COMPLAINT OF COOK TRANSP. SYSTEM, INC.

• Decision Date: 15 January 1976
• Docket Number: No. C-75-453.,C-75-453.
• Citation: 431 F. Supp. 437
• Parties: Complaint of COOK TRANSPORTATION SYSTEM, INC., a corporation, et al.
• Court: U.S. District Court — Western District of Tennessee

431 F. Supp. 437

Complaint of COOK TRANSPORTATION SYSTEM, INC., a corporation, et al.

No. C-75-453.

United States District Court, W. D. Tennessee, W. D.

January 15, 1976.

COPYRIGHT MATERIAL OMITTED

James E. Blount, III, Thomas R. Prewitt, F. C. Sewell, Jerome Rosengarten, Virgil A. Minor, Warner Hodges, Troy L. Henderson, Palmer E. Miller, Paul W. Denton, Memphis, Tenn., for claimants.

Carroll C. Johnson, Memphis, Tenn., for Cook Transp. and Cook Industries, and Upper Mississippi Towing Co.

Jerome T. Stauffer, Memphis, Tenn., for the Pillsbury Co.

Edward P. A. Smith, Memphis, Tenn., for Cook Industries & Bayside Warehouse.

John I. Houseal, Jr., Memphis, Tenn., for Cook Industries, Bayside Warehouse, Cook Transp. and Cook Grain Co.

Joe D. Spicer, Memphis, Tenn., for Destrehan Board of Trade Laboratory, Inc.

MEMORANDUM OPINION

WELLFORD, District Judge.

Complainants have filed a complaint for exoneration from, or limitation of liability, a stipulation of value, and a motion for notice under 46 U.S.C. §§ 181-185 and Rule F of the Supplemental Rules, Federal Rules of Civil Procedure, dealing with asserted admiralty and maritime claims. Pursuant to the Court's order, a special hearing was set for an opportunity for the many interested claimants to be heard who have filed suits in Tennessee state courts growing out of a fire and/or explosion in or about unloading and plant facilities of the Pillsbury Company on President's Island, Memphis, Tennessee. Many serious injuries occurred with respect to this tragic occurrence within the City of Memphis, on or about May 22, 1974. The essence of suits filed by and on behalf of injured workmen in Shelby County Courts, beginning in April of 1975, has been a charge that Cook Transportation System, Inc. (herein "C.T.S."), Cook Industries, Inc. (herein "Cook"), Cook Grain Co. (herein "C.G.C.") and Bayside Warehouse Co. (herein "Bayside") were negligent in allowing foreign metal objects or matter to mix with excessively dusty soybean grain shipped in Barge CKI 388 owned by Upper Mississippi Towing Corporation (herein "UMTC") that had negligently not been properly cleaned, cleared and inspected and was defective and unfit.

It is asserted in the complaint that the said barge was, on or about April 23, 1974, loaded with soybeans from Bayside's facility at Reserve, Louisiana, and that shortly thereafter it was transported on the Mississippi River to McKellar Lake, contiguous to the river at Memphis, and spotted at the Pillsbury grain facility there. The barge was owned by UMTC and the soybeans by Cook and/or C.G.C.; they were to be temporarily stored by Pillsbury for further shipment to Cook in Marks, Mississippi. The claimants further charge the Destrehan Board of Trade Laboratory (herein "Destrehan") in Louisiana with negligent inspection and certification as to quality and condition of the soybeans and the barge prior to loading and unloading the 35,000 bushel shipment.

The violent explosion allegedly occurred on the day after the barge was spotted by UMTC which, under direction from C.T.S. and/or Cook, towed the barge from Louisiana to Memphis. The barge was partially unloaded by Pillsbury employees, and the explosion took place in a conveyor system, including metal belt buckets, carrying the unloaded soybeans from the dock into a silo, a part of the Pillsbury facility, for weighing.

Complainants CTS, Cook and UMTC allege in the action under consideration that the accident and damage in question was occasioned due to no fault on their part, and that it occurred without privity or knowledge on their part. Third party actions in the state court suits have been instituted against Pillsbury and Destrehan. The barge was a steel-hulled river barge with no independent means of power. It is also alleged that C.T.S. and Cook were "demise charterers" of this Barge.

All of the jurisdictional requisites of Rule F were asserted in the filing of the Complaint in less than six (6) months after claims, the tender in Court of the barge or appraised value of $40,000, plus $4,140 of soybeans yet unloaded and the prayers for relief based on facts asserted as to exoneration and/or limitation of liability. Claimants, however, have responded, instituted discovery, and have moved to dismiss the complaint as to all three complainants on the following bases:

1. This is not a proper case of admiralty or maritime jurisdiction;

2. Denial that C.T.S. or Cook is a "demise" or bareboat charterer; and

3. Value of the towboat vessel which towed the Barge should be added to the stipulation of value.

Additional facts have been brought to light at or before the hearing on the motions to dismiss. There is apparently no dispute but that UMTC is the owner of the barge. The barge charter agreement dated 12/1/73 was between UMTC, a Minnesota Corporation, and C.T.S., a Delaware Corporation, with its principal office in Memphis. UMTC, for valuable consideration, was to deliver the barge to C.T.S. free from lien and in a seaworthy condition. "Delivery" and "possession" were made over to C.T.S., which was obligated to return in "as good running order . . . ordinary wear and tear excepted" with a qualified marine surveyor to inspect at the beginning and end of the approximate four (4) year term. C.T.S. was to maintain hull insurance to a minimum value of $40,000 naming C.T.S. and UMTC as their interests may appear, but C.T.S. was to indemnify UMTC from "any and all loss or damage of or to the barge . . . excluding liability at law of UMTC . . . as a tower." "All necessary maintenance and cleaning for the barges during the Charter term shall be arranged by UMTC for the account of Cook, provided that UMTC shall be responsible for one-half the cost of all ordinary maintenance, excluding cleaning. Cook shall be solely responsible for keeping the barges in a clean and safe condition, including the cleaning of meal or other commodities off the decks which are detrimental to the life of the barge or the safety of crews."

Cook was further under the charter to be responsible for pollution damage, but "UMTC shall have the exclusive right to tow all barges covered by this Agreement." Cook guaranteed "unconditionally and absolutely" the "agreements" and "obligations" of C.T.S. "as if it were an original party."

The explosion happened some yards away from the water and the dock,¹ where the barge had been spotted. Bayside is a wholly owned subsidiary of Cook, as is C.T.S. The tugboat which brought Barge CKI-388 to the Pillsbury dock at Memphis had departed the scene on May 22, 1974.

STIPULATION OF VALUE

Value of complainant's interests in Barge CKI-388 and freight thereon at the time of the explosion was asserted to be $45,000 based on affidavits filed in support thereof. No claimant has challenged this valuation, but several have maintained that the value of the towboat ought to also be included. There is, however, no basis for this contention; the barge was a separate and independent vessel and was not a part of the towboat which had departed the scene at the time of the explosion. In Re American Commercial Lines, 353 F.Supp. 872 (E.D.Ky.1973). Complainants have submitted a correct stipulation of value at $45,000. See In Re Midland Enterprises, 296 F.Supp. 1356 (S.D.Ohio, 1968).

ADMIRALTY—MARITIME JURISDICTION

Section 740 of the Admiralty Jurisdiction Act, which was extended in 1948, provides:

"The admiralty and maritime jurisdiction of the United States shall extend to and include all cases of damage or injury, to person or property, caused by a vessel on navigable water, notwithstanding that such damage or injury be done or consummated on land."

This extension of maritime jurisdiction declares injuries on land "to be maritime torts if caused by a vessel on navigable waters." Nacirema Co. v. Johnson, 396 U.S. 212, 222, 90 S.Ct. 347, 353, 24 L.Ed.2d 371 (1969). See State of California v. S.S. Bournemouth, 307 F.Supp. 922, 925 (C.D. Cal., 1969); Gebhard v. S.S. Hawaiian Legislator, 425 F.2d 1303, 1309 (9th Cir., 1970). The result is that "`ship to shore' torts now have a new form of relief available in admiralty." State of California v. Bournemouth, supra, p. 925. Perhaps the leading case on this question, however, is Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 83 S.Ct. 1185, 10 L.Ed.2d 297 (1962). Jurisdiction under admiralty was held to apply where a longshoreman working on a dock in unloading a ship slipped on spillage from cargo that had been negligently stored and packed and had spilled during the unloading process:

"We think it sufficient for the needs of this occasion to hold that the case is within the maritime jurisdiction under 46 USC, Section 740 when, as here, it is alleged that the shipowner commits a tort while or before the ship is being unloaded, and the impact of which is felt ashore at a time and place not remote from the wrongful act." 373 U.S. at 210, 83 S.Ct. at 1188.

See also to this same effect, Burrage v. Flota Mercante S.A., 431 F.2d 1229 (5th Cir., 1970). Gutierrez v. Waterman, supra, was interpreted in Gebhard v. S.S. Hawaiian Legislator, supra, at page 1306, as not limiting maritime jurisdiction to injuries on land to those "actually caused by the physical agency of the vessel or a particular part of it." Furthermore, at page 1307 of that latter decision, the Court held that maritime jurisdiction extends "to all claims arising out of a vessel-caused injury, regardless of the parties sought to be charged." See also Huser v. Santa Fe Pomeroy, Inc., 513 F.2d 1298 (9th Cir., 1975). The wrong, however, regardless of where it occurs, to come under admiralty jurisdiction must "bear a significant relationship to traditional maritime activity." Executive Jet Aviation v. City of Cleveland, 409 U.S. 249, 268, 93 S.Ct. 493, 504, 34 L.Ed.2d 454 (1972). See St. Hilaire Moye v. Henderson, 496 F.2d 973, 979 (8th Cir., 1974).

It would appear that complainants have made out a case, subject to...