In re M/V Dg Harmony
| Decision Date | 03 March 2008 |
| Docket Number | Docket No. 05-6116-cv. |
| Citation | 533 F.3d 83 |
| Parties | In re M/V DG HARMONY Mark J. Fisher, Inc., Dow Agrosciences LLC, Dow Agrosciences Industrial Ltda., Witco Do Brasil Ltda., Pinturas Industriales S.A., Grace Argentina S.A., Akzo Nobel Ltda., Techumesh Do Brasil, Ltda., Hercules International Trade Corp. Ltd., Hercules International Aqualon Division, Hercules Inc., Grace Construction Products, Sun Chemical Export Corporation, Akzo Nobel Chemicals, Inc., Rohm and Haas Company, Zippo Manufacturing Company, Victorinox Do Brasil, McClane Company, Inc., Handy Chemicals, Ltd., KOA Fire & Marine Insurance Co., N.Y., as subrogee of Ricoh Latin American, Intercargo Insurance Company, Great American Insurance Company, Washington International Insurance Company, Neare, Gibbs & Co., Mutual Marine Office Inc., Zurich American Insurance Co., as subrogee of Putnam Rolling Ladder Co., Inc., E.D. Bullard, Kelley Co., Inc., Ramco Trading, Security Insurance Company of Hartford, AGF-MAT, Ethyl Petroleum Additives, Inc., Diverseylever, Cheesebrough Ponds, BASF CORPORATION, Sandra R. Leoni, Jose Guillermo Martinez, Oriental Fire & Marine Insurance Co., Ltd., Federal Insurance Company, Vigilant Insurance Company, Chubb & Son, Inc., E.I. Du Pont de Nemours and Company, Deer & Company, Industrias John Deere Argentina, S.A., John Deere, S.A., Interagrovial, S.A., Accion Int'l, Inc., Delta Cargo Corporation, Martini Distribuciones, O.S. International Trading Corp., Simon Anos, Chegary de Chalus, Through Transport Mutual Insurance Association Limited, Miller Intermodal Logistical Services, Inc., Sea Mates International, Inc., Dan Transport Corp., ZKZO Nobel Ltda., Trans Tank, Brown Forman Beverages Worldwide, Superior Graphite Co., Mid-Missourithermo King, Inc., Rayonnier, Jas Ocean Services, Inc., Myeel S.A., Sato Agriculture Trading Co., Z & J Overseas Trading Operations, Lander Company Inc., Melrose International Trading Limited, Cheney & Associates, Lucy's Tire Inc., Marcouer Group, Kanematsu USA Inc., Finora Company Inc., GTG Co., International Operations Services Corporation, Sharp Electronics Corp., Equipsa, Inc., Imex Shipping, Inc., Nordic Insurance Co., Maritime Insurance Company, Ltd., Distribuidora Cummins, S.A., Groupama Navigation Transports, and United Tire & Rubber Co., Ltd., Consolidated-Plaintiffs-Appellees, v. M/V DG Harmony, Her Engines, Tackle, Boilers, Etc., South African Marine Corp., Ltd., CMBT Lines N.V., Leonhardt & Blumberg, Navigator Shipping Ltd., Econocaribe Consolidators, Inc., And Florida Consolidator, Hanjin Shipping Co., Ltd., "Aller" MBH & Co. KG, American Liner System, Inc., in personam, Safmarine & CMBT Lines N.V., Schiffahrtsges "Aller" MBH & Co., KG, Direct Container Line, Inc., Montemar S.A. Pan-American Independent Line, Conterm Consolidation Services, Inc., United Intermodal Line, Cho Yang Shipping Co., Ltd., DSR-Senator Lines, DSR-Senator GMBH, Di Gregorio Navegacao, Ltda., Seabridge Container Transport, Inc., Zim Container Services, Dacol Corp., Decal Air & Sea Cargo, Safmarine Container Lines, Challenger Ocean Lines, Shipco Transport, Inc., Expeditors International Ocean, Independent Carriers Alliance, G.S.I. Cargo Systems, Inc., Liberty Container Lines, Inc., Zim-American Israel Shipping Co., Transfreight Express Lines, Lafco Americas, Inc., Danamr Lines, Cargo Systems, Inc., Fritz Transportation International, and Ambassador Logistics International, Consolidated-Defendants-Appellees, v. PPG Industries, Inc., in personam, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Second Circuit |
Wayne D. Meehan (Peter J. Gutowski and Gina M. Venezia on the brief), Freehill, Hogan & Mahar, LLP, New York, NY, for Consolidated-Defendants-Appellees.
Stanley McDermott III (Camilo Cardozo on the brief), DLA Piper Rudnick Gray Cary U.S. LLP, New York, NY, for Defendants-Appellant.
Before: SACK, B.D. PARKER, and HALL, Circuit Judges.
Defendant-Appellant PPG Industries, Inc. ("PPG") appeals from an interlocutory order of the United States District Court for the Southern District of New York (Chin, J.) finding PPG solely liable for the explosion and resultant constructive total loss of the M/V DG Harmony and its cargo. See 28 U.S.C. § 1292(a)(3). We reverse the district court's determination that PPG was strictly liable under § 4(6) of the Carriage of Goods by Sea Act, 46 U.S.C. § 30701 note ("COGSA"). We also reverse the district court insofar as it held PPG liable under a general negligence theory. Finally, with regard to failure-to-warn negligence under COGSA § 4(3), we affirm the district court's ruling that PPG had a duty to warn and that PPG breached that duty, as well as the district court's factual finding that PPG's dangerous cargo caused the explosion. We vacate the judgment, however, because the district court failed to address whether a warning, if given, would have prevented the harm, and we remand for further proceedings on that issue.
AFFIRMED in part, REVERSED in part, VACATED in part, and REMANDED.
The M/V DG Harmony ("Harmony") was a 176.57 meters-long container ship registered in the Isle of Man and owned by Navigator Shipping Ltd. ("Navigator"), a subsidiary of Safmarine and CMBT Lines N.V. ("SCL"). Capable of carrying approximately 1800 standard containers, the Harmony was equipped with three separate holds, each of which was designed to carry dangerous goods. At the time of its destruction the Harmony was on charter to, inter alia, Di Gregorio Navegacao, Ltda., Cho Yang Shipping Co., and DSR-Senator Lines GmbH. Together, these owners and charterers ("the ship-owning interests") are the Consolidated-Defendants-Appellees in this action.
The Harmony's final voyage began in New York in late October 1998. Bound for points in South America, the Harmony made stops in Newport News, Savannah, and Miami. At these ports, the Harmony took on containers immuring cargo owned by various entities which, with one important exception, together comprise the Consolidated-Plaintiffs-Appellees in this action ("the cargo owners"). Although most of these cargoes proved innocuous, one did not; at Newport News, Virginia, the Harmony received and stowed, through its charterer Cho Yang Shipping Co., ten containers, each of which contained approximately 16,000 kilograms of calcium hypochlorite (hydrated) ("calhypo"). The parties agree that this substance, manufactured and shipped by Defendant-Appellant PPG Industries, Inc., precipitated the subsequent explosion and fire on the Harmony.1
On November 9, ten days after leaving Miami, the Harmony reached a point off the northern coast of Brazil. At approximately 7:20 a.m., an explosion ripped through the third hold. The Captain and crew of the Harmony, realizing that the third hold had caught fire, mobilized to fight the blaze. For nearly twelve hours, the full crew battled the flames, but their efforts were to no avail. Most of the crew abandoned ship at 6:00 p.m. that evening, and they were followed by the Captain and the remainder of the crew at 2:00 a.m. the next day. Although there were no casualties, the Harmony burned for three weeks. The fire resulted in a constructive total loss of both the vessel and its cargo.
In divining the cause of the fire, the parties focused on PPG's calhypo, an industrial bactericide sometimes identified as "UN 2880," its designation under the International Maritime Dangerous Goods Code ("IMDG Code"). Calhypo is an unstable substance that continually decomposes at room temperature. It is an oxidizer, which means that it releases oxygen in most reactions.
Most importantly, however, calhypo is prone to "thermal runaway," a phenomenon in which the heat naturally produced by the calhypo serves to heat the calhypo further, thus causing it, in turn, to generate even more heat. Thermal runaway operates like a feedback loop. As one expert witness explained, "[t]he higher the temperature, the faster the reaction, and the reaction becomes circular inasmuch as it generates the heat, [and the heat] causes [the reaction] to go faster." This snowballing reaction "runs away, goes critical, and [it] get[s] to the point where it just goes so fast that the material explodes, it deflagrates, decomposes and reaches the point where we have a fire ensuing." A number of extrinsic factors can exacerbate this phenomenon. For example, if calhypo is tightly enclosed in a container from which heat cannot easily escape, it might more easily succumb to thermal runaway. Likewise, calhypo might more readily exhibit thermal runaway if exposed to an external or "radiant" source of heat.
The most important factor in predicting the decomposition and eventual combustion of calhypo is its "critical ambient temperature" or "CAT." As PPG correctly notes, "CAT is the minimum temperature at which a heat-sensitive product will begin to retain more heat than it dissipates." The CAT of a given amount of calhypo "depends inversely upon the size of the sample; as the mass increases, the critical temperature decreases." Standard Commercial Tobacco Co. v. M/V "Recife", 827 F.Supp. 990, 993 (S.D.N.Y.1993). For example, in Recife, the district court found that the CAT "of a single pellet of [calhypo] is approximately 180 degrees C." Id. In the instant case, which involves a much larger amount of calhypo, the district court found the CAT to be considerably lower. The exact CAT is elusive. One expert in this case "testified that he did not find any data from which he could ascertain the . . . CAT of the `specific material' carried on the Harmony." In re M/V DG Harmony, 394 F.Supp.2d 649, 669 n. 28 (S.D.N.Y. 2005). Nevertheless, the district court believed it could make a rough...
To continue reading
Request your trial
- In re In re, 12-cv-8892 (KBF)
-
In re M/V Rickmers Genoa Litigation
... ... I note that the Court of Appeals has recently clarified the law of shipper strict liability for accidents relating to the shipment of dangerous goods. See In re M/V DG Harmony, 533 F.3d 83 (2d Cir.2008); Senator Linie, 291 F.3d 145. The Court of Appeals has indicated that COGSA is the exclusive means for suing cargo shippers in this context. See Senator Linie, 291 F.3d at 168 ("`[T]he exclusive application of COGSA cannot be avoided by couching claims in terms of ... ...
- In re Re
- United States v. Egan Marine Corp.