United States District Court, S.D. New York
October 18, 2005.
In re M/V DG HARMONY and Consolidated Cases.
The opinion of the court was delivered by: DENNY CHIN, District Judge
On November 9, 1998, the M/V DG HARMONY was off the coast of
Brazil, en route from Miami. At approximately 7:20 a.m., the
vessel shuddered. Within moments, dense smoke covered the ship.
The master of the vessel, Captain Michael Balitzki, rushed to the
bridge. After checking the wind, he turned the ship starboard.
The wind cleared the smoke from the deck, and he saw flames
coming from cargo hold 3.
The chief officer, who had the watch, had already sounded a
general alarm and alerted the crew to assemble. The crew began
fighting the fire, wearing fire suits and using hoses and pumps.
The crew continued to fight the fire until late afternoon, when
the captain ordered most of the crew to abandon ship. A lifeboat
was launched at 6 p.m., carrying away fourteen crew members and
leaving only the captain and a handful of others behind. As the
fourteen crew members looked back from the lifeboat, they saw the
HARMONY ablaze, with flames and smoke rising high from approximately the middle third of the ship. One
of the crew members took a photograph:
(CX 110 at 1).*fn1
The captain and the others who remained aboard the HARMONY
continued to fight the fire and operate the vessel. They finally
abandoned ship at 2 a.m., after yet another explosion, when the
captain decided that it was no longer safe to remain on board.
The vessel had been on fire for more than eighteen hours, and
portions of her deck and side shell plating had turned red and
white hot. The captain collected the vessel's log books and
charts, and he and the remaining crew members evacuated, transferring from the HARMONY via a lifeboat to the SEALAND
URUGUAY, a northbound container ship that had been standing by
approximately half a mile away.
The DG HARMONY continued to burn for three weeks. Most of its
cargo was destroyed or damaged. The vessel itself was declared a
constructive total loss and eventually was scrapped.
Some eighteen lawsuits were filed in this Court, by cargo,
vessel, and other interests seeking recovery for damages suffered
as a result of the casualty. All claims have been settled except
for the claims of certain cargo and vessel interests*fn2
against defendant PPG Industries, Inc. ("PPG"), the manufacturer
of calcium hypochlorite hydrated ("cal-hypo"), a bactericide used
to purify water. Ten of the containers aboard the HARMONY
contained 120 drums each of cal-hypo, manufactured and shipped by
Plaintiffs contend that the cal-hypo in one (if not two) of the
containers decomposed and self-heated, resulting in "thermal
runaway," an explosion, and the fire that followed. Plaintiffs
assert theories of strict liability, breach of warranty, failure
to warn, and negligence, and proceed under the Carriage of Goods
by Sea Act ("COGSA"), 46 U.S.C. § 1304, general maritime law, and
New York law, as incorporated by general admiralty principles. PPG denies liability, arguing that plaintiffs are unable to
prove the origin and cause of the fire and that it is impossible
to determine where the fire started. PPG also argues that its
cal-hypo was not defective, it had no duty to warn, and, even
assuming such a duty existed, the duty was not breached. PPG
further argues that even if the fire did originate in the
containers of cal-hypo, the crew failed to properly stow the
cargo because it recklessly placed the containers of cal-hypo
next to a source of heat heated fuel oil bunkers. Finally, PPG
argues that the crew was negligent in its efforts to fight the
The case was bifurcated and the issue of liability was tried to
the Court, without a jury, from April 22 through May 18, 2004.
The parties also submitted extensive deposition excerpts. My
findings of fact and conclusions of law follow.
A. The Casualty
1. The Vessel
The DG HARMONY was a full container ship built as the HANSA
CLIPPER in West Germany in 1989. (DX 40 at 5; see Tr. 101,
197). The HARMONY was one of a series of sister vessels. (DX 40
at 5). It had an overall length of 176.57 meters and a breadth of
27.5 meters. (Id. at 4).
The vessel had three holds with numbered bays using odd numbers
from forward to aft as follows: Hold 1 Bays 1-7
Hold 2 Bays 9-23
Hold 3 Bays 25-39
(Id. at 12; Tr. 256; CX 31). The vessel could hold the
equivalent of 1,799 twenty-foot containers. (DX 40 at
12).*fn3 Hold 3 had twelve hatch covers (or "pontoons"),
each 40 feet long and 25 feet wide and weighing 22 tons. (Tr.
Containers were placed into the vessel in "slots," running
lengthwise aft to forward. Each odd-numbered bay could hold a
twenty-foot container in each slot. A forty-foot container could
be placed across two slots and the combination of the two bays
would be referred to by the corresponding even number.*fn4
Rows of slots continued across the breadth of the vessel.
Containers could be stacked under deck up to the top of the hold,
just below the hatch covers. Each layer in the stack was referred
to as a "tier." Hence, each slot could be identified by a series
of three numbers indicating the bay, the row, and the
tier.*fn5 Containers could also be stacked on deck, on top
of the hatch covers, as many as six or seven containers high.
(Tr. 289-90, 315-16, 379; see CX 92). All three holds were ventilated by electric fans and were
designed to carry dangerous goods. All three holds had CO2
extinguishing systems, and hold 1 had a water sprinkler system as
well. (DX 40 at 13; Tr. 201-02). Each hold also had a smoke
detection system that would, upon detecting smoke, sound an alarm
and turn on a red light on a control panel on the bridge. (Tr.
203-05). The red light would indicate whether the smoke condition
was in hold 1, 2, or 3. (Tr. 205). The smoke detection system was
last inspected before the casualty on September 2, 1998, when it
was inspected by a surveyor from the Isle of Man. (Tr. 205-06; CX
The HARMONY had a fire control and safety plan, which was
posted in several places on board, in German and English. (Tr.
199-200; CX 95). The firefighting system included, in addition to
the features described above, two seawater pumps, an emergency
pump, a series of hydrants and hoses, fire extinguishers, and
firefighting suits. (Tr. 200-03). The crew generally conducted
fire and boat drills on Saturdays when the Harmony was at sea;
the drills included running the fire pumps and running water
through the hoses. (Tr. 211-14).*fn6
The HARMONY was originally registered in Germany. In September
1998, just two months before the casualty, the ownership of the
vessel changed as the HARMONY was acquired by Navigator Shipping, Ltd. ("Navigator"), a subsidiary formed for
this purpose by Safmarine and CMBT Lines N.V. ("SCL"). (Tr. 101,
106; see CX 14, 15). Upon the purchase, the registry of the
vessel was transferred to the Isle of Man. (See CX 14; Tr.
At the time of the purchase, the Harmony was on charter to
DiGregorio Navegacao Ltda. ("DiGregorio"), which had been
employing the vessel as a member of the Independent Carriers
Alliance (the "ICA"), a group of carriers (or "slot charterers")
engaged in a liner service between the east coast of the United
States and Brazil. The ICA included DiGregorio, Cho Yang Shipping
Co. ("Cho Yang"), DSR Senator Lines GmbH, Montemar S.A.
Pan-American Independent Line, Zim Israel Navigation Co., and
Hanjin Shipping Co., and it operated a tonnage center, where stow
planners prepared pre-stow and final stow plans. (Tr. 288-89,
832-33, 913-14). SCL did not have an immediate need for the
Harmony, and thus it decided to and did re-charter the vessel to
DiGregorio. (Tr. 106-08, 134; CX 16, 17). Around the same time
SCL entered into crew and ship management agreements with
Leonhardt & Blumberg ("L&B"), a reputable ship management
company. (Tr. 134-40; CX 18, 19).
2. The Crew
At the time of the casualty, the DG HARMONY had a crew of
twenty, exceeding the number (seventeen) required by the Safe
Manning Certificate issued by the Isle of Man. (CX 22, 23; Tr.
218-19, 221). The crew included the captain, Michael Balitzki, from Germany;*fn7 the chief mate, Yuri Kovshel, from Russia;
and the chief engineer, Ulrich Hahnemann, from Germany. (CX 23).
Many of the crew members were from the Kiribati islands in the
South Pacific. (Id.).
Both Captain Balitzki and chief mate Kovshel were trained in
both firefighting and the handling of dangerous cargo and were
certified in the handling of hazardous materials. (Tr. 186-88,
191, 241-43, 276-77, 279; CX 24 at 436-40; CX 98). Although
Balitzki was ultimately in charge of ensuring the proper stowage
of dangerous cargo aboard the HARMONY, he delegated the
day-to-day responsibility for this task to the chief mate. (Tr.
3. The Voyage
The voyage commenced in New York on October 26, 1998, bound for
Newport News, Virginia. The HARMONY arrived in Newport News on
October 27th, where it took on the ten containers of cal-hypo.
From there the HARMONY traveled to Savannah and then to Miami. It
departed Miami on October 30th, bound for Rio de Janiero, Santos,
and other ports in Brazil. (Tr. 222-23; CX 84 at 08210, 08211; CX
103 at 11816, 11825). 4. The Fire
On November 9, 1998, at approximately 7:20 a.m., as the HARMONY
was off the coast of Brazil, Balitzki was in his bedroom when he
felt the vessel shudder two or three times. (Tr. 224). Within
three or four seconds, his phone rang. He went to the phone,
which was located next to a window, looking forward. As he
reached for the telephone, he looked out the window and saw
dense, white, dirty smoke. He could see nothing else. The chief
mate, who had the watch, was on the phone, shouting into the
phone. (Tr. 224-25, 312, 314; Kovshel Dep. 247-48, 351).
Balitzki got dressed and immediately went to the bridge,
arriving at approximately 7:26 a.m. The chief mate was the only
other person present. Again, the captain saw dense, white, dirty
smoke. The general alarm had been sounded, alerting the crew that
something was wrong and that therefore they should assemble. The
smoke detection system indicated that there was smoke in hold 3
and the engine room. The captain sent the chief mate to the
muster station, where the crew was gathering, and also instructed
him to check the main deck. (Tr. 226-29; Kovshel Dep. 248-49,
Balitzki checked the ship's course, the weather conditions, and
the wind. He turned the ship to the starboard side, to clear the
smoke from the deck. He then saw the flames for the first time.
The vessel's speed had been reduced automatically because smoke
had been detected in the engine room. (Tr. 227-28; see Kovshel
Dep. 249-50). Communicating by walkie-talkie, the chief mate reported to
Balitzki that the vessel was on fire, in bay 26, the forward part
of hold 3, on the port side. He also reported that one hatch
cover was missing; the 22-ton hatch cover had been blown off by
the force of the explosion.*fn8 Balitzki then checked the
dangerous goods list and dangerous goods stowage plan, and saw
that the fire had broken out approximately where the ten
containers of cal-hypo had been stowed. (Tr. 228-29; Kovshel Dep.
The crew immediately started fighting the fire, using all three
firefighting pumps at maximum capacity, all hydrants, and all
available fire hoses. They even took some hoses from the engine
room. It quickly became clear, however, that the fire could not
be extinguished with just water. (Tr. 229-31; Kovshel Dep.
248-50; see CX 110 at 2).
After approximately an hour, the port side fuel oil tank in
hold 3 breached. The smoke, which had changed in color gradually
from white to gray, turned to black. The fire started to spread,
including onto the deck. At some point, the crew used the C02 system to try to extinguish the fire. The captain did not
believe the C02 would work because a hatch cover had been blown
off, but he tried it anyway. It did not work. (Tr. 231-33, 321;
Kovshel Dep. 253). Approximately three hours after the fire
started, Balitzki sent a distress signal, to a rescue center on
land to coordinate rescue measures and send firefighting
equipment. (Tr. 232, 324). Another ship had offered help within
the first hour or so, but the captain had declined assistance
because he thought he could bring the fire under control. (Tr.
322). Other ships also offered assistance, but Balitzki declined;
he needed foam to fight what had become a petroleum fire, and he
did not want to risk having a tanker come alongside the burning
HARMONY. (Tr. 323; see Kovshel Dep. 395).
At approximately 3 p.m., Balitzki decided that most of the crew
should abandon ship. He and five others, including the chief
engineer and the chief mate, were to remain on board. The other
fourteen crew members abandoned ship in a lifeboat at 6 p.m.,
while it was still daylight They were picked up by a German
containership, the SEALAND URUGUAY, that had been following the
HARMONY about a mile behind since noon. (Tr. 233-34, 322; Kovshel
Balitzki and those who stayed behind took all the remaining
fire hoses and nozzles and fixed them to railings and other
extensions with the pumps running, intending to create a water
curtain to protect the super-structure and engine area. At
approximately 1:30 a.m., there was another explosion, on the starboard side of the vessel.*fn9 Balitzki decided it was no
longer safe to remain on board, and at 2 a.m. he and the five
others abandoned ship, transferring via a lifeboat to the SEALAND
URUGUAY. (Tr. 235-36). The HARMONY continued to make speed, as
its engine continued to run. (Tr. 236).*fn10
Three or four days later, Balitzki re-boarded the HARMONY, to
release both anchors. (Tr. 236-38). The ship was still on fire,
although the fire had "calmed down a little bit." (Tr. 238). The
fire continued to burn, and did so for a total of approximately
three weeks. (Tr. 239-40).
Eventually, the vessel was declared a total loss. The HARMONY
had been purchased for $16.43 million but the estimated cost of
repairs was more than $18 million. Hence, the decision was made
to scrap the vessel. (Tr. 116; CX 67).
4. The Investigation
The various interests retained fire investigators shortly after
the incident. For approximately two days in January 1999 and three days in February 1999 six fire
investigators inspected the HARMONY in Curacao. These included
Dr. Geoffrey Philip Bound, retained by the cargo interests and
vessel owners, and Dr. Roger McCarthy, for PPG. In general, the
investigators viewed the fire scene as a group, taking
photographs and videos as the debris was removed, bit by bit. The
investigators were permitted to walk around on the vessel,
getting close to objects, including the remains and burnt-out
ruins of containers. (Tr. 498-504). Eventually, the containers
(or their remains) were removed and examined, with the
investigators observing and inspecting each container during the
process. (Tr. 547). Fluorescent spray paint was used to mark the
container numbers on the containers (or ruins thereof) as they
were removed; the various investigators conferred and agreed on
the container number before the number was painted onto the
container. (Tr. 553). As Dr. Bound testified:
Investigating a containership [fire] is like taking
apart a 3-dimensional jigsaw. You only get one chance
to look at the evidence as it becomes
uncovered. . . .
(Tr. 501). The investigators focused their attention on hold 3
and, in particular, the area in hold 3 where the containers of
cal-hypo had been stowed.
B. The Cargo
Cal-hypo is a bactericide used to purify water. It is a
molecule containing calcium chlorine and oxygen in a form that is a "fairly high-energy material." (Tr. 599). When it
decomposes, it liberates oxygen and chlorine. Cal-hypo will
decompose at room temperature. The higher the temperature it is
exposed to, the greater the rate of decomposition. (Tr. 599;
Simmons Dep. 21). When cal-hypo decomposes, it liberates heat and
heats itself up. Cal-hypo reacts faster when it gets hot. (Tr.
600, 1312-13). When cal-hypo is stored in a drum, heat is
retained inside the drum. The larger the mass, the harder it is
for the heat to escape, and the decomposition is likely to
increase. Similarly, the higher the ambient temperature (the
temperature of the atmosphere surrounding the drum), heat loss
becomes more difficult and the temperature inside the drum will
increase. (Tr. 601-03, 1313-14).
When cal-hypo reaches "decomposition temperature," there is a
rapid breakdown of the material, liberating oxygen. The rapid
decomposition throws white particulate material around, which has
the appearance of fine smoke. A great deal of heat is also
liberated, which can ignite materials in the immediate vicinity,
which may result in a white or cream-colored smoke. The term
"critical temperature" or "critical ambient temperature" (or
"CAT") refers to the ambient temperature at which the heat from
the material inside the drum cannot escape fast enough, heat is
retained inside, and the material in the drum becomes hotter,
increasing to the point of self-decomposition. The reaction
becomes circular and "runs away" the material explodes, decomposes, and a fire ensues. (Tr. 603-04).*fn11 The term
"self-accelerating decomposition temperature" (or "SADT") is used
in the United Nations testing procedures, and is the ambient
temperature at which the bulk of the material in a specific
package (once it is within 2°C of the ambient temperature) will
rise by a temperature of 6°C within the period of seven days.
(Tr. 605-06, 676). CAT and SADT are similar, but the SADT does
not necessarily result in thermal runaway while the CAT does.
The placement of drums of cal-hypo adjacent to each other will
make it more difficult for the heat to dissipate. Hence, the
critical temperature for a stack of drums will be lower than for
an individual drum, because it is harder for the heat to
dissipate. (Tr. 604-05, 643-44, 1316). A container stuffed with
drums creates a double risk the stacking of a larger number of
drums creates more heat and the container walls inhibit the
ventilation of the drums. A containerized stack of drums is
likely to have a lower critical temperature than the same stack
of drums not stuffed in a container. (Tr. 605; see also
Simmons Dep. 239 ("the mass of the material in the package is a
factor" in determining the CAT), 244 (CAT is lower in "larger
packages"); Banks Dep. 69 ("SADT varies with respect to package size."), 70 ("[L]arger packages have lower SADTs.");
Ferguson Dep. 201-02).
2. The Transportation of Hazardous Materials
The International Maritime Organization (the "IMO"), which is
affiliated with the United Nations (the "UN"), has developed a
code, the International Maritime Dangerous Goods Code (the "IMDG
Code" or the "Code"), to govern the carriage of dangerous goods
aboard ships. (Tr. 111, 802-03; CX 2). There is an International
Convention for the Safety of Life at Sea ("SOLAS"), to which the
United States and other member nations of the UN are signatories.
The members of the IMO and the signatories to the SOLAS
convention have adopted the IMDG Code. (Tr. 114-15; CX 2, Vol. I,
The Code is relied on by shippers, manufacturers, tonnage
centers, stowage planners, and ships' crews to make decisions on
the carriage and stowage of dangerous goods. The Code is
"absolutely critical" in the system for the transportation of
dangerous goods by sea: "It is the bible for people who go to
sea." (Tr. 112-13; see also Tr. 681).
Cal-hypo is a Class 5.1 oxidizer designated as "UN 2880" in the
IMDG Code and the Hazardous Materials Table of the Department of
Transportation ("DOT") regulations, 49 C.F.R. § 172.101. (CX 3 at
127; CX2, Part 3 at 5138).*fn12 The IMDG Code provides stowage instructions specifically for UN 2880, as
Stowage Category A. "Away from" sources of heat
where temperatures in excess of 55°C for a period of
24 hours or more will be encountered. "Separated
from" powdered metals, ammonium compounds, cyanides
and hydrogen peroxide.
Packing, Stowage & Segregation See also General
Introduction and introduction to this class.
(CX 2, Part 3 at 5138). Category A includes cargo ships, and
stowage is permitted on deck or under deck. (CX 2, Part 1 at
0122). The reference to 55°C (which is equivalent to 131°F) is to
the ambient temperature, or the air temperature surrounding the
cargo, and not to the temperature of the heat source itself. (Tr.
In addition to the individual schedules, the IMDG Code includes
a general introduction that sets forth general principles,
including the following:
14.2 Substances, materials and articles should be
stowed as indicated in the individual schedules in
the various classes in accordance with one of the
categories specified below. . . . . . .
14.6 In view of the high protective advantages,
stowage under deck has been recommended whenever
possible, except that, for certain articles of class
1 whose principal hazard is the production of smoke
or toxic fumes, stowage on deck has been
recommended. . . .
. . .
14.12 Where it is necessary to prevent pressure
build-up, decomposition or polymerization of a
substance, the packages should be stowed shaded from
radiant heat, which includes protection from strong
14.13 When it is recommended in individual schedules
that the substance should be shaded from radiant
heat, stowage under deck should be "away from"
sources of heat, including sparks, flame, steam
pipes, heating coils, etc.
(CX 2, Part 1 at 0122-24; see generally Tr. 681-84).*fn14
Where there is a conflict between instructions in an individual
schedule and the general introduction, the individual schedule
takes precedence. (Tr. 684-86; CX 2, Part 1 at 0122 (14.2), 0127
The transportation of hazardous materials is also governed by
DOT regulations, including 49 C.F.R. § 173.21, which provides in
Unless otherwise provided in this subchapter, the offering for transportation or
transportation of the following is forbidden:
. . .
(f) A package containing a material which is likely
to decompose with a self-accelerated decomposition
temperature (SADT) of 50°C (122°F) or less . . . with
an evolution of a dangerous quantity of heat or gas
when decomposing . . ., unless the material is
stabilized or inhibited in a manner to preclude such
evolution. The SADT may be determined by any of the
test methods described in Part II of the UN Manual of
Tests and Criteria.
(CX 3 at 357-58). One means of stabilizing or inhibiting
decomposition is the use of refrigerated containers. (Tr. 672).
The IMDG Code provides that cargo having an SADT of "over 35°C"
(95°F) must be transported at a "control temperature" of 10°C
less than the SADT. (CX 2, Part 1 at 0155).*fn15 The control
temperature is the maximum temperature at which substances such
as self-reactive materials can be safely transported. (Id.).
Hence, if a cargo has an SADT of 45°C, the control temperature
would be 35°C. (Tr. 673-74).
The DOT regulations also require a shipper "who offers a
hazardous material for transportation" to certify that the
regulations have been complied with, including as to
classification, packaging, and labeling. (CX 3 at 291 (49 C.F.R.
§ 172.204)). The shipper must tell the carrier what the UN number
is so that the carrier can then refer to the IMDG Code to determine the stowage requirements. (Tr. 885).
3. The Cal-Hypo on the HARMONY
The cal-hypo at issue in this case was manufactured by PPG at
its plant in Natrium, West Virginia in mid-October 1998. (Tr.
1248-51, 2078). PPG booked the shipment of ten containers of UN
2880 with Cho Yang, which processed the booking request through
the ICA tonnage center. (CX 4; Tr. 913-14).
The cal-hypo was placed in 136-kilogram (or 300-pound) fiber
drums made of a thick cardboard with metal rings at the top and
bottom. The temperature of the cal-hypo was approximately 34°C
(93.2°F) when it was placed in the drums. Four drums were placed
on each wooden pallet and each pallet was then immediately
shrink-wrapped in plastic. The shrink-wrapped pallets were then
loaded into the containers, 30 pallets in 3 layers of 10 pallets
each, 5 pallets on each side of the container, for a total of 120
drums in each container.*fn16 As a consequence, the
tightly-wrapped containers were packed into the unventilated
containers, stacked three-high, with very little air space and a
large quantity of cal-hypo (36,000 pounds) in each container. PPG did the packing
and loading selecting the pallets, loading the drums onto the
pallets, shrink wrapping the drums onto the pallets, and then
placing the pallets into the containers. The bottom layer sits on
the floor of the container, and there is no separation between
the pallets on each side of the container or between the layers.
The containers were provided by Cho Yang and inspected by PPG.
(Tr. 563-64, 608-10, 2078-84; see PX 111; OX 30, 31, 43; see
also Patterson Dep. 113, 134-35; Ferguson Dep. 29). The
containers were not refrigerated.*fn17
The containers were shipped out by truck approximately 36 hours
after the cal-hypo was manufactured, under circumstances that did
not permit it to cool down. (Tr. 2078). In transit, the
containers were exposed to some sun, although there would have
been some cooling at night (although not markedly). (Tr. 2078-81;
see PX 169 at 0876. The temperature inside a container can be
significantly higher than the ambient temperature. (Tr. 2079-80;
PX 168 at 3).
The ten containers were loaded onto the HARMONY at Newport
News, Virginia in late October 1998. (CX 4; Tr. 222). They were
accompanied by a three-page dangerous goods summary. (Tr. 255; CX 105). The summary showed that the ten containers
contained cal-hypo and identified the cargo as class 5.1 UN 2880.
(CX 105). PPG also provided dock receipts for the ten containers
describing the material as follows:
120 (136 KG DRUM) RQ CALCIUM HYPOCHLORITE HYDRATED
CLASS 5.1 UN2880 PACKING GROUP II IMDG PG 5138 ERG
(See CX 6; Tr. 697, 700-01). The reference to "PG 5138" was to
page 5138 of the IMDG Code. (CX 2, Part 3 at 5138). The reference
to "ERG #45" was to an outdated Emergency Response Guide
publication. (Tr. 702). The dock receipts included the following
certifications, signed by a representative of PPG:
It is declared that the packing of the container . . .
has been carried out in accordance with the general
introduction IMDG code, paragraph 12.3.7. . . .
This is to certify to that the above-named materials
are properly classified, described, marked, labeled,
and are in proper condition for transportation,
according to applicable regulations of the [DOT].
(See CX 6; Tr. 699-01).
The containers were also accompanied by a Material Safety Data
Sheet prepared by PPG. (See Tr. 704-05, 887-88). The sheet
warned that the product was a "Strong Oxidizing Agent" that could
cause fire or explosion with contamination. (CX 184 at 5406). The
sheet also stated that "[p]roduct decomposes at 180 C releasing
oxygen gas." (Id. at 5407). It also stated that the product was
to be stored "in a cool, dry, well-ventilated place . . ., away
from heat, sparks, flames, direct sunlight, and other sources of heat." (Id. at 5408). With respect to
stability, it stated that the product was "[u]nstable above 117
C." (Id. at 5409). It also stated, with respect to
transportation information, that the product was a 5.1 oxidizer,
UN 2880. (Id. at 5411).
In general, when the HARMONY arrived in a port, the vessel
would receive a general loading plan covering all cargo that was
going onto or off the vessel in that particular port. (Tr. 249).
When dangerous goods were loaded on board, Balitzki, the captain,
would receive dangerous goods manifests. He would sign for them
and then pass them on to the chief mate, who was the cargo
officer. (Tr. 243). The chief mate would check the ship's
documents of compliance to ensure the proper stowage of dangerous
goods. (Tr. 249-50). Once the chief mate determined that the
cargo was permitted by the document of compliance, he would then
check the IMDG Code to determine whether there were any specific
stowage restrictions. (Tr. 254-55; see Kovshel Dep. 398-400).
The captain and the chief mate would also consult the Storck
Guide, which set forth guidelines on segregation. (Tr. 283-86; CX
On this voyage, the ten containers of cal-hypo were stowed in
hold 3, in bays 25 and 27, in slots 270802, 270602, 270402,
250802, 250602, 250402, 250804, 250604, 250404, and 250406. The
port sides of containers 270802, 250802, and 250804 were adjacent
to the No. 5 heated port side bunker tank in hold 3. (PX 92).*fn18 There was a gap of some twelve inches
between the tank wall and the containers, because cell guides
bars were affixed to the wall to keep the containers in
position while the ship was at sea. (Tr. 361-63). Containers
270802 and 250802 also sat directly above the port side bunker
tank, although there was a gap, less than twelve inches, between
the tank top and the bottom of the container because there was a
securing device to hold the containers in place. (Tr. 374).
Hence, the latter two containers were exposed to the heated
bunker tanks both on the bottom and on the port side. (PX 92).
The adjacent containers 270602 and 250602 sat on top of the
water ballast tank, which went down to the outer skin of the
ship. (Tr. 369; see PX 92).
The HARMONY had three main bunker tanks: one on the port side,
one on the starboard side, and one in the center. (Tr. 302-03,
309). Fuel was drawn on alternating days from the port side tank
and the starboard tank. (Tr. 309). The fuel was transferred from
one of these storage tanks to the service tank. (Tr. 304, 309).
When fuel was to be transferred from one of the storage tanks,
that tank would be heated for half an hour to an hour to warm up
the fuel to make it "pumpable" to facilitate transfer.
Otherwise, the tanks were not heated. (Tr. 304, 308-11; Kovshel
Dep. 244, 2885). On the date of the fire, the fuel had not been
drawn from the port side bunker tank, no. 5, the tank in question.*fn19
The temperature in hold 3 ranged from approximately 35°C to
approximately 40°C (or approximately 95° to 104°F). (Tr. 260,
262, 305, 1749, 2115). Balitzki had been in hold 3 about two days
before the casualty, and the hold temperature was slightly above
body temperature "probably" 40°C. (Tr. 262).*fn20 Kovshel
was not concerned because he knew that the temperature in the
hold would not reach 55°C and therefore there was no risk of
violating the Code. (Kovshel Dep. 400-01)
Both the captain and the chief mate were aware of, and
approved, the stowage positions of the cal-hypo near bunker tank
5. (Tr. 259-60). The captain explained that he was comfortable
with this stowage plan because it was not prohibited. (Tr. 260).
Likewise, the chief mate approved of the location. (Kovshel Dep.
242-45, 398-99). The HARMONY'S Document of Compliance showed that
cargo designated class 5.1 could be stored in hold 3. (CX 21; see also CX 20, 93; Tr. 250-54, 687-88).
The HARMONY had a list of all the dangerous goods containers on
board when the vessel departed Miami on October 30, 1998. (Tr.
256; CX 30). The vessel also had a bay plan showing the stowage
positions of all the dangerous cargo containers. (Tr. 256; CX
31). There was no other hazardous material stowed in hold
3.*fn21 There were some additional hazardous materials
stored under deck in holds 1 and 2. (Tr. 389-90; Kovshel Dep.
4. The P&I Club Circular
On September 1, 1998, in New York, Balitzki received a box of
correspondence, videos, and other materials from Leonhardt &
Blumberg. (Tr. 298-99; CX 39). Included was a circular from the
Swedish Club dated July 1998 setting forth a "Member Alert." (CX
40). The circular stated in part:
In the course of investigating a serious fire onboard
a container vessel, the fire experts appointed by us
have undertaken a research of how Calcium
Hypochlorite (hydrated) reacts to heat exposure. The
preliminary results have such serious implications
regarding the transportation of this material that we
have decided to immediately advise the shipping
community of the findings. Our fire experts have
issued the statement below, which will be brought to
the attention of amongst others the IMO. . . .
"The current IMO recommendation is that material is
not to be exposed to a heat source in excess of 55°C
for longer than a 24-hour period. Preliminary results
of the research indicate, however, that for the type
and size of packaging used routinely to ship this
material around the world, the temperatures at which
the runaway reaction is likely to begin may be much
lower than that recommended by the IMO (IMDG Code
"It is our understanding that the ambient temperature
of holds of certain container ships can reach the
critical ambient temperature of this material, which
preliminary results of our research suggests is
considerably lower than that previously published.
"Accordingly, it is suggested that this material is
not shipped in the holds of such ships and if stowage
on deck is arranged, heating of this material by
direct sunlight must be avoided."
5. PPG's Prior Knowledge of the Risks Presented By the
Shipping of Cal-Hypo
The Swedish Club circular was issued based on a fire and
explosion that occurred in containers of cal-hypo on the M/V
CONTSHIP FRANCE in October 1997, about one year prior to the
HARMONY fire. PPG concluded that the cause of the explosion was
the stowage of the UN 2880 adjacent to heated bunker tanks.
(Ferguson Dep. 573; Lee Dep. 319-22).
PPG knew that cal-hypo "is decomposing all the time. It is
relatively unstable." (Allen Dep. 86). Its product safety manager
believed that cal-hypo should be stored in "a dry, cool place," one that was "certainly not warm, certainly not hot,"
meaning 90°F (or 32.2°C) or less. (Lee Dep. 176-78; accord
Ferguson Dep. 102 ("cool" means less than 90°F); Allen Dep. 575).
In fact, the product safety manager testified: "our literature
says 90 degrees F." (Lee Dep. 177). He also testified that these
guidelines should apply not just for storage but also for
transporting cal-hypo. (Id. 177-78 ("[c]ertainly" below 90°F);
see also Ferguson Dep. 134).
PPG had done some temperature monitoring in the 1980s in
containers in container ships and found temperatures in the 110°
to 115°F range (approximately 43° to 46°C). (Lee Dep. 222, 227).
The product safety manager was of the view that UN 2880 should be
restricted to deck stowage, but he was persuaded that this was a
decision that should be left to the master of the ship. (Id.
PPG was also aware that cal-hypo, and in particular UN 2880,
had been involved in numerous land-based explosions or fires over
the years, including some resulting in the destruction of
warehouses or large stores. For example, the former product
safety manager of PPG, who retired in April 2000, recalled 10 to
12 PPG cal-hypo fires or explosions, on-site or off-site, over
some 20 years. (Id. 10, 16-18, 130-31). He was aware of another
20 fires or explosions not involving PPG over the same period.
(Id. 131-32; see id. 132-42). There was a cal-hypo fire in
a PPG warehouse in the late 1980s, as a result of which PPG
changed its procedures for storing one-ton bags of cal-hypo to
require monitoring of temperatures. (Patterson Dep. 196, 199, 302,
304-05). One of these changes was to ensure that the "packout
temperature," i.e., the temperature of the product as it went
into the bags, was 90°F (32.2°C) or less. (Lee Dep. 178-79). In
addition, the one-ton bags were used only when they could be
transported by truck within a radius of eight to ten hours, and
only in refrigerated containers set to a temperature of "probably
70 degrees F, 80 degrees F, something like that," considerably
below 90°F. (Id. 180-81; cf. Ferguson Dep. 390-91
(temperature of refrigerated trucks carrying "super sacks" of
cal-hypo is set to 60° to 70°F)).
6. PPG's Use of the 300-Pound Drum
Prior to 1994, PPG did not ship cal-hypo in package sizes
larger than 45 kilos (100 pounds). Customers began requesting
larger packages, however, because larger packages enabled them to
repackage the product more efficiently. In 1994, PPG began
shipping in 400-pound drums. (Kuhn Dep. 43-44). It chose the
400-pound fiber drums because that was what was "available"
that was the drum PPG was using for domestic customers. (Id.
In 1998, as it continued to use 400-pound drums, PPG also began
to ship cal-hypo overseas in 300-pound (or 136-kilogram) drums.
This was also done at the request of a customer. (Id. 61). PPG
did not have any special procedures for utilizing the 300-pound
drums. (Patterson Dep. 200). No new instructions were provided to
the loaders when the 300-pound drum was introduced. (Id. 274-75). PPG did not do any testing on the
use of the 300-pound drums for shipping cal-hypo. (Banks Dep.
126-27; see Ferguson Dep. 809 ("There were no studies done when
we [PPG] instituted the 300-pound drums.")). Nor did PPG obtain
any material, results, documentation, or reports from the
manufacturer of the drums with respect to any testing done on the
drums. (Banks Dep. 130-31). PPG conducted no testing of the use
of any fiber drums to hold cal-hypo. (Id. 139-40). Nor did PPG
consider the impact of stowing 136-kilogram fiber drums of
cal-hypo packed three-high in a 20-foot container. (Id.
149-50). Nor did PPG conduct any tests or research regarding
ventilation when cal-hypo is stored in a shipping container.
(Id. 300; Lee Dep. 263-64). Prior to 1999, PPG had not done any
SADT testing of various sizes of drums holding cal-hypo. (Banks
Dep. 170-71; see id. 380; see also Lee Dep. 161-62, 171-72,
In August 1999, after the fires on the CONTSHIP FRANCE and the
HARMONY, PPG stopped shipping cal-hypo overseas in drums larger
than 45 kilos. (See Kuhn Dep. 63-64, 70; PX 31; Patterson Dep.
111-12).*fn23 7. Other Lawsuits Involving Cal-Hypo
On October 15, 1997, the M/V CONTSHIP, while docked in Papeete,
Tahiti, caught fire following an explosion in a container holding
UN 2880 packed in 193-kilogram (or 425-pound) drums. Eventually,
suit was brought against the manufacturer, PPG. See Conti Zweite
Cristallo Schiffarhrts GMBH & Co. KG v. PPG Indus., Inc., No. 99
Civ. 10545, Tr. at 1357-67 (S.D.N.Y.). Ruling from the bench
following trial, Judge Stanton found that the fire was caused
because the container was placed directly above the bottom center
fuel tank of the vessel and the vessel's fuel tanks were heated
to "exceptionally high temperatures." Id. at 1359-60.*fn24
Judge Stanton dismissed the claims against PPG.
On September 7, 1991, the M/V RECIFE caught fire at sea while
bound for North Carolina after an explosion in a container
holding chlorine replacement cartridges that contained a
different form of cal-hypo, UN 1748. Standard Commercial Tobacco
Co. v. M/V "RECIFE," 827 F. Supp. 990, 992-93 (S.D.N.Y. 1993).
The cal-hypo, which was not manufactured by PPG, was in pellets,
packed ten to a plastic tube, four tubes per box, and four boxes
per carton, with 1,005 cartons packed into the container. Id.
at 992. The container was stowed on deck, where it was exposed to
sunlight, as the result of which the temperature inside the container reached 156°F (68°C). Id. Suit was brought against
the vessel. The court concluded that the fire was caused by the
stowage of the container in direct sunlight, but concluded that
the vessel interests were not negligent because the stowage was
in compliance with the IMDG Code. Id. at 997-98.
On March 14, 1970, the M/V NICOLAOS D.L. caught fire as it was
preparing to leave the Port of Savannah, Georgia. Ionmar
Compania Naviera, S.A. v. Olin Corp., 666 F.2d 897, 898 (5th
Cir. 1982). The fire was caused when a cal-hypo compound (70%
cal-hypo and 30% inert substances) accidentally spilled and mixed
with organic material (sawdust), igniting a fire. Id. at 898,
902-04. Cargo interests sued the vessel, the stevedore, and Olin,
the manufacturer of the cal-hypo compound. On appeal, the circuit
court concluded that Olin had a duty to warn the vessel interests
and stevedore of the hazards of which they could not reasonably
have been expected to be aware, but remanded for further findings
on the failure-to-warm claims and on the issue of whether the
stowage was negligent. Id. at 904-05. The court noted that the
cal-hypo compound "present[ed] a serious fire hazard," and that
when it "decomposes, enough heat is produced to ignite any
combustible material." Id. at 899.
8. Testing of Cal-Hypo
Tests were performed on the stability of cal-hypo after the
fire on the HARMONY.*fn25 In 1999, PPG asked Safety Consulting Engineers, Inc. ("SCE") to
perform tests on cal-hypo in two types of containers: 100-1b
plastic buckets with screw-on lids and 300-pound (or
136-kilogram) fiber drums with clamp-on lids. (PX 50 at 0029,
0032). An oven was built and a container of cal-hypo was placed
into the oven, sitting on a wooden pallet. The heat was turned on
and thermocouples (temperature recording devices) measured the
temperature. (Id. at 0030). These were SADT tests performed per
UN guidelines. (Id. at 0029). Once the temperature of the
material reached 2°C below the test chamber temperature (the
ambient temperature), the time was noted and the test was
continued for up to seven days to determine whether the sample
temperature increased by at least 6°C. (Id. at 0030, 0032).
In the one run performed on 300-1b drums, the oven temperature
was set at 50°C and the temperature increased by more than 6°C
indeed, it rose to a maximum of 60.9°C in 177.2 hours. (Id. at
0032, 0037; OX 9).*fn26 One run, using 100-1b drums and a
test temperature of 54°C, resulted in the material going into "full reaction," with a maximum temperature of 225°C reached
in 200 hours. (Id. at 0032, 0035). A third test, using a 100-1b
drum and a test temperature of 57°C, also resulted in an increase
of more than 6°C, as the temperature increased to 67.1°C in just
79.5 hours. (Id. at 0032, 0036).
Hence, three of the five runs failed the SADT test. One run
(using a 100-1b drum and a test temperature of 52°C) resulted in
an increase of 5°C and was deemed "borderline," while one run
(using a 100-1b drum and a test temperature of 50°C) resulted in
an increase of only 4°C. (Id. at 0032, 0038, 0039; see
Ferguson Dep. 658-63, 674-83).
In 2001, PPG engaged Touchstone Research Laboratory, Ltd.
("Touchstone") to perform some experiments on cal-hypo.
Touchstone built an "oven" large enough to hold a 20-foot
container, which was filled with drums of cal-hypo. Thermocouples
were placed among the drums and elsewhere in the container. The
oven was heated and the thermocouples recorded temperature
changes. The test was run several times, with adjustments for,
among other things, size of drum and oven temperature. (Tr.
621-32; CX 51).
One test was run in May 2001 using a container filled with
eighty 196-kilogram drums of cal-hypo (stacked two-high), with
the oven temperature set at 41°C (106°F). (Tr. 624-26; CX 51).
The starting temperature of the various materials was
approximately 25°C and it increased to 41°C in roughly 220 hours.
(Tr. 628; PX 57). The cal-hypo inside the drums then increased slowly but steadily until roughly 580 hours, when there was a
very sharp increase in the temperatures inside the drums of
calhypo. (Tr. 628-29). In fact, at 609 hours, the oven
automatically turned off. As the Touchstone report explained:
After a total of 609 hours the Cal-hypo in the
shipping container became self-accelerating causing
the control system to trigger the alarm and shut down
the heating system.
(CX 51 at T0833) (emphasis added).*fn27
C. The Cause and Origin of the Fire
1. The Experts
PPG's principal expert witness on the cause and origin of the
fire was Dr. Roger McCarthy. I did not find his testimony
credible. He had no recollection of having done a cause and
origin investigation regarding a container vessel or cargo ship
prior to the HARMONY. (Tr. 1659). Although he had authored some
60 articles, not one involved a vessel fire or a cause and origin
investigation. (Tr. 1646-49). He had no recollection of using the
Code before this case. (Tr. 1659). His company, Exponent, Inc.
("Exponent"), provides a wide range of engineering and scientific
consulting services, but he was not listed on Exponent's website
under "marine services" or "fire and explosions," although he was
listed under "data/risk analysis," "mechanical engineering," and "vehicle engineering," among
others. (Tr. 1660-63). He was mistaken as to the meaning of the
term "trim"; the trim of the HARMONY was down by the stern,
meaning unburned fuel that hit the floor would flow toward the
stern. (Tr. 1709-11).
Dr. McCarthy's testimony was problematic in other ways. For
example, he testified that he did not shoot any video when he was
on board the Harmony for the inspections because of
"[i]nsufficient lighting" (Tr. 1667), and when shown bills
revealing that Exponent had charged PPG for "video" expenses, he
testified that he was "virtually certain" the reference was to
the purchase of news video of the HARMONY sailing into the
harbor. (Tr. 1677). Yet, on the fourteenth day of trial, PPG
counsel announced that Exponent had found four videotapes taken
during inspections of the vessel. (Tr. 1850-51, 1854). The
videotapes were then produced for the first time in the
litigation, and Dr. Bound relied on them when he testified on
plaintiff's rebuttal case on May 17, 2004. (Tr. 2027-28).
Dr. McCarthy also acknowledged that he prepared at least a
dozen drafts of his report, and yet he did not retain a copy of
any draft, either electronically or on paper. (Tr. 1631-33,
1680). Moreover, he testified that he had not taken a single note
during his investigation. (Tr. 1678, 1702-03). Although he sent
some e-mails, purportedly they were not substantive and in any
event were not retained. (Tr. 1678-79, 1695). He did not write
down any measurements (e.g., the length of a pipe or the distance from a container to the wall). (Tr. 1690-91). He took
more than a thousand photographs over the course of three
inspections, and yet did not take one note to remind him where or
when or of what a particular photograph was taken. (Tr. 1496,
1691). During cross-examination, he was unable to recognize
photographs that he had taken himself. (Tr. 1718-22, 1726). At
the time of trial Dr. McCarthy had only one writing that
reflected any of his observations made during his three
inspections of the HARMONY in 1998 his final report. (Tr.
1679-80). It is not credible that Dr. McCarthy took no notes, and
even assuming he took none, it is not credible that he could
remember what was shown in the photographs with any precision.
I found plaintiffs' expert, Dr. Bound, to be forthright and
credible. With some minor exceptions, I accept his testimony.
2. Where Did the Fire Start?
The fire was the result of an explosion in a container of
cal-hypo stowed on the port side of hold 3 container 250404,
the container in row 04 and tier 04 in bay 25, three in from the
port side of the vessel and two up from the bottom. (Tr. 506;
see PX 92-A). That this was the point of the start of the fire
is demonstrated convincingly by the following:
1. Photographs taken on the vessel during the fire show large
flames rising from hold 3. (CX 107, 108, 110 at 2; see Tr.
230-231, 520-23; PX 73). Another photograph taken by a crew
member shortly after the first group left the ship confirms that the fire was burning primarily in hold 3. (CX 110 at 1;
see Tr. 239).
2. The physical inspection showed major damage and collapse
around hold 3. In particular, there was major damage in the
forward part of hold 3 in the area of bays 26 and 30. (Tr.
523-31; PX 74, 75, 77, 78, 79, 80, 81).
3. The physical evidence showed that the fire spread from hold
3 primarily from aft to forward, although to some extent it
spread aft as well. There was damage in the area of hold 2, but
the damage was more severe at the aft end than it was at the
forward end, consistent with the fire spread going from aft to
forward. (Tr. 524; PX 74). Likewise, the damage was more severe
at the forward end of hold 3 than it was at the aft end. (Tr.
524-25; PX 75).
4. There was more damage on the port side of hold 3 than there
was on the starboard side. (Tr. 526; PX 77, 78).
5. There was severe damage in bay 26, and in particular in rows
02, 04, 06. (Tr. 528-29; PX 79). There was a major collapse of
the cargo stowed on deck into bay 26. There was severe fire
damage in that area, above where the cal-hypo had been stowed.
(Tr. 533-34; PX 82, 84, 85). The major damage was found where the
cal-hypo was stored. (Tr. 558).
6. The steel had been melted in bay 26 to the point where there
was defamation the steel had been heated so much that it lost
its structural strength and bent. In some places the steel had
actually burned away, resulting in re-solidified globules of steel. The steel had turned to iron oxide, or rust,
and had become very brittle or friable. (Tr. 534-35; PX 84, 85).
These characteristics were consistent with the involvement of a
large quantity of oxidizers because the extent of the damage
suggested an oxygen-rich fire, such as the kind that would result
from a cal-hypo fire. (Tr. 534-35). The oxidizer itself does not
burn, but when it decomposes it generates oxygen, which will
assist in the burning of surrounding materials. (Tr. 535-37).
Here, the surrounding flammable materials included the fiber
drums, shrink wrapping, wooden pallets, wooden floors of the
containers, the paint on the containers, and, when the fire got
hot enough, the steel of the containers itself. (Tr. 536-37). The
area where the steel had been burned in this fashion was "quite
localized" in bay 26. No other areas with the same type of
destruction was found. (Tr. 538).
7. As reflected in the documents, including the dangerous cargo
manifest and stowage plan, the only dangerous cargo stored in
hold 3 was the cal-hypo in the forward port corner of hold 3.
8. The witnesses reported an explosion immediately followed by
large quantities of white smoke and then flames. These
observations are consistent with a fire involving cal-hypo. (Tr,
539-40). White smoke or white particulates dispersed in the air
is a feature of a cal-hypo fire. The cargo manifest did not
reveal any other materials that would generate very large
quantities of white smoke. (Tr. 540-41, 2031-33; see PX 174 (videotape of cal-hypo fire, giving off white smoke); OX 50 (PPG
safety video, showing cal-hypo fire giving off white smoke).
9. The pattern of fire damage showed movement and directional
damage, indicating that the "seat" of the fire or explosion was
on the forward port side of the vessel, where the cal-hypo had
been stored. There was a hatch cover collapse on the forward port
side, with deck containers having fallen into the hold. In the
middle of bay 26, there was a movement of materials in a forward
direction. On the starboard side of bay 26, there was directional
damage moving out to starboard. In the center of bay 34, there
was directional movement aft and outwards, which decreased
further aft. The deck cargo above bay 38 was still in place.
There was also evidence that the tank had exploded on the port
side around bay 30. (Tr. 549-51; PX 93).
10. An inspection of the smoke detection system showed that
there had been smoke in all three holds, but the smoke in hold 3
"was by far the worst." (Tr. 543-45). There was some smoke in
hold 2 and "a little" in hold 1, but that was more likely than
not smoke drawn into those holds from the smoke coming out of
hold 3. (Tr. 545; see also Tr. 2030-31).
11. There was no evidence to suggest that the fire started on
the starboard side; there was evidence inconsistent with the fire
starting on the starboard side; and the stowage patterns, fire
damage patterns, and witness evidence were all consistent with
the fire starting in the forward port side and then spreading
both forward and aft from there. (Tr. 556-57). 12. The most severe damage was along the line between bays 25
and 27 the line along the doors of the containers in bay 25.
(Tr. 557-58; PX 97, 98). The cal-hypo was stored in these
containers. (PX 92, 97, 98). Some of these containers showed
deformation bending upwards a sign of "considerable disruption"
of the metal. (Tr. 559; PX 98).
13. Container 250404 was identified, and very little remained.
The two doors were missing, as they had been blown off and
embedded into the adjacent container, 270404. (Tr. 566, 568-69,
573-74, 2052; PX 103, 104). Imbedded into container 270604 was a
door that had been blown off of the adjacent container, 250604.
In other words, the force of the explosions in containers 250604
and 250404 both of which contained cal-hypo blew doors off
and embedded them into the adjacent aft containers, 270604 and
270404, respectively. (Tr. 566-67, 575, 581, 641, 2051; PX 96;
see also PX 92-A, 94). Containers are typically stowed with the
doors at the aft end. (Tr. 556).
14. The right side of container 250604 was pushed inward,
suggesting a force from container 250404. Similarly, container
250804, the outboard container, was deformed and pushed against
the side of the bunker tank, again suggesting a force from inside
the ship toward the bunker tank. (Tr. 575-76). The containers in
tier 02 containers 250802, 250602, and 250402 were collapsed
down, almost to the tank level, suggesting a force from above.
(Tr. 576). In contrast, doors were still attached to the
containers in bay 27 that contained cal-hypo (containers 270802, 270602, 270402) these doors had not been blown off.
(Tr. 582-83; PX 92-A).
15. Container 250802 had been burned badly, as very little of
it remained. But when the roof of the container was pulled back,
neat stacks of rings were found, indicating that the drums burned
in place and the rings fell straight down. (Tr. 583-84; PX 105).
In contrast, in container 250404, there was considerable
disruption and the rings were not in neat stacks. (Tr. 584-85; PX
103). This would suggest an explosion inside 250404 but not
3. What Caused the Fire?
The cause of the fire was thermal runaway in the cal-hypo in
container 250404. (Tr. 649-50).
In light of the circumstances in which it was loaded, including
the manner in which it was placed while still hot into
136-kilogram fiber drums that were then shrink-wrapped onto
wooden pallets and tightly packed three-high into unrefrigerated,
unventilated metal containers, the cal-hypo on the HARMONY had a
CAT of below 41°C. (Tr. 2073-74).*fn28 Here, the temperature
in the hold was approximately 40°C and on November 9, 1998 the
cal-hypo in container 250404 went into thermal runaway. It was
simply less stable than anyone realized. This is the most
logical, if not the only logical, explanation, and I find that,
more likely than not, this is what happened.
The evidence demonstrates, beyond any reasonable doubt, that
the fire started in the cal-hypo containers. All the physical
evidence points to that fact. The transportation of cal-hypo in
300-pound drums was a relatively new, and untested, phenomenon.
Testing showed that cal-hypo is less stable than had been
realized. The May 2001 test run by Touchstone, for example,
showed that a container packed with eighty 196-kilogram drums of
cal-hypo stacked only two-high starting at a temperature of 25°C
(as compared to 120 drums stacked three-high starting at probably
a higher temperature) resulted in an accelerating increase in the
temperature of the cal-hypo to the point the oven shut itself off
automatically for safety reasons on the verge of thermal
runaway. In addition, three of the five tests run by Safety
Consulting Engineers in 1999 failed the SADT test, with a fourth
test deemed "borderline."
The storage of the containers adjacent to bunker tank 5
contributed only in the sense that the temperature in the hold
was undoubtedly affected by the heated bunker tanks. The crew's
decision, however, to stow the cal-hypo in that location complied
fully with the requirements of the Code. Hold 3 was certified for the carriage of 5.1 class cargo. The Code specifically
permitted below deck stowage and the only restriction was that
the cargo not be exposed to temperatures in excess of 55°C for
more than 24 hours. The ambient temperature in the hold never
exceeded 55°C, much less for 24 hours.*fn29 Rather, PPG
failed to give proper warnings and instructions on the
transporting of cal-hypo.*fn30 The thermal runaway and
explosion on the HARMONY occurred even though the cal-hypo was exposed to normal and
expected hold temperatures.
DISCUSSION and CONCLUSIONS OF LAW
This is essentially a products liability case in the maritime
context. In East River Steamship Corp. v. Transamerica Delaval,
Inc., 476 U.S. 858 (1986), the Supreme Court held that products
liability law is "part of the general maritime law." Id. at
865. It recognized that the "general maritime law is an amalgam
of traditional common-law rules, modification of those rules, and
newly created rules," drawn from state and federal sources. Id.
Here, plaintiffs proceed on essentially four legal theories:
(1) strict liability; (2) failure to warn; (3) negligence; and
(4) breach of warranty. I discuss the strict liability claim
first. I then discuss the failure to warn and negligence claims
together. In light of my conclusions on these claims, I do not
reach the breach of warranty claim.
A. Strict Liability
Section 4(6) of COGSA provides in pertinent part:
Goods of an inflammable, explosive, or dangerous
nature to the shipment whereof the carrier, master or
agent of the carrier has not consented with knowledge
of their nature and character, may at any time before
discharge be landed at any place or destroyed or
rendered innocuous by the carrier without
compensation, and the shipper of such goods shall be
liable for all damages and expenses directly or indirectly arising out of or resulting
from such shipment. . . .
46 U.S.C. § 1304(6).
In Senator Linie GMBH & Co. KG v. Sunway Line, Inc.,
291 F.3d 145 (2d Cir. 2002), the Second Circuit held that § 4(6) of COGSA
imposes on a shipper of dangerous goods strict liability "for
damages resulting directly or indirectly from such shipment when
neither the shipper nor the carrier had actual or constructive
preshipment knowledge of the danger." Senator Linie,
291 F.3d at 168. The court explained its reasoning:
[W]e conclude today that a strict-liability
construction of § 1304(6) will foster fairness and
efficiency in the dealings of commercial maritime
actors. In contrast to a carrier, which typically is
in the position of taking aboard its vessel a large
quantity and variety of cargoes, a shipper can be
expected to have greater access to and familiarity
with goods and their manufacturers before those goods
are placed in maritime commerce. If an unwitting
party must suffer, it should be the one that is in a
better position to ascertain ahead of time the
dangerous nature of the shipped goods. That party in
many cases will be the shipper.
291 F.3d at 169; accord East River Steamship Corp.,
476 U.S. at 866 (holding that rationale that "strict liability should be
imposed on the party best able to protect persons from hazardous
equipment" applies to products liability claims in the maritime
The cal-hypo here clearly qualified as "[g]oods of an
inflammable, explosive, or dangerous nature."
46 U.S.C. § 1304(6). Indeed, cal-hypo is covered by the Code and was treated
by all parties as a dangerous and hazardous material. The vessel and cargo interests, however, did not have actual or constructive
pre-shipment knowledge of the true nature of the cargo or the
full extent of the danger presented. Nor, apparently, did PPG
have actual such knowledge. Neither the vessel interests nor PPG
knew of the risks presented by cal-hypo when it is stowed below
deck in shrink-wrapped 300-pound fiber drums packed 120 to a
container, in normal and expected hold temperatures.
As between plaintiffs and PPG, clearly PPG was in a better
position to ascertain ahead of time the true nature of the
shipped goods. Indeed, the rationale for applying strict
liability is even more compelling here than in Senator Linie
because PPG was not just the shipper but also the manufacturer.
PPG makes three arguments that warrant some discussion. First,
PPG argues that the vessel and cargo interests cannot rely on §
1304(6) because PPG was in privity only with Cho Yang, and the
Cho Yang bill of lading extends no rights under COGSA to any
other party. Second, PPG argues that Senator Linie is
inapplicable because Cho Yang and the vessel interests consented
to carrying the cal-hypo with knowledge of the nature and
characteristics of the product and the hazards presented. Third,
PPG argues that § 1304(6) liability is precluded here because Cho
Yang and the vessel interests failed to exercise due diligence to
render the vessel seaworthy. I address each argument in turn.
PPG's first argument reads § 1304(6) too narrowly. The statute
provides that in the circumstances described a shipper is liable
for "all damages and expenses directly or indirectly arising out of or resulting from . . . [the] shipment" of the
dangerous cargo. 46 U.S.C. § 1304(6) (emphasis added). Congress
did not limit liability under the section to any particular class
of entities, nor did Congress impose a requirement of privity. It
would make no sense to read § 1304(6) to protect only the issuer
of the bill of lading, as often such an issuer, like Cho Yang,
merely charters space on a ship with no physical property
interest at stake. It is the vessel and cargo owners cargo whose
property is damaged or destroyed who require protection. See
also Senator Linie, 291 F.3d at 169 ("In determining that §
1304(6)'s strict-liability rule displaces otherwise inconsistent
general maritime law, we have been mindful of COGSA's overarching
purpose to `allocat[e] risk of loss and creat[e] predictable
liability rules on which not only carriers but others can
rely.'") (quoting Stolt Tank Containers v. Evergreen Marine
Corp., 962 F.2d 276, 279 (2d Cir. 1992)); 1 Thomas J.
Schoenbaum, Admiralty & Maritime Law § 5-6 at 210 (4th ed.
2004) ("In the case of tort liability, . . . privity is
irrelevant and the doctrine of foreseeability is an inadequate
brake. A manufacturer's duty is to the public
generally. . . .").*fn31 PPG's second argument is rejected because the vessel interests'
consent to carrying the cal-hypo was given without knowledge of
the full risks and dangers presented by the transporting of
cal-hypo in 300-pound drums in the manner in which they were
carried aboard the HARMONY. The vessel interests were not
properly warned of the extent of the hazards presented. They
consented, but their consent was not informed.
PPG's third argument also fails, for, as I have found, the crew
of the HARMONY stowed the cal-hypo in full compliance with the
Code. They followed the instructions fully, they did not fail to
use due diligence, and the ship was not rendered
Accordingly, judgment will be entered in favor of plaintiffs
both vessel and cargo interests on their strict liability claim
B. Failure To Warn and Negligence
Even assuming the strict liability claim fails, plaintiffs may
still prevail by establishing their claims for failure to warn and negligence by showing fault on the part of
A leading admiralty treatise summarizes the substantive law of
negligence in this context as follows:
[T]he plaintiff [is required] to prove: (1) that the
defendant sold or manufactured the product; (2) that
the product was unreasonably dangerous or was in a
defective condition when it left the defendant's
control; and (3) that the defect resulted in injury
to the plaintiff.
Schoenbaum, supra, at 206 (citing Restatement (Second) of Torts
§ 402A (1965)); see Saratoga Fishing Co. v. J.M. Martinac &
Co., 520 U.S. 875, 879 (1997) ("The first principle is that tort
law in this area ordinarily (but with exceptions) permits
recovery from a manufacturer and others in the initial chain of
distribution for foreseeable physical harm to property caused
by property defects.") (discussing East River and citing
Restatement (Second) of Torts § 402A (1965)); see also
46 U.S.C. § 1304(3) ("The shipper shall not be responsible for loss
or damage sustained by the carrier or the ship arising from or
resulting from any cause without the act, fault, or neglect of
the shipper, his agents, or his servants.").
Liability is imposed upon sellers and manufacturers who
negligently fail to warn of a defect in design or construction,
where the existence of the defect is known or should be known,
and the manufacturer or seller, by exercising reasonable
diligence, could have made a warning available. See Schoenbaum,
supra, at 207; Pavlides v. Galveston Yacht Basin, Inc.,
727 F.2d 330, 338 (5th Cir. 1984) ("[A] manufacturer has a responsibility
to instruct consumers as to the safe use of its product and to
warn consumers of dangers associated with its product of which
the seller either knows or should know at the time the product is
sold."). A product is deemed defective and unreasonably dangerous
even if there is no manufacturing or design defect if the seller
or manufacturer fails to give an adequate warning as to
foreseeable risks. See Pavlides, 727 F.2d at 338. A product
is "unreasonably dangerous if the risks inherent in the product
are greater than those a reasonable buyer would expect, and the
likelihood and gravity of harm outweigh the potential utility of
the product." Schoenbaum, supra, at 206; see Ionmar Compania
Naviera, S.A. v. Olin Corp., 666 F.2d 897, 904 (5th Cir. 1982)
(holding that manufacturer had duty to warn stevedore and vessel
of "foreseeable hazards inherent in the [cal-hypo] shipment of
which the stevedore and the ship's master could not reasonably
have expected to be aware").
The adequacy of a warning depends on its reasonableness in view
of the danger created. Schoenbaum, supra, at 207. "In assessing
what hazards are foreseeable, a manufacturer is held to the
status of an expert." Pavlides, 727 F.2d at 338. There is no
duty, however, to warn a person who has actual knowledge of the
danger. Schoenbaum, supra, at 207-08. The manufacturer must
show that the injured party "had knowledge of the specific hazard
and of the extent of harm that could follow, so that his choice
to brave it was an informed one." Pavlides, 727 F.2d at 340. Here, I conclude that plaintiffs have proven their failure to
warn and negligence claims. First, it is undisputed that PPG
manufactured and shipped the product. Second, the product was
unreasonably dangerous when it left PPG's control and PPG failed
to give adequate warnings on the handling and transportation of
the product. Third, plaintiffs' property was damaged as a result.
Although I have concluded that PPG was not actually aware of
the full risks of shipping cal-hypo in 300-pound drums in the
manner in which it was shipped here, I conclude also that the
hazard was foreseeable, as there were sufficient red flags to
have caused PPG, in the exercise of reasonable care, to have
investigated further the dangers presented.
PPG knew that cal-hypo was a hazardous, unstable product that
decomposes upon exposure to heat, with a risk of thermal runaway.
PPG knew that the manner in which cal-hypo was stored and packed
for shipping was important to the risk of accelerating
decomposition. PPG knew that a large quantity of cal-hypo was
being shipped here ten containers holding 120 300-pound drums
each and it knew that the risk of accelerating decomposition
increased as the mass of cal-hypo increased. PPG knew that the
metal containers used for this type of transportation were not
ventilated or refrigerated and would be exposed to some sunlight
and the temperatures in the hold of a container ship. PPG knew of
prior fires and explosions involving PPG, including the fire on
the M/V CONTSHIP FRANCE in October 1997. PPG knew or should have known of the research referred to
in the Swedish Club circular, which suggested that the CAT of
cal-hypo was "considerably lower" than had been previously
published. All of these red flags should have caused PPG to
investigate further the risks of transporting cal-hypo in
300-pound fiber drums in unventilated, unrefrigerated metal
containers, packed 120 drums per container, in the temperatures
typically found in the hold of a container ship.
The reasonableness of PPG's actions must be measured by the
danger presented, and here the risks were great. A shipment of
ten containers each packed with 120 300-pound drums of an
unstable substance presented significant risks, and, indeed,
there was a huge fire that resulted in the loss of an entire
container ship as well as hundreds of containers of cargo. In
view of the magnitude of the risks presented, a reasonable
manufacturer would have done more than PPG did here. The tests
that were done in 1999 and 2001, for example, should have been
done immediately after the CONTSHIP FRANCE fire, if not before.
In addition, tests such as these should have been performed
before PPG started shipping cal-hypo in 300-pound drums packed
120 per container. The 300-pound fiber drums had only been in use
for a period of months before the fire on the HARMONY, and PPG
had done no testing on them.
The warnings provided by PPG were inadequate and misleading.
The Material Safety Data Sheet, for example, warned only that
cal-hypo decomposes at 180°C (356°F) and is unstable above 117°C (253°F). (CX 184 at 5407, 5409). This sheet was
prepared by PPG, and, of course, cal-hypo decomposes and is
unstable at much lower temperatures. In contrast, in the domestic
transportation of one-ton bags of cal-hypo by truck, PPG used
refrigerated containers set to temperatures of 70° to 80°F
(approximately 21° to 27° C), far lower than the ambient
temperatures usually found in the holds of ships (approximately
35° to 40°C (or 95° to 104°F) in the hold of the HARMONY). PPG
also believed that cal-hypo should be stored in warehouses at a
temperature of below 90°F (approximately 32°C), again below the
temperature usually found in ship holds.
Likewise, PPG signed dock receipts certifying that the
containers had been packed in accordance with regulations and
that the materials were "properly classified, described, marked,
labeled, and are in proper condition for transportation,
according to applicable regulations of the [DOT]." (CX 6). PPG
should have known that the provisions of the Code applicable to
UN 2880 were inadequate, as the Code provided only that UN 2880
is to be stored away from sources of heat "where temperatures in
excess of 55°C for a period of 24 hours or more will be
encountered." (CX 2, Part 3 at 5138). In fact, at least where it
is shipped in 300-pound drums packed 120 to a container, UN 2880
should be stowed at temperatures substantially lower than 55°C.
Moreover, although it concluded that the CONTSHIP FRANCE fire had
been caused by stowage of cal-hypo next to heated bunker tanks,
PPG took no steps to warn other shippers of this risk. PPG had a duty to provide a warning that would fully inform
vessels and others in the distribution chain of all the risks
involved in shipping cal-hypo in the manner in which it was
shipped here. PPG breached that duty. The court's observation in
Pavlides is applicable here:
Holding [the manufacturer] to the legally mandated
standard of expertness, we find that the manufacturer
should reasonably have foreseen that a disaster like
that which happened here could occur if warnings
adequate to inform an ordinary person of the specific
dangers were not given.
Consequently, it had a commensurate duty to provide
such a warning.
727 F.2d at 339.
For the reasons stated above, the Court concludes that PPG is
liable to the vessel and cargo interests on their strict
liability, negligence, and failure-to-warn claims. Counsel for
the parties shall appear for a conference on November 1, 2005, at
10 a.m. to discuss further proceedings.
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