In Re M/V Rickmers Genoa Litigation

752 F. Supp. 2d 379, 2010 WL 4446080
CourtDistrict Court, S.D. New York
DecidedNovember 4, 2010
Docket05 Civ. 4261(LAP), 05 Civ. 6226(LAP), 05 Civ. 8841(LAP), 05 Civ. 9472(LAP)
StatusPublished
Cited by1 cases

This text of 752 F. Supp. 2d 379 (In Re M/V Rickmers Genoa Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re M/V Rickmers Genoa Litigation, 752 F. Supp. 2d 379, 2010 WL 4446080 (S.D.N.Y. 2010).

Opinion

*381 OPINION AND ORDER

LORETTA A. PRESEA, Chief Judge:

This Opinion and Order resolves a third-party action and certain other claims arising out of a maritime disaster in the Yellow Sea. After two ships, the M/V RICKMERS GENOA (the “RICKMERS GENOA”) and the M/V SUN CROSS (the “SUN CROSS”), collided, water flooded one of the RICKMERS GENOA’S cargo holds. That hold contained 600 tons of a granulated, magnesium-based desulphurization reagent with the trade name Super-Sul Mg-89 (“SS-89”). About four hours later, the RICKMERS GENOA suffered an explosion and fire in that hold. The chief officer died in the explosion, and all of the cargo in that hold was destroyed. The ship itself sustained serious damage. The owners of the destroyed cargo (the “Cargo Interests”) instituted actions against, inter alia, the vessel owner, Rickmers Linie GmbH & Cie. KG (“Rickmers”), the SS-89 manufacturer ESM (Tianjin) Co., Ltd. (“ESMT”), the manufacturer’s parent company ESM Group, Inc. (“ESM Group”), and the non-vessel-owning common carrier (“NVOCC”) that shipped the SS-89 on board the RICKMERS GENOA, Pudong Trans. Rickmers then brought this third-party action against ESMT and ESM Group (collectively, “Defendants”). ESMT and ESM Group now move for summary judgment on all claims against them. [See dkt. no. 152 (4261 action).] For the reasons set forth below, Defendants’ motion [id] is GRANTED in its entirety.

I. BACKGROUND

The general background of this action is set forth in this Court’s prior decision, In re M/V RICKMERS GENOA Litigation, 622 F.Supp.2d 56 (S.D.N.Y.2009), which is hereby incorporated by reference. The parties refer to the collision, together with the subsequent explosion and fire aboard the RICKMERS GENOA, as the “Casualty.” They refer to this particular voyage of the RICKMERS GENOA as the “Casualty Voyage.” The following additional facts are derived from the parties’ Rule 56.1 statements, affidavits, deposition testimony, and exhibits.

ESM Group is a Delaware limited liability corporation with its principal place of business in New York. Id at 60. ESMT is a wholly owned subsidiary of ESM Group located in Tianjin, People’s Republic of China and organized under Chinese law. Id ESMT produces a family of magnesium-based desulphurization reagents, including SS-89. Id SS-89, which is so named because it contains 89% magnesium, is injected into molten iron ore to *382 remove sulphur and thereby strengthen the resulting steel. Id. Because magnesium is flammable and potentially explosive upon contact with water, SS-89 must be kept dry and away from moisture. Id. Magnesium fires must be extinguished with dry material such as graphite, sand, or Purple K, rather than water or carbon dioxide. (Dillon Aff., Ex. 23 at 1.)

In February 2005, ESMT sought to transport a 600-ton shipment of SS-89 from its plant in Tianjin to ESM Group in the United States. (ESM 56.1 Stmt. ¶ 5; Rickmers 56.1 Stmt. ¶ 5.) 1 It hired Pudong Trans to arrange for shipment of the SS-89 by sea. {See O’Connor Aff., Ex. 57 at 1.) Pudong Trans issued its own bill of lading to ESMT in which it agreed to accept the SS-89 from ESMT and have it shipped to the United States on board the RICKMERS GENOA. {See id.)

Pudong Trans inquired with Rickmers about booking a shipment of the SS-89 on the RICKMERS GENOA. {See ESM 56.1 Stmt. ¶ 55; Rickmers 56.1 Stmt. ¶ 55.) Pursuant to Rickmers’ standard booking-inquiry practices {see ESM 56.1 Stmt. ¶¶ 51-52; Rickmers 56.1 Stmt. ¶¶ 51-52), Pudong Trans supplied Rickmers with the Harmonized Tariff System (“HTS”) Commodity Code number that corresponded to a description of certain physicochemical properties of the SS-89. (ESM 56.1 Stmt. ¶¶ 48, 55-56; Rickmers 56.1 Stmt. ¶¶48, 55-56.) That number, 81043000, identified “Magnesium and articles thereof including waste and scrap: Raspings, turnings and granules, graded according to size; powders.” (ESM 56.1 Stmt. ¶ 39; Rickmers 56.1Stmt. ¶ 39.) Paul Wang, an employee of Rickmers’ commercial booking staff in Tianjin, received Pudong Trans’ inquiry. (ESM 56.1 Stmt. ¶55; Rickmers 56.1 Stmt. ¶ 55.) He understood from the HTS Commodity Code number that SS-89 was a magnesium-based cargo. (ESM 56.1 Stmt. ¶ 55; Rickmers 56.1 Stmt. ¶ 55.) Wang, however, did not have authority to accept cargo on Rickmers’ behalf; this was the responsibility of one Joachim Neimke, another Rickmers’ employee. (Dillon Aff., Ex. 1 ¶ 15.)

Wang’s relevant responsibility was to enter Pudong Trans’ booking inquiry into Rickmers’ computerized booking system (the “Softship System”) and forward that information to Neimke for his review. (ESM 56.1 Stmt. ¶¶29, 54-55; Rickmers 56.1 Stmt. ¶¶ 29, 54-55.) Because of certain technical limitations on the Softship System, however, Wang did not forward the number 81043000 to Neimke. (ESM 56.1 Stmt. ¶¶ 52-53; Rickmers 56.1 Stmt. ¶¶ 52-53.) Instead, he sent Neimke HTS Commodity Code number 810419, which identifies “Other unwrought magnesium.” (ESM 56.1 Stmt. ¶ 53; Rickmers 56.1 Stmt. ¶ 53.) This description was considerably more general than the one Pudong Trans had provided to Rickmers. Changing the HTS Commodity Code number in this way had been Wang’s customary practice when handling inquiries to book shipments of SS-89. (ESM 56.1 Stmt. ¶ 54; Rickmers 56.1 Stmt. ¶ 54.)

The HTS Commodity Code number constitutes information that Neimke could have used to make his decisions whether to accept and how to stow the cargo of SS-89. (Dillon Aff., Ex. 1 ¶ 61; Neimke Dep. 102:5-18.) Although nothing prevented Neimke from using this information for these purposes (Dillon Aff., Ex. 1 ¶ 61)-— except perhaps his own “lack of knowledge of this possibility” at the time he accepted the SS-89 (Neimke Dep. 103:12-19)— *383 Neimke nevertheless did not use the information to decide whether to accept and how to stow the SS-89 (id. at 102:5-11). Thus, without having assessed all the information Pudong Trans provided to Rickmers, Neimke accepted the SS-89 cargo on Rickmers’ behalf for shipment on the Casualty Voyage. (See id. at 102:5-11; O’Connor Aff., Ex. 58 at 1.) Rickmers issued its own bill of lading to Pudong Trans (see O’Connor Aff., Ex. 58); it identifies Pudong Trans as the shipper and does not mention ESMT (see id. at 1).

Two letters of indemnity that were in Rickmers’ possession play a significant role in the parties’ dispute. The first letter, dated November 8, 2004, covers a shipment of 600 bags of SS-89 that were shipped on the RICKMERS NEW ORLEANS approximately five months before the Casualty Voyage. (O’Connor Aff., Ex. 55 at 1.) It states:

We herewith to certify that Super-Sul Mg-89 is not dangerous cargo listed in <? International Maritime Dangerous Goods Code>, the cargo covering sub B/L(S) to be shipped in container is 600bags identical with the description as attached and are seaworthy packed. Carrier will claim for any damages consequence.

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Related

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Bluebook (online)
752 F. Supp. 2d 379, 2010 WL 4446080, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-mv-rickmers-genoa-litigation-nysd-2010.