Norfolk & Western Co. v. U.S.

• Decision Date: 21 October 1980
• Docket Number: No. 78-3271,78-3271
• Citation: 641 F.2d 1201
• Parties: NORFOLK & WESTERN COMPANY, Plaintiff-Appellant, v. UNITED STATES of America, and Dunbar & Sullivan Dredging Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1201

641 F.2d 1201

NORFOLK & WESTERN COMPANY, Plaintiff-Appellant, v. UNITED STATES of America, and Dunbar & Sullivan Dredging

Company, Defendants-Appellees.

No. 78-3271.

United States Court of Appeals, Sixth Circuit.

Argued June 19, 1980.

Decided Oct. 21, 1980.

Robert G. McCreary, Jr. (argued), William J. Miller, Arter & Hadden, Donald Kronenberger, Cleveland, Ohio, for plaintiff-appellant.

James R. Williams, U. S. Atty., Cleveland, Ohio, Michael K. Bell, Admiralty & Shipping Section, Dept. of Justice, Washington, D. C., for defendants-appellees.

Edward J. Cass (argued), Gallagher, Sharp, Fulton, Norman & Mollison, Cleveland, Ohio, for Dunbar & Sullivan.

Before CELEBREZZE, KEITH and MERRITT, Circuit Judges.

KEITH, Circuit Judge.

This appeal is taken from the judgment of the United States District Court for the Northern District of Ohio, the Honorable John M. Manos presiding, dismissing Norfolk & Western Railway Company's complaint alleging 1) that Dunbar had breached provisions of the construction contract of which Norfolk & Western was an intended beneficiary; 2) that the United States and Norfolk & Western furnished to the Defendant-Appellee United States part of a dock for use as storage in a future project. Thereafter, the United States entered into an agreement with defendant-appellee Dunbar & Sullivan Dredging Company, whereby Dunbar was to build the project and use the dock for storage. When Dunbar unloaded from a ship 5,000 tons of stone on Norfolk & Western's dock, the dock collapsed and stone and debris fell into the river.

Dunbar were negligent in failing to investigate the capacity of the dock to support the load and therefore caused the dock to collapse; and 3) that the defendants were required by the Rivers and Harbors Act of 1899 to remove the obstruction to navigation created by the collapsed dock. This litigation followed the collapse of a dock which Norfolk & Western had leased to the United States for storage in a forthcoming construction contract with Dunbar & Sullivan Dredging Company.

When demand by Norfolk & Western against the United States and Dunbar to remove the wreckage from the river was refused, Norfolk & Western removed the debris at its own expense. Norfolk & Western then made demand on the United States and Dunbar to repair its dock. When this demand was refused as well, Norfolk & Western brought suit in United States District Court for the Northern District of Ohio for the costs of removal and repair.

Subject matter jurisdiction for Norfolk & Western's admiralty claims was premised on the Admiralty Extension Act, 46 U.S.C. § 740, which extends the court's admiralty jurisdiction, 28 U.S.C. § 1333, to cases involving damage caused by a vessel on navigable water, even if the damage occurred on land. Norfolk & Western's third party beneficiary claim against Dunbar was granted pendant jurisdiction by the district court under United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

After the district court concluded that neither defendant was liable upon any of the grounds advanced by Norfolk & Western and dismissed the complaint, Norfolk & Western appealed to this court alleging that: 1) the district court failed to apply proper standards of law in holding that the proximate cause of the collapse was a latent defect in the dock rather than negligent overloading of the dock; 2) the district court misconstrued the construction contract in ruling that Norfolk & Western was not an intended beneficiary of the safety and repair obligations of Dunbar thereunder; and 3) in finding that the stone and debris which fell into the river did not create an obstruction to navigation, the district court disregarded wholly uncontradicted evidence to the contrary, which, if accepted, would entitle Norfolk & Western to removal costs.

We affirm the judgment of the district court on the issues of the proximate cause of the dock's collapse, and of Norfolk & Western's third-party rights under the contract. We reverse on the obstruction to navigable capacity issue and imply a private right of action under Section 12 of the Rivers and Harbors Act as a remedy to Section 10 violations. In addition we order defendants-appellees to reimburse Norfolk & Western for one-half of the costs incurred in removing the debris caused by the dock's collapse.

I.

In 1970 the United States Corps of Engineers was authorized by Congress to construct a spoil disposal facility for the containment of spoil dredged from the Huron River. In December, 1973, the City of Huron, Ohio furnished the United States with the work areas, easements, and rights-of-way necessary for the construction of the disposal facility. Among the work areas furnished by the City of Huron was the southern part of the Huron Ore Dock, property to which the Lake Erie Dock Company, a subsidiary of plaintiff Norfolk & Western Railway Company, holds a 99-year lease.

Sometime in January, 1974 the United States asked Lyle Sprankel, president of the Lake Erie Dock Company, if his company On April 17, 1974 the United States entered into a contract with the defendant Dunbar & Sullivan Dredging Company for the construction of the spoil disposal facility in Huron, Ohio. Under the terms of the contract Dunbar was to act as an independent contractor. It was Dunbar's responsibility to obtain, and store if necessary, most of the construction materials needed for the facility. Also, the contract gave Dunbar the use of the two work areas supplied by the Lake Erie Dock Company, Norfolk's subsidiary.

could provide additional work space for the project. On January 29, 1974 Sprankel wrote the United States that the northernmost corner of the peninsula-shaped Huron Ore Dock would also be made available.

The contract between the United States and Dunbar was entered into with the understanding that Dunbar would purchase crushed stone that could be barged directly to the construction site from the quarries of the Marblehead Stone Division. In the summer of 1974, a labor dispute at Marblehead threatened to delay progress on construction. As a result, the contract between Dunbar and the Corps was modified to provide for obtaining stone from sources other than Marblehead. The Inland Lime and Stone Company was selected as an alternative supplier. The stone supplied by Inland Lime was transported in large quantities by lake-going vessels and it was necessary for Dunbar to place the stone in an interim storage area until it was taken to the construction site. Dunbar determined, after discussion with Sprankel about the feasibility of storing a boat load of stone on the North Dock, that the North Dock could accommodate the self-unloading lake vessels sent from Inland Lime and used it as the interim storage place for the incoming stone.

The construction of the Huron disposal facility began in the summer of 1974. In early August, 1974 Dunbar received word that the first shipment from Inland Lime, 21,000 tons of stone carried by the Adam E. Cornelius, would arrive on August 22, 1974. In preparation for the Adam E. Cornelius' arrival Dunbar took depth soundings along the two seaward sides of the North Dock. The soundings showed the river channel was deep enough to accommodate the Adam E. Cornelius. Also, the soundings demonstrated that no cell fill material had escaped the cellular cofferdams that ringed the North Dock.

Prior to the arrival of the Adam E. Cornelius, Dunbar had used the North Dock to store miscellaneous small equipment. Since the area was overgown with brush and small trees it was cleared off with a bulldozer before the ship's arrival. The bulldozing revealed that the upper two to three feet of the North Dock was composed of sand and gravel. The district court found that although it had the necessary equipment, Dunbar did not conduct any tests to determine the composition of the sub-soil of the North Dock.

A Dunbar employee, Lionel Demers, visually inspected the North Dock after it had been cleared off and concluded that it could support the Adam E. Cornelius' load. The basis for Demers's conclusion was his knowledge of structures similar to the Huron Ore Dock. Demers also called Lyle Sprankel and informed him of the Adam E. Cornelius' arrival. Sprankel knew the Adam E. Cornelius carried approximately 20,000 tons of stone and he expressed no reservation to Demers about putting the stone there.

On August 22, 1974 the Adam E. Cornelius arrived at Huron Harbor. The self-unloading ship placed about 4,000 tons into barges and then started to discharge the remainder of her cargo onto the North Dock. Demers directed that the stone be placed uniformly abound the perimeter of the one acre of land that comprised the North Dock until the perimeter pile was about ten feet high. Then Demers instructed that the balance of the stone be discharged at the center of the North Dock.

After approximately 5,000 tons had been placed on the North Dock's center, and about ten minutes into the unloading process, a section of the dock's western wall gave way and a good deal of stone, as well Both parties retained independent experts to investigate the cause of the collapse. Norfolk & Western's experts concluded, based on their observations and soil test borings performed in 1969, that the factor of safety in overturning was less than one and that therefore the collapse of the North Dock was a result of it having been overloaded. Dunbar's expert concluded, after laboratory analysis of soil samples taken from the same test borings used by Norfolk & Western's experts, that the safety factor exceeded one. The soil samples taken by Dunbar's expert were subjected to laboratory analysis and found to consist mainly of silt rather than clay. As Dunbar noted in its brief, the distinction between silt and clay is significant from a soil mechanical viewpoint, and the fact that the two experts differed in their assumptions as to the soil's...