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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 PPG.

  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 fire.

  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. 246-47, 290).

  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 91, 92).

  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. 133).

  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. 240-41, 282).

  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, 351-52).

  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. 250-53).

  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 Dep. 257).

  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

  1. Cal-Hypo

  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. (Tr. 606-07).

  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 ...

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