Kawasaki Kisen Kaisha, Ltd. et al v. CMT International, Inc.
Filing
216
MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 12/30/2013. Mailed notice (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KAWASAKI KISEN KAISHA, LTD.,
and “K” LINE AMERICA, INC.,
Plaintiffs,
and
Case No. 07 C 5675
UNION PACIFIC RAILROAD CO.,
Hon. Harry D. Leinenweber
Intervening Plaintiff,
v.
PLANO MOLDING CO.,
Defendant.
MEMORANDUM OPINION AND ORDER
Before the Court are the trial record and post-trial briefs
of Plaintiffs Kawasaki Kisen Kaisha, Ltd. and “K” Line America,
Inc.
(hereinafter,
collectively,
“K-Line”);
Plaintiff
Union
Pacific Railroad Co. (“UP”); and Defendant Plano Molding Co.
(“Plano”).
For the reasons stated herein, the Court finds in
favor of Defendant.
I.
FACTUAL BACKGROUND
As the factual background of this dispute has been described
repeatedly, see, e.g., ECF No. 78, only a cursory review of the
underlying facts is provided here.
Plano is an Illinois corporation that designs, manufactures,
and
sells
plastic
storage
boxes.
Plano
contacted
CMT
International (“CMT”), a company that assists American customers
who wish to purchase products from Asia, because it needed new
molds. CMT solicited bids from manufacturers, and Plano selected
Kunshan, a Chinese company, as its fabricator for two steel molds
(“Molds”) for its Illinois factory.
World
Commerce
Services
LLC
(“World”)
was
selected
to
coordinate the Molds’ transportation from China to the United
States.
The World Bill of Lading identifies Plano as the
consignee.
2005.
Plano received the World Bill of Lading on April 3,
It contained a “Himalaya clause” that grants World’s
subcontractors all warranties and indemnities defined in the bill
of lading.
Under Section 2.3, a “Merchant” is defined as “the
Shipper, the Receiver, the Consignor, the Consignee, the Holder
of this Bill of Lading and any person having a present or future
interest in the Goods or any person acting on behalf of any of
the above-mentioned persons.”
Ex. 79.
According to the World
Bill of Lading, if any party other than World packs the shipping
container, the Merchant warrants “that the stowage and seals of
the containers are safe and proper and suitable for handling and
carriage and indemnifies [World] for any injury, loss or damage
caused by breach of this warranty.”
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Id.
As the freight forwarder, World contracted with THI Group
LTD (“THI”) and K-Line to ship the Molds from China to Illinois.
K-Line, in turn, subcontracted shipping within the United States
to UP.
The Molds were packed into two crates of different sizes,
weighing collectively about 25,000 lbs.
These were then loaded
into a large shipping container (the “Container”) owned by KLine.
The Molds were on a UP train moving through Oklahoma on
April 21, 2005 when the Molds broke through the bottom of the
Container and fell onto the track while the train was in transit
at approximately 70 m.p.h.
The train derailed, causing $4
million of damage to UP and K-Line customers.
Plaintiffs claim
that the Molds were not secured properly in the Container and
were the cause of the derailment.
They seek to hold Plano liable
for the damage caused by the accident pursuant to the World Bill
of Lading.
II.
PROCEDURAL BACKGROUND
Following the derailment of the UP train, various Complaints
were filed in the Southern District of New York by owners of
cargo damaged by the derailment, as well as among the parties to
this suit. K-Line filed an action in this District against Plano
and CMT, but it was consolidated for pre-trial proceedings in the
Southern District of New York with eight other actions.
All
other claims settled, leaving only Plaintiffs’ suit against
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Plano, which the Southern District of New York transferred back
to this District.
On July 27, 2011, this Court granted Plano’s Motion for
Summary Judgment on Plaintiffs’ breach of contract and negligence
claims, finding that because it was not a party to the K-Line
bill of lading, nor a principal of a party to the bill of lading,
it could not be bound by it.
Plaintiffs appealed, and the
Seventh Circuit affirmed the Court’s decision regarding the
negligence claims and Plaintiffs’ breach of contract claims under
the K-Line bill of lading.
However, the Seventh Circuit found
unresolved questions of fact material to the determination of
Plaintiffs’ contract claims based on World’s Bill of Lading. The
court stated that, in analyzing Plaintiffs’ contention that Plano
is
bound
by
the
terms
of
the
World
Bill
of
Lading
as
a
contracting party, “we must consider Plano’s role in obtaining
World as the freight forwarder for the molds’ transportation.”
Kawasaki Kisen Kaisha, Ltd. v. Plano Molding Co., 696 F.3d 647,
656 (7th Cir. 2012).
The Seventh Circuit found this question
important, because “if Plano engaged World to handle the shipment
on its own behalf, it could be found liable to K-Line and Union
Pacific by the plain terms of the World Bill of lading.”
Id.
The Court found the evidence surrounding the Plano/CMT/World
transaction “murky at best,” and concluded that conflicts in the
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record created a material question of fact that required remand.
Id.
As such, the Seventh Circuit concluded:
On this record, we are unable to ascertain
whether CMT or Plano arranged the molds’
shipment
with
World.
Without
this
determination, we cannot conclude whether or
not Plano engaged World in a manner that
would impose liability as a contracting
party, and subject Plano to liability under
the World bill of lading. As to this narrow
issue, we reverse the district court’s grant
of summary judgment and remand for further
consideration.
Id. at 657-58.
On June 24, 2013, the Court conducted a one-day bench trial
focusing on the narrow issue raised by the Seventh Circuit with
respect to the World Bill of Lading.
presented
both
live
and
deposition
Plano/CMT/World transaction.
Plaintiffs and Plano
testimony
regarding
the
After the trial concluded, the
Court ruled that Plano was bound to the World Bill of Lading and
could be held liable to Plaintiffs pursuant to the Merchant and
Himalaya clauses in the World Bill of Lading.
See, Kawasaki
Kisen Kaisha, Ltd. v. Plano Molding Co., No. 07 C 5675, 2013 U.S.
Dist. LEXIS 101118 (N.D. Ill. July 19, 2013).
The parties had earlier stipulated to delaying determination
on causation and damages until after the Court ruled on whether
Plano was subject to the World Bill of Lading.
Having resolved
that issue in the affirmative, the Court set the matter for trial
on causation and damages. However, just days before trial began,
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the
parties
stipulated
to
referring
the
issue
of
damages
calculation to a magistrate judge, should it be necessary.
ECF No. 193.
Thus, on October 15, 2013, the parties began a
three-day trial to determine whether Plano was indeed liable for
the accident, and if so, for what categories of damages it was
liable.
The trial was a classic “battle of the experts,” with the
vast majority of the testimony focusing on presenting evidence
and testimony supporting or contesting the expert opinions of the
parties.
opinion
Plaintiffs’ expert, Dr. Robert Vecchio, presented his
that
the
crates
containing
the
Molds
were
loaded
improperly into the Container in a manner that did not distribute
their weight sufficiently, which overstressed the metal crossmembers supporting the floor of the container.
Vecchio,
the
crates
were
not
lashed,
and
According to Dr.
thus
experienced
“dynamic amplification,” which means, in simple terms, that they
bounced.
This bouncing increased the stresses on the cross-
members until they failed.
Plano responded with the testimony of three experts.
Their
primary expert, Mitchell Kaplan (“Kaplan”), testified that the
cause of the failure was not the loading of the crates or dynamic
amplification,
Container.
but
instead
the
defective
condition
of
the
Specifically, the welds fixing the cross-members to
the side of the container were defective, which made them weak
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and unable to withstand the amount of stress they otherwise
would.
Plano also presented the testimony of two other expert
witnesses, Thomas Johnson and Dr. John Slater, who testified to,
among other topics, the poor condition of the welds.
Following the witness’ testimony, the Court then directed
the parties to submit post-trial closing briefs.
The parties
each filed one closing brief, and a second brief regarding the
types of damages at issue in the case.
III.
A.
DISCUSSION
Evidentiary Rulings
Prior to trial, the parties filed Motions in Limine seeking
to bar expert testimony pursuant to Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993) and various Federal
Rules of Evidence.
The Court denied the Motions, noting that
there is less of a need for the Court to serve as a “gatekeeper”
as to expert testimony during a bench trial, since the Court can
weigh the expert testimony appropriately while deciding the case.
See, Tr. at 4; see also, United States v. Brown, 415 F.3d 1257,
1269
(11th
Cir.
2005)
(“There
is
less
of
a
need
for
the
gatekeeper to keep the gate when the gatekeeper is keeping the
gate only for himself.”).
Despite this ruling, the parties in
their closing briefs again encourage the Court to exclude expert
testimony as improper under Daubert.
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The Court declines to do
so.
The Court found all of the experts qualified and their
testimony proper for consideration. However, as discussed below,
the Court did consider the methods and analyses used by each
expert and weighed what testimony it found most persuasive and
credible, keeping their credentials and expertise in mind.
There
is
one
other
compelled to address.
expert
issue
that
the
Court
feels
Plaintiffs did not learn that Plano
intended to call Mr. Johnson and Dr. Slater as witnesses until
October 4, 2013, eleven days before trial. These disclosures are
clearly
late
under
Federal
Rule
of
Civil
Procedure
26.
Plaintiffs argued that since they were unable to depose these
individuals prior to trial due to their late disclosure, that
their testimony should be struck.
Under Federal Rule of Civil Procedure 37, “if a party fails
to provide timely expert disclosures as required under Rule 26,
exclusion of the untimely expert opinion is proper unless the
party shows that its late disclosure was justified or harmless.”
Willis v. Sears Holdings Mgmt. Corp., No. 10 C 5926, 2012 U.S.
Dist. LEXIS 128208 at *17 (N.D. Ill. Sept. 7, 2012).
Plano made
no effort to justify the late disclosure of these witnesses.
Despite
this
disclosure
failure,
harmless.
controversy.
however,
These
the
Court
witnesses
are
finds
not
the
new
tardy
to this
Mr. Johnson and Dr. Slater both served as experts
for parties involved in earlier stages of this dispute.
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Thus,
the substance of their testimony was not a total surprise to
Plaintiffs, as they have had access to Mr. Johnson and Dr.
Slater’s expert reports for more than five years.
Indeed,
Plaintiffs’ expert, Dr. Vecchio, issued a rebuttal report in 2008
in response to those reports.
The Court is convinced that the
Plaintiffs suffered no undue surprise or prejudice by the tardy
disclosure.
Finally, the parties presented the Court, in their First
Amendment to Pretrial Order (ECF No. 188), with a number of
objections to evidence and testimony.
The Court considered and
ruled on some of these objections during trial.
Rather than go
through and rule on any outstanding objections, the Court will
address below any relevant exhibits or testimony for which a
ruling on an objection is required.
B.
Findings of Fact and Conclusions of Law
Pursuant to Federal Rule of Civil Procedure 52, the Court
enters the following written Findings of Fact and Conclusions of
Law based upon consideration of all the admissible evidence as
well as this Court’s own assessment of the credibility of the
trial witnesses.
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1.
a.
Findings of Fact
The Molds Were Secured Properly
in the Shipping Container
One central question of this case is whether the Molds were
stowed and secured properly inside the shipping container.
Put
simply, Plaintiffs argued that the Molds were not secured,
whereas Plano argued that they were. The limited evidence before
the Court, however, demonstrates that it is more likely than not
that the Molds were secured within the Container.
The Court notes at the outset that neither party presented
any witnesses who were actually involved in the loading of the
crates into the Container.
Obviously, such information would
have been useful to the parties and the Court.
However, the
Court understands that acquiring such information from a foreign
jurisdiction can, at times, be difficult.
Plaintiffs suggest
that, to the extent there is any uncertainty about the exact
stowage of the Molds, the Court should draw an adverse inference
against
Plano.
They
argue
that
because
Plano
had
“close
connections” with Kunshan, it was in a better position to get
such information, whereas any attempts Plano made in the New York
litigation were unsuccessful.
Pls.’ Closing Br. at 8-9.
The
Court declines to draw such an inference, as the cases Plaintiffs
cite in support of this notion do not stand for the broad
application of such an inference in circumstances such as these.
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That the parties in China involved in the loading and securing of
the crates refused to get involved is unfortunate, but the Court
declines
to
punish
Plano
for
their
inaction.
Thus,
the
determination of whether the Molds were loaded properly must be
made based on documentary evidence and the opinions of the
parties’ experts.
Based on the arguments of the parties, in determining
whether the crates were loaded in the container correctly, there
are two main questions.
First, whether the crates were secured
and lashed in the container, and second, whether the crates were
loaded in such a way as to distribute their weight in the
Container properly.
With respect to the question of whether the crates were
loaded in the container in a way that distributed their weight
properly, Plaintiffs cited Circular 43-D, a set of guidelines
approved by the Damage Prevention and Freight Claim Committee
Association
contention.
of
American
Railroads,
See, Ex. 122.
as
support
for
this
Illustration 3 of Circular 43-D
states that “not more than 25,000 lbs. uniformly distributed in
any
10
linear
specifications
feet
of
can
AAR
be
loaded
Intermodal
on
trailers
Standards
and
meeting
the
Recommended
Practices M-931.” Ex. 122 at 6. In loading railroad containers,
wooden pallets, wooden beams or other dunnage are used to help
disburse the weight of cargo.
- 11 -
Plaintiffs do not claim that the total weight of the Molds
violated Circular 43-D, but that the weight was too concentrated.
Plaintiffs claim that the crates were loaded in the center of the
Container.
Again, neither party presented testimony from anyone
involved in the loading explaining where in the Container the
crates were placed or how they were secured. Instead, Plaintiffs
rely on information found in an investigation report written
after the accident by a company called Intertek Caleb Brett (the
“Intertek Report”), and a “Testification” from Shanghai Ocean
Shipping Tally Company (Ex. 127).
The Court notes that while
they rely on the Testification as to the location of the crates
in the center of the Container, Plaintiffs ignore the statement
in the document that the crates were “packed sound.”
WCS000185.
Ex. 127 at
The Intertek Report also states that the crates were
placed in the center of the Container.
While no one from
Intertek testified at trial regarding the report, both parties
rely on it heavily without objection, so the Court will admit it
into evidence.
In any event, Dr. Vecchio’s assessment of the accident is
that the crates containing the Molds fell through the center of
the container, in the area between cross-beams 10-13, because
their weight was not distributed properly. As Vecchio explained,
“the weight of the mold crates, one of the mold crates was higher
than
the
floor
capacity
and
caused
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the
floor
beams
to
be
overloaded, which caused them to fracture, which allowed the
molds to pass through the floor.”
Tr. at 103.
In other words,
“the mold weight was too concentrated relative to the footprint
that
it
was
placed
in
on
the
floor
consequently overloaded the floor.”
of
the
container
and
Id. at 102.
Dr. Vecchio asserted that the crates would not have burst
through the
bottom
of
disbursed properly.
the
container
had
their
weight
been
What appears to be the remains of one
pallet, along with many other pieces of wood, were found in the
container after the incident.
Dr.
Vecchio
testified
that
See Pls.’ Ex. 278-P, Tr. 110-112.
the
pallet
in the
picture was,
according to his estimation just from looking at the photograph,
approximately four feet by four feet, a standard size for a
pallet.
Id. at 110-12, 184.
He also acknowledged that the
pallet would have been sufficient to disburse the weight of the
smaller crate.
Id. at 186.
It is, however, unknown which crate
sat on this pallet.
Dr. Vecchio also opined that there was a second pallet based
on information he was provided by Plaintiff’s attorneys and the
Intertek Report, which indicated that the crates were on pallets.
Tr. at 191.
When asked what he did to determine whether there
was a second pallet, he said LPI “looked through the debris to
see what was there, and I reported what was there.”
Id. at 193.
When asked if he saw other pallets, Dr. Vecchio stated, “[n]ot in
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recognizable form.”
Id.
So even though Dr. Vecchio believed
there was a second pallet, he assumed that whatever may have
happened to it, it was not sufficient to disburse the weight of
the crates.
Which leads the Court to the largest problem with Dr.
Vecchio’s assertions – they are based on speculation that the
Court finds unpersuasive.
It bears repeating first that no
evidence was put forth as to how the crates were actually loaded
in the container, and Dr. Vecchio did no investigation as to how
they were loaded.
Dr. Vecchio states that the one pallet found
in the container is the only one found in “recognizable form.”
Id.
That would not surprise the Court, considering the damage
that the derailment caused.
According to Dr. Vecchio’s own
estimates, between 50-66% of the container’s floor was gone after
the
accident,
and
as
he
acknowledged,
there
was
“wood
everywhere.” (Tr. at 187, 201-02) (“There were also multiple
containers that were damaged, and there was wood everywhere from
all of the containers that were damaged.”)
derailed,
and
derailment.
debris
was
found
several
More than 30 cars
miles
west
of
the
However, aside from the possibility that the second
pallet was the proper size and was simply destroyed in the
derailment,
it
is
clear
that,
contrary
to
Dr.
Vecchio’s
testimony, there were remnants of pallets found at the crash
site.
Exhibit 281 appears to show two pallets that survived the
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accident, as well as several long boards.
Dr. Vecchio testified
that he did not remember if he had seen the picture before.
The presence of all of the wood debris, as well as the
pallets and boards shown in Exhibit 281, is important because Dr.
Vecchio himself acknowledged that dunnage of the proper size,
such as square pieces of lumber or wood planks, could be used to
distribute the crates’ weight.
Indeed, he testified that if the
heavier crate had been supported by dunnage of a sufficient
length, the larger crate would not have fallen through the
container floor.
While he said that he had not calculated the
dimensions of the necessary dunnage, he indicated he thought such
boards
would
need
to
be
at
least
8
feet
long.
He
also
acknowledged that the boards in Exhibit 281 were approximately
eight feet long.
size
found
in
The Court also notes that two pallets of the
the
container
put
together
would
also
be
approximately eight feet by eight feet.
Put simply, the evidence presented does not support Dr.
Vecchio’s conclusion that the weight of the crates was not
distributed properly. Plaintiffs presented no evidence as to how
the crates were actually loaded.
The evidence also showed that
the pallet found in the container could have supported the
smaller crate, or served as partial support for the larger crate.
The wood and debris found at the crash site indicates that it was
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likely that both crates were placed on pallets or dunnage to help
disburse their weight properly.
With respect to the question of whether the crates were
secured and lashed in the container, the evidence presented
indicates that they were. First, the Intertek Report relied upon
heavily by both parties states clearly that the Molds were
secured upon loading.
In describing the loading of the Molds
into the container, Section 3.05 of the Intertek Report states:
Only
two
cases
were loaded
in [the
container] when the appearance of two cases
was noted in sound condition, the stowage
position was at the middle of the Container
No. TRLU2733410. On completion of stowage,
securing and lashing was done and the
container was sealed by Shanghai Ocean
Shipping Tally Co., Ltd with the seal No.
CK34459.
Ex. 130 (emphasis added).
Dr. Vecchio relied heavily on the
Intertek report for a variety of information and data in forming
his opinion. Dr. Vecchio testified that it was his understanding
“that
the
Intertek
report
provided
the
best
available
information,” and that he “had no reason not to believe it.”
at 208, 259.
for
a
Tr.
Despite such heavy reliance on the Intertek Report
wealth
of
other
information
regarding
the
accident,
Plaintiffs disregard the statement about the Molds being secured
and
lashed
completely,
arguing
that
“the
post-derailment
investigation did not unearth any evidence this was done.” Pls.’
Closing Br. at 8.
Dr. Vecchio echoed this argument that the
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Molds were not secured and lashed, claiming that he saw no
evidence the Molds were lashed within the container, and that
dents in the floor of the container support the conclusion that
no lashing had been done.
The Court finds Dr. Vecchio’s testimony on the subject of
the securing and lashing of the Molds to be unpersuasive. First,
Circular 43-D, upon which Dr. Vecchio relies to state that the
crates were not loaded properly, gives no indication that lashing
is a necessary requirement for securing cargo in a container.
See, Ex. 122.
Second, Dr. Vecchio’s theory of the accident
hinges on the idea that the Molds were not lashed down properly
in the container, began to bounce around when they were subject
to vertical amplification, and eventually broke through the
bottom of the container, thereby causing the derailment.
The
lashing, or alleged lack thereof, is thus critical to his theory.
Yet he disregarded the statements of the Intertek Report that the
Molds were, in fact, secured and lashed despite acknowledging
that the report was the best source of information and relying on
it heavily for other information.
Nor did he contact the
drafters of the Intertek Report to follow up with them about
their statements as to the lashing of the Molds.
Third, the Intertek report is not the only indication that
the Molds were secured.
In an email from THI’s Joana Feng to
World’s John Wember, Feng stated that “wooden brackets” were used
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“to fix the case[s] in order not to move when transmitting
[sic].”
Ex. 280 at WCS 00254.
Dr. Vecchio testified that he had
never seen that document before, so when he was preparing his
report, he did not take it into account.
Tr. at 257-58.
Fourth, the physical evidence upon which Dr. Vecchio relies
to support the theory that the Molds were not lashed down is
inconclusive.
This
evidence
takes
the
form
of
several
“significant dents” in the wood floor of the container. Tr. 24748.
He claims that, in his opinion, those dents show that the
Molds were not lashed vertically.
But there is no evidence
indicating when or how those dents were caused.
Dr. Vecchio
could not say definitively whether the dents were caused by the
bottom of the pallet, or the molds themselves if they had broken
through the crates before falling through the floor.
Tr. 280.
Nor could he say when they occurred. Indeed, after acknowledging
that they could have occurred at the grade crossing the train
passed over prior to the accident or when the container was
offloaded from the truck in China, Dr. Vecchio acknowledged
“those dings could occur anywhere where there was a significant
dynamic amplification.”
Tr. at 281.
This testimony is in line
with that of Plano’s expert Thompson, who indicated that “. . .
the dings show that at least at some point the crates were moving
around.
Whether it was towards the end of the failure or more
towards the beginning, we don’t know.”
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Tr. at 486.
This
testimony makes it clear that it is just as likely that the dents
occurred when the Molds were being loaded into the container
(possibly before being lashed) or after the floor began to fail.
The Court acknowledges that neither side presented any
material found in the Container that they claim was the lashing
for the crates. But again, because no testimony was presented as
to how the crates were lashed into the Container, it is not clear
what that material was, or whether investigators even searched
for it.
Again, with the amount of damage and debris, it is
entirely possible the lashing was lost or destroyed in the
derailment.
In addition, the derailment scene was not protected
from possible scavengers immediately following the accident.
See, S. Gannon Dep. at 146 (noting that the scene was not
“secure” the night after the derailment).
It is certainly
possible that a bystander could have removed lashing, or other
debris, from the unsecured site if it had any value.
Based on the limited evidence before the Court, it concludes
that it is more likely than not that the Molds were secured and
lashed in the Container. In any event, Plaintiffs failed to meet
their
burden
of
showing
that
they
were
not
lashed.
They
disregard the “best information available” in disregarding the
Intertek Report, neither they nor their expert contacted or
discussed the loading and storage of the Molds with any of the
clearly identifiable parties involved in their stowage, and they
- 19 -
read more significance into the dents in the flooring than the
Court is willing.
b.
The Shipping Container was Defective
The Court finds that the shipping container was defective.
The bottom of the container consisted of twenty metal crossmembers (numbered, for purposes of trial, 1-20, with 1 at the
door end and 20 at the nose end) that were welded to the side
rails of the container.
of the container.
These cross-members supported the floor
The purpose of the welds was to transfer the
load from the cross-members to the side rail.
Defendants put
forth evidence establishing that a significant number of the
cross-members had a bad weld to the side rails of the container.
The expert testimony and physical evidence indicate that
many of the welds were defective.
The purpose of all welding in
steel products is to not have the weld fail, but to have the base
metal surrounding the weld fail if the weld is overloaded.
If
done properly, the weld will not break, and instead the weld will
hold and the base material to which the weld is attached will
fail and tear, resulting in “plastic deformation.” Failures that
do not demonstrate plastic deformation indicate that the weld was
bad. Various conditions, such as poor repairs and corrosion, can
weaken a weld.
Plano’s expert Kaplan testified that an examination of
cross-members 14, 15, 17 and 19 showed welds that had been
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repaired previously and that were “quite poor.”
Tr. at 318.
They had “virtually every weld problem that you can have,”
including
lack
corrosion.
Id.
of
penetration,
undercutting,
porosity
and
These welds were subjected to chemical analyses
and metallurgical analyses according to protocols agreed to by
the parties which demonstrated that these welds were poor.
Kaplan also examined the welds on cross-members 10, 11, 12
and 13, which were the cross-members Dr. Vecchio identified
specifically as being the ones that failed and led to the
derailment.
All of those cross-members except for No. 11 also
demonstrated that they suffered from poor welds, as many of them
failed without any plastic deformation.
For example, while one
of the welds in No. 10 showed some plastic deformation indicating
it was a good weld (see Ex. 142 at 50), the other weld on that
cross-member showed no plastic deformation, indicating it was an
improper weld (id. at 51). Photographs presented at trial of the
welds demonstrated that several welds failed without any, or with
very slight, plastic deformation.
Kaplan’s
conclusions
regarding
the
quality
of
the
Container’s welds were supported by other witness’ testimony.
For
example,
Dr.
Slater
testified
that
he
evidence” of poor welding in the container.
observed
“clear
Tr. at 523.
He
stated that “[e]ffectively about half or more than half of the
welds joining the side sill to the floor beams were effectively
- 21 -
poor in relation to the method of fracture or their prior
corrosion and cracking possibility as a result of fatigue.”
Id.
at 526. Keith Cronin, who investigated the derailment, testified
that he examined the welds and saw some that had old breaks in
them as evidenced by rust within the welds.
Cronin Dep. at 106.
He also indicated that one of the welds had been broken for an
extended period of time.
Id. at 83.
In contrast, Dr. Vecchio concluded that the condition of the
welds had no bearing on the derailment.
He argued that many of
the relevant welds did show significant tearing of the side
sills, arguing that such tearing indicates that the welds were
strong enough since it was the side sill that tore and not weld
that failed.
experts.
This reasoning is consistent with that of Plano’s
However, in reviewing the photographs of the welds, it
is undeniable that many of the welds appear to have suffered
little or no plastic deformation.
Indeed, during his direct
examination on the subject, Dr. Vecchio ignored the fact that a
photograph from his own report of cross-member No. 10, one of the
key cross-members Dr. Vecchio claims failed, showed a weld
failure with no tearing of the side sill at all.
51.
See, Ex. 142 at
The court notes that several other welds Dr. Vecchio claims
showed plastic deformation did not appear to show much tearing.
See, id. at 54 (No. 12), 56-57 (No. 13).
- 22 -
Many of these defective
welds were located in the center of the car, where Vecchio
concluded the Molds fell through to the track.
Based on the testimony and evidence, the Court finds that
the Container, particularly many of the welds of the crossmembers to the side sill of the Container, was defective.
c.
Defective Welds in the Shipping Container
Caused the Molds to Fall Through the
Bottom of the Container and Cause the Derailment
The heart of this dispute is what caused the derailment:
inadequate, unstable stowage and weight overload, as concluded by
Dr. Vecchio, or the weak welds at the bottom of the container, as
suggested by Plano’s experts.
The Court finds Plano’s position
is supported by a preponderance of the evidence.
Dr. Vecchio’s theory is that the crates fell through the
center of the container, in the area of cross-beams 10-13,
because their weight was not distributed properly pursuant to
Circular 43-D.
He claims the weight distribution problem was
exacerbated by the failure to lash the crates properly, which
caused dynamic amplification, and testified that there were no
problems
with
the
welds.
Among
other
support
for
his
conclusions, Dr. Vecchio relied upon a finite element analysis
(“FEA”), a computer model that he used to calculate the stresses
in the Container.
Dr. Vecchio asserts that his FEA supports his
causation theory.
- 23 -
Plano’s experts disagreed with Dr. Vecchio’s conclusions.
Their testimony varied, but they were in agreement that the weak
welds were the reason the crates fell through the floor of the
container.
Plano presented their own FEA that demonstrated the
Container should have been able to support the crates, even if
they were not stowed in accordance with Circular 43-D.
The Court finds Plano’s explanation more convincing.
As
explained above, Plaintiffs failed to establish that the crates
were
loaded
into
the
Container
improperly.
Based
on
the
evidence, it appears likely that the crates were stowed and
secured properly, which is contrary to fundamental conclusions
reached by Dr. Vecchio.
This cuts against his claim that the
weight was not distributed properly in the Container, and it
contradicts his theory of dynamic amplification playing a role in
the failure of the container.
In addition, the Court found that
many of the welds were defective, including welds in the crossmembers where Dr. Vecchio claims the Molds first fell through the
floor.
The
Court
is
convinced
that
these
defective
welds
weakened the container floor, and led ultimately to the crates
falling through the floor of the Container, thereby causing the
derailment.
As explained by Kaplan, the strength of the welds affects
the strength of the container.
Weakened welds mean that the
Container could bear less weight, and would fail prematurely.
- 24 -
When the weld on one end of a cross-member failed, the structural
integrity of that entire cross-member was lost. Put another way,
once a weld failed, the entire cross-member ceased to be a loadcarrying member.
Weight would then be redistributed to the
remaining cross-members, adding to the stress placed on those and
increasing the chances that other faulty welds would fail as
well.
Dr. Vecchio testified that the welds were not defective and
had no bearing on the derailment.
The Court finds this to be
crippling to his opinion, as it is clear based on the testimony
of several experts as well as the evidence presented to the Court
that many of the welds in the Container were in poor condition
and failed.
The fact that Dr. Vecchio views the welds as though
they were completely sound is simply contrary to the evidence,
and makes his opinion as to the cause of the derailment far less
credible.
The Court notes that both parties argue at great length as
to what the deficiencies are in both FEAs.
convinced
that
neither
of
them
is
perfect.
The Court is
As
with
any
scientific analysis, some variables were assumed or neglected on
both sides.
For example, Dr. Vecchio’s FEA failed to take into
account forklift pockets in the Container’s floor that are
stronger than the other cross-members and used the wrong number
of cross-members, whereas Kaplan’s assumed that the floorboards
- 25 -
were glued to the beams when they were screwed into place.
The
Court suspects that such variables may each have some effect on
the outcome of a sensitive analysis such as an FEA.
On a whole,
though, the Court finds the shortcomings with Dr. Vecchio’s FEA
to be more problematic, and have more of an impact on its
outcome, than those of Plano’s FEA.
After considering the evidence and testimony, the Court
finds that the derailment was caused when the weakened welds of
the Container’s cross-members failed, allowing the crates with
the Molds inside to fall through the floor and ultimately cause
the derailment of the train.
2.
Conclusions of Law
a.
Burden of Proof
The parties seem to be at odds as to the burden of proof
they bear in this action.
Plano claims that Plaintiffs bear the
burden of proof as to whether Plano owed them a duty under the
World Bill of Lading, and whether Plano breached that duty.
Plaintiffs claim that Plano bears “the impossible burden of
proving its contention that defective container welds allowed the
non-compliant load to breach the container cross-beams and cause
the derailment.”
Pls.’ Closing Br. at 16.
This seems to be
based on Clause 10.5 of the World Bill of Lading, which states:
Merchant shall inspect containers before
stuffing them and the use of the containers
- 26 -
shall be prima facie evidence of their being
sound and suitable for use.
Ex. 79.
Plaintiffs claim that this clause places the burden on
Plano to show that the container was not sound and suitable for
use
when
it
was
loaded,
and
that
unsoundness
caused
the
derailment.
In a civil suit, the burden is usually on the plaintiff
because it is the party asking the court to alter the status quo.
Binder v. Bristol-Myers Squibb, Co., 184 F.Supp.2d 762, 768 (N.D.
Ill. 2001).
Indeed, the “party asserting the ‘affirmative of an
issue has the burden of proving the facts essential to its
claim.’”
Id. (quoting Auburndale State Bank v. Dairy Farm
Leasing Corp., 890 F.2d 888, 893 (7th Cir. 1989)).
Parties
claiming a warranty under a maritime contract, such as the one at
issue here, bear the burden of proof.
See, e.g., Central Oil Co.
v. M/V Lamma-Forest, 821 F.2d 48, 49 (1st Cir. 1987).
Clause
10.5, which deals with the condition of the Container, does
nothing to change the fact that Plaintiffs brought this action
alleging
that
Plano
violated
Clause
10.2.
Specifically,
Plaintiffs claim that Plano breached its warranty that the
“stowage and seals of the containers are safe and proper and
suitable for handling and carriage,” and that it would indemnify
Plaintiffs for any damage caused by such breach.
Ex. 79.
The
question of whether the stowage and seals were safe and proper is
- 27 -
a different question than whether the container was sound and
suitable.
Thus, Plaintiffs bear the burden of proving the Plano
owed them a duty under Clause 10.2 of the World Bill of Lading,
and that Plano breached that duty through unsafe or improper
stowage of the crates in the container.
Even accepting Plaintiff’s contention that Clause 10.5 puts
a burden on Plano to show that the container was defective, as
discussed above, the Court finds that Plano has met that burden.
b. Plaintiffs Failed to Establish that Plano
Breached Clause 10.2 of the World Bill of Lading
At the outset, the Court notes that the parties argue at
length as to whether Plano was even subject to Clause 10.2 of the
World Bill of Lading based on the question of whether Plaintiffs
received the goods already packed into the Container, a condition
precedent.
The Court assumes, without finding, that Plano is
subject to Clause 10.2.
Even with that assumption, however,
Plaintiffs have failed to show that Plano breached the warranty
in Clause 10.2.
Under Clause 10.2 of the World Bill of Lading, the Merchant
warrants that the stowage and seals of the containers are “safe
and proper and suitable for handling and carriage . . . ”
Ex. 79.
“safe
The Bill of Lading does not define what constitutes
and
proper”
or
“suitable
for
handling.”
However,
Plaintiffs and their expert Dr. Vecchio argued that the Molds
- 28 -
were not secured in the container properly based on two main
failures – the failure to distribute the Mold’s weight properly,
and the failure to lash the Molds.
As stated previously, the
Court found that Plaintiff failed to carry their burden of
proving these alleged failures, and that it was more likely than
not that the Molds were stowed and secured properly based on the
evidence presented.
As such, Plaintiffs have failed to prove
that Plano breached the warranty in Clause 10.2 that the Molds
were stowed in the Container in a safe and proper manner that was
suitable for handling.
Furthermore, the Court has concluded that the derailment was
not due to improper weight distribution and lack of lashing, as
proposed by Dr. Vecchio, but because the floor of the Container
was weakened due to poor welds between the cross-members and the
side of the Container.
Thus, it was not the alleged breach of
the warranty that caused the derailment, but the poor condition
of the Container.
Put simply, in the battle of the experts, the
Court found Plano’s experts, their theory of failure, and the
evidence upon which they relied more convincing and credible than
that of Plaintiffs’ expert, Dr. Vecchio.
For these reasons, the Court finds that Plaintiffs failed to
establish that Plano breached any warranty. The Court thus finds
in favor of Plano.
- 29 -
c.
Plano Owes Plaintiffs No Damages for the Derailment
As the Court has concluded that Plano did not breach the
World Bill of Lading, the Court also holds that Plano does not
owe Plaintiffs any damages stemming from the derailment.
IV.
CONCLUSION
For the reasons stated herein, and in open court, the Court
rules as follows:
1.
denies the parties Motions in Limine (ECF Nos. 180,
183, 186);
2.
finds
that
Plaintiffs
failed
to
prove
that
Plano
breached the World Bill of Lading; and
3.
enters judgment in favor of Plano.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
DATE: 12/30/2013
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