The opinion of the court was delivered by: Sweet, District Judge.
LIRR and MTA are public benefits corporations organized and
existing under the laws of New York. LIRR is a subsidiary of
Poling Transportation Corp. ("PTC") and Motor Vessel Poling
Bros. No. 7, Inc. ("Poling, Inc.") (collectively, "Poling") the
plaintiffs in this action, are New York corporations with offices
in Staten Island. During the relevant time period, Poling, Inc.
was the registered owner and PTC was the owner pro hac vice of
the Motor Vessel POLING BROS. NO. 7 ("Poling No. 7"), a
Claimant Ditmas Oil Associates, Inc. ("Ditmas") is a New York
corporation which manages the Terminal as a fuel storage
facility. Ditmas is joined in its claim by various affiliated
entities having interests in the Terminal and its fuel storage
Claimants Antonio Coca ("Coca") and David Theophilous
("Theophilous")*fn2 are individuals who were injured in the
explosion and fire at the Terminal. Theophilous was employed by
Ditmas and Coca was employed by one of its affiliates, Chambers
Following the accident, Coca commenced suit in the New York
Supreme Court for Bronx County to recover for his injuries. On
December 1, 1987 Poling instituted this action for exoneration or
limitation of liability pursuant to 46 U.S.C. § 183. The various
claimants responded and discovery was taken. At some point,
additional state court actions were filed by Theophilous, also in
the Bronx, and by various parties against LIRR in Queens County.
LIRR filed its motion for summary judgment on January 24, 1991,
and oral argument was heard on March 8. Following further
submission from the parties, the matter was taken under
advisement as of March 18.
Except as otherwise noted, the following facts are not
The Terminal is situated in Long Island City between Newtown
Creek on the south and 53rd Avenue on the north, in the vicinity
of the Pulaski Skyway and the Queens entrance to the Mid-Town
Tunnel. There are a number of fuel storage tanks on the premises,
including two gasoline tanks, No. 27-East and No. 27-West,
located at the north boundary, adjacent to 53rd Avenue.
Across 53rd Avenue to the north is an LIRR right-of-way along
which run several sets of railroad tracks. In this vicinity there
are four track switches which allow trains to move from one track
to another. Because of their moving parts, such switches are
susceptible to cold weather and must be kept from freezing.
Methods used by railroads to keep switches from freezing include
gas or kerosene open flame heaters, electric heaters, or chemical
compounds which prevent ice build-up on the metal surfaces. For
the four switches near the Terminal, the LIRR used kerosene
burners, or "smudge pots," fairly simple devices consisting of a
container of kerosene with a wick for lighting. The burner is
placed between the railroad ties underneath the portion of the
switch to be heated, and is lit manually when conditions warrant.
Based on the evidence presented, it appears that the burner
closest to the Terminal is at least seventy feet away, across
53rd Avenue and up a slight embankment. In addition to kerosene
LIRR uses both gas and electric heaters at various locations in
its rail system.
On the evening of December 27, 1986, Poling No. 7 arrived at
the Terminal laden with gasoline. It made fast along Newtown
Creek and at approximately 11:30 p.m. began to discharge gasoline
into Tank No. 27-East. The operation continued until
approximately 1:15 a.m. the following morning. During the
discharge some amount of gasoline, asserted by LIRR to have been
between 5,000 and 12,000 gallons, was spilled. The spilled
gasoline was ignited and an explosion and fire followed in which
Coca and Theophilous were injured and the Terminal and Poling No.
7 were damaged. For the purposes of the present motion only, LIRR
concedes that the spilled gasoline was ignited by a lit smudge
Evidence has been presented both that LIRR personnel working
near the Terminal were aware that gasoline was stored there, and
that Terminal personnel were aware of LIRR's use of the switch
heaters. The manager of the Terminal, George Esayan ("Esayan"),
testified during his deposition that he and a fire inspector had
at one time discussed with an unidentified LIRR employee the
possible danger of having an open flame across the street from a
fuel depot, and that the fire inspector subsequently made
telephone calls to LIRR on the topic. Esayan also testified by
affidavit that he had on several occasions witnessed rubbish
fires caused by refuse and debris around the tracks which had
been ignited by the open flame of the heaters.
There was also evidence that in October 1986 a gasoline spill
occurred at the Terminal, involving the release of between 150
and 200 gallons of gasoline. At that time, the street on the east
side of the Terminal was blocked off to traffic while the spill
was cleaned up. At oral argument, several parties stated that the
LIRR suspended operations near the Terminal during the clean-up,
but no evidence was presented to support this assertion.
Following the spill, Esayan wrote to the Fire Department stating
that Ditmas had ...