United States v. Egan Marine Corp.
| Decision Date | 12 October 2011 |
| Docket Number | Case No. 08 C 3160 |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. EGAN MARINE CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Hon. Harry D. Leinenweber
Before the Court for decision are the trial record and post-trial briefing of both parties. For the reasons stated herein, the Court finds for Defendant Egan Marine Corporation on Counts I and II, awards the United States the sum of $100,000 in civil penalties under Count III, and finds that the United States has waived its claims for relief under Count IV.
The Court enters the following Findings of Fact and Conclusions of Law pursuant to FED. R. CIV. P. 52(a)(1).
On January 19, 2005, the barge EMC 423 exploded on the Chicago Sanitary and Ship Canal (the "Canal") near the Cicero Avenue Bridge. At the time, it was being transported by the tugboat Lisa E., which is owned by Egan Marine Corporation ("EMC") and staffed by its employees. It was carrying a load of Clarified Slurry Oil ("CSO"), which gives off flammable vapors. On this trip, those vapors ignited, exploded, and sunk the EMC 423; the explosion caused oil and oil solids to leak into the canal. At the time of the explosion, EMC employee Alex Oliva ("Oliva") was on board the barge; he died. Much of the dispute in this case revolves Oliva's actions and whereabouts at the time of the explosion.
The United States (the "Government") alleges that the explosion happened because Oliva used a propane torch to thaw out a cargo pump that had frozen in the cold weather. The Government contends that the barge's thermal fluid heat trace system, which is used to keep barge works warm so that CSO will not solidify inside them, was inoperable or not connected to the cargo pump. If CSO solidified inside the cargo pump, it would have to be heated before the pump could run. Rather than doing this safely, the Government contends, the crew chose to heat the pump with a propane torch. Under the Government's theory, a pipe near the cargo pump was open, creating an open-air access point to Storage Tank 4 underneath the deck. The flame of the propane torch allegedly ignited the flammable vapors emanating from the standpipe and caused the explosion. EMC disputes each of these facts. The parties agree, however, that for such an explosion to occur, the open flame or incandescent spark would have had to be, at the very least, very near to the top of the standpipe.
The sinking of the EMC 423 obstructed the Canal and resulted in the discharge of considerable oil and oil solids into the water.The Government undertook substantial efforts from January 19 until June 7, 2005, to remedy the situation. It also, through the National Pollution Funds Center (the "NPFC"), compensated several companies which were adversely affected by the explosion and related restrictions on the Canal. EMC has several claims pending before the NPFC, which will not be adjudicated until at least the end of this proceeding.
In the aftermath of the explosion, the Coast Guard held hearings on the incident. Several of those who testified at this trial also testified before the Coast Guard. Among those witnesses was Dennis Michael Egan, who was the master of the EMC 423 at the time of the incident, and who relied on his Fifth Amendment privilege against self-incrimination to limit his testimony at trial.
In July 2005, EMC initiated a Limitation Proceeding to require anyone with a claim relating to the explosion and spill to bring their claims. The Government filed a variety of claims in that proceeding. However, in December of 2005 it sought and received dismissal from the Limitation Proceeding, in order to file this claim. The United States then filed this action, followed by an Amended Complaint on July 24, 2008. Count V of the Complaint (under general maritime law) was dismissed by the Memorandum Order of Judge David Coar on March 30, 2009. The parties proceeded totrial on the remaining four counts beginning on September 12, 2011. The Court heard testimony from eyewitnesses, EMC employees, and a variety of experts regarding the sequence of events on January 19, 2005.
Pursuant to the Oil Protection Act of 1990 (the "OPA"), responsible parties (or RPs, here, EMC) are liable to the United States for removal costs, damages, and/or disbursements relating to any spill the RP causes. Here, the Government claims such costs - mostly, removal costs and compensation that the NPFC has paid to harmed third parties. The Government seeks to recapture those costs, as well as to obtain civil penalties. The OPA, however, also contains a limitation of liability for responsible parties who are not grossly negligent and do not cause the oil spill by their own unsafe actions. That limitation on liability is the chief source of contention in this case.
The parties have stipulated, in effect, that EMC is liable for the Government's removal costs and damages under the OPA. Specifically, the parties have stipulated that EMC 423 was a vessel belonging to EMC at the time, that EMC is the responsible party, and that the explosion discharged oil into the navigable waters of the United States.
It appears to be undisputed that EMC has paid out at least $2 million in containment, recovery and compensation expenses in the wake of the spill. At trial, the Government established that the Coast Guard and the National Pollution Fund Center have paid out, in cleanup and other payments, well in excess of $3.5 million.
The parties disagree, however, as to whether EMC is eligible for the OPA's limitation on liability. Because the Government has not proved by a preponderance of the evidence that the spill was proximately caused by EMC's gross negligence or the violation of a safety regulation, this Court concludes that the limitation of liability does apply, and the Government is not entitled to any additional recovery under 33 U.S.C. § 2704.
The EMC 423 was a tank vessel of approximately 1,397 gross tons. On January 19, 2005, the EMC 423 was traveling on the Canal under the power of the tug Lisa E., carrying a cargo of roughly 14,000 barrels of CSO. CSO is a very viscous substance that becomes solid when it is not kept sufficiently hot.
At some time during the January 19, 2005 voyage, flammable vapors accrued in the head space of the EMC 423's Storage Tanks 3 and 4 in a sufficient concentration to be dangerous. At or around 4:40 p.m. on January 19, 2005, the vapors in Tank 4 ignited, setting off the deflagration event which then ignited vapors in Tank 3. The explosion resulted in the discharge of substantial CSOinto the Canal (4,817 gallons of oil and 32 tons of oil solids) and the sinking of the EMC 423.
Under the command of the Federal On-Scene Coordinator (the "FOSC") Capt. David Fish, the United States undertook substantial recovery and containment efforts to mitigate the damage to the canal and surrounding businesses caused by the sinking of the EMC 423. EMC expended more than $2 million in related efforts to salvage the EMC 423, and to clean up the damage that the incident caused.
The Government adduced some evidence that there was a propane torch on board the EMC 423 on the day of the incident. They also introduced some evidence that the crew of the Lisa E./EMC 423 told investigators that crew members had used such a torch on the barge in the past. However, in light of all the evidence and testimony presented, including eyewitness testimony and photographs, the Government did not prove, by a preponderance of the evidence, that Alex Oliva was using a propane torch on the cargo pump of the EMC 423 at the time of the incident.
Similarly, the Government has adduced some evidence that Alex Oliva was a smoker, and could have been lighting a cigarette on the EMC 423 at the time of the explosion. However, the Government has not proved, by a preponderance of the evidence, that Alex Oliva was using an open flame to light a cigarette on board the EMC 423 at the time of the incident.
This Court concludes that only an open flame or incandescent spark would have been competent to set off the deflagration of the EMC 423, and not merely any energy source of greater than quarter of a millijoule. However, the Court does not find the Government's experts credible to the extent that they claim, based on their relatively limited investigations, to have proved that a propane torch caused the explosion.
Both DeHaan and Malooly have significant experience with explosion investigations. However, both relied on questionable law enforcement reports and/or on evidence that was excluded as unreliable at trial when they assumed or concluded that the standpipe was open and a propane torch was used. Furthermore, neither conducted substantial outside research, modeling, calculations, or experimentation to support their opinions. Finally, both experts conceded that it is not unusual for explosions to have undetermined causes. Based on their relatively limited analyses and the questionable facts on which they relied, this Court cannot credit their opinions that a propane torch must be to blame.
The Government's theory of liability is predicated on there being an open flame, operated by Alex Oliva, very close to an open standpipe. (The standpipe lead directly into Tank 4, and if open, would have provided an avenue for a flame to travel into the tank.) The Government has also not proved that the standpipe was open.The standpipe was recovered in the open position and may have been without a cap before the EMC 423 embarked. However, there is significant evidence in the record that an open standpipe would have produced visible smoke or steam, and witnesses and photographic evidence prior to the explosion showed no evidence of visible steam or smoke. Because the Government...
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