South Port Marine, LLC v. Gulf Oil Ltd. Partnership

United States Court of Appeals
For the First Circuit
____________________

Nos. 99-2369
99-2370

SOUTH PORT MARINE, LLC,

Plaintiff, Appellant,

v.

GULF OIL LIMITED PARTNERSHIP;
THE REINAUER COMPANIES, INC.,
f/k/a BOSTON TOWING AND TRANSPORTATION COMPANY INC.;

Defendants, Appellees.

____________________

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

____________________

Before

Torruella, Chief Judge,
Boudin and Lynch, Circuit Judges.

_____________________

David J. Perkins, with whom Daniel G. Lilley, Patrick J. Mellor
and Perkins, Olson & Pratt, P.A. were on brief, for appellant.
William H. Welte, with whom Welte & Welte P.A. was on brief, for
appellee Gulf Oil Limited Partnership.
Brian P. Flanagan, with whom Flanagan & Hunter, P.C., Leonard W.
Langer, Marshall J. Tinkle and Tompkins, Clough, Hirshon & Langer, P.A.
were on brief, for appellee Boston Towing and Transportation Co., L.P.

____________________
 December 7, 2000
____________________

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 TORRUELLA, Chief Judge. This appeal, which arises out of a

February 1997 gasoline spill in Maine's Portland Harbor, requires us to

interpret both historic and contemporary maritime law in the United

States. On the one hand, appellees present a Seventh Amendment

argument that involves the state of federal admiralty jurisdiction in

the early days of the Constitution. Appellant, on the other hand,

raises questions of federal preemption and statutory interpretation in

relation to two issues of much current interest: oil spills and

punitive damages. Finally, both parties dispute the sufficiency of

evidence presented to the jury on various aspects of appellant's

alleged damages.

We conclude that the district court's disposition of these

issues must be affirmed in part and reversed in part.

I. Factual and Procedural Background

A. The Parties

Appellant South Port Marine, LLC, ("South Port") is a family-

owned marina located on a cove in Portland Harbor, Maine. The marina

is principally designed to accommodate recreational motor and sailing

vessels by allowing them to tie up to floating dock segments that are

connected with fixed docks leading to the marina's onshore facilities.

The floating dock segments are identical in function and purpose to

ordinary fixed docks, but are designed in sections with Styrofoam

flotation which allows them to rise and fall with the tides.

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 In the winter of 1996-1997, South Port's owners planned to

dredge the marina and parts of the surrounding cove to allow access by

larger boats. The owners also intended to increase the number of slips

in the marina from approximately one hundred to closer to one hundred

and twenty-five.

Appellee Gulf Oil is a Massachusetts-based petroleum company.

It operates a distribution facility on Portland Harbor where, inter

alia, petroleum products such as gasoline are pumped into barges for

transportation to other ports. Appellee Boston Towing and

Transportation operates tug boats and tank barges for the purpose of

oil transportation. Gulf Oil was pumping gasoline into a barge owned

and operated by Boston Towing at the time of the incident involved in

this appeal.

B. The February 5, 1997 Spill

In the early morning hours of February 5, 1997, a Boston

Towing tank barge was tied to the Gulf Oil pier in Portland Harbor,

while a crew member transferred gasoline from a Gulf onshore storage

facility into individual tanks on the barge. The gasoline transfer

process required the crew member to monitor the filling of each tank

and to manually switch the flow of gasoline to the next empty tank when

the prior tank reached its full capacity.

Sometime after 2:00 a.m. in the morning, under severe weather

conditions, the crew member assigned to monitor the gas flow left the

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barge and boarded a nearby tug boat, leaving the gasoline transfer

completely unattended. While the crew member was absent, the gasoline

overflowed the recipient tank and subsequently overflowed the barge's

safety transom, flowing into Portland Harbor. Between 23,000 and

30,000 gallons of gasoline spilled into the water.

A large portion of the spilled gas entered the cove on which

South Port Marine is located, and by 8:00 a.m. two to three inches of

gasoline floated on the surface of the water at the marina. The

Styrofoam flotation of the dock segments began to disintegrate, causing

the docks to sink, list, and in many cases, fully submerge. As this

happened, a number of electrical posts (at least some of which were

apparently awaiting installation) fell off the docks and into the

water.

C. Alleged Effects of the Spill on South Port Marine

At trial, South Port alleged damages falling into three

general categories: extensive property damage, lost profits, and

"other economic losses" including loss of goodwill and business stress.

The spill allegedly destroyed between sixty and eighty Styrofoam floats

and severely damaged forty-five dock segments. According to South

Port, the repair and cleanup of this damage was both costly and, at a

critical time in its development, very time-consuming. South Port

further alleged that the spill set back its dredging plan an entire

year and put the construction of new slips on indefinite hold due to

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the cash flow crisis caused by the accident and the diversion of South

Port's employees from gainful work to cleanup and repair tasks. South

Port claimed the economic injury caused by the spill eventually forced

it to restructure its debt and threatened its owners' entire investment

of almost $1,000,000.

D. Procedural History

On January 14, 1998, South Port filed a complaint in federal

district court raising claims under the federal Oil Pollution Act of

1990 ("OPA") and asserting several state common law tort actions. The

complaint demanded trial by jury on all claims. Appellants argued that

South Port was not entitled to a jury trial because its claims sounded

in admiralty. The court initially reserved judgment on that issue and

proceeded to try the case before a jury.

On April 7, 1999, the first day of trial, appellees conceded

liability under the OPA in response to questioning from the court.

However, the court then ruled that South Port's state common law claims

(which included strict liability, negligence, private nuisance, and

trespass) were barred by Maine law, see Me. Rev. Stat. Ann. tit. 38, §

551(2)(D) (West 1999); see also Portland Pipeline Corp. v. Envtl.

Improvement Comm'n, 307 A.2d 1, 40 (Me. 1973), because South Port

failed to bring its state law claims under Maine's Oil Pollution

statute, which displaces state common law claims. The court also

decided that punitive damages were unavailable under the OPA.

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 On April 16, 1999, the jury returned a verdict in favor of

South Port. The jury awarded South Port $181,964 in damages for injury

to property, $110,000 for lost profits, and $300,000 for injury to good

will and business stress. After the jury verdict, appellees renewed

their motion for judgment as a matter of law, moved for a new trial,

and also renewed their challenge to appellant's right to trial by jury.

The district court denied appellees' challenge to the jury

trial in an order and opinion issued July 27, 1999. The motions for

judgment as a matter of law and for a new trial, however, were granted

in part and denied in part by order and opinion issued October 14,

1999. The court held that the evidence presented to the jury was

insufficient as a matter of law to support the award of damages for

lost profits and other economic loss and reduced the jury's award by

$395,000. Ruling in the alternative in case its decision should be

overturned on appeal, the court also granted appellees' motion for a

new trial unless appellant would agree to a remittitur of $100,000.

Appellant filed this timely appeal challenging the district

court's rulings on the availability of punitive damages and sufficiency

of the evidence, and appellees have cross-appealed the district court's

decision that appellant was entitled to trial by jury. We will address

the jury issue first, the punitive damages issue second, and the

sufficiency of the evidence arguments last.

II. Law and Application

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 A. Appellant's Seventh Amendment Right to Trial by Jury

In the district court, appellees moved to strike South Port's

jury demand on the basis that the OPA claim was comparable to a claim

in admiralty to which the Seventh Amendment's guarantee of trial by

jury does not apply. The district court initially reserved judgment on

the motion and impaneled a jury with the caveat that the jury's verdict

would be merely advisory if the court later determined that appellant

had no right to a jury trial. Following trial, on July 27, 1999, the

district court ruled that the Seventh Amendment did in fact guarantee

South Port a trial by jury on its OPA claim, and entered judgment

according to the jury's verdict. Appellees now challenge that

determination.

South Port's demand for a jury trial in its complaint bound

the district court to Federal Rule of Civil Procedure 39, which

required the court to try the case before a jury unless it found that

South Port was not entitled to a jury trial under the Constitution or

laws of the United States. See Fed. R. Civ. P. 39(a). Because the OPA

does not create a statutory right to trial by jury, South Port's

entitlement to such jury trial must stem, if at all, from the Seventh

Amendment to the Constitution, which states, "In Suits at common law,

where the value in controversy shall exceed twenty dollars, the right

of trial by jury shall be preserved . . . ." U.S. Const. amend. VII.

As the Supreme Court has declared,

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 Although "the thrust of the Amendment was to
preserve the right to jury trial as it existed in
1791," the Seventh Amendment also applies to
actions brought to enforce statutory rights that
are analogous to common-law causes of action
ordinarily decided in English law courts in the
late 18th century, as opposed to those
customarily heard by the courts of equity or
admiralty.

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41-42 (1989). The issue

before us, then, is whether South Port's OPA claim is analogous to a

cause of action in admiralty in 1791, to which no right to trial by

jury would apply, or to a cause of action at law, which carries the

Seventh Amendment guarantee. We agree with the district court that in

1791, South Port would have brought its claim for damages to its marina

under the common law rather than in admiralty, and we therefore affirm

the use of a jury to hear the claim at trial.

The earliest cases from the United States courts on the scope

of admiralty jurisdiction applied a "locality" test to determine

whether a tort fell under the admiralty or common law jurisdiction.

Justice Story, riding the Circuit in 1813, stated his understanding

"that the jurisdiction of the admiralty is exclusively dependent upon

the locality of the act. The admiralty has not (I believe)

deliberately claimed to have any jurisdiction over torts, except such

as are maritime torts, that is, such as are committed on the high seas,

or on waters within the ebb and flow of the tide." Thomas v. Lane, 23

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F. Cas. 957, 960 (C.C.D. Me. 1813). More recently, the Supreme Court

summarized the locality test as follows:

The traditional test for admiralty jurisdiction
asked only whether the tort occurred on navigable
waters. If it did, admiralty jurisdiction
followed; if it did not, admiralty jurisdiction
did not exist. This ostensibly simple locality
test was complicated by the rule that the injury
had to be "wholly" sustained on navigable waters
for the tort to be within admiralty. Thus,
admiralty courts lacked jurisdiction over, say,
a claim following a ship's collision with a pier
insofar as it injured the pier, for admiralty law
treated the pier as an extension of the land.

Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 531 (1995)

(citations omitted).

As suggested by Grubart, the "location" of a tort sometimes

depended on the nature of the injured structure, i.e., whether the

structure was considered "an extension of the land." Beginning with

The Plymouth, 70 U.S. (3 Wall.) 20 (1866), which found no admiralty

jurisdiction over damage to a warehouse destroyed in a fire started on

board a ship, admiralty jurisdiction "has not been construed to extend

to accidents on piers, jetties, bridges, or even ramps and railways

running into the sea." Rodrigue v. Aetna Cas. Co., 395 U.S. 352

(1968). Using this rubric, South Port contends that the injury to its

docks would not have fallen within the admiralty jurisdiction of the

federal courts in 1791.

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 Appellees, however, argue that several cases, most notably

The Blackheath, 195 U.S. 361 (1904), support the opposite conclusion.

In The Blackheath, Justice Holmes distinguished The Plymouth and

announced the Court's decision that a collision with a beacon would lie

in admiralty since it served as a navigational aid. This remained so

despite the fact that the structure is "technically land, through a

connection at the bottom of the sea," Id. at 367.

Appellees have failed to persuade us, however, that The

Blackheath or any of the other cases cited in their briefs invalidated

the rule established in The Plymouth. In fact, in Cleveland Terminal

& Valley R. Co. v. Cleveland S.S. Co., 208 U.S. 316 (1908), the Supreme

Court addressed the tension between The Plymouth and The Blackheath and

concluded that the two decisions were not incompatible. After

discussing both cases, the Court reaffirmed that admiralty jurisdiction

did not extend to injuries inflicted by a vessel upon a bridge, its

protective pilings, and an adjacent dock, stating that "the bridges,

shore docks, protection piling, piers, etc., pertained to the land.

They were structures connected with the shore and immediately concerned

commerce upon land. None of these structures were aids to navigation

in the maritime sense, but extensions of the shore and aids to commerce

on land as such." Id. at 321.

Moreover, courts specifically examining the nature of

floating docks have consistently held that they do not possess the

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characteristics associated with maritime objects. In Cope v. Vallete

Dry-Dock Co., 119 U.S. 625 (1887), for example, the Supreme Court

decided that the salvage of floating dry-docks could not properly fall

under admiralty jurisdiction because they "had no means of propulsion

. . . and were not designed for navigation." Id. at 627. Circuit

cases in this century have reached similar conclusions. See, e.g.,

Atkins v. Greenville Shipbuilding Corp., 411 F.2d 279, 282-83 (5th

Cir. 1969) (holding that as a matter of law, a floating dock was not a

"vessel" owing a maritime warranty of seaworthiness); Royal Ins. Co. of

America v. Pier 39 Ltd. Partnership, 738 F.2d 1035, 1037 (9th Cir.

1984) (ruling that policies insuring floating docks did not fall under

admiralty jurisdiction because the subject matter was not maritime);

cf. Digiovanni v. Traylor Bros., 959 F2d 1119, 1123 (1st Cir. 1992)

(stating that if a float is not in actual navigation, the test for

whether it qualifies as a vessel is whether its "purpose or primary

business is . . . navigation or commerce"). Thus, appellees' emphasis

on the floating nature of South Port's docks is insufficient and

misplaced. See id. ("Floating is not enough."). Although these

structures move with the ebb and flow of the tides, they remain moored

to a fixed location and serve no navigational function. Indeed, their

purpose is precisely the same as that of traditional fixed piers or

docks: to facilitate commerce on land, presumably conducted in and

around whatever retail and repair facilities are operated by South

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Port. In essence, South Port's floating docks are "extensions of the

land" in the sense of that phrase in eighteenth century admiralty

jurisprudence. Consequently, a tort that causes damage to them does

not occur "wholly on the navigable waters" and would have constituted

an action at law, rather than in admiralty, in the late eighteenth

century.1

We therefore agree with the district court that South Port's

OPA claim is analogous to a claim under the common law at the time of

the Seventh Amendment's ratification in 1791, and that South Port was

entitled to trial by jury.

B. Punitive Damages

Plaintiff contends that the district court erred in ruling

that punitive damages were unavailable as a matter of law. We affirm

the district court's ruling.

Plaintiff's complaint alleged six "counts": a claim under the

OPA, four state law tort claims, and a count entitled simply "Punitive

Damages." Punitive damages, however, do not constitute a separate

1 The district court correctly noted that the Admiralty Extension Act
of 1948, 46 U.S.C. § 740 (1994), which eliminates the land-water
distinction, does not affect the analysis here. While the Act might
permit the extension of admiralty jurisdiction over South Port's tort
action today, it does not divest the claim of its original common law
character and its attendant right to trial by jury. See, e.g.,
California v. Bournemouth, 307 F. Supp. 922, 925 (C.D. Cal. 1969)
("[T]he legislative history clearly indicates that the Act makes
available a concurrent remedy in admiralty for the existing common-law
action.").

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cause of action, but instead form a remedy available for some tortious

or otherwise unlawful acts. Consequently, plaintiff's claim for

punitive damages must relate to some separate cause of action which

permits recovery of punitive damages.

Despite a valiant effort, plaintiff has been unable to point

to a legal basis for its punitive damages claim. One of the four tort

claims alleged in the complaint might have been adequate; those claims,

however, were dismissed by the trial court, a decision which plaintiff

has not challenged on appeal. The remaining possibilities, therefore,

are (1) the OPA, or (2) general admiralty and maritime law.

1. OPA Does Not Provide for Punitive Damages

In 1990, in the wake of the Exxon Valdez and other oil spill

disasters, Congress established a comprehensive federal scheme for oil

pollution liability in the OPA. See 33 U.S.C. § 2702 et seq. (1990).

The OPA sets forth a comprehensive list of recoverable damages,

including: removal costs; damage to natural resources and real or

personal property; loss of subsistence use of natural resources; loss

of government revenues, lost profits and earning capacity; and costs of

increased or additional public services occasioned by the unlawful act.

See 33 U.S.C. § 2702(b). Absent from that list of recoverable damages

is any mention of punitive damages. The question before us, therefore,

is whether, by leaving punitive damages out of the OPA, Congress

intended to supplant the general admiralty and maritime law that

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existed prior to the enactment of the statute, which permitted the

award of punitive damages for reckless behavior. See, e.g., CEH,

Inc. v. F/V Seafarer, 70 F.3d 694, 699 (1st Cir. 1995) (punitive

damages long recognized in admiralty actions for willful or reckless

conduct).

2. Congress Intended the OPA To Be the Exclusive
Federal Law Governing Oil Spills

First, we note that, although the parties have referred to

this issue as one of "preemption," it does not present any of the

federalism concerns normally associated with that word, because we are

concerned only with the OPA's effect on preexisting federal law. The

question, therefore, is not complicated by any "presumption against

preemption," see, e.g., Medtronic, Inc., v. Lohr, 518 U.S. 470, 485

(1996), but is rather a straightforward inquiry into whether Congress

intended the enactment of the OPA to supplant the existing general

admiralty and maritime law, which allowed punitive damages under

certain circumstances in the area of oil pollution. We conclude that

Congress did so intend.

The best indication of Congress's intentions, as usual, is

the text of the statute itself. See Strickland v. Com'r Dept. Human

Services, 48 F.3d 12, 17 (1st Cir. 1995). Section 2702 sets forth a

list of damages recoverable under the OPA, briefly describing each

type. As we have noted already, this scheme is comprehensive. To our

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knowledge no case or commentator has suggested that the availability of

punitive damages under general admiralty and maritime law survived the

enactment of the OPA. We take this to be a strong indication that

Congress intended the OPA to be the sole federal law applicable in this

area of maritime pollution.

The text of the statute is not without its limitations,

however. Plaintiff emphasizes the language at 33 U.S.C. § 2718, which

states that the OPA shall not be construed as "preempting the authority

of any State or political subdivision thereof from imposing any

additional liability," 33 U.S.C. § 2718(a), nor to "affect the

authority of the United States of any State or political subdivision

thereof (1) to impose additional liability of additional requirements;

or (2) to impose, or to determine the amount of, any fine or penalty

(whether criminal or civil in nature) for any violation of law," id. §

2718(c). Plaintiff also points to 33 U.S.C. § 2751, which states that

"[e]xcept as otherwise provided in this chapter, this chapter does not

affect . . . admiralty and maritime law." Plaintiff argues that this

language demonstrates that Congress intended to leave open claims and

damages other than those enumerated in the OPA.

We have indeed acknowledged that Congress did not intend the

OPA to bar the imposition of additional liability by the States. See

Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 630-31 (1st. Cir.

1994) (using OPA to support validity of state liability statute

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permitting recovery for purely economic loss). That determination

rested on the underlying federalism concerns that counsel a skeptical

view towards federal preemption of state statutes. See id. at 630

("Where as here the state remedy is aimed at a matter of great and

legitimate state concern, a court must act with caution."). This case,

however, presents an entirely different issue, namely, whether

Congress's very specific treatment of oil pollution in the OPA, which

does not provide for punitive damages, supplanted general admiralty and

maritime law, which has traditionally provided for the general

availability of punitive damages for reckless conduct. This question

has largely been decided for us by the Supreme Court in Miles v. Apex

Marine, 498 U.S. 19 (1990), in which the Court declined to supplement

damage provisions of the Death on the High Seas Act, 46 U.S.C. § 762.

The Court refused to allow recovery for loss of society when such

damages were not provided in the statute, reasoning that "in an 'area

covered by statute, it would be no more appropriate to prescribe a

different measure of damage than to prescribe a different statute of

limitations, or a different class of beneficiaries.'" See Miles, 498

U.S. at 31 (quoting Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625

(1978)). As we indicated in CEH, 70 F.3d 694 (1st Cir. 1995), Miles

dictates deference to congressional judgment "where, at the very least,

there is an overlap between statutory and decisional law." Id. at 701.

Such is obviously the case here.

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 Although our analysis might end there, we think it necessary

to address plaintiff's contention that the OPA should be construed more

liberally because it was enacted for the purposes of benefitting the

victims of oil pollution and punishing its perpetrators. While we

agree that such intentions were Congress's principal motivation in

enacting the OPA, we think it would be naive to adopt so simpleminded

a view of congressional policymaking in light of the competing

interests addressed by the Act. For instance, the OPA imposes strict

liability for oil discharges, provides both civil and criminal

penalties for violations of the statute, and even removes the

traditional limitation of liability in cases of gross negligence or

willful conduct. Yet at the same time, the Act preserves the liability

caps in most cases and declines to impose punitive damages. We think

that the OPA embodies Congress's attempt to balance the various

concerns at issue, and trust that the resolution of these difficult

policy questions is better suited to the political mechanisms of the

legislature than to our deliberative process.

For the reasons set forth above, we agree with the district

court that punitive damages were not available to plaintiff and affirm

the court's ruling on that issue.

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 C. Sufficiency of the Evidence

Finally, South Port challenges the district court's decision

granting judgment as a matter of law to defendants on sufficiency-of-

the-evidence grounds. The court held that, as a matter of law, South

Port had failed to introduce sufficient evidence to support the jury's

verdict with regard to most of the damages claimed for lost profits and

"other economic harm." We affirm this decision in part, and we reverse

in part.

1. Lost Profits

The jury awarded $110,000 of the $185,062 that South Port

requested for damages in the form of lost profits. These alleged

damages were presented in two main categories: (1) $105,000 in lost

slip revenues resulting from a delay in South Port's plans to dredge

and expand the marina by approximately twenty-five slips, and (2)

$80,062 from business interruption, including diversion of South Port's

labor force and the loss of slip fees due to the temporary closing of

the facility. The district court, however, vacated all but $15,000 of

this award on the ground that it was not supported by sufficient

evidence.

We disagree with the district court's conclusion that South

Port failed to introduce evidence sufficient to support the award for

lost slip revenues. Plaintiff presented testimony establishing the

marina's plan to dredge the cove leading to the marina, as well as

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parts of the marina itself, and to expand the marina by some twenty-

five slips. South Port further offered proof sufficient to support a

finding that the delay in this improvement to the business was caused,

at least in part, by the February 5, 1997 gasoline spill. The district

court noted that South Port introduced no evidence to support its hope

that the additional slips could be filled if constructed and that no

comparison was made with other marinas or with any indicator of the

number of boats in the Portland Harbor area seeking dockage. We

believe, however, that a jury could reasonably infer that South Port's

very willingness to make a substantial investment was grounded in some

professional certainty that a market would, in fact, exist once the

dredging was completed. Although the district court did not find

compelling the fact that the existing slips had been nearly full in

years prior to the spill, we think this evidence substantially supports

an inference that the new slips would also be in demand. Thus, we

uphold the jury's award for lost slip fees resulting from the delay in

expansion and improvement.

We also cannot agree with the district court's conclusion on

the issue of diversion of South Port's workforce. The jury apparently

compensated South Port for the losses incurred by the marina when it

was forced to allocate employees who normally serviced boats (and

billed clients) to dock repair necessitated by the spill. The district

court vacated this award for the same reason it vacated the award for

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lost slip fees--that the plaintiff had failed to establish demand for

the service work that the employees allegedly would have been doing had

they not been needed for repairs. Again, we think that the claimed

damage is considerably less speculative than it appeared to the

district court. South Port claims that, absent the spill, things would

have proceeded essentially as they always had at the marina, with a

portion of the labor force performing service work that could be billed

to clients rather than nonbillable repair work. Robert Craig, South

Port's damage expert, testified that he had spoken with the principal

operator of the marina, Kip Reynolds, and others, and that he had also

seen the diversion of labor with his own eyes. Although Craig

admitted that the time cards used by South Port's employees did not

allocate hours to specific projects or types of work, he explained how

he had arrived at his expert opinion and estimates. Appellant might

have done more to establish this element of the damages it claimed.

Nevertheless, we think that the proof presented meets the minimum

inferential threshold and that the jury award should not have been

disturbed. We therefore reverse the district court on its evaluation

of the lost slip revenue diversion of labor issues and reinstate the

jury's award of $110,000.

2. Other Economic Losses

The district court also vacated the jury's award for a

$100,000 loss in goodwill and a $150,000 for business stress. After

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reviewing the record, we agree with the district court that the

evidence is insufficient to support the jury's verdict on these claims.

South Port's goodwill loss is based upon a projected loss of

value of the business after the spill. Certainly, a bad reputation

which lingers even after South Port repairs its damages could affect

its expected earnings. This loss could be calculated by discounting

the estimated loss of future revenues to present value or,

alternatively, by assessing the decrease in value of the business to

potential buyers after the spill repairs. South Port's estimated loss,

however, was not adequately supported by either of these calculations.

Craig offered his expert opinion that South Port's goodwill

following the spill was approximately $100,000, or ten percent of the

value of the business. The court correctly determined that the jury

could accept that ten percent is typically the value of goodwill in

this type of business. However, as the district court observed, Craig

"never gave any basis for concluding that this goodwill had been

reduced to zero or to any other number." Craig did identify the

potential perception that South Port marina was located in a cove

susceptible, for geographic reasons, to spill-related pollution, and

South Port introduced evidence at least suggesting damage to its

reputation in the community (media coverage, etc.). There were no

concrete numbers, however, explaining how these factors affected all,

or even part, of the goodwill of the business

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 Similarly, South Port provided no basis for its estimation

of business stress. Like goodwill loss, this claim involved a form of

the loss in value of the business: the reduction in the value of the

business due to the bank loan default and the risk that the workout

plan may not succeed. Although this is a plausible claim for

recovery, Craig offered no analysis for quantifying this potential loss

at $150,000. The district court concluded that Craig's estimate was

not supported by evidence that he conducted a more specific

investigation "regarding the market for a business like South Port

Marine's." We agree.

A reasonable calculation of loss due to business stress might

take into account general data concerning the reduced value of

businesses in default or a specific showing that this property had

declined in market value. At the very least, the calculation of

business stress resulting from South Port's workout plan required a

specific computation of its risk of failure in the same arrangement.

However, Craig derived his estimation simply as a portion of South

Port's $600,000 net value after deducting the loan. We believe this,

without a more accurate account, is an insufficient foundation to

sustain the jury's award. Accordingly, we affirm the district court's

vacatur of the awards for loss of goodwill and business stress.

Affirmed in part, reversed in part. Remanded for action

consistent with this opinion.

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