US v. M/V SANTA CLARA I

• Citation: 887 F. Supp. 825
• Decision Date: 08 May 1995
• Docket Number: Civ. A. No. 2:92-0389-18.
• Court: U.S. District Court — District of South Carolina
• Parties: UNITED STATES of America, Plaintiff, v. M/V SANTA CLARA I, its engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, etc., in rem, and Kyriakopoulos Internacional, S.A.; and Empressa Naviera Santa, S.A.; and Juan Alvarez, in personam, Defendants. KYRIAKOPOULOS INTERNACIONAL, S.A.; and Empressa Naviera Santa, S.A., Third-Party Plaintiffs, v. COMPANIA MINERA EL INDIO; Chemical Specialities, Inc., Degesch de Chile, Ltd; and Degesch America, Inc., Third-Party Defendants.

887 F. Supp. 825

UNITED STATES of America, Plaintiff, v. M/V SANTA CLARA I, its engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, etc., in rem, and Kyriakopoulos Internacional, S.A.; and Empressa Naviera Santa, S.A.; and Juan Alvarez, in personam, Defendants.

KYRIAKOPOULOS INTERNACIONAL, S.A.; and Empressa Naviera Santa, S.A., Third-Party Plaintiffs, v. COMPANIA MINERA EL INDIO; Chemical Specialities, Inc., Degesch de Chile, Ltd; and Degesch America, Inc., Third-Party Defendants.

Civ. A. No. 2:92-0389-18.

United States District Court, D. South Carolina, Charleston Division.

May 8, 1995.

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Ben A. Hagood, Jr., Charleston, SC, Michael J. Devine, Eileen T. McDonough, Richard Buckingham, Washington, DC, for plaintiff.

Gordon Schreck, Douglas Muller, Charleston, SC, Brian Starer, Charles B. Anderson, New York City, for defendants.

ORDER

NORTON, District Judge.

This case involves a relatively small shipment of magnesium phosphide, a relatively large shipment of arsenic trioxide, and a storm at sea. As such, it is both an admiralty and an environmental case involving the M/V SANTA CLARA I. For the reasons set forth in detail below, this court denies the summary judgment motions made by Third Party Plaintiffs and Third Party Defendants.

I. BACKGROUND

January 3, 1992 was a dark and stormy night off the New Jersey coast. The wind whistled through the rigging of the M/V SANTA CLARA I and she was buffeted about by raging seas. The M/V SANTA CLARA I is a Panamanian flagged 478 foot long multi-purpose cargo vessel owned by Kyriakopoulos Internacional, S.A. and operated by Empressa Naviera Santa, S.A. (hereinafter jointly referred to as "ENS"). On December 2, 1991, the M/V SANTA CLARA I was loaded with a shipment of ten drums of magnesium phosphide in Valparaiso, Chile. The ten drums were secured to five pallets of two drums each and were placed in the # 1 tween deck. The seller of the magnesium phosphide, Degesch de Chile ("Degesch Chile"), hired a freight forwarder A. Hardrodt Chile ("Hardrodt") to prepare the appropriate shipping forms and bills of lading for the magnesium phosphide.¹ Although Degesch Chile labeled the drums of magnesium phosphide as "poison when wet" and paid the hazardous cargo shipping rate to Hardrodt, the bills of lading and the Chilean customs forms prepared by Hardrodt and delivered to the M/V SANTA CLARA I did not designate the cargo as hazardous. The magnesium phosphide was destined for Baltimore where it would be unloaded for ultimate delivery to the consignee purchaser, Degesch America.

After loading the magnesium phosphide in Valparaiso, the M/V SANTA CLARA I continued to Coquimbo, Chile, where on December 3 and 4, 1991, twenty-five shipping containers each holding approximately one hundred eight barrels of arsenic trioxide were loaded onto the ship. Compania Minera El Indio ("El Indio"), the seller of the arsenic trioxide, was responsible for the packing and delivery of the sealed shipping containers to the M/V SANTA CLARA I. Unlike the bills of lading for the magnesium phosphide, the bills of lading for the arsenic trioxide properly declared the cargo as hazardous. Some of the shipping containers were loaded on the deck of the vessel on top of the # 2 hatch. The cargo of arsenic trioxide was also destined for the United States for ultimate delivery to the consignee purchaser, Chemical Specialties, Inc. ("CSI"). CSI is a company located in North Carolina that uses the arsenic trioxide in the manufacture of a wood treatment chemical compound. After loading the arsenic trioxide, the vessel began her northbound voyage stopping in Ecuador prior to transiting the Panama Canal en route the continental United States for port stops in Philadelphia, New Haven, New York, Port Elizabeth, Baltimore, and ultimately Charleston, South Carolina.

On December 29, 1992, while the vessel was in New Haven, a new captain embarked on the M/V SANTA CLARA I. The ship arrived in New York on New Years Eve where she was idle at anchor until January 2, when she docked at Port Elizabeth, New Jersey to load and discharge cargo. On the evening of January 3, at approximately 5:50 p.m., the M/V SANTA CLARA I departed Port Elizabeth for what was intended to be a short overnight transit to her next port of call, Baltimore, Maryland. During the course of that overnight transit, the vessel encountered a storm approximately thirty miles off the coast. According to the affidavits of the crew, the storm caused the vessel to pitch and roll violently for several hours and resulted in damage to the ship and to much of its cargo. Reconstruction of weather data from buoys in the area indicate that the sea heights reached eighteen feet and the winds gusted to fifty knots. When the storm subsided, the crew noticed that twenty-one shipping containers had been lost overboard and much of the cargo had broken loose below decks. Four of the twenty-one containers lost overboard were loaded with the barrels of arsenic trioxide. A fifth container of arsenic trioxide remaining on board was damaged such that some of its barrels fell overboard. The crew determined that approximately 441 barrels of arsenic trioxide had been lost overboard. The vessel also suffered stowage collapse of sundry cargo including the magnesium phosphide.

On arrival in Baltimore, on January 4, 1992, the M/V SANTA CLARA I was immediately boarded by representatives of the United States Coast Guard Marine Safety Office, the Maryland Port Authority Police, and other government agencies. The Coast Guard required the vessel to clean the decks of any arsenic trioxide prior to allowing cargo to be discharged. The Coast Guard supervised the clean up, and ultimately shore side stevedores discharged cargo.

Included in the discharged cargo was the ten drum shipment of magnesium phosphide. There is some dispute as to whether there was any indication to the vessel or its crew that some of the magnesium phosphide had spilled from the drums resulting in a potentially hazardous condition on board the vessel.² After the cleanup of the arsenic trioxide and the unloading of the appropriate cargo, the Coast Guard permitted the vessel to depart Baltimore and to continue its voyage to Charleston, South Carolina.

The vessel left Baltimore on January 6, and arrived in Charleston the evening of the next day. On January 8 longshoremen boarded the vessel early in the morning to load and discharge cargo. Additionally, Coast Guard representatives boarded the M/V SANTA CLARA I to continue to investigate the overboard loss of the shipping containers of arsenic trioxide. While Coast Guard officials were talking with the ship's captain about the loss of the arsenic trioxide, a stevedore reported the existence of fumes and a "garlic-like" smell in the # 1 tween deck. A preliminary investigation resulted in the location of a lid from one of the drums of magnesium phosphide that was previously unloaded in Baltimore. The Coast Guard brought the lid to the captain's office in an effort to identify the source of the fumes. Further investigation revealed that approximately 800 pounds of magnesium phosphide had spilled in the hold of the vessel. It was then determined that the fumes were caused by a spontaneous chemical reaction that occurred when the spilled magnesium phosphide reacted with latent moisture thereby creating a dangerous phosphine gas. The captain inspected the documentation associated with his cargo and noted that none of the shipping documents, including the bills of lading, the Chilean custom's forms nor the vessel's Dangerous Cargo Manifest, listed the magnesium phosphide as a hazardous cargo, which in fact it was. The vessel was required to clean up the remaining magnesium phosphide and incurred costs in doing so in addition to expenses related to personal injury claims, cargo damage claims, and government fines. According to ENS, the costs associated with the magnesium phosphide spill amounted to approximately 2.2 million dollars.

As a result of the loss of the arsenic trioxide, the United States in conjunction with ENS began to search for, locate, and recover the arsenic trioxide containers and barrels. Most of the barrels were found in an underwater "debris field" approximately thirty miles off the coast of Cape May, New Jersey. After determining that a removal action was appropriate and receiving authority from the United States Environmental Protection Agency for response action, an Administrative Order³ was issued on February 20, 1992 to Third Party Plaintiffs directing them as the owner and operator of the M/V SANTA CLARA I to retrieve and dispose of the barrels of arsenic trioxide. Under protest, Third Party Plaintiffs carried out the Administrative Order over a period of six weeks successfully recovering approximately 320 barrels from the debris field. Third Party Plaintiffs incurred significant costs and expenses in complying with the Administrative Order and now seek to recover these expenses from El Indio and CSI. According to ENS, the recovery costs amounted to approximately five million dollars.

II. SUMMARY JUDGMENT STANDARD

To grant a motion for summary judgment, this court must find that "there is no genuine issue as to any material fact." Fed.R.Civ.P. 56(c). The judge is not to weigh the evidence, but rather to determine if there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). If no material factual disputes remain, then summary judgment should be granted against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which the party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)....