## Facts

- During Tropical Storm Gordon (Nov. 1994), the tug M/V *JA Orgeron* lost power while towing the barge *Poseidon* off Florida.
- The tug and barge drifted toward Bethel Shoal, facing imminent grounding and potential total loss.
- The Coast Guard could not assist; the *Orgeron*’s captain planned to release the barge to protect life and the tug.
- The M/V *Cherry Valley*, a fully loaded oil tanker owned by Margate Shipping Co., diverted after hearing the distress call.
- The *Cherry Valley* undertook a high-risk operation in severe weather, secured the tug and barge, and prevented grounding or foundering.
- The barge carried a NASA space-shuttle external fuel tank; the salvage preserved the vessels and this high-value cargo.

## Issues

1. Whether the district court misvalued the NASA external fuel tank, resulting in an excessive salvage award.
2. Whether, after correcting the valuation, the salvage award remained appropriate under traditional salvage principles, including the Blackwall factors.

## Decision

- The Fifth Circuit held that a substantial salvage award was warranted given the peril, risk, and extraordinary skill involved.
- The court concluded the district court overstated the fuel tank’s value by relying on an inflated valuation approach.
- The court reduced the salvage award from approximately $6.4 million to $4.125 million and rendered judgment in that amount, as modified.

## Legal Principles

- A salvage claim requires (1) marine peril, (2) voluntary service, and (3) success in saving property; entitlement was not disputed on appeal.
- The amount of salvage is determined by weighing the Blackwall factors, including labor, promptitude and skill, risk to salvors, danger to the property, and the value of property saved.
- Valuation of the property saved must be grounded in an objective, defensible measure for salvage purposes; salvage compensation should reflect reasonable value rather than abstract program-level expenditures or immeasurable strategic importance.
- Even when service is exceptional, the award must remain proportionate to the properly determined value of the property saved.

## Conclusion

The Fifth Circuit sustained Margate’s right to a major salvage award for rescuing a disabled tug and barge in a severe storm but reduced the judgment after correcting an inflated valuation of the NASA fuel tank, reaffirming that salvage awards must be based on realistic value and assessed under the Blackwall factors.


Margate Shipping Co. v. M/V JA Orgeron, 143 F.3d 976 (5th Cir. 1998)