Republic of France v. United States, 18064.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Citation290 F.2d 395
Docket NumberNo. 18064.,18064.
PartiesREPUBLIC OF FRANCE & Compagnie Generale Transatlantique, Appellants, v. UNITED STATES of America et al., Appellees.
Decision Date11 July 1961

Edwin Longcope, New York City, Clarence S. Eastham, Houston, Tex., Eastham, Watson, Dale & Forney, Hill, Betts, Yamaoka, Freehill & Longcope, New York City, Edward A. Neiley, David I. Gilchrist, New York City, of counsel, for appellants.

John R. Green, Asst. U. S. Atty., Houston, Tex., Carl C. Davis, Atty., Samuel D. Slade, Dept. of Justice, Washington, D. C., George Cochran Doub, Asst. Atty. Gen., William B. Butler, U. S. Atty., Houston, Tex., George Jaffin, William E. Gwatkin, III, Attys., Dept. of Justice, Washington, D. C., for appellee.

McLeod, Mills, Shirley & Alexander, Preston Shirley, Galveston, Tex., for appellee, Texas City Terminal R. Co.

Before TUTTLE, Chief Judge, and HUTCHESON, RIVES, CAMERON and JONES, Circuit Judges.

RIVES, Circuit Judge.

The fire upon and explosion of the S.S. Grandcamp at Texas City, Texas, while she was loading a cargo of Fertilizer Grade Ammonium Nitrate (FGAN) on April 16, 1947, resulted in more than 500 deaths, more than 3000 personal injuries, and tremendous destruction of and damage to property. It has become known as the Texas City Disaster. On May 5, 1947, two weeks after the disaster, the Republic of France, as owner, and Compagnie Generale Transatlantique (hereinafter referred to as the "French Line"), as agent of the owner or charterer of the vessel, filed a petition in the District Court for the Southern District of New York (Admiralty No. 149-248), pursuant to the Limitation of Liability Act, 46 U.S.C.A. §§ 182-189, praying for exoneration from or limitation of liability for damages resulting from the explosion. That New York limitation proceeding is still pending without trial or other disposition.

On October 17, 1947, within the six-month period prescribed by 46 U.S.C.A. § 185, the Republic of France and the French Line filed the present like petition for exoneration or limitation of liability in the District Court for the Southern District of Texas. A long delay in bringing the latter petition to trial has been occasioned by giving precedence to the suits under the Federal Tort Claims Act, 28 U.S.C. §§ 1346 and 2674, against the United States, the manufacturer of the FGAN. Eventually, this Court held that the United States was not liable, and its decision was affirmed by the Supreme Court. In re Texas City Disaster Litigation, 5 Cir., 1952, 197 F.2d 771, affirmed sub nom. Dalehite v. United States, 1953, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427.

Thereafter, in 1955 Congress enacted the Texas City Relief Act, 69 Stat. 707-709. That Act left insurance underwriters to bear their own losses, but provided for payment of uninsured claims in an amount not exceeding $25,000.00 for any one claim. Pursuant to the provisions of that statute, the United States paid approximately $16,000,000.00 to victims of the disaster and obtained from the recipients assignments of their claims for death, personal injuries and property damages which totalled approximately $70,000,000.00. Thereafter, in May 1957, the United States filed in this proceeding an amended claim based upon these assignments, not for the $16,000,000.00 paid but for approximately $70,000,000.00, the amount originally asserted by these claimants.

The claims of all persons who made assignments to the United States were dismissed on January 27, 1958. Many persons who had not made assignments to the United States thereafter voluntarily withdrew their claims. The only remaining claimant, other than the United States, is the Texas City Railway Terminal Co. That Company did not file under the Texas City Relief Act because it was not willing to assign an uninsured loss of nearly five million dollars for the $25,000.00 maximum allowed under the Relief Act. In addition to its assigned claims, the United States filed a claim in the amount of $350,000, as successor to the Reconstruction Finance Corporation, for the loss of goods in a warehouse awaiting loading on another vessel.

Neither of petitioners here was a party to the Dalehite case. The cases are alike to the extent that each arises out of the Texas City Disaster. Sensibly, the trial of the present case was shortened by the introduction by agreement of the testimony in Dalehite of 86 of the total of 133 witnesses in that case. Four of the witnesses in Dalehite again testified in this case, and an additional 25 witnesses testified in open court during thirteen days of trial. So that the findings and decision of the district court in this case were based not only on a large part of the evidence taken in Dalehite, but also on a voluminous record now comprising some 2400 pages of additional testimony. The issues in the two cases, particularly at the present stage of this limitation proceeding, are not identical.

The findings of fact and conclusions of law of the district court in this case comprise some 43 pages of the printed record, and have been published at 171 F.Supp. 497, 511 and at 1959 A.M.C. 547. Based upon such findings and conclusions, the district court entered an interlocutory decree granting the motion of the petitioners for leave to implead the United States,1 and denying the petitions for exoneration or limitation.2 This appeal is from that decree.

The only ultimate issue so far determined by the district court is that the petitioners are not entitled to exoneration from or limitation of liability. The merits of the claims or of the impleading petition have not yet been determined. The decree was captioned by the district court as an "Interlocutory Decree," and for purposes of appellate jurisdiction we think that it must be so considered. See La Bourgogne, 1907, 210 U.S. 95, 112, 113, 28 S.Ct. 664, 52 L.Ed. 973. The jurisdiction of this Court of Appeals is that granted by 28 U.S.C. § 1292(a) (3):

"(a) The courts of appeals shall have jurisdiction of appeals from:
* * * * * *
"(3) Interlocutory decrees of such district courts or the judges thereof determining the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are allowed."

While interlocutory for purposes of appellate jurisdiction, this decree finally determined the rights and liabilities of the parties by denying the petition for exoneration from or limitation of liability. To that extent, the decree is not subject to the rule usually applicable to interlocutory decrees;3 viz.: that in reaching its final decree the court may exercise its discretion to re-examine any or all of its findings which form the basis of the interlocutory decree. Instead, except as to the issues which were reserved to be determined on the impleader of the United States (see footnote 1, supra), the present decree is res judicata on the issue of liability for the damages caused by the explosion.4

The district court found that the Grandcamp was unseaworthy in that she was improperly manned and improperly stowed, and that the Grandcamp's unseaworthiness was within the privity and knowledge of the petitioners.5 The district court found also that the master and the petitioners were guilty of fault and negligence both in the origin of the fire6 and in the failure to extinguish it in its incipient stage.7 The court concluded:

"From the foregoing, it follows that by reason of the fault and negligence of the petitioners, and the unseaworthiness of the vessel, all of which was within the privity and knowledge of petitioners, neither is entitled to exoneration from or limitation of liability under § 183, Title 46 U.S.C.A."8

All of the claims having been filed, and there being no claims for loss of or damage to cargo, it is apparent that the fire statute, 46 U.S.C.A. § 182, is not applicable, and that consideration can be restricted to limitation of liability, 46 U.S.C.A. § 183. It is apparent also that there are no claims to which seaworthiness, not in itself amounting to negligence,9 can apply.

The findings of fault and negligence which appellants challenge on this appeal are those pertaining to the cause of the fire, and to the procedures that should have been used in attempting to extinguish the fire at its incipiency.10

We are relieved from entering into an exhaustive review of this voluminous record to reach a decision as to whether or not those findings of fact are clearly erroneous11 by the following considerations. All of the claims for personal injury, death, and property damage resulted not directly from fire but from explosion. The district court found no more than that the Master could have foreseen the possibility of explosion:

"The Master could and reasonably should have foreseen and anticipated the danger of a disastrous fire, with the possibility of explosion, in failing to prevent smoking in the presence or proximity of the FGAN. His negligence in this regard constituted a proximate cause of the fire, the resultant explosion, and the damages which ensued.8
"8 In connection with this finding as to `foreseeability\', it is undoubtedly true that the force and devastating effects of this explosion shocked and surprised the scientific field as well as the transportation industry. What was not generally recognized before Texas City was (a) that ammonium nitrate would cause a detonation of such magnitude in the absence of great confinement and pressure (as within a bomb), and (b), that fire and heat alone would cause such detonation, without an initial or booster detonation; or according to one theory, with such initial detonation resulting from an explosion of accumulated gases, which in turn come from the heated and decomposing ammonium nitrate.
"From the literature and information generally available, I do not believe, that, in the exercise of ordinary care, the Master could have foreseen the probability of an explosion of

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