Court Opinion

ID: 27086
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:03:54+00
Date Added: 2024-06-11T14:55:39.224358
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                                 FOR THE FIFTH CIRCUIT

                                         No. 01-20466

       LINTOTT RESOURCES, INC.;
       BRIDAS P.I.C. S.R.L.,

                                                           Plaintiffs-Appellants,

                                             versus

       PETROLEO BRASILEIRO, S.A.,
       also known as Petrobras International
       S.A., (Braspetro); FROTA NACIONAL
       DE PETROLEIROS, also known as
       Fronape; PETRO-TANKERS, S.A.,

                                                           Defendants-Appellees.

                   Appeal from the United States District Court for
                           the Southern District of Texas
                            (USDC No. H-98-CV-4293)
           _______________________________________________________
                                  March 11, 2002

Before HIGGINBOTHAM, DEMOSS and BENAVIDES, Circuit Judges.

PER CURIAM:*

       In this maritime suit, appellants Lintott Resources, Inc. and Bridas P.I.C. S.R.L.,

       *
        Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
plaintiffs below, appeal the district court’s summary judgment. Appellants sued appellees

Petroleo Brasileiro, S.A. and its shipping arm, Frota Nacional de Petroleiros (collectively

Petrobras) to recover for the loss of cargo aboard the M/V Lancer and related salvage

expenses. The district court concluded that Petrobras, who had time-chartered the vessel,

was entitled summary judgment based on its successful assertion of the fire defense, as

set out in the Fire Statute, 46 U.S.C. § 182, and extended to carriers such as Petrobras by

the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1304(2)(b).

       The Fire Statute exempts vessel owners from liability for loss or damage to cargo

“by reason or by means or any fire happening to or on board the vessel, unless such fire is

caused by the design or neglect of such owner.” The COGSA provision exempts carriers

from liability for losses arising or resulting from “[f]ire, unless caused by the actual fault

or privity of the carrier.” “It has long been held that the COGSA fire exemption and the

Fire Statue exemption are the same, except that COGSA extends to the ‘carrier,’ not just

the ‘owner’ as in the Fire Statute.” Westinghouse Elec. Corp. v. M/V Leslie Lykes, 734

F.2d 199, 205 n.3 (5th Cir. 1984) (Brown, J.) (citation omitted).

       The summary judgment evidence indicates that the Lancer was destroyed when

flammable gases in one of the vessel’s tanks exploded, which resulted in additional tank

explosions and fire aboard the vessel. Smoke is visible in a videotape before the first

explosion. The first explosion apparently occurred in a tank which had previously held

toluene, a flammable hydrocarbon. The river pilot aboard the Lancer at the time of the

incident recalled that the first explosion was accompanied by a bluish flame, and that

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about twenty seconds later a second explosion occurred, accompanied by a large ball of

flame and black smoke.

       Appellants argue that a distinction should be drawn between damage from the

explosions and damage from the fire. We agree with the district court that on these facts

no such distinction should be made. The fire defense “is to be applied broadly, and the

exception to the defense for fires ‘caused by the design or neglect of such owner’ must be

viewed narrowly.” Id. at 208. Giving the Fire Statute a broad reading, the incident in

question is properly characterized as a fire. Fire is simply a rapid chemical reaction

between oxygen and some other, flammable, material. See Cargo Carriers, Inc. v. Brown

S.S. Co., 95 F. Supp. 288 (W.D.N.Y. 1950) (quoting testimony of chemist that “[i]t is the

reaction of oxygen with carbon, hydrogen, nitrogen, phosphorus, and so forth, which we

see as combustion. . . . When it reaches the point where it glows or it is a flame, then we

call it fire.”). The initial and subsequent explosions on the Lancer were, legally and as a

matter of chemistry, the rapid and violent combustion of flammable gases and oxygen

which are properly characterized as fire. See EAC Timberlane v. Pisces, Ltd., 580 F.

Supp. 99, 116-17 (D.P.R. 1983) (finding Fire Statute and COGSA’s fire defense

applicable to loss of vessel caused by explosion of detonator caps “almost simultaneously

accompanied by an immense wall of fire”), aff’d, 745 F.2d 715 (1st Cir. 1984).

Appellants cite no authority which convinces us otherwise. While we can agree with

appellants that heat damage is not necessarily the same as fire damage, see The Buckeye

State, 39 F. Supp. 344, 348-49 (W.D.N.Y.) (holding that damage to corn caused by

                                             3
electric lights was damage caused by heat without fire), the damage in the pending case

was properly characterized as fire damage.

       Appellants appear to argue that even if the fire defense is applicable and they had

the burden of proving carrier negligence, they presented sufficient evidence to the district

court to defeat summary judgment. The fire defense is not a complete defense; rather, it

shifts the burden to the shipper to identify “the cause of the fire, and also to establish that

the cause was due to the ‘actual fault or privity’ of the [c]arrier.” Leslie Lykes, 734 F.2d

at 206. The defense is broadly applied, as stated above, and the shipper’s “burden is not

satisfied by proving that the fire was caused by the negligence of the master or crew.

‘Neglect of such owner’ means personal neglect of the owner, or, in case of a corporate

owner, negligence of its managing officers or agents.” Id. at 206-07.

       We conclude that appellants failed to raise sufficient evidence to avoid summary

judgment. FED. R. CIV. P. 56 “mandates the entry of summary judgment, after adequate

time for discovery and upon motion, against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 106 S.

Ct. 2548, 2552 (1986). Under modern summary judgment practice “there is no issue for

trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a

verdict for that party. If the evidence is merely colorable, or is not significantly

probative, summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 249-50, 106 S. Ct. 2505, 2511 (1986) (citations omitted).

                                               4
       Appellants offered the expert testimony of Dr. Bland, who opined that the cause of

the initial explosion had “not been identified with any degree of precision.” He went on

to state:

       It appears most likely, therefore, that the explosion was initiated by
       something falling through one of the aft two tank cleaning hatches, both of
       which appeared to have been open. In my view, it must be considered bad
       practice to leave any tank opening, to a tank that is not gras free, in the
       open position, if that tank is not being washed or gas freed. It should be
       noted that on this vessel, because of the absence of an operational inert gas
       system, explosive vapour/air mixtures were likely to form, from time to
       time, within cargo tanks and some flammable gas was likely to be
       discharged, at times, onto the tank deck.

       Insofar as Bland believes that hatches should have been closed, on this record such

a failure amounts at most to crew negligence that is not imputed to the carrier. As

explained above, such crew negligence is not imputed to the vessel owner under the Fire

Statute. Leslie Lykes, 734 F.2d at 206. As further explained above, carriers like

Petrobras are subject to the same fire defense as vessel owners, and we therefore can see

no reason that crew negligence of the sort claimed by the expert should be imputed to a

carrier. Petrobras was the carrier because it time-chartered the vessel, and it offered

undisputed evidence that as the charterer it did not employ or supervise the Lancer’s

crew. Further, exempting carriers from liability for crew negligence in these

circumstances is consistent with the law of our circuit recognizing, in other contexts, that

a time charterer’s traditional duties extend to designating cargo, and determining the

vessel’s route and general mission, but that a time charterer is generally not held

responsible for dangerous conditions on board the vessel or crew negligence. See

                                             5
Hodgen v. Forest Oil Corp., 87 F.3d 1512, 1520 (5th Cir. 1996); Forrester v. Ocean

Marine Indem. Co., 11 F.3d 1213, 1215 (5th Cir. 1992); Moore v. Philips Petroleum Co.,

912 F.2d 789, 791-92 (5th Cir. 1990).

       As for the “absence of an operational inert gas system,” Bland goes on to explain

that the Lancer had an inert gas system, but that under relevant Convention for Safety of

Life at Sea (SOLAS) regulations, there was no requirement that the vessel be fitted with

an inert gas system during the voyage in issue, given the cargo that was being transported.

In our view, Bland’s statement regarding the lack of an operating inert gas system was

insufficient to defeat the summary judgment motion.

       Appellants separately argue that the district court erred in refusing to allow them

to recover from Petrobras salvage expenses incurred in removing cargo from the vessel

because of the “New Jason” clause. We agree with the district court that this clause in

the bills of lading provides that if the carrier has a valid statutory defense, the shipper

“shall contribute with the carrier in general average to the payment of any sacrifices,

losses or expenses of a general average nature that may be made or incurred and shall pay

salvage and special charges incurred in respect of the goods.” Since Petrobras was

entitled to the COGSA fire defense, Petrobras was not obligated to indemnify appellants

for salvage costs they incurred in removing cargo from the vessel.

       Finally, appellants ask us to reconsider the holding of Leslie Lykes, 734 F.2d at

207, that the carrier has the burden of proving that it exercised due diligence as a

prerequisite to invoking the COGSA fire defense. Even if, writing on a clean slate, we

                                               6
were inclined to agree with appellants, one panel of this court cannot overrule the

decision of another panel. FDIC v. Dawson, 4 F.3d 1303, 1307 (5th Cir. 1993).

       AFFIRMED.

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