Feds renew lawsuit against Bollinger in cutter cracked-hull caseMar 31, 2015 12:44 PM
The U.S. Justice Department has rekindled a 2011 lawsuit against Bollinger Shipyards for inadequate hull work on Coast Guard cutters. A ruling in late December by the U.S. 5th Circuit Court of Appeals in New Orleans reversed a District Court judge’s decision to dismiss the suit.
The suit, claiming that Bollinger made false statements about the strength of its cutters, was dismissed in January 2013 by Judge Sarah Vance of the U.S. District Court for the Eastern District of Louisiana. In February 2013, the Justice Department filed an amended complaint. Eight months later, the District Court granted Bollinger’s second motion to dismiss, saying the government failed to show that the Lockport, La.-based company knowingly made false statements. The Justice Department thought Vance had erred, however, and in April 2014 asked to have the suit reinstated. It seeks at least $78 million paid for hull work.
The wrangling dates to 1999, when the Coast Guard began its Deepwater program to upgrade or replace aging vessels. One of the program’s contractors, Integrated Coast Guard Systems (ICGS), suggested changes to existing 110-foot patrol boats to prolong their lives. The work, to be done by using 13-foot hull extensions, was subcontracted to Bollinger since it had built the boats.
The first vessel lengthened to 123 feet was Matagorda, delivered by Bollinger to the Coast Guard in March 2004. By that September, Matagorda’s hull had buckled, however. A Coast Guard investigation and new calculations by Bollinger found that the vessel’s section modulus, built based on calculations to resist bending, was 2,615 cubic inches. That number was under the American Bureau of Shipping minimum of 3,113 inches required by the contract, and under all figures given by Bollinger to the Coast Guard before delivery.
The Coast Guard received the first four modified boats before it knew the section modulus data were wrong. On vessels five through eight, the Coast Guard and ICGS sought an increase in the section modulus from Bollinger and other modifications. After vessels five through eight were delivered, however, those changes proved to be inadequate. All eight boats delivered were removed from service, and in May 2007 the Coast Guard revoked its acceptance of the vessels.
Judges W. Eugene Davis, Harold DeMoss Jr. and Jennifer Walker Elrod of the 5th Circuit Court of Appeals sat on a panel in Houston in late October 2014, hearing arguments on whether to reverse Vance’s dismissal of the suit.
Bollinger declined to discuss the revived suit. “Since this is an open case, we won’t be commenting at this time,” Robert Socha, Bollinger’s executive vice president for sales and marketing, said in January.
Bollinger has continued to build for the Coast Guard since the hull dispute began. On Jan. 13, the company delivered the 154-foot Isaac Mayo, the 12th of its Sentinel-class fast response cutters.
In December, Ben Bordelon, grandson of company founder Donald Bollinger, was named Bollinger’s president and chief executive. Bordelon, along with the Chouest family in Galliano, La., have acquired all of Bollinger Shipyard’s assets and stock. Bollinger designs and builds offshore support vessels, oceangoing double-hull barges, tugboats, rigs, liftboats, inland pushboats and barges, and fast patrol boats. Bollinger has 10 shipyards between New Orleans and Houston and is the Gulf’s top vessel-repair firm, with 30 dry docks in Louisiana and Texas.