of North Carolina at Wilmington earned in 2004. Trans. p. 3; Ex. S-128 (Video Cards).

18. On the team with Cohen was Peter Fattamag of the EPA, Mike Hasurmai, Damasius Mailing, and James Yinug of the MRMD. The team went to a location approximately 100 meters from the Gilman reef where they observed the barge Nationwide II. Cohen observed the Nationwide II drifting unsecured and found no one on board at the time. She later identified the barge in several photographs. Photos D, E, F, and G; Trans. at 11-13; Ex. S-157 (CD-ROM Photos).

19. EPA also contacted staff at various Yap businesses, including Nature's Way, Beyond the Reef, Manta Ray Bay Hotel, and Yap Divers to confirm that they had observed the barge near the Gilman reef in the vicinity of the Magic Kingdom dive site. Trans. at 7.

20. Cohen noticed that about 30 minutes after arrival to the site of the Nationwide II, the barge had drifted approximately one kilometer from shore moving in a southwest direction away from the reef. Trans. at 12-13.

21. Melloney Verbeurgt, a dive master with Manta Ray Bay and Yap Divers with over an estimated 8,000 scuba dives, with approximately 200 on the Magic Kingdom dive site, stated that on May 22, 2006 she was diving in that vicinity and heard the noise from the engines of the tugboat Easternline I. When she first made visual contact, the Easternline I was approaching her at her safety stop at a depth of between 10 and 15 feet. Depo. at 18-19.

22. Verbeurgt could feel the vibrations of the Easternline I and saw both propellers turning in front of her and they scared her. Id. at 22-23. The tugboat was approximately 40 feet from her, as she was clinging to the edge of the reef wall and she was then at a depth of approximately 30 feet. Id. at 24-25. When she surfaced from the scuba dive she saw the Easternline I and its crew members on it. She was angry and shouted a profanity at the tugboat and crew. Id. at 26-27, 30.

23. Henry Erechilug was the dive boat driver on the boat that transported Verbeurgt and her group of scuba divers on May 22, 2006. Erechilug stated that the dive was at the Magic Kingdom dive site adjacent to the reef at Gilman.

24. Erechilug stated that when the Easternline I steered toward the open ocean, the barge the Nationwide II swung toward him and the reef wall. Erechilug took evasive action to avoid collision with the Easternline I and the Nationwide II in tow. He observed that the barge was dragging chains as it approached his dive boat. He observed Verbeurgt shouting at the crew of the tugboat because of the potential danger they had created. He stated that the tugboat and barge approached within 20 feet of his boat, which in turn was an estimated 10 feet from the edge of the reef.

25. Ho, the Woodman's Shipping Manager, confirmed that photographs of the barge with three chains extending down into the water were fair pictures of the barge Nationwide II. Ho Depo. at 75. The chains were identified as heavy and approximately seven meters in length. Id. at 76. Ho testified that the chain is very heavy and that people cannot pull it out of the water and this is why the chain was not stored on deck. Id. at 78. Two of the hanging chains were for towing the barge and the third was an anchor chain. Id. at 77-78.

26. Sia Pak Ann, the Woodman's representative, confirmed the location at the Nationwide II 's bow where the chain holds the anchor. Sia Depo. at 28. The anchor is made of raw iron or some kind of iron and attached to the chain at the bow. Sia Depo. at 29. The length of the chain to the anchor is five "shackles" or approximately 130 meters in length. Sia Depo. at 29-30. Two of the chains that hang at the side of the barge were identified as tow chains for connection to the tugboat. Sia Depo. at 30-31. Three chains hung down from the barge. One of the three chain lines was fastened to the anchor hanging below. Sia Depo. at 45. The barge's anchor is much larger in size than the tugboat's anchor. Sia Depo. at 33. The barge's anchor weighs approximately two tons while the tugboat has two anchors of a half ton each. Sia Depo. at 34.

27. Between May 22, 2006 when the tugboat and barge arrived at the southwest corner of Yap and May 25, 2006, the barge's anchor was out and remained in the down position. Sia Depo. at 38-39. While the barge was separated from the tugboat, Sia stated that the barge's anchor remained in the down position. Sia Depo. at 38.

C. Extent of Gilman Reef Damage

28. On May 25, 2006, Cohen swam a length of about 200 meters along the reef and found moderate fresh damage to the coral in an area about 15 meters wide. Trans. at 14-15. The damage to the substrate and hard corals appeared fresh and with scars characteristic of fresh damage. Trans. at 17, 39.

29. Cohen had previously seen freshly broken-off corals caused by large objects. Id. She had observed the prior grounding site of the M/V Kwoya Violet in Yap. Id. She observed large, white smooth surfaces and jagged edges. Trans. at 18.

30. Cohen explained photographs taken of the barge and coral damage by Yap EPA and MRMD. Exs. S-115, 116, 133-140, 150-154. Cohen explained that no scuba diving visitors could have caused such damage to the reef. Trans. at 18.

31. Cohen stated that no other boats or ships of any kind, no commercial vessels, no tugboats and no other barges were seen in the vicinity during the EPA and MRMD investigation. Trans. at 43-44.

32. Cohen had reason to report that three chains and a metal object were observed hanging down from the barge and she had personally observed one chain hanging underwater on May 25, 2006. Trans. at 15, 30; Ex. Z.

33. The Magic Kingdom dive site's attractions include beautiful reef formations, nice slope, yellow colors, and numerous fiddle fish living among the coral heads. Verbeurgt Depo. at 11-12.

34. Whether a coral reef is healthy or unhealthy cannot be determined from a mere photographic review. Trans. at 62. Verbeurgt stated that from her diving experience, which included observation of damage done in the Red Sea by vessel chains and anchors, she was of the opinion that the damage depicted in the May 26, 2006 photographs were very similar. Photo Exs. 1-6, 13-18, 54, and 73-78; Trans. at 64-65, 67, and 69.

35. Mike Hasurmai, a Marine Specialist, MRMD, took photographs of the damage on May 25 and 26, 2006. On May 25, 2006 he took photographs while snorkeling and did not have scuba gear at the time. On May 26, 2006 he brought a team and took many underwater photographs of the damage field. Many of his observations were included in the Preliminary Reef Damage Report. Ex. S-113, Id. at 3.

36. Hasurmai showed 73 photographs and slides of damage to the reef at Gilman. Id. at 7-9. The photographs included split-open coral, with the white parts the fresh parts of the damage. Id. at 7-9.

37. Two years later, Hasurmai and MRMD, did a reassessment between September and November, 2008. Id. at 9. The 2008 reassessment confirmed the damage field was 2,680 square meters. Id. at 10; Reassessment Rept and related photographs, Ex. S-114. Hasurmai took under water tape measure measurements for the length and the width of the damage field, and measured it north to south. Id. at 11. For the reassessment, Hasurmai spent approximately 77 hours on the work between the months of September to December, 2008. Id. at 12. In addition to the crew, he used measurement tape, clipboard or diver's slate, scuba gear, camera, and a GPS. Id. at 13.

38. Hasurmai was familiar with this particular reef because of his work on the Yap State Trochus Assessment Program and his survey reports made every one to two years. Id. at 14-15. He had never observed damage to the reef of this kind in his previous surveys and dives on this reef. Id. at 15. Hasurmai had measured a slight 25 square meter difference over the two years between observations, he explained that subsequent algae growth over the broken coral obscured the 2008 observations so that his personal opinion was that the 2,680 square meter damage field identified in 2006 remains the correct damage field size. Id. at 16; Ex. S-113; S-114 (Reassessment Report 2008).

39. Corals can take some time to die after impact. Id. at 67-68. A large brain coral may be five feet in diameter and require up to 20 years to reach that size. Id. at 69-70. If this brain coral were damaged in the center, the whole coral would take time to die later. Id. at 70. Hasurmai noted that there is always some live or healthy coral within every damage or debris field. Id. at 71. Over a period of time after impact, additional damage is realized from the broken and dead coral that is washed or dragged over the healthy coral. Id. at 71.

40. Andy Tafeleichig, has been Chief of MRMD, for approximately 20 years and supervises Hasurmai. Trans. at 1-2. He explained that the Gilman reef investigation commenced on May 25, 2006 when a phone call was received from the Yap State AG's Office with instructions to look for a barge, because the tugboat that had been towing the barge had returned to the Colonia port without the barge. Trans. at 2.

41. The wind speed on May 25, 2006 was reported at 5 to 7 knots. Ex. S-113 at 2; Trans. at 5. The investigation team arrived at the site at 1:15 p.m. Id. The barge was observed with three chains hanging down into the water. Id. The MRMD Preliminary Report of 2006 had been published subject to Tafeleichig's review and approval. Ex. S-113; Trans. at 5. The opinion reported in that report was that anchors and chain had caused 2,680 square meters of damage. Ex. S-113 at 6.

42. MRMD wanted to do a reassessment report after the initial report, but budgetary limitations made it difficult until 2008. Id. at 6. The primary and secondary damage fields were included inside the 2,680 square meters damage area. Id. at 30.

43. Dr. Robert Richmond, University of Hawaii professor and plaintiffs' expert witness, stated his opinion that the barge must have been anchored to the reef as of May 25, 2006 based on prevailing currents and winds taken together with the 7:30 a.m. separation of the tugboat Easternline I and the barge Nationwide II, and the 1:15 p.m. arrival of the MRMD and EPA investigation team. Rept. at 4. The documented reef damage disclosed impact both in shallow areas (1m to 2m depth) and deeper areas consistent with anchor/chain damage. Rept. at 4.

44. In April, 2009, Dr. Richmond and Hasurmai swam into and along the damage field. Rept. at. 5. Dr. Richmond confirmed that the GPS coordinates provided by MRMD matched exactly his own GPS unit. He took underwater notes on the inspection of the site. Ex. S-124. Dr. Richmond's report on "Reef Site Assessment re: WN Nationwide II" was entered into evidence as Ex. S-119.

45. Dr. Richmond's assessment found impact to large coral colonies that were analogous to cutting down giant redwood trees, because some of the colonies were estimated to be over 150 years old. Rept. at 17. For calculating the value of the damage, Dr. Richmond justified his opinion upon commodity value as calculated on the basis of a retail sale price of coral, fish, and other resources, the cost of replacement and restoration, and contingency value based on tourism, cultural use, and ecological services. Rept. at 17. Dr. Richmond analyzed the retail value of small golf ball sized coral at $35 each for 3-5 centimeter diameter coral. Id. Alternatively, he took into account previous court decisions and settlements from both Yap and Florida State. He also considered the Florida statutory penalty of $1,000/per sq. meter for lost or destroyed coral. Ex. S-166.

46. Dr. Richmond started from the $600/per square meter value for loss/damage to the reef found in the Kyowa Violet court decision which was affirmed on appeal. He noted the importance of this particular damage site as a commercially valuable dive site known as Magic Kingdom. This dive site is popular for its recreational value, in addition to its economic value, which was considered a strong factor. The plaintiffs suggest the damage site supports a value of $800/per square meter for damage to the resource. Rept. at 18.

47. Dr. Richmond's expert witness rebuttal testimony was taken on March 17, 2010. Ex. S-175. He confirmed that both MRMD reports of 2006 and 2008 that support the 2,680 square meter damage field were appropriate and reasonable. Trans. at 13-15. No mistakes, no gross error, and no abuse of discretion existed in the perimeter measurements employed by MRMD. Id. at 14. The slope of the reef was considered a factor by MRMD and Dr. Richmond. Id. The MRMD method of measurement is not employed only by Yap State. Id. at 15.

48. Dr. Brett Kettle, the defendant's expert witness, is a marine scientist and has a Ph.D. in marine biology or zoology from James Cook University in Australia. Dr. Kettle presented measurements and mapping Ex. S-163, video transects from which "percent coral cover" was calculated by computer modeling, Exs. S-169 and 170, still pictures extracted from the video transects Ex. S-164, calculations of percent coral cover, Ex. S-122, and photographs showing damaged coral that had re-grown. Ex. S-122. Dr. Kettle assessed the health of the coral community by analysis of the video transects and found the health to be good. Kettle rebuttal trans. at 50-55; Ex. S-176.

49. Dr. Kettle agreed that the 2,655 square meter damage field (45 meters by 59 meters) as measured by MRMD and confirmed by Dr. Richmond was a reasonable number. Kettle testimony trans. at 180, 190. Dr. Kettle, however, suggests that there is a smaller actual damage field. Dr. Kettle determined that within the damage field there exists an "impact zone" of 609 or 879 square meters. The 609 square meters is a "plain view" and the 879 square meters is a "flattened down view" of the impact zone. Id. at 176-177.

50. Dr. Kettle contends that within the impact zone there are 85.4 square meters of damage. This calculation was determined by formulating percent coral cover in different zones (shallow, middle, and deep water) of the damage field and subtracting this percentage from the percent coral cover in reference or control zones outside the damage field where no damage existed. Id. at 185-188.

51. Dr. Richmond's opinion was that, although Dr. Kettle's May, 2009 photographs show no apparent damage, they may be inadequate because the photographs are over three years after the incident, because no microscopic damage is shown as no photography method was utilized that would show that kind of damage, and because a three year loss of soft corals, brittle star fish, and anemone would not be apparent in May, 2009. Id. at 16-20. The loss of crustose corallines that were visible in May, 2006 would be gone within months of the damage. Id. at 20.

52. Dr. Richmond's opinion is that assuming that in 2009, three years after the incident, there was no damage visually, does not mean that damage did not occur in 2006. Id. at 21. The ability to see the physical damage was lost over time. Id. at 23.

53. Dr. Richmond's opinion was that Dr. Kettle did not employ other physiological measures or to review the problem from a perspective of scaling-up the visual damage. Depo. at 24. The cellular function - rate of protein production; up to the tissue level - connections between coral polyps, lesion repair and plugs; scaled-up to individual coral level - physiological measures of respiration, growth rate, rate of reproduction or fecundity were not evaluated by Dr. Kettle's work. Id. at 24. The interactions between corals - two corals that may agress against or attract one another; scaled-up to the trophic level - the review of producers and consumers of the coral reef, algae, herbivore and carnivores was not reviewed or reported by Dr. Kettle. Id. at 25.

54. Dr. Richmond's opinion was that the singular coral cover analysis employed by Dr. Kettle is only one parameter in the measurement of coral health. Id. at 25. Dr. Kettle's findings on the square meters of damage for the damage field or impact zone was not acceptable primarily because of the three year loss of resolution; his inability or unwillingness to find a very large underwater damage field in October, 2008; and his confusion in understanding differences between coral population and coral ecosystem. Id. at 8-11.

55. Dr. Richmond's opinion was that you may have individual corals that are healthy, but if others had been removed that would have an effect upon the coral community and the ecosystem itself. The coral community would include the corals themselves plus the invertebrates and fish, and then with all of the other elements including physical, water characteristics, that would be an ecosystem. Richmond Trans. of direct exam. at 45-48.

III. Conclusions of Law

A. Maritime Negligence

FSM admiralty law recognizes a cause of action for damages to coral reefs and marine resources caused by marine vessels. People of Rull ex rel. Ruepong v. M/V Kyowa Violet, [2006] FMSC 53; 14 FSM Intrm. 403, 415-16 (Yap 2006), aff'd[2008] FMSC 53; , 16 FSM Intrm. 49 (App. 2008). The elements of maritime negligence are: (1) the existence of a duty requiring conformance to a certain standard of conduct in order to protect others against unreasonable risks; (2) a breach of that duty by engaging in conduct that falls below the standard of conduct (usually called "negligence"); (3) a reasonably close causal connection between the unreasonable conduct and any resulting injury (often called "proximate cause"); and (4) an actual loss or injury to another party. Id. at 416.

1. Duty and Breach

The Easternline I and the Nationwide II had a duty not to cause any damage to the reef and marine resources in Yap waters. This duty was breached by the vessels' failure to maintain a position off of Yap without causing damage to Yap's fringing reef and its attendant marine resources.

2. Causation

The evidence showed that the reef area was undamaged when Verbeurgt was leading a scuba dive group there on May 22, 2006; that the Easternline I and Nationwide II arrived there on May 22, 2006, and remained there for three days; and that on May 25, 2006, when Cohen and a team from MRMD and EPA went there reef damage was very apparent.

Exactly how the reef was damaged - whether anchors and/or chains were dragged on the reef; or whether a detached or slack cable or chain used to connect the barge to the tugboat struck the reef; or whether one or both of the vessels struck the reef; or whether some combination of these was responsible - is undetermined. However, since the damages occurred while the two vessels were on the site (or while just the barge was there) and since no other vessels were present at the time and the damage was of the type that must have been caused by one or more of the methods described above, the circumstantial evidence proves proximate cause.

3. Damages

a. Damage to the Reef and Marine Resources

The court in making this ruling does not attach any deference to Yap State MRMD's findings of fact. Woodman was never a party to any proceeding in that agency and was not even aware of the proceeding. No Yap State agency ever initiated any action against Woodman or imposed any fines or penalties on it. This action is not a judicial review of an adversarial agency action so the agency report is not entitled to the judicial deference given such agency action.

The court finds that the 2,680 square meter damage field determined by MRMD is the outer perimeter of damages that had been recorded. Within this damage field, the court determines from a review of the photographs admitted into evidence and the testimony at trial, that there were areas within the damage field without damage.

Dr. Kettle contended that within the 2,680 square meter damage field there was a 879 square meter area which he called the impact zone. The plaintiffs, which have the burden of proof, did not prove that more than 879 square meters was damaged. Dr. Kettle made further calculations of percent coral cover in three zones within the damage field, compared these with percent coral cover outside the damage field, and calculated that the area with actual coral damage was 85.4 square meters.

The court determines that the 879 square meter impact zone more accurately reflects the area of the reef that sustained damage. The court, however, does not agree with the application of a further reduction based on percent coral cover as calculated by Dr. Kettle. First, the damage to the coral reef includes damages to not only coral, but also to the coral reef community as an ecological system or unit. Second, damages were also sustained to the substrate and all manner of marine organisms, including, but not limited to the coral.

Further, the defendant Woodman's calculations were based upon video transect analysis and, as was pointed out by the plaintiffs Gilman, the video transects would be limited as to what damages it would reveal because of the resolution of the videos and because some damage would not be revealed from an analysis of the video transects.

The court, will therefore, use the 879 square meter impact zone as the area damaged for purposes of its damages calculation. The court finds that 879 square meters of reef were damaged and that the subject reef has a value of $600 per square meter.

b. Prejudgment Interest

"Injured parties in maritime tort cases are typically awarded prejudgment interest." People of Rull, 14 FSM Intrm. at 420. Woodman contends that the prejudgment interest should be the rate for borrowing in the banking market for the period in question. Woodman asserts that, based on the United States Federal Reserve Board data, the prime borrowing rate during this time has varied from 7.25% to the current rate of 3.25% for what it calls an average of 5.25% (5.25% is a median rather than an average).

In the cases cited by Woodman, the courts indicated that they would use the borrowing rate if it were higher than the legal rate and the injured party actually borrowed money to repair the damages (to a ship), United States v. Central Gulf Lines, Inc., [1992] USCA5 2001; 974 F.2d 621, 630-31 (5th Cir. 1992), or use it when repairs [to a damaged vessel] are delayed because of the inability to obtain financing for the repairs, Independent Bulk Transport v. Vessel "Morania Abaco"[1982] USCA2 278; , 676 F.2d 23, 26-27 (2d Cir. 1982).

The court has previously rejected a claim that prejudgment interest should be calculated by using the interest rate that local lending institutions charge for consumer loans and instead, awarded the legal interest rate - 9% simple interest. People of Rull, 14 FSM Intrm. at 420-21. One consideration for that rejection would have been that the injury did not cause the plaintiffs to take out any loans.

While Woodman is correct that the FSM statute, 6 F.S.M.C. 1401, by its terms, applies solely to judgments from the date of entry, the court has judicially adopted the 9% rate as the legal interest rate to be applied when interest is awarded and the interest rate has not been otherwise designated by statute or contract. See, e.g., Coca-Cola Beverage Co. (Micronesia) v. Edmond, [1998] FMSC 20; 8 FSM Intrm. 388, 393 (Kos. 1998); Bank of Hawaii v. Air Nauru, [1996] FMSC 35; 7 FSM Intrm. 651, 653 (Chk. 1996); Bank of Guam v. Nukuto, [1994] FMSC 56; 6 FSM Intrm. 615, 616 (Chk. 1994). Since Woodman has not shown sufficient reason to depart from these previous cases, the court will set the prejudgment interest rate at nine percent per annum simple interest.

B. Nuisance

FSM admiralty law also recognizes a cause of action for nuisance. People of Rull, 14 FSM Intrm. at 416. The Yapese interest in exclusive use and exploitation of their submerged lands on and within the fringing reef is analogous to interests in dry land. Id. at 417. A nuisance is a substantial interference with the use and enjoyment of another's land (either dry or submerged in Yap) resulting from intentional and unreasonable conduct or caused unintentionally by negligent or reckless conduct. Id. at 416.

Woodman is thus liable under this cause of action since its vessels substantially interfered with the plaintiff Gilman class members' use and enjoyment of the affected reef both when the vessels were present and afterward because of the resulting damage. Since the nuisance damages are the same (or lesser portion of) those awarded for maritime negligence, no further damages will be awarded for this cause of action.

IV. Conclusion

The defendant Woodman Easternline Sdn. Bhd. is therefore liable to the plaintiff class in the amount of $527,400.00 plus nine per cent simple interest per annum from May 25, 2006 onward. Let the clerk enter judgment accordingly.

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