United States Of America v. Egan Marine, Inc et al

Filing 290

MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 8/9/2011:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA,
Plaintiff,
v.
EGAN MARINE CORPORATION, in
personam, MOTOR VESSEL LISA E,
in rem, TANK BARGE EMC-423, in
rem,
Defendants.

Case No. 08 C 3160

EGAN MARINE CORPORATION,

Hon. Harry D. Leinenweber

Defendant/ThirdParty Plaintiff,
v.
EXXON MOBIL CORPORATION and
EXXONMOBIL OIL CORPORATION,
Third-Party Defendants.

MEMORANDUM OPINION AND ORDER
Before
dispositive:

the

Court

are

four

motions,

two

of

which

are

(1) Defendant/Third Party Plaintiff Egan Marine

Corporation’s (hereinafter, “EMC”) Motion to Dismiss; (2) EMC’s
Motion to Strike Plaintiff United States of America’s (hereinafter,
the “Government”) Expert Witnesses; (3) Third-Party Defendants

Exxon

Mobil

Corporation

and

ExxonMobil

Oil

Corporation’s

(hereinafter, “Exxon”) Motion for Summary Judgment; and (4) EMC’s
Motion to Strike Portions of Exxon’s Statement of Material Facts.
I.

BACKGROUND

In 1996, Exxon and Clark Oil Trading Company (“Clark Oil”)
entered into a contact under which Exxon sold Clarified Slurry Oil
(“CSO”) to Clark Oil.

EMC, which is based in Lemont, Illinois,

transported CSO from Exxon’s refinery in Joliet, Illinois, to Clark
Oil.

On January 18, 2005, EMC’s tanker barge EMC-423 arrived at

the Joliet refinery to accept a load of CSO for delivery to Clark
Oil.

Although Exxon intended to load the EMC-423 with CSO from

Storage Tank 516, the cold winter weather caused the valve on this
tank to malfunction.

This forced Exxon to transfer the CSO from

Tank 516 to Tank 515.
whether

the

transfer.

A dispute exists between Exxon and EMC

characteristics

of

the

CSO

changed

during

this

EMC argues that the CSO loaded onto the EMC-423 became

contaminated with more than 10,000 gallons of gasoline, while Exxon
contends that the cargo fell within the variances allowed in the
CSO refining process.

Under the Exxon–Clark Oil contract, SGS, an

independent inspector, tested the quality and quantity of the CSO
loaded onto the EMC-423.

- 2 -

After Exxon finished loading approximately 14,000 barrels of
CSO on board the EMC-423 from Tank 515, it released the barge from
its dock at 6:15 a.m. on January 19, 2005.

Later that day, as the

barge moved up the Chicago Sanitary Ship Canal propelled by the
Lisa E motor vessel, its cargo of CSO exploded, which caused the
barge to sink.

Alexander Oliva (“Oliva”), a crew member on the

Lisa E working on the EMC-423, died in the explosion.

Thousands of

gallons of CSO spilled into the canal in Chicago near the Cicero
Avenue bridge, and the accident temporarily closed and impeded the
canal. The Government alleges that Oliva improperly used a propane
rosebud torch to thaw a broken pump on the EMC-423.

The use of

this torch, along with an allegedly improperly opened ball valve on
barge’s standpipe, caused vapors emanating from the CSO to ignite
and explode.
explosion.

EMC denies that the use of a rosebud torch caused the
Rather, it contends that the contaminated CSO Exxon

loaded onto the barge caused the explosion.
The Government filed a five-count Complaint on June 2, 2008,
followed by an Amended Complaint on July 24, 2008, in which it
claims that EMC is the party responsible for the explosion and
subsequent spill.

Counts 1–3, brought under the Oil Pollution Act

(the “OPA”), 33 U.S.C. § 2701, et seq., seek damages of more than
$1.5 million for the costs to clean up the spill, disbursements for
- 3 -

claims of third parties, and additional civil damages of up to
$25,000 for each day of the spill cleanup.

Count 4 seeks damages

under the Rivers and Harbors Act, 33 U.S.C. §§ 403, 407, and
Count 5 claims a violation of general maritime law.
The Government filed an indictment against EMC and the captain
and pilot of the Lisa E and EMC-423, Dennis Michael Egan, in a
parallel criminal prosecution on January 13, 2010.
case is before Judge James B. Zagel.
filed

a

three-count

Third

Party

The criminal

On September 10, 2008, EMC

Complaint

against

Exxon

for

contribution, indemnity, and a maritime claim pursuant to Federal
Rule of Civil Procedure 14(c), claiming that Exxon’s negligence in
loading contaminated CSO on the EMC-423 was the sole or partial
cause of the explosion and spill.

Upon the Government’s request,

the Court dismissed Count 5 of the Amended Complaint on March 30,
2009.
Now, EMC claims that the Government has deliberately violated
discovery rules during this litigation in such a manner that
deprives it of a fair trial, and moves to dismiss the remaining
counts in the Amended Complaint pursuant to Federal Rule of Civil
Procedure

37(b)(2).

EMC

also

moves

to

strike

three

of

the

Government’s experts because it alleges that in preparing their
expert reports they improperly relied on the United States Coast
- 4 -

Guard’s Marine Casualty Incident Report (the “MCIR”) for the
explosion on the EMC-423 and subsequent oil spill.

In addition,

Exxon moves for summary judgment on all counts of EMC’s Third Party
Complaint.

In defending itself against Exxon’s Motion, EMC moves

to strike numerous paragraphs in Exxon’s Rule 56.1 Statement of
Material Facts. The parties have fully briefed all these motions.
II.
A.

ANALYSIS

EMC’s Motion to Dismiss

EMC moves to dismiss the Amended Complaint based on the
Government’s alleged discovery misconduct.

Among the allegations

that EMC makes, it claims that the Government (1) seized documents
that EMC prepared for its defense in this case when it executed a
search warrant on EMC’s Lemont offices, and has failed to return
important documents to EMC; (2) altered key physical evidence
without EMC’s knowledge and failed to provide adequate custody logs
for physical evidence; (3) instructed two of its witnesses not to
answer numerous questions at their depositions; (4) failed to turn
over newly found discovery in a timely manner; (5) failed to turn
over all discoverable documents that it had in its possession,
which EMC learned about at depositions; (6) failed to disclose the
extent of its contacts with Exxon; and (7) failed to disclose
documents it had obtained and produced in the related criminal
- 5 -

prosecution.

EMC

argues

that

the

cumulative

effect

of

the

Government’s violations warrants the extreme sanction of dismissal
with prejudice of the Amended Complaint.
1.

Legal Standard

Under Federal Rule of Civil Procedure 37(b)(2), the Court may
sanction a party for failing “to obey an order to provide or permit
discovery.”

FED. R. CIV. P. 37(b)(2)(A).

While the Court possesses

the inherent authority to sua sponte sanction a party, some form of
court order — be it a written or an oral directive — is generally
required for the Court to invoke Rule 37(b)(2).

See, e.g., Halas

v. Consumer Servs., Inc., 16 F.3d 161, 164 (7th Cir. 1994).
Dismissal pursuant to Rule 37(b)(2) is harsh, and should be used on
a limited basis. See Ladien v. Astrachan, 128 F.3d 1051, 1057 (7th
Cir. 1997).

Such dismissal is proper “where the offending party

has displayed willfulness, bad faith, or fault, and it is a
proportionate and otherwise appropriate sanction.”

Shaw-Reed v.

Children’s Outing Ass’n, No. 98-2202, 1999 WL 38588, at *2 (7th
Cir. Jan. 27, 1999).
2.

Merits of EMC’s Motion

While EMC alleges a litany of discovery violations by the
Government, not one of these allegations stem from the Government’s
failure

to

obey

a

court

order.
- 6 -

Fact

discovery

closed

on

November 26, 2010.

ECF No. 138, Feb. 22, 2010.

this Motion to Dismiss until December 15, 2010.

EMC did not file
It appears that

EMC knew about many of the alleged discovery violations before
discovery closed.

For example, the first alleged infraction

occurred on April 10, 2009, when federal agents from the United
States Coast Guard and the Environmental Protection Agency executed
a

search

warrant

proceedings.

at

EMC’s

offices

as

part

of

the

criminal

EMC alleges that the agents seized material that

related to its trial preparation in this case.

Despite having

concerns about this seizure, EMC never filed a motion to compel.
Likewise,

EMC

cites

abuses

by

the

Government

during

depositions of Government witnesses. EMC points to the depositions
of Robert Reggio (“Reggio”) and Eric Hann (“Hann”), which took
place in September 2010, as examples of the Government’s attorney
improperly instructing its witnesses not to answer questions.

It

appears, however, that at the Reggio and Hann depositions EMC’s
counsel did not object to the Government attorney’s instructions to
the witnesses.

Further, EMC did not file a motion to compel

answers to the questions objected to during these depositions. EMC
also argues

that

it learned

of missing

documents

during

the

depositions of Reggio, Hann, and other Government witnesses.
Again, it never filed a motion to compel production of these
- 7 -

documents — some of which the Government appears to have produced.
Regardless, EMC does not establish the necessary bad faith or
willfulness, or that it was severely prejudiced, for these alleged
discovery abuses to warrant dismissal.
The Court need not address separately every discovery abuse
EMC alleges.

While EMC argues that the Government engaged in

deliberate obstruction, its failure to raise this issue during
discovery

dooms

its

motion.

EMC

cannot

stockpile

alleged

improprieties until after discovery closes and then aggregate them
for a dismissal motion.

Again, dismissal under Rule 37(b)(2) is a

harsh sanction that the Court should use sparingly.
128 F.3d at 1057.

See Ladien,

Contrary to EMC’s argument, Magistrate Judge

Susan E. Cox did not rule that this is not a discovery dispute.
She simply stated that this motion may be dispositive.
No. 205, Dec. 22, 2010.

ECF

EMC’s motion does, in fact, raise a

discovery dispute. The Court can reopen discovery, but EMC has not
moved for this.

Between the timing of this Motion after the close

of discovery, and the fact that the allegations do not create the
requisite level of prejudice to warrant dismissal, the Court denies
EMC’s Motion to Dismiss.
The Court notes that EMC may address some of the concerns it
has regarding the Government’s evidence prior to trial through
- 8 -

motions in limine.

At this point, however, the Court is not

prepared to rule on the admissibility of evidence, or if the
Government’s alleged alteration of the standpipe by cleaning it
warrants sanctions at trial, without complete arguments from the
parties addressing these issues.
B.

EMC’s Motion to Strike Government’s Expert Witnesses

EMC moves to strike Government experts Capt. Brian Hall
(“Hall”),

Dr.

John

DeHaan

(“DeHaan”),

and

Peter

Wakefield

(“Wakefield”), alleging that these witnesses improperly included
information from and relied on the EMC-423 accident MCIR to prepare
their expert

reports.

After

the

accident,

the

Coast

Guard,

pursuant to 46 U.S.C. § 6301, assigned Commander Mark Hamilton to
conduct an investigation into the incident. Commander Hamilton
submitted the MCIR to the Coast Guard on March 24, 2008, and it
became public on April 6, 2010.

The MCIR is inadmissible as

evidence in this case:
Notwithstanding any other provision of law, no part
of a report of a marine casualty investigation conducted
under section 6301 of this title, including findings of
fact, opinions, recommendations, deliberations, or
conclusions, shall be admissible as evidence or subject
to discovery in any civil or administrative proceedings,
other than an administrative proceeding initiated by the
United States.

- 9 -

46 U.S.C. § 6308(a).

The broad exclusion provided by § 6308 is not

at odds with Federal Rule of Evidence 703, which allows an expert
to use inadmissible facts or data to form the basis of his opinion,
due to the “notwithstanding any other provision of law” clause.
See Ward Hornblower Proescher, Limitation Proceedings, M/V Jack
London Commodore, 1999 AMC 1612, 1615 (N.D. Cal. 1999).
Hall, DeHaan, and Wakefield each list the MCIR as a source
used to formulate their opinion, and DeHaan also considered the
Hall and Wakefield reports to prepare his report.

Therefore, EMC

argues, each of these witnesses has been so tainted by the MCIR
that the Court should strike them from the Government’s expert
disclosures and prohibit each from testifying.

See id. (“The

[MCIR] is inadmissible as evidence for any purpose whatsoever
pursuant to 46 U.S.C. § 6308. . . . [T]he parties’ expert witnesses
cannot use the [MCIR] as the basis for any of their opinions.”);
see also Eckstein Marine Serv., Inc. v. Crescent Marine Towing,
Inc., No. 98-1467, 1999 U.S. Dist. LEXIS 1019, at *2 (E.D. La.
Feb. 2, 1999).

However, an expert report that simply cites or

references an MCIR is not necessarily inadmissible, nor is the
expert automatically barred from testifying.

See Baker Hughes

Oilfield Operations, Inc. v. Seabulk Tankers, Inc., No. 03-1230,
2004 U.S. Dist. LEXIS 6900, at *4 (E.D. La. Apr. 19, 2004).
- 10 -

A

conclusion that does not rely on and is not substantially based on
the MCIR is admissible, as long as any references to the MCIR are
stricken. See id.
1.

Hall’s Expert Report

Hall’s report addresses the cause of the explosion on the EMC423.

He lists the MCIR as one of 28 sources he analyzed to develop

his report.

EMC argues that no other evidence other than the MCIR

supports two presumptions in Hall’s report.

The first presumption

is that a crew member used a propane torch on the EMC-423 to heat
a cargo pump.

The information about a rosebud torch connected to

a propane tank being on the EMC-423 exists, however, in the
deposition that Hall reviewed of Jason Hainline (“Hainline”),
Process Technician at Exxon’s Joliet refinery in January 2005. See
Hainline Dep., 93:8–97:22, Oct. 20, 2010.

United States Special

Agent John Gamboa (“Gamboa”) corroborates this testimony in his
deposition.
Second,

See Gamboa Dep., 170:24–171:20, Oct. 6, 2010.
EMC

argues

that

Hall

based

his

opinion

on

the

presumption in the MCIR that the EMC-423’s heating system did not
work.

This allegedly forced Oliva to use a propane torch to heat

the CSO in the barge’s pump, as the CSO can solidify in cold
weather.

The Government has not produced any evidence that the

heating system did not work in any other source that Hall analyzed.
- 11 -

It can be implied in Gamboa’s deposition, however, when he states
that

using

a

rosebud

torch

on

the

pump

“was

a

common

occurrence . . . because it would freeze up in inclement weather.”
Id. at 171:18–20.

Presumably, if the heating system worked, using

the torch would have been unnecessary.

Hall, however, states as a

fact that the heating system did not work, which based on a review
of the sources he reviewed exists only in the MCIR.

Hall,

therefore, cannot state as a fact that the system did not work.
Therefore, the Court strikes the two references in his report that
the heating system was inoperable at the time of the accident.
This presumption, however, is not material to Hall’s opinion.
Whether the system worked or not, Hall can use as a foundation for
his opinion that Oliva used a rosebud torch on the pump.

The

inoperable heating system is only a potential reason why Oliva
would use the torch.

While Hall can speculate as to why Oliva used

a rosebud torch on the pump, he cannot couch this speculation as
fact. Accordingly, the rest of Hall’s opinion does not rely on the
MCIR, and is admissible.
2.

DeHaan’s Expert Opinion

DeHaan works as a forensic scientist/criminalist.
addresses the cause of the explosion on the EMC-423.

His report
He lists 20

resources he reviewed to prepare his report, including the MCIR and
- 12 -

Hall and Wakefield’s reports. Again, EMC argues that DeHaan relied
on the MCIR for the evidence to form his opinion.

Conveniently, in

the analysis section of his report, DeHaan cites the resources he
used to form each section of his opinion.

Only two sections of

this analysis rely solely on the MCIR: the second full paragraph on
page 5, and the third full paragraph on page 6, which specifically
discusses Capt. Hamilton’s findings in the MCIR.
§ 6308(a), the Court strikes these paragraphs.
other

references

to

this

report

are

Pursuant to

In addition, all

stricken,

including

the

photographs and overhead views and reconstructions from the MCIR.
Contrary to EMC’s argument, however, DeHaan does not rely on
evidence in the MCIR to formulate the central findings of his
report.

Rather, the MCIR contains evidence mostly cumulative of

other documents that DeHaan uses to reconstruct the events that
unfolded on the EMC-423.

Further, DeHaan’s opinion as it relates

to the contents of the cargo on the EMC-423 does not rely on the
MCIR.

As such, except for the sections cited above, DeHaan’s

opinion is admissible.

Further, all other references to the MCIR

are stricken from his report.
3.

Wakefield’s Expert Opinion

Wakefield starts his report by writing, “After review of the
[MCIR], [i]t is clear that Alexander Oliva (Deckhand) caused the
- 13 -

explosion and fire than resulting in the sinking of Tank Barge EMC
423. . . .”

Obviously, this section, as well as any other sections

of Wakefield’s report that address the cause of the explosion —
including that the ship’s onboard heating system was inoperable —
are inadmissible under § 6308(a).

In addition, the Court strikes

the photos in the report culled from the MCIR.
Wakefield’s report, however, does not principally address the
cause of the accident.

Rather, it addresses the rosebud torch

allegedly used by Oliva to heat the pump.

It provides a general

background on propane torches, addressing how they work, where they
are sold, and in what circumstances people use them. Wakefield did
not acquire this information from the MCIR.
opening

paragraph,

admissible.

Wakefield’s

report

As such, despite its
about

the

torch

is

However, all references in the report as to the cause

of the accident, how it could have been prevented, and photos from
the MCIR are stricken.
In

sum,

EMC’s

Motion

to

Strike

the

Government’s

Expert

Witnesses is granted in part and denied in part.
C.

Exxon’s Motion for Summary Judgment

EMC’s Third Party Complaint raises three counts against Exxon:
(1) indemnity; (2) contribution; and (3) liability under Federal
Rule of Civil Procedure 14(c).
- 14 -

Exxon has moved for summary

judgment on all counts of this Complaint.
Motion to

Strike

portions of

Exxon’s

Resolution of EMC’s

Rule

56.1

statement

of

material facts, as well as determining what law applies to this
case, is necessary before addressing the merits of Exxon’s motion.
1.

EMC’s Motion to Strike Portions of
Exxon’s Statement of Facts

This district requires a party that moves for summary judgment
to file a statement of material facts that it contends entitle it
to judgment as a matter of law.

N.D. Ill. R. 56.1(a)(3).

Exxon

has filed this statement, and EMC moves to strike certain facts in
it.

The Court will address each separately.
a.
EMC

alleges

conclusions,

Paragraphs 36, 65, and 66

that

which

these

should

be

paragraphs

state

stricken.

See

improper
Judson

legal

Atkinson

Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 382 n.2
(7th Cir. 2008).

The Court has the discretion to require strict

compliance with Local Rule 56.1. See id.

EMC argues that the

statement that the CSO was “properly monitored” in Paragraphs 36
and 66 states a legal conclusion.

However, an affidavit from

Clifton Gilbert Henne (“Henne”), the Optimization Supervisor at
Exxon’s Joliet refinery at the time of the accident, supports this
statement.

Henne’s statement that the cargo loaded onto the EMC-

- 15 -

423 before the accident was properly monitored refers to Exxon’s
practices at the refinery.

Whether Exxon’s monitoring of the CSO

eliminates its liability to EMC constitutes a legal conclusion.
Paragraphs 36 and 66 do not make this conclusion, and thus do not
violate Rule 56.1.
EMC also objects to the statement in Paragraph 65 that the CSO
loaded

onto

the

transportation.”

EMC-423

was

“fit

and

appropriate

for

The Court agrees that this statement is a legal

conclusion, despite its support from Henne’s affidavit.

Coast

Guard regulations determine if a cargo is fit for transportation.
Compliance with these regulations is a question of law.
Court strikes this part of Paragraph 65.

Thus, the

The Court, however,

considers the rest of this paragraph in ruling on summary judgment.
b.

Paragraph 68

EMC argues that this paragraph is inadmissible pursuant to 46
U.S.C. § 6308(a), as it states facts found in the MCIR.

Exxon

argues that this statement is culled from the depositions of
Lieutenant Commander Michael Reed (“Reed”) and Commander Hamilton
(“Hamilton”).

Hamilton, however, prepared the MCIR, and Reed

worked on the investigation.

Using their deposition testimony as

a means to insert the findings of the MCIR as a material fact on
summary judgment violates § 6308(a), as this testimony relies on
- 16 -

the MCIR.

See Baker Hughes, 2004 U.S. Dist. LEXIS 6900, at *4.

Therefore, the Court strikes Paragraph 68.
c.

Paragraphs 9–11, 38, 39, 41, 42, 44, 45, 47, 49–51

The next statements EMC seeks to strike addresses the testing
by independent contractor SGS (“SGS”) on the CSO loaded onto the
EMC-423.
Exxon

and

SGS conducted these tests under the contract between
Clark

Oil.

EMC

claims

that

these

statements

are

irrelevant to Exxon’s motion. See Harney v. Speedway SuperAmerica,
LLC, 526 F.3d 1099, 1104 (7th Cir. 2008).
however, is relevant.
Donald

Flessner

The testing of the CSO,

EMC has tendered an expert report from

(“Flessner”)

of

Baker

&

O’Brien

Inc.,

which

concludes that light hydrocarbons contaminated the CSO loaded onto
the

EMC-423.

SGS

performed

the

testing

set

forth

in

these

contested paragraphs on samples of the CSO taken before Exxon
loaded it onto the barge and after the CSO was unloaded.

The fact

that SGS performed the actual testing on these samples after the
explosion on the EMC-423 does not eliminate the relevancy of these
tests.
Exxon has provided an affidavit from Stan Houser (“Houser”),
Branch Manager for SGS, which details the procedures used to test
the CSO loaded onto the barge.

EMC can and does contest the

accuracy of these tests; however, the Court cannot make a factual
- 17 -

determination as to the accuracy of these tests.

As such, these

tests are relevant, as they directly relate to the breaches of duty
that EMC alleges warrants it receiving contribution and indemnity
from

Exxon.

Accordingly,

the

Court

does

not

strike

these

paragraphs.
d.

Paragraphs 53–63

EMC claims that the testing that STAT Analysis Corporation
(“STAT”) performed after the accident on product and air samples
from Storage Tanks 515 and 516 at Exxon’s Joliet refinery, as well
as on product and air samples from the storage tanks on the EMC423, is irrelevant. This testing revealed that the material in the
tanks and on the barge was “essentially the same.”

These facts

have relevance because EMC primarily argues that Exxon loaded a
contaminated cargo onto the EMC-423. This testing relates directly
to

EMC’s

claim

that

Exxon

negligently

violated

Coast

Guard

regulations by loading a cargo onto the EMC-423 that the barge’s
certification did not allow.

Further, as explained below in the

analysis of Exxon’s summary judgment motion, the tests by STAT are
relevant to whether Exxon breached its duty to warn EMC of the
nature of its cargo.

As such, the Court does not strike these

paragraphs.
e.

Paragraphs 15–27
- 18 -

These paragraphs relate to the Material Safety Data Sheets
(the “MSDS”) that Exxon created for the CSO it produced at its
Joliet refinery.

Exxon had provided the last version of the MSDS

it produced before the accident (in 1999) to EMC.

EMC argues,

however, that because gasoline allegedly contaminated the CSO
loaded onto the EMC-423, the MSDS does not address the actual cargo
on the barge.

As explained in more detail below, the 1999 MSDS is

material as to whether Exxon breached its duty to warn.

EMC also

argues

make

that

unreliable.

contradictory

statements

in

the

MSDS

it

The Court, however, cannot determine if seemingly

contradictory statements in the MSDS make it irrelevant; this would
be an improper weighing of the evidence. Therefore, the Court does
not strike these paragraphs.
f.

Paragraphs 14, 35

Despite taking different positions on these paragraphs, EMC
and Exxon appear to agree that the facts stated in them ultimately
present irrelevant issues to the disposition of Exxon’s motion.
Paragraph 14 relates to whether Exxon “weathers” the CSO at its
Joliet refinery, and Paragraph 35 relates to why Exxon loads from
a static tank.

The fact that EMC does not raise these issues in

its cursory Third Party Complaint does not make them irrelevant.
Exxon claims that EMC presented these issues as potential theories
- 19 -

of liability during discovery.

While these concepts do not appear

in EMC’s brief or statement of facts in defending against summary
judgment, the fact it raised them during discovery warrants their
inclusion in Exxon’s statement of facts.

Nevertheless, while the

Court denies EMC’s motion to strike on these, the Court does not
consider these facts in ruling on summary judgment.
g.

Paragraphs 69, 70

These paragraphs relate to the fact that Clark Oil accepted
the

salvaged

CSO

from

the

explosion on the ship.

EMC-423

several

months

after

the

The Court does not agree with EMC’s

argument that these statements are irrelevant.

Exhibit R of

Exxon’s Statement of Facts does not detail the specific findings of
Clark Oil’s tests of the CSO salvaged from the barge. A reasonable
presumption, however, would be that because the CSO satisfied the
sales contract between Exxon and Clark Oil, Exxon did not load a
product onto the EMC-423 that was contaminated beyond the variances
allowed in producing CSO.

This relates to EMC’s claims that Exxon

violated Coast Guard regulations, the implied warranty of safe
cargo, and the duty to warn.

Accordingly, the Court denies EMC’s

motion for these paragraphs.
h.

Paragraph 67

- 20 -

Paragraph 67 contains a fact culled from the deposition of
Irvin Holm (“Holm”), the Console Shift Supervisor at Exxon’s Joliet
refinery in January 2005.

Through Holm’s deposition, Exxon has

laid a proper foundation for this statement.

The Court does not

strike it.
In sum, EMC’s Motion to Strike is granted in part and denied
in part.

Paragraph 68 and part of Paragraph 65 are stricken.

The

rest of Exxon’s Statement of Facts remains intact.
2.

Law Applicable to EMC’s Claim

In its Third Party Complaint, EMC states that this Court has
diversity and federal question jurisdiction over this case.

EMC

does not directly state that this Court has maritime jurisdiction
pursuant to 28 U.S.C. § 1333(1), by which the Court would apply
substantive

maritime

law.

See

East

River

S.S.

Transamerica Delaval, Inc., 476 U.S. 858, 864 (1986).

Corp.

v.

It does,

however, raise a maritime claim under Rule 14(c) in Count 3 of the
Third Party Complaint.
the

Third

jurisdiction.

Party

While not a model in precision pleading,

Complaint

sufficiently

alleges

maritime

Such jurisdiction arises when a tort occurs on the

navigable waters of the United States, Victory Carriers, Inc. v.
Law, 404 U.S. 202, 205 (1971), and the tort bears “a significant
relationship

to

traditional

maritime
- 21 -

activity.”

Exec.

Jet

Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 268
(1972).
Presumably because EMC did not plead that this case emerges
under maritime jurisdiction, Exxon’s memorandum in support of its
summary judgment motion addresses federal common law, the OPA, and
Illinois state law.

After EMC argued that this case involves

maritime law in its response brief, Exxon argued that while EMC has
turned its Third Party Complaint into a “moving target,” summary
judgment is still warranted under maritime law. This case involves
the loading of CSO onto the EMC-423 tank barge, and the subsequent
destruction of the ship and the spilling of the CSO into the
Chicago Sanitary Ship Canal when the cargo exploded.

The Canal

qualifies as part of the navigable waters of the United States.

As

such, the Court finds that maritime law, in addition to the OPA,
applies to this case.

See Hammes v. AAMCO Transmissions, Inc., 33

F.3d 774, 778 (7th Cir. 1994)(“[T]he court “has an independent duty
to satisfy itself that it has subject-matter jurisdiction.”).
Because it based its arguments in its reply brief on the
application of maritime law to this case, Exxon has sufficiently
addressed the merits of EMC’s maritime claims.

Also, it should be

noted that EMC did not address Exxon’s argument that it did not
violate Illinois products liability laws.
- 22 -

“A party’s failure to

address an argument in a summary judgment response is deemed a
waiver.” DeLaney v. Chertoff, No. 07-C-5785, 2008 U.S. Dist. LEXIS
88192, at *8 (N.D. Ill. Oct. 30, 2008).

As such, because EMC has

not developed an argument as to why Exxon is liable under Illinois
products

liability

law,

it

has

waived

this

as

a

basis

for

contribution under 33 U.S.C. § 2709.
3.

Legal Standard for Summary Judgment

Summary judgment is proper if “the movant shows that there is
no genuine issue as to any material fact and the movant is entitled
to judgment as a matter of law.”

FED . R. CIV . P. 56(a).

A fact is

material if it could affect the outcome of the suit, and a dispute
is genuine where the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.

See Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986).

In ruling on summary

judgment, the Court does not weigh the evidence or determine the
truth of the matter, but determines whether a genuine issue of
material fact exists that warrants trial. See id. at 249.

In

making this determination, the Court must view all the evidence and
draw

any

reasonable

inferences

therefrom

favorable to the nonmoving party.

the

light

most

See Miller v. Am. Family Mut.

Ins. Co., 203 F.3d 997, 1003 (7th Cir. 2000).

- 23 -

in

The moving party bears the burden of establishing the basis
for its motion, together with evidence demonstrating the absence of
any genuine issue of material fact.
477 U.S. 317, 323 (1986).

See Celotex Corp. v. Catrett,

Once the moving party has met this

burden, the nonmoving party may not rest on mere allegations, but
must present specific facts showing that a genuine issue exists for
trial.

See Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d

160, 163 (7th Cir. 1984).

To support their position that a genuine

issue of material fact does or does not exist, the parties may cite
to materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations,
stipulations, admissions, and interrogatory answers, or show that
the materials in the record do or do not establish a genuine
dispute.

FED. R. CIV. P. 56(c).
4.

Merits of Exxon’s Motion
a.

Contribution

EMC argues that because genuine issues of material fact exist
that Exxon’s negligence was the sole or partial cause of the
explosion on the EMC-423 that led to the oil spill, summary
judgment is improper.
joint

tortfeasors

A general right of contribution between

exists

under

apportioned according to fault.

maritime

law,

with

liability

See Hunley v. Ace Maritime Corp.,

- 24 -

927 F.2d 493, 496 (9th Cir. 1991).

Further, under the OPA, a party

“may bring a civil action for contribution against any other person
who is liable or potentially liable under this Act or another law.”
33 U.S.C. § 2709.

A third party is treated as the responsible

party under the OPA if the oil spill damages were caused “solely by
an act or omission” by the third party. Id. at § 2702(d)(1)(A).

In

regard to the “other law” provision of the OPA, maritime law
applies to this case.

As such, EMC raises three duties that Exxon

allegedly breached which make it liable for damages accruing from
the accident:

(1) it violated Coast Guard regulations; (2) it

breached the implied warranty of safe cargo; and (3) it breached
the duty to warn.
I.

Coast Guard Regulation Violation

The EMC-423 barge is subject to inspection by the Coast Guard
to certify that it can handle cargo of flammable or combustible
liquids classified as Grade A, B, C, D, or E. 46 C.F.R. § 31.05-1.
A

flammable

liquid

has

a

flashpoint

at

or

below

80

degrees

Fahrenheit. Id. at § 30.10-22. Flammable liquids are classified as
Grade A, B, or C depending on their Reid vapor pressure. Id.
Grade D and E cargoes are combustible, with Grade D having a
flashpoint above 80 degrees Fahrenheit and below 150 degrees

- 25 -

Fahrenheit, and Grade E having a flashpoint of 150 degrees or
above. Id. at § 30.10-15.
The EMC-423 was certified to carry Grade B cargo.

EMC

Statement of Additional Facts Ex. D at 2 (Temporary Certificate of
Inspection).

EMC argues, however, that because the EMC-423 was

equipped with a thermal fluid heater, it could carry only Grade E
cargo.

The Coast Guard certificate of inspection does not reflect

this change in certification.

No evidence exists in the record

that the EMC-423 could not carry Grade B, C, or D cargo as long as
the

heater

was

not

in

operation.

95:12–96:25, Oct. 22, 2010.

See,

e.g.,

Carie

Dep.,

Further, no evidence exists that the

heater on board the barge operated when Exxon loaded CSO onto the
EMC-423, or when the barge carried the CSO.

In addition, no

evidence exists that EMC informed Exxon that it equipped the barge
with a heater that affected its ability to haul anything other than
Grade E cargo. More significantly, no evidence exists that the CSO
loaded

onto

Fahrenheit.

the

EMC-423

had

a

flashpoint

below

150

degrees

As such, as a matter of law Exxon loaded a Grade E

cargo of CSO onto the barge prior to the accident. 46 C.F.R.
§ 30.10-15.
EMC’s expert report by Flessner states that light hydrocarbons
contaminated

the

CSO

that

Exxon
- 26 -

loaded

onto

the

EMC-423.

Flessner’s report, however, does not indicate that the CSO had a
flashpoint below 150 degrees Fahrenheit.

In his deposition,

Flessner stated that all of the testing done prior to and after the
explosion on the EMC-423 showed that the CSO at the Joliet refinery
and loaded onto the EMC-423 had a flashpoint above 150 degrees.
Flessner

Dep.

254:21–257:7,

Apr.

28,

2011.

Accordingly,

no

evidence exists that Exxon violated Coast Guard regulations in
loading the CSO onto the EMC-423.

This does not provide EMC a

ground for contribution.
ii.

Implied Warranty of Safe Cargo

EMC alleges that Exxon breached the implied warranty that the
CSO was “fit for carriage in the ordinary way and . . . not
dangerous.”

Westchester Fire Ins. Co. v. Buffalo Housewrecking &

Salvage Co., 40 F.Supp. 378, 381 (W.D.N.Y. 1941)(internal citation
omitted).

“This rule however, does not apply where the shipowner

knows, or ought to know, the dangerous character of the goods.”
Id. at 381–82.

As stated above, no evidence exists that the cargo

in the EMC-423 was anything other than a Grade E combustible
liquid.

As a carrier of combustible petroleum products, EMC had a

duty to know about the dangerous nature of its cargo.

No evidence

exists that the CSO had dangerous properties that would have caused
EMC to treat the cargo differently than it would in its usual and
- 27 -

ordinary course of business.

As such, no evidence exists that

Exxon breached the implied warranty of safe cargo.
iii.
Under

maritime

law,

“a

Duty to Warn
shipper

has

a

duty

to

warn

the

stevedore and the ship owner of the foreseeable hazards inherent in
the cargo of which the stevedore and the ship’s master could not
reasonably have been expected to be aware.”

Ente Nazionale Per

L’Energia Electtrica v. Baliwag Nav., Inc., 774 F.2d 648, 655 (4th
Cir. 1985).

Similar to the implied warranty of safe cargo, the

duty to warn does not apply in a case in which the shipowner knows
or should have known of the hazards associated with the cargo.
id.

See

The elements of a duty to warn cause of action are the common

elements of a negligence claim:

duty, breach, causation, and

damages. See In re M/V DG Harmony, 533 F.3d 83, 94 (2d Cir. 2008).
In this case, a genuine issue of material fact exists on the
breach element.

Exxon gave EMC a Material Safety Data Sheet

(“MSDS”) that indicated that the CSO it provided to EMC had a
flashpoint above 141 degrees Fahrenheit.

EMC argues that changes

to the CSO processing at Exxon’s Joliet refinery created a product
that did not comply with the MSDS, which made the MSDS obsolete.
The Flessner expert report supports this argument.

While Exxon

disputes Flessner’s findings and offers extensive evidence that the
- 28 -

CSO was not contaminated, the Court cannot weigh competing facts on
summary judgment.

See Kodish v. Oakbrook Terrace Fire Protection

Dist., 604 F.3d 490, 505 (7th Cir. 2010).

The weight of evidence

that Exxon has tendered does not eliminate the issue of material
fact created by Flessner’s report.
EMC’s duty to warn claim, however, runs into a roadblock at
the causation element.

In maritime law, proximate cause is “that

cause which in a direct, unbroken sequence produces the injury
complained
happened.”

of

and

without

which

such

injury

would

not

have

Ente Nazionale, 774 F.2d at 655 (internal quotation

omitted). EMC must show that the allegedly contaminated CSO caused
the harm, and that, if Exxon had warned it of the change in the
properties of the CSO, it would have changed the conditions under
which it would have carried the product.

See In re M/V DG Harmony,

533 F.3d at 96.
EMC admits that it received the MSDS from Exxon, which warned
that the CSO can create a flammable atmosphere in the storage tank
headspace with a flashpoint less than that of the CSO.

The MSDS

also advised EMC to store the CSO in a cool area, not to place any
ignition sources in the area surrounding the filling and venting
operations of the barge, and to avoid sparking conditions.

EMC

argues that the MSDS was “generic” because it did not address the
- 29 -

alleged light hydrocarbon contamination.

The MSDS, however, did

warn EMC of the potential dangers of the product.

This gave EMC

sufficient warnings about the dangers of the cargo.

See, e.g.,

Martinez v. Dixie Carriers, Inc., 529 F.2d 457, 464 (5th Cir. 1976)
(“[I]n an action for negligent failure to warn, there is no right
to recovery where the party to be warned is already aware of the
danger.”).

Further, no evidence exists that the alleged danger

presented by the contamination caused the explosion and resulting
spill.

See In re M/V DG Harmony, 533 F.3d at 96.

From the facts

before the Court, Exxon’s failure to warn EMC about the alleged
contamination was not a contributing cause of the accident.

The

Coast Guard certified the EMC-423 to carry a Grade B cargo.

No

facts in the record show that the crew of the EMC-423 would have
treated the cargo loaded on it in January 2005 any differently had
it known of the alleged contamination.

See Ente Nazionale, 774

F.2d at 656–57.
To accept EMC’s argument that the alleged contamination was
the sole or contributing cause of the explosion and spill, the
Court must speculate as to causation.

Such an exercise would

extend beyond drawing a reasonable inference in favor of EMC, as it
would require the Court to assume facts not presently before it.
As such, this speculation as to causation does not defeat Exxon’s
- 30 -

summary judgment motion. See Joyce v. J.C. Penney Corp., Inc., 389
Fed.Appx. 529, 531 (7th Cir. 2010).
Further,

because

no

evidence

exists

that

the

allegedly

contaminated CSO caused the explosion and subsequent oil spill, EMC
has not produced a genuine issue of material fact that Exxon solely
caused the oil spill.

As such, the OPA does not provide grounds

for contribution. 33 U.S.C. § 2702(d)(1)(A).

Therefore, the Court

grants Exxon’s Motion for Summary Judgment on Count 2 of EMC’s
Third Party Complaint.
b.

Indemnity

EMC also seeks indemnity from Exxon for liability it may incur
to the Government.

In this case, because the OPA and maritime law

govern the underlying action, these laws apply to this indemnity
claim.

See Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1172

n.12 (11th Cir. 2009).

The OPA provides that EMC is not liable for

removal costs or damages if Exxon solely caused them.
§ 2702(a)(1)(A).

33 U.S.C.

In maritime law, a split in authority exists on

whether an active-passive negligence doctrine may serve as a basis
for indemnity.

While this circuit appears not to have addressed

this issue, the Third and Fourth Circuits use this doctrine.

See

SPM Corp. v. M/V Ming Moon, 22 F.3d 523, 526 (3d Cir. 1994); Vaughn
v. Farrell Lines, Inc., 937 F.2d 953, 957 (4th Cir. 1991)(“This
- 31 -

active-passive theory typically arises when the indemnitee has been
held absolutely liable for the wrongful act of another. . . .”).
The Fifth Circuit, on the other hand, has abandoned the activepassive

doctrine

for

admiralty

negligence

cases.

See

Seal

Offshore, Inc. v. Am. Standard, Inc., 736 F.2d 1078, 1082 (5th Cir.
1984)(applying comparative fault); see also Miller v. Am. President
Lines,

Ltd.,

989

F.2d

1450,

1459

(6th

Cir.

1993)(applying

comparative causation).
The Court need not determine which standard applies in this
case, because under the active-passive doctrine, comparative fault,
or comparative causation, no genuine issue of material fact exists
that Exxon is liable for the explosion and spill.

For the reasons

stated above in the contribution analysis, EMC has not presented
any facts that Exxon’s alleged negligence caused the accident and
spill.

In each of the alleged theories of negligence that EMC

raises, it either cannot establish that Exxon breached its duty to
EMC (Coast Guard regulation violation and implied warranty of safe
cargo) or that Exxon’s breach caused the damages (duty to warn).
Again, the Court cannot speculate on causation for EMC’s indemnity
claim.

Accordingly, the Court grants Exxon’s Motion for Summary

Judgment on EMC’s indemnity claim in Count 1 of the Third Party
Complaint.
- 32 -

In addition, because there are no facts before the Court that
Exxon is wholly or partially liable to EMC and the United States
for

the

damages

caused

by

the

oil

spill

after

the

EMC-423

explosion, the Court also grants Exxon summary judgment on EMC’s
Rule 14(c) liability claim in Count 3 of its Third Party Complaint.
III.

CONCLUSION

For the reasons stated herein, the Court rules as follows:
1.

EMC’s Motion to Dismiss is denied;

2.

EMC’s Motion to Strike the Government’s Expert Witnesses

is granted in part and denied in part;
3.

EMC’s Motion to Strike Portions of Exxon’s Statement of

Material Facts is granted in part and denied in part; and
4.

Exxon’s Motion for Summary Judgment is granted.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
DATE: 8/9/2011

- 33 -