The opinion of the court was delivered by: TENNEY
This is an action brought by a shipowner, Ta Chi Navigation (Panama) Corp., S.A. ("Ta Chi"), for exoneration of its steamship S.S. EURYPYLUS under the Fire Statute of the United States, 46 U.S.C. § 182 (1976), or for limitation of damages under 46 U.S.C. § 183. Furthermore, the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. §§ 1300 et seq., is also relevant since the bills of lading for the cargo incorporated that statute. The action arose out of an explosion and massive fire aboard S.S. EURYPYLUS on November 10, 1975 while the vessel was on the high seas proceeding from Taiwan around the world. The explosion and fire resulted in the deaths of or injury to certain officers and members of the crew and in substantial cargo loss or damage. After a non-jury trial, the Court filed a lengthy opinion in which it denied the petition for exoneration or limitation. Complaint of Ta Chi Navigation (Panama) Corp., S.A., 504 F. Supp. 209 (S.D.N.Y. 1980).On appeal, the Court of Appeals for the Second Circuit reversed this Court's denial of the petition and remanded the case for further proceedings consistent with its opinion. Complaint of Ta Chi Navigation (Panama) Corp., S.A., 677 F.2d 225 (2d Cir. 1982). The court of appeals held that this "court erred in fixing the elements and burden of proof," id. at 226, due to "a misunderstanding of the terms of the Fire Statute as they have been applied by the Supreme Court and the courts of this Circuit." Id. at 228.
Certain portions of this Court's opinion which the appellate court found objectionable are set out below. The court quoted the portions hereinafter underlined. 677 F.2d at 227-28.
In a proceeding for exoneration from, or limitation of, liability (as is the present proceeding) the petitioner is required to prove that the vessel was seaworthy at the commencement of the voyage and to set forth facts known to it which might have a bearing on the cause of loss. The cargo claimants have the burden of proof of establishing either unseaworthiness or negligence causally related to the loss or damage. If such unseaworthiness or negligence is established the petitioner must then show that it is entitled to limitation or exoneration because of a lack of privity or knowledgge as to the condition of unseaworthiness or negligence. In re Marine Sulphur Transport Corp., 312 F. Supp. 1081, 1092 (S.D.N.Y. 1970), aff'd in part, rev'd in part sub nom. In re Marine Sulphur Queen, 460 F.2d 89 (2d Cir. 1972) (The Marine Sulphur Queen). If the petitioner failed to use due and proper care, i.e., due diligence, to provide a competent master and crew and to see that the ship was seaworthy at the commencement of the voyage, then any loss occurring by reason of fault or neglect in these particulars is within its privity, and it may not avail itself of the fire exemption statutes. Tug Ocean Prince Inc. v. United States, 584 F.2d 1151, 1155 (2d Cir. 1978) (Tug Ocean Prince); The Gladiola, supra, 603 F.2d at 1341. Conversely, if petitioner did exercise the due diligence mandated by § 1303, then the burden falls on claimants to show that the damage was due to the personal "design or neglect" or "fault or privity" of the petitioner. Complaint of Caldas, 350 F. Supp. 566, 573 (E.D. Pa. 1972), affirmed without opinion sub nom. Appeal of Coldemar Line, 485 F.2d 678 (3d Cir. 1973).
In the instant case we are concerned with whether the carrier had exercised due diligence under § 1303 before and at the commencement of the voyage to make S.S. EURYPYLUS seaworthy, to properly man, equip, and supply her, and to make her holds fit and safe for the reception, carriage, and preservation of cargo.
504 F. Supp. at 229-30 (emphasis in original).
The first two portions quoted by the appellate court were intended to apply to petitioner's prima facie case in a limitation proceeding.
Concededly they would appear to run counter to the prevailing law in this circuit in Fire Statute cases.(The last portion quoted does not deal with the burden of proof.) What this Court failed to recognize is that, while in limitation proceedings under 46 U.S.C. § 183(a) the burden is on the shipowner to prove that the unseaworthiness was without its privity or knowledge, Coryell v. Phipps, 317 U.S. 406, 409, 87 L. Ed. 363, 63 S. Ct. 291 (1943); In re Marine Sulphur Queen, supra, 460 F.2d at 101, in limitation proceedings involving the Fire Statute, the burden, at least in this circuit, is on the cargo claimants to prove that the fire was "caused by the design or neglect of such owner."
This is apparently so even if the shipowner makes no prima facie case of due diligence under 46 U.S.C. § 1303(1).
The error committed by this Court in its previous decision appears in the second sentence of the following language:
The cargo claimants have the burden of proof of establishing either unseaworthiness or negligence causally related to the loss or damage. If such unseaworthiness or negligence is established the petitioner [carrier] must then show that it is entitled to limitation or exoneration because of a lack of privity or knowledge as to the condition of unseaworthiness or negligence.
504 F. Supp. at 229-30 (emphasis added) (citations omitted).
In reversing and remanding, the appellate court stated:
We adhere to our prior holdings that, if the carrier shows that the damage was caused by fire, the shipper must prove that the carrier's negligence caused the fire or prevented its extinguishment. If on remand the shipper fails to meet this burden, the action must be dismissed. Only if the shipper sustained the burden would the carrier have the obligation to establish what portion of the damages was not attributable to its fault.
677 F.2d at 229 (citation omitted).
Although no mention of the burden of proof as to "privity or knowledge" of the shipowner, see 46 U.S.C. § 183(a), was made by the appellate court, this Court must assume that the burden of proof as to privity or knowledge was considered as part of the burden of proving "the carrier's negligence." See G. Gilmore & C. Black, supra, at 879. The carrier cannot be liable for fire loss due to negligence or unseaworthiness without its privity or knowledge. Id.
This Court's statement that "the petitioner is required to prove that the vessel was seaworthy at the commencement of the voyage," 504 F. Supp. at 229, was directed to the prima facie case commonly made in limitation proceedings and tracks petitioner's pleadings. In its petition for exoneration or limitation, the shipowner alleged in part as follows:
SECOND: At all times hereinafter mentioned the S/S EURYPYLUS was a steam vessel, 151.49 meters long, 19.33 meters in beam, of 8,601 gross and 4,419 net tons.The vessel was built in Port Glasgow in the year 1959. She was registered under the laws of Panama and her home port was Panama, R.P. She held the highest classification for hull, machinery and tackle in Lloyd's.Complainant used due diligence to make the S/S EURYPYLUS seaworthy, and at the time of the loss hereinafter described and at and prior to the commencement of the voyage upon which said loss, injuries and deaths occurred the S/S EURYPYLUS was tight, staunch, strong, properly manned, equipped and supplied and in all respects seaworthy and fit for the service in which she was engaged.
FOURTH: The foregoing cargo losses, deaths and personal injuries were not caused by or due to any fault or neglect or want of care on the part of complainant or on the part of the S/S EURYPYLUS or those in charge of her, or of any person or persons for whom complainant is or was responsible, but were caused as a result of a fire which the vessel could not withstand despite her seaworthy condition and the proper seamanship displayed by her officers and crew.
FIFTH: The foregoing cargo losses, deaths and personal injuries were done, occasioned and occurred without the privity and knowledge of complainant and without the privity or knowledge, at or prior to the commencement of the voyage upon which the S/S EURYPYLUS was then engaged, of her master or of complainant's superintendents or managing agents.
Complaint of Ta Chi Navigation (Panama) Corp., S.A., at 1-2 (emphasis added).
In their answer, the cargo claimants put certain of these affirmative allegations in issue. In particular they denied the allegations of Pargraphs Fourth and Fifth and denied knowledge or information of Paragraph Second, except for the allegations as to the place where the vessel was built and her registry. Answer of Rohm & Haas & Co., PP2, 4 & 5. However, in the claims filed by the cargo claimants seeking damages, they affirmatively alleged that the vessel "sailed on the intended voyage in an unseaworthy condition, with the full knowledge and privity of [the shipowner]." Claim of Rohm & Haas & Co., P5. A similar affirmative claim was made by the other claimant. See Answer of Citibank N.A., P14.
It would appear from the pleadings that the shipowner believed it had at least the burden of making out a prima facie case of seaworthiness in its claim for exoneration or limitation, whereas cargo claimants recognized in their claims for damages their duty of proving unseaworthiness and knowledge and privity. Accordingly, it is important to note that the Court was only trying the limitation or exoneration case, not the claims for damages.
The Court respectfully suggests that in a limitation or exoneration proceeding, where the petitioner shipowner is seeking affirmative relief -- even in cases involving the Fire Statute -- the petitioner must at least make out a prima facie case that it exercised due diligence to make the ship seaworthy at the commencement of the voyage. The shipowner in the instant case assumed that it had a duty to make out such a prima facie case, and commenced the trial by calling witnesses and introducing a great quantity of exhibits such as ship plans, inspection reports, depositions showing inspections, fire drills, and other facts known to it which might have a bearing on the cause of loss. Moreover, petitioner's attorney referred to all of this as its prima facie case. Trial Transcript ("Tr.") at A 20.
FINDINGS OF FACT AND CONCLUSIONS OF LAW REVIEWED
Although this Court, with all due respect, believes that it in fact did place on cargo claimants "the burden of proof of establishing either unseaworthiness or negligence causally related to the loss or damage," 504 F. Supp. at 229, it has nevertheless partially retried the issues to the extent suggested by the appellate court and reviewed the prior trial record. This Court again concludes that the cargo claimants have sustained the burden of proof: the S.S. EURYPYLUS was unseaworthy at the time she commenced her final voyage; the owner of the S.S. EURYPYLUS was negligent in keeping oxygen and acetylene cylinders stored outside the engine room; and the negligence was a substantial causative factor in the loss of or damage to her cargo. However, in view of an expression of opinion by the appellate court as to substantial evidence contrary to such a conclusion, which will be referred to in more detail hereinafter, it would appear advisable to go into greater detail than would otherwise be indicated.
This Court made comprehensive and specific findings of fact in its prior opinion. See 504 F. Supp. at 211-28. The Court will assume familiarity with such findings, and will repeat or summarize only the principal ones upon which it based its legal and factual conclusions.
S.S. EURYPYLUS, originally S.S. MANGLA, was built in Scotland in 1958 under the requirements of the 1948 Safety of Life at Sea Act Convention ("SOLAS") and the laws of the United Kingdom for merchant vevssels. She was a steel general cargo vessel: length 497 feet; beam 63 feet; gross tonnage 8,601 tons; net tonnage 4,419 tons. Her plans were approved by Lloyd's Registry of Merchant Shipping with a 100A-1 classification. The vessel was equipped with two steam turbine engines. She had a 'tween deck running the length of the ship, and had six hatches on or above the main deck, three of which were forward of the midship accommodation house and three aft. The midship accommodation house occupied the full width of the ship and extended fore and aft approximately 148 feet. It rose some 42 feet from main deck level and was divided by three decks, i.e., the bridge deck, the promenade deck, and the boat deck. One level above the boat deck and forward of the boat deck was the navigating bridge structure, aft of which were the ship's funnel and ventilators. Just aft of and extending into the midship accommodation house forward to the engine room casing above the main deck was the refrigerating machinery room. The structure housing the refrigeration machinery rose to the level of the bridge deck, the top of the structure consituting a continuation or extension of that deck in the midship accommodation house. At the stern of the ship was the structure which contained the living accommodations for the crew, and directly below and slightly above 'tween deck level was the steering gear platform where the steering gear machinery was located. It was here that the diesel emergency fire pump was located, forward of the steering gear machinery and readily accessible by means of a ladder in the crew's accommodations on the main deck. Finding 4, 504 F. Supp. at 211-12.
The vital areas of the ship in this litigation were (1) the engine/boiler room (hereinafter the "engine room") -- where the initial explosion occurred -- which reached from the ship's bottom and terminated in the smokestack atop the uppermost deck of the midship accommodation house, and (2) the midship accommodation house, particularly the port "tonnage" alleyway, within that structure, on the main deck level -- where the oxygen and acetylene cylinders were stored. The engine, boiler and other equipment located therein have been described in detail in the Court's prior opinion, see Finding 5, 504 F. Supp. at 212-13, as have the spaces of the midship accommodation house, see Finding 6, 504 F. Supp. at 213-16.
The engine room (actually an undivided space below the main deck) rose from two contiguous double bottom tanks on the ship's bottom on which were located three diesel generators. Some three feet above the base of these generators was the bottom or first level. Some 10 feet above the bottom level was the second level or maneuvering platform, which was slightly above the tops of the generators. Aft on the bulkhead was the main electric switchboard. Forward were the two main boilers, forward of which was the auxiliary boiler. About three feet above the second level or maneuvering platform was the third level (actually the lower 'tween deck).On the starboard side of the third level was the engine room workshop.Sixteen feet above the third level was the fourth level or main deck of the ship. Finding 5, 504 F. Supp. at 212-13.
Access to the engine room from without was effected on the main deck by a door on the port side opening into the port tonnage alleyway, which door was always kept open, Finding 59, 504 F. Supp. at 227, and a door aft on the port side leading into the cargo refrigerating machinery room which this Court believes was also open at the time of the explosion. Access was also afforded by a door on the starboard side of the engine room on the bridge deck. Egress to the boat deck was through an escape hatch. The other access was effected through the shaft tunnel around the first level of the engine room. This tunnel ran above the shaft from the casing of the engine room aft about 160 feet where it connected by ladder and stairway with the living accommodations of the crew in the superstructure at the stern of the ship. Finding 5, 504 F. Supp. at 212-13. The entire engine room was protected by a casing .3 inch thick of riveted steel construction which was insulated and rose from the ship's bottom through the upper decks up to the funnel atop the vessel. Finding 6, 504 F. Supp. at 216.
The engine room was ventilated by an arrangement of one exhaust and two inlet fans, electrically powered, which placed the space under constant pressure, i.e., the inlet fans blew air into the engine room at approximately 1-1/2 inches of water pressure while the exhaust system was at a pressure of 1/2 inch of water, so that the space was under a constant pressure of one inch of water. The intake of air was approximately 22,000-25,000 cubic feet per minute. Accordingly, if any of the doors to the casing were open, a massive flow of air would pass out through them. Id.
The midship accommodation house contained the living accommodations of the master, the ship's officers, and certain crew members (11 officers and 6 crew members). These accommodations have been described in detail in the Court's prior opinion. Id.
At main deck level one entered the accommodation house from forward on the ship through either of two doors in the forward bulkhead: one on the port side, the other on the starboard side. The starboard alleyway ran aft in a straight line some 135 feet terminating in open access to the main deck aft of the accommodation house. However, this open access had been closed by wooden planks fitted into steel channels. There were no living accommodations on the starboard side of the vessel contiguous to the starboard alleyway. Id.
The port tonnage alleyway, entered through a door on the port side of the forward bulkhead, differed from the starboard alleyway. The entrance led to the tonnage alleyway, but it also led to a passageway running parallel to and outboard of the tonnage alleyway.On the outboard side of this passageway were the living quarters of certain members of the crew. On the inboard side there were storage spaces and a paint shop. The bulkhead on both sides of this passageway was made of wood. The port tonnage alleyway itself was four feet wide and extended directly aft in a straight line for approximately 90 feet where it turned outboard. Id.
Some 10 to 15 feet before the tonnage alleyway turned outboard there was a metal rack on its outboard side with 10 apertures approximately eight inches indiameter. The rack was used for the storage of oxygen, acetylene and possibly freon cylinders. This rack was approximately six feet forward of the door to the engine room on the inboard side. Id. There is no evidence of any other rack for the storage of the cylinders.
Before the alleyway turned outboard it was paralleled by another passageway outboard of the tonnage alleyway which led into living quarters and hospital space. After turning outboard the alleyway continued aft some 45 feet along the port side of the ship where there was access to the open main deck. Here, as in the case of the starboard tonnage alleyway, such access had been closed by wooden planks fitted into steel channels. Id.
Finally, in describing the accommodation house it is important to note that on the main deck level the house on its port and starboard sides was a continuation of the hull not open to the sea -- in effect, part of the freeboard of the vessel.
The importance of the port tonnage alleyway cannot be overstated. Unlike the starboard alleyway which ran along the outboard side of the accommodation house, the port tonnage alleyway ran well within the structure of the accommodation house. Moreover, it contained the main arteries or controls of the ship's fire-fighting system.
There were two principal systems for fighting fire, a water system and a steam system. See Findings 7-10, 504 F. Supp. at 216-17. One portion of the fire water main ran along the overhead of the port tonnage alleyway. The steam smothering system could be operated from within the engine room or by remote controls on the outside. The only remote system that could be operated while the ship was underway was located in the port tonnage alleyway within a few feet of the cylinder storage rack.
On October 4, 1975, seven filled oxygen cylinders, two filled acetylene cylinders, and 1,450 pounds of freon were loaded aboard at Keelung, Taiwan. Finding 25, 504 F. Supp. at 220. These were billed directly to petitioner, Ta Chi. Id. When the shipowner's fire expert boarded the ship in February 1976 he found twenty to twenty-four gas cylinders in the port tonnage alleyway. The shipowner has offered no explanation for the presence of the additional cylinders.
Finding 52, 504 F. Supp. at 226. An additional cylinder was found in the aft accommodation house. Claimant's Exh. 5, photos 61 & 62.
The dangerous qualities of oxygen and acetylene, separately or in combination, as found by this Court, are not disputed. Finding 53, 504 F. Supp. at 226. Nor is there a factual dispute as to the oxy-acetylene system as it was rigged on November 10, 1975 at the time of the explosion. Finding 30, 504 F. Supp. at 221.
The Court has reviewed the evidence regarding the explosions and fire and concludes that its factual findings are clearly supported by a preponderence of the credible evidence. The physical evidence alone, and with the reasonable inferences drawn therefrom, support the conclusions as to the cause and nature of the almost simultaneous explosions. See 504 F. Supp. at 231-33. What the Court stated in its original opinion were, and remain, its conclusions based upon a preponderance of the evidence clearly sufficient to satisfy the cargo claimants' burden of proof of establishing not only unseaworthiness but also negligence causally related to the loss or damage. Findings 51-60, 504 F. Supp. at 226-27, 233. As this Court previously stated:
The stowage of the oxygen and acetylene gas cylinders at the location and in the manner so stowed at the commencement of the voyage, and the presence of the additional cylinders for which no permanent stowage was provided, together with the foreseeability that in the event of fire in the engine room the cylinders would explode and destroy or seriously impede the ship's fire-fighting ...