BASF Corporation v. Man Diesel & Turbo North America, Inc.
Filing
198
FINDINGS OF FACT AND CONCLUSIONS OF LAW: The Court finds that BASF and Man entered into a contract under which Man was to change the dry gas seals on its Compressor. BASF's entire five-page Purchase Order constituted that contract.Even though B ASF knew that the Compressor, bearing caps, and related equipment would likely be relevant evidence to future litigation, BASF knowingly failed to make such evidence available to Man. However, Man failed to prove by a preponderance of the evidence t hat BASF acted for the purpose of depriving Man of evidence. Accordingly, Man's spoliation claim is dismissed with prejudice, and it is entitled to no adverse presumption.Nevertheless, BASF failed to prove by a preponderance of the evidence tha t Man breached its contract or that, even if there was a breach, Man's breach caused BASF's damages. Consequently, BASF's breach of contract claim is dismissed with prejudice. Similarly, BASF has failed to prove that any act or omissi on of Man was a cause-in-fact of the failure of the Compressor. BASF has specifically failed to prove that it is more likely than not that the loose bolts caused the Compressor failure. As a result, BASF's tort claim is dismissed with prejudice.. Signed by Judge John W. deGravelles on 09/30/2016. (KDC)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BASF CORPORATION
CIVIL ACTION
VERSUS
NO. 13-42–JWD-RLB
MAN DIESEL & TURBO NORTH
AMERICA, INC.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
TABLE OF CONTENTS
I.
INTRODUCTION AND RULING - 4
II.
PROCEDURAL HISTORY - 5
III.
FACTUAL BACKGROUND - 9
A. BASF and Its Geismar Facility - 9
B. Man and Its Relationship with BASF’s Geismar Facility - 11
C. The Events Leading Up to The Repair of the Compressor - 11
1. Man’s Prior Work on the Compressor - 11
2. Man’s November Quote - 12
3. Man’s December Quote - 12
4. December 28, 2011: Man’s Arrival at Geismar and BASF’s Purchase
Order - 14
D. Man’s Work on the Compressor - 18
E. Man’s Completion of Work, Start-Up and Failure of the Compressor - 19
F. BASF’s Investigation and Root Cause Failure Analysis - 19
1
IV.
FINDINGS OF FACT - 21
A. Arguments of the Parties – the Contract - 21
1. BASF’s Position - 21
2. Man’s Position - 23
B. Findings of Fact – the Contract - 24
C. Arguments of the Parties – BASF’s Investigation, RCFA and Alleged Spoliation
of Evidence - 27
1. Man’s Position - 27
2. BASF’s Position - 36
D. Findings of Fact – BASF’s Investigation, RCFA and Alleged Spoliation of
Evidence - 46
E. Arguments of the Parties – Work Done By Man - 54
1. BASF’s Position - 55
2. Man’s Position - 57
F. Findings of Fact – Work Done by Man - 61
G. Arguments of Parties – Fault and the Cause of the Failure - 64
1. BASF’s Position - 64
2. Man’s Position - 68
H. Findings of Fact – Fault and the Cause of the Failure - 70
I. Summary of Findings of Fact - 71
2
V.
CONCLUSIONS OF LAW - 72
A. Contract - 72
B. Spoliation - 73
1. Spoliation Introduction - 73
2. Intentional Tort of Spoliation of Evidence - 74
3. Adverse Presumption (federal law) - 76
C. Man’s Liability - 82
1. Burden of Proof - 82
2. Breach of Contract - 83
3. Tort Liability - 83
VI.
SUMMARY - 85
3
I.
INTRODUCTION AND RULING
1.
This is a suit for damages allegedly arising from the failure of a centrifugal
compressor (“Compressor”) at a chemical plant near Baton Rouge, Louisiana. The
plaintiff is plant owner BASF Corporation (“BASF” or “Plaintiff”). Defendant is Man
Diesel and Turbo North America, Inc. (“Man” or “Defendant”). The parties are diverse
and the amount in controversy is in excess of $75,000 exclusive of interest and costs.
2.
Shortly after Man completed its work on the Compressor, it failed
catastrophically. BASF alleges that the failure was caused by Man’s breach of contract
to properly and safely repair the Compressor and/or its negligent repair of same. BASF
claims damages of nearly $12 million.
3.
Man denies those allegations and argues that the failure occurred for reasons other
than its work, including BASF’s own negligence.
4.
To resolve this case, the Court must answer the following questions:
a. What was the nature of the contract between BASF and Man that governed
Man’s work on the Compressor, and what were the terms of the contract?
b. What work did Man perform on the Compressor, did that work breach the
terms of the contract, and did that work cause or contribute to the failure of
the Compressor?
c. In performing the work on the Compressor, did Man breach any tort duty that
would impose liability on Man for BASF’s damages?
d. Did BASF spoliate evidence, and, if so, what are the legal ramifications of the
spoliation?
e. If BASF is entitled to recover, what are the damages to which it is entitled?
4
5.
In making the following findings of fact and conclusions of law, the Court has
considered the record as a whole. The Court has observed the demeanor of those
witnesses who gave live testimony or testified by video and has carefully weighed their
testimony and credibility in determining the facts of this case and in drawing
conclusions from those facts. The Court has also carefully reviewed the deposition
testimony submitted in lieu of live testimony and the exhibits introduced into evidence.
The Court has reviewed and considered the briefs and arguments of counsel.
6.
All findings of fact contained herein that are more appropriately considered
conclusions of law are to be so deemed. Likewise, any conclusion of law more
appropriately considered a finding of fact is to be so classified.
7.
For the reasons which follow, this Court holds that BASF has failed to sustain its
burden of proof to establish liability on the part of Man and therefore renders judgment
in favor of Man.
II.
PRODEDURAL HISTORY
8.
BASF initiated these proceedings on December 21, 2012, in the 23rd Judicial
District Court of Louisiana.1 Man removed the case to the United States District Court
for the Middle District of Louisiana on January 17, 2013, based upon diversity
jurisdiction pursuant to 28 U.S.C. § 1332.2
9.
The Compressor is a Siemens C-300 Turbo Compressor owned and operated by
BASF at its Ethylene Oxide Unit at the Geismar, Louisiana, facility on December 30,
2011.3 BASF alleges that Man is liable for the damage and repair costs to the
1
Petition, Doc. 1-4 at 3.
Complaint for Removal, Doc. 1-1 at 2.
3
Petition, Doc. 1-4 at 6.
2
5
Compressor, as well as for the business interruption and lost profits allegedly caused by
its failure.4 Man denies these allegations.5
10.
MAN has made a counterclaim of spoliation of evidence against BASF.6 In this
counterclaim Man asserts that BASF’s spoliation of key evidence deprived Man of its
opportunity to investigate the incident that formed the basis of this litigation and to
present evidence at the trial of this matter in its defense against BASF’s allegations.7
11.
On April 9, 2013, Man moved for summary judgment contending that BASF was
precluded from asserting this action for consequential damages and attorneys’ fees and
costs by the terms of its contractual agreement with Man.8 U.S. District Judge James J.
Brady, who was formerly assigned this matter, dismissed the Motion for Summary
Judgment on April 30, 2013, “without prejudice to being re-filed following completion
of discovery.”9
12.
On June 25, 2013, the Court adopted the jointly proposed scheduling order,
making it an Order of the Court.10 This Order established a discovery deadline of April
30, 2014, and set trial for June 8, 2015.11 Approximately 30 depositions were taken in
this matter; some 3,706 pages of testimony.
13.
On October 18, 2013, Man filed a Motion for Leave to File First Supplemental
and Amended Answer and Counterclaim of Spoliation of Evidence.12 This Motion was
granted on November 27, 2013, and the First Supplemental and Amended Answer and
4
Petition, Doc. 1-4 at 7—11.
Answer and Demand for Trial by Jury, Doc. 2 at 2.
6
Man’s First Supp. & Am. Answer & Countercl., Doc. 26.
7
Id.
8
Man’s Mot. For Summ. J., Doc. 8-1 at 10—14.
9
Order, Doc. 12 (dismissing Man’s motion for summary judgment).
10
Scheduling Order, Doc. 15.
11
Scheduling Order, Doc. 15.
12
Man’s Mot. for Leave to File First Suppl. & Am. Answer & Countercl., Doc. 21.
5
6
Counterclaim was filed into the record on November 27, 2013.13 BASF answered the
counterclaim on December 18, 2013.14
14.
A joint Motion for Leave of Court was filed to extend the discovery deadline.15
That Motion was granted March 20, 2014, extending the discovery deadline to June 30,
2014.16
15.
On June 24, 2014, Man filed its Second Supplemental and Amending Answer and
Counterclaim to add an additional factual paragraph to its claim of spoliation against
BASF.17 BASF filed its Answer on July 8, 2014.18
16.
On August 13, 2014, this case was reassigned to U.S. District Judge John W.
deGravelles.19 On November 20, 2014, the trial was reset by this Court to December 14,
2015.20
17.
On March 4, 2015, Man re-urged its Motion for Summary Judgment which BASF
timely opposed.21 BASF filed a Cross Motion for Summary Judgment on April 2, 2015,
which Man opposed.22 A hearing was held on April 30, 2015, and on May 15, 2015,
both Motions for Summary Judgment were denied.23
13
Order, Doc. 25; Man’s First Suppl. & Am. Answer & Countercl., Doc. 26.
Answer of BASF Corp. to First Suppl. & Am. Answer & Counter Claim of Man Diesel, Doc. 28.
15
Joint Mot. for Leave of Ct. to Extend Disc. Deadlines, Doc. 31.
16
Order, Doc. 32.
17
Man’s Second Suppl. & Am. Answer & Countercl., Doc. 49.
18
Answer of BASF Corp. to Second Suppl. & Am. Answer & Counter Claim of Man Diesel, Doc.50.
19
Case Reassignment, Doc. 52.
20
Order, Doc. 65 (resetting jury trial).
21
MAN’s Re-urged Mot. for Summ. J., Doc. 78; BASF Corp’s Mem. in Opp’n to Reurged Mot. For Summ. J. Filed
by Man, Doc. 80.
22
BASF Corp.’s Cross-Mot. for Summ. J., Doc. 86; Man’s Mem. in Opp’n to BASF’s Cross Mot. For Summ. J.,
Doc. 90.
23
Ruling & Order, Doc. 98 (denying BASF and Man’s motions for summary judgment).
14
7
18.
On June 1, 2015, BASF filed a Motion for Summary Judgment on Spoliation of
Evidence which Man timely opposed on June 22, 2015.24 A Ruling and Order denying
BASF’s Motion for Summary Judgment on Spoliation of Evidence was signed on
November 5, 2015.25
19.
On November 10, 2015, this Court dismissed without prejudice Man’s Daubert
Motion and Motion to Exclude Testimony of Edelbach, and Man was allowed to file a
new motion regarding BASF’s new loss of profit expert by December 15, 2015.26
20.
On November 24, 2015, BASF produced to Man the expert report of George
Panzeca.27 His deposition was taken December 11, 2015, and a subsequent Daubert
Motion and Motion to Exclude Testimony and Evidence was filed.28 BASF opposed the
motion on January 4, 2016.29 A hearing was held on January 14, 2016, and Man’s
Daubert Motion and Motion to Exclude Testimony was granted in part and denied in
part.30
21.
Thereafter, on February 1, 2016, Man filed a Motion in Limine to Exclude the
Testimony of Dr. Fernando Lorenzo and Exclude Evidence.31 BASF filed its opposition
24
BASF Corp.’s Mot. for Summ. J. on Spoliation of Evid., Doc. 102; Man’s Opp’n to BASF’s Mot. For Summ. J.
on Spoliation of Evid., Doc. 107.
25
Ruling & Order, Doc. 119 (denying BASF’s motion for summary judgment on spoliation).
26
Order, Doc. 120 (dismissing Man’s Daubert Mot. & Mot. in Lim. to Exclude Edelbach).
27
BASF’s Certificate of Service, Doc. 121.
28
Man’s Mot. in Lim. To Exclude Evid. of Alleged Economic Loss & Alternatively Daubert Mot. to Exclude Test.
Of George J. Panzeca, Doc. 122.
29
BASF Mot. for Leave to File Mem. In Opp’n to Mot. in Lim. To Exclude Evid. Of Alleged Economic Loss and
Alternatively Daubert Mot. to Exclude Test. of George J. Panzeca in Excess of Page Limitations, Doc. 131.
30
Min. Entry from January 14, 2016, Hearing, Doc. 139 at 2.
31
Man’s Mot. in Lim. to Exclude the Test. of Dr. Fernando Lorenzo and Exclude Evid., Doc. 145.
8
to Man’s Motion in Limine on February 8, 2016.32 Man’s Motion in Limine to Exclude
the Testimony of Dr. Fernando Lorenzo was ultimately denied on February 11, 2016.33
22.
Prior to trial, a Joint Stipulation Waiving Demand for Jury Trial was filed,34 and
this matter was converted to a Bench Trial on January 20, 2016.35 On February 1, 2016,
the parties filed their respective Final Witness Lists,36 Exhibit Lists,37 and their pretrial
Proposed Findings of Fact and Conclusions of Law.38
23.
Trial was held from February 22, 2016,39 to February 26, 2016, and from
February 29, 2016, to March 8, 2016, at which time it was submitted to this Court. The
Court then requested post-trial Proposed Findings of Fact and Conclusions of Law.
These were submitted by the parties on April 18, 2016.40 Replies were filed on May 2,
2016.41
III.
FACTUAL BACKGROUND
A. BASF and Its Geismar Facility
24.
BASF is a Delaware corporation with its principal place of business in New
Jersey.42
32
BASF Corp.’s Mem. in Opp’n to Man’s Mot. in Lim. to Exclude the Test. of Dr. Fernando Lorenzo and Exclude
Evid., Doc 157.
33
Ruling & Order Doc. 160 (denying Man’s Mot. in Lim. to Exclude the Test. of Dr. Fernando Lorenzo and
Exclude Evid.).
34
Stipulation Waiving Demand for Jury Trial, Doc. 138.
35
Min. Entry of January 20, 2016, Doc. 142 at 1 (converting jury trial to bench trial).
36
MAN’s Final Witness List, Doc. 147; BASF’s Final Witness List, 151.
37
MAN’s Final Exhibit List, Doc. 148; BASF’s Final Exhibit List, Doc. 150.
38
MAN’s Findings of Fact and Conclusions of Law, Doc. 146; BASF’s Proposed Findings and Conclusions, Doc.
149.
39
Min. Entry for Bench Trial, Doc. 169 at 1.
40
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 194; Def.’s Post Trial Findings of Fact and
Conclusions of Law, Doc. 193. At the Court’s request, BASF submitted a reformatted brief on May 20, 2016, See
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197.
41
Reply Mem. to BASF Corp. to [Man’s] Post-Trial Findings of Fact and Conclusions of Law, Doc. 196; Def.’s
Rebuttal to Plaintiff’s Post-Trial Proposed Findings and Conclusions, Doc. 195.
42
Joint Uniform Pretrial Order, Doc. 130 at 1.
9
25.
BASF employs approximately 17,000 people in its North American operations.43
26.
BASF’s largest North American facility is located at Geismar, Louisiana,44 where
the events giving rise to this litigation took place (“Geismar,” “Geismar site,” or
“Geismar facility”).
27.
The events giving rise to this litigation occurred in a portion of the Geismar
facility called the Ethylene Oxide Unit (“EO Unit”). This unit, and its associated
equipment, combines the raw product ethylene with oxygen to produce ethylene oxide
(“EO”).
28.
The EO produced in Geismar’s ethylene oxide unit is piped to other units within
the Geismar facility to be used in the production of different products such as
surfactants, polyols45 and many other products that BASF makes.46 EO is also shipped
by rail to other BASF plants and to third parties.
29.
The EO Unit at Geismar is the only BASF facility in North America that produces
EO.47
30.
The Compressor at the center of this controversy was located in the EO Unit. It
was a Siemens Demag Delaval model I-IVK 16-2 integrally geared recycle gas
centrifugal compressor.48 During normal operation, the Compressor circulated gas in the
Recycle Gas Loop in the EO Unit.49
43
Trial Test. of Tom Yura, Trial. Tr. vol. 1, 11, Feb. 22, 2016, Doc. 183.
Id. at 12.
45
Id. at 15—16.
46
Id. at 19.
47
Id. at 15; Trial Test. of Ann Marie Foreman, Trial Tr. vol. 6, 124, Feb. 29, 2016, Doc. 188.
48
Expert Report of Steven Kushnick, P.E., Tr. Ex. D-284, at 10.
49
Id.
44
10
31.
The Compressor was described as the “lifeline of the plant” and the “heart and
soul of this process”.50 When the Compressor was not working or was taken out of
service for maintenance or repair, the entire EO Unit could not function.51
B. Man and Its Relationship with BASF’s Geismar Facility
32.
Man is a New York corporation with its principal place of business in New
York.52
33.
Man’s Louisiana operations began in 2008 when it acquired an existing business,
Baton Rouge Machine Works.53 Described as a “specialty business,” Man’s Louisiana
office focused on “critical machining [and] rotating repairs,” including field service
repairs of industrial equipment.54
34.
Prior to the events at issue, Man had done at least 34 jobs for BASF.55 In each of
these, a Purchase Order was issued by BASF in connection with the work to be
performed by Man.56
C. The Events Leading up to the Repair of the Compressor
1. Man’s Prior Work on the Compressor
35.
In October of 2011, BASF initiated a turnaround of the EO Unit.57 Siemens
Demag Delaval Turbomachinery, Inc. (“Siemens”) provided a technical advisor for the
turnaround. During the October turnaround, Man removed the bearing caps to inspect
50
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 40, Feb. 24, 2016, Doc. 185; Trial Test. of Joe Parsiola, Trial Tr.
vol. 3, 179, Feb. 24, 2016, Doc. 185.
51
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 40, Doc. 185.
52
Joint Uniform Pretrial Order, Doc. 130 at 1.
53
Trial Test. of Nick Granier, Trial Tr. vol. 8, 208—09, Mar. 2, 2016, Doc. 190.
54
Id. at 209.
55
Dep. of Nick Granier, Tr. Ex. P-416-L, at 72:1—74:6; BASF Corp’s Post-Trial Proposed Findings and
Conclusions, Doc. 197 at 41.
56
Id.
57
Trial Test. of Holly Sharp, Trial Tr. vol. 8, 40, Mar. 2, 2016, Doc. 190; Trial Test. of Mervin McCon, Trial Tr. vol.
5, 151, Feb. 26, 2016, Doc. 187.
11
the journals and bearings among other work performed by Man on the Compressor.58
The dry gas seals were not replaced at this time.
36.
After the turnaround, BASF restarted the Compressor on or about October 21,
2011, without incident.
37.
Six days later, on October 27, 2011, BASF shut down the plant due to an ethylene
feed leak.59 Upon restart, the dry gas seals in the Compressor began to leak.60
2. Man’s November Quote
38.
On November 7, 2011, in response to a verbal request from BASF’s Kyle
Frederick,61 Man submitted a quote to replace the seals (“November Quote”).62
However, BASF concluded that the seals did not need to be changed at that time as it
was believed the seals could “make it” another twelve to eighteen months.63 Therefore,
BASF made the decision to not respond to the Quote it had solicited.
3. Man’s December Quote
39.
However, on December 24, 2011, BASF “had a plant upset that tripped the
[C]ompressor and after restart”; the Compressor gas seal flow again began to increase.64
40.
On Christmas Day, December 25, 2011, at 2:11 p.m., BASF’s Kyle Frederic
asked Man’s Nicholas Granier if Man could have a crew available on December 28,
2011, to remove and replace the dry gas seals.65 Mr. Granier responded on the evening
58
The pinion shaft is also referred to as a “journal.” See BASF Corp’s Post-Trial Proposed Findings and Conclusions,
Doc. 197 at 9 n. 18.
59
BASF Corp’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 9.
60
Id.
61
Trial Test. of Kyle Frederick, Trial Tr. vol. 4, 121, Feb. 25, 2016, Doc. 186.
62
Trial Test. of Nicholas Granier, Trial Tr. vol. 8, 217-18, 230, Doc. 190; Man Diesel Quote, Tr. Ex. J-1.
63
Trial Test. of Kyle Frederick, Trial Tr. vol. 4, 122, Doc. 186.
64
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 53; BASF Corp.’s Post-Trial Proposed
Findings and Conclusions, Doc. 197 at 10.
65
See Email Chain, Tr. Ex. P-361 at 4.
12
of December 26, 2011, at 7:18 p.m., stating that Man would have a crew available to
perform the job and that he would contact BASF the next day to discuss it further.66
41.
On December 27, 2011, at 8:35 a.m., Jerad Mitchell, Man’s
Business Development Manager/Technical Assistant, forwarded a quote for the
upcoming work. Rather than draft a new quote, Mitchell forwarded the November Quote:
The December 27, 2011, email stated:
I have attached a copy of the quote that we generated for Leonard in
November to perform this job. This quote should be valid with the
exception of the holiday that we have on Friday. If this job should go into
Friday, our time will be billed according to our rate sheets for holiday pay.
Please work with Nick to get a P.O. for this opportunity.67
To distinguish between the November Quote and this one, the quote sent by
Mitchell on December 27 will be referred to as the “December Quote” or
simply, the “Quote”.
42.
The Quote provided to BASF on December 27 included a “Work Scope” that
enumerated several steps for the job.68 At the heart of the controversy in this case are the
fourth and fifth steps: “[r]emove the main upper gear case cover”; and “[i]nspect
journals and bearings.”69 Both of these steps, if performed, would have involved
loosening bearing cap bolts that were found loose after the failure70 and which BASF
maintains caused the failure.71
43.
Additionally, per the Quote, Man would provide “[t]echnical support and
expertise” and provide a completed job report within two weeks of the job.72
66
See Email Chain, Tr. Ex. P-361, at 3.
See Email Chain, Tr. Ex. P-361, at 1.
68
Man Quote, Tr. Ex. J-1, at 1.
69
Id.
70
Dep. of Rene Scholz, Tr. Ex. P-416-J, at 82:7—84:11; see also Trial Test. of James Spinks, Trial Tr. vol. 5, 57, Feb.
26, 2016, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 161, Doc. 187.
71
See, e.g., BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 58—62.
72
Man Quote, Tr. Ex. J-1 at 1.
67
13
44.
On December 28, 2011, at 6:14 a.m., the morning the job was to begin, Mitchell
again informed BASF that the Quote should be valid with the exception of the holiday
rate for work done on Friday, December 30, 2011. 73
4. December 28, 2011: Man’s Arrival at Geismar and BASF’s
Purchase Order
45.
In the early morning hours of December 28, 2011, Man’s crew met at the Man
facility, loaded its tool trailer and travelled to BASF’s Geismar facility.74
46.
The tool trailer contained the tools that Man would need in order to complete the
work.75 All Man personnel working on the job had a key to the tool trailer.76 The tool
trailer contained tools that could be used to loosen the bolts on the bearing end cap.77
The job file, which held the Quote, was also kept in the tool trailer.78
47.
Both sides agree that Man arrived at BASF’s gate on December 28 “shortly after
6 [a.m.]”79 More precisely, a document entitled “MAN GATE PUNCHES BASF
GEISMER 122811-123011”80 demonstrates that Man crew members James Spinks and
Kenneth Thompson arrived at the gates of the Geismar facility at 6:06 a.m.
73
The December 28, 2011 email stated:
We have a crew heading out to you [sic] facility this morning per your request to begin a seal change
out on C300. It is possible that the P.O. is caught up due to the time frame we are working in to
support this opportunity. Can you please email Nick and I a confirmation P.O. which supports the
efforts we a [sic] putting forth. I forwarded the quote put together initially in November for this job
as it should be the same pending holiday work on Friday.
See Email Chain, Tr. Ex. P-361 at 3.
74
Trial Test. of James Spinks, Trial Tr. vol. 5, 10, 21, Doc. 187.
75
MAN Diesel Quote, Tr. Ex. J-1, at 1.
76
Trial Test. of James Spinks, Trial Tr. vol. 5, 21, Doc. 187.
77
Trial Test. of James Spinks, Trial Tr. vol. 5, 35—36, Doc. 187; Trial Test. of Roger Craddock, Trial Tr. vol. 6, 83,
Feb. 29, 2016, Doc. 188.
78
Trial. Test. of Mervin McCon, Trial Tr., vol. 5, 157, Doc. 187. While Mr. Spinks does not recall seeing the Quote
onsite, Mr. Spinks testified that the Quote may have been in the job file for this work and that the job file is kept in
the Man tool trailer or work truck where Messrs. Landry and Thompson waited during Mr. Spinks’ meeting with
Steven Laiche. Trial Test. of James Spinks, Trial Tr. vol. 5, 56—57, Doc. 187
79
Established Facts in Joint Uniform Pretrial Order, Doc.190 at 4—5; see also BASF Corp.’s Post-Trial Proposed
Findings and Conclusions, Doc. 197 at 41.
80
Work Crew Gate Punches, Tr. Ex. D-173.
14
48.
At about the same time, employees of Turner Industries, BASF’s maintenance
contractor prepared Safe Work Permits to remove the insulation from the
Compressor and build scaffolding in preparation for Man’s work on the Compressor.81
49.
As noted above, at 6:14 a.m. that morning, Jerad Mitchell sent Kyle Frederick
an email stating in part:
We have a crew heading out to you [sic] facility this morning per your
request to begin a seal change out on C300. It is possible that the P.O. is
caught up due to the time frame we are working in to support this
opportunity. Can you please email Nick and I a confirmation P.O. which
supports the efforts we a [sic] putting forth. I forwarded the quote put
together initially in November for this job as it should be the same
pending holiday work on Friday. 82
50.
After entering the plant at around 6:06 a.m., the Man crew did preparatory work
in anticipation of their work on the Compressor.83 This included meeting with other
workers, reviewing drawings and schematics, staging tools, and otherwise preparing to
commence work on the Compressor.84
51.
When the Man crew arrived, the Siemens Technical Advisor, Rene Scholz, had
not yet arrived. The Purchase Order had also not yet been issued, and Man refused to
start work on the Compressor until a Purchase Order was received.85
81
Safe Work Permits, Tr. Exs. P-5 & P-6.
Email chain, Tr. Ex. P-361 at 3.
83
Trial Test. of James Spinks, Trial Tr. vol. 5, 19, 22, 116—17, 119—20, Doc. 187. As is made clear later in these
Findings, the parties disagree on exactly what was done and said by Spinks and the rest of the Man crew after the
crew arrived and before work began on the Compressor (which is arguably relevant to other issues), the Court
concludes that Man did some work in preparation for the actual work on the Compressor.
84
Id.
85
Trial Test. of James Spinks, Trial Tr. vol. 5, 16, Doc. 187 (“Q. Did you make sure that you got a purchase order
before you started the work on this job? A. Yes.”); Dep. of Nicholas Granier, Tr. Ex. P-416-L, at 27:1—8 (testifying
that the policy at the time of contract was that MAN Diesel would do no work for BASF until BASF issued a purchase
order).
82
15
52.
This delay for the Purchase Order is consistent with BASF and Man’s “long
history or customary practice”86 of delaying work until BASF issued a purchase order.87
Man employees were required to receive the purchase order or, at minimum, a purchase
order number, before commencing performance.88
53.
The parties agree that, later that morning, “at 9:02 a.m., [BASF] issued purchase
order No. 4901021764, to [Man] to remove the existing seal and install a new
seal in the C-300 compressor.”89 The complete BASF Purchase Order was introduced as
Trial Exhibit J-2.
54.
At 9:02 a.m., Terry Bourgeois, a Turner maintenance planner at Geismar,90
emailed the Purchase Order number for this job to Man’s Jerad Mitchell:91
Jerad,
Po for C-300 is as follows:
PO # 490102176492
55.
According to Man’s crew supervisor James Spinks, work on the Compressor
began at around 9:25 a.m.93
86
Man and BASF have a long “history of business dealings.” Dep. of Nicholas Granier, Tr. Ex. P-416-L, at 44:22—
45:13.
87
The normal procedure between Man and BASF is for BASF to request a quote, for Man to send a quote, for BASF
to issue a purchase order, and finally for Man to perform the work. Dep. of Nicholas Granier, Tr. Ex. P-416-L, at
45:6—9 (“the procedure is, a quote is issued and BASF reviews the quote but no work can be done until BASF issues
the purchase order[.]”). See also Trial Test. of Nicholas Granier, Trial Tr. vol. 8, 234—35, Doc. 190; Trial Test. of
James Spinks, Trial Tr. vol. 5, 16, Doc. 187.
88
Dep. of Nicholas Granier, Tr. Ex. P-416-L, at 27:1-13. Mr. Granier suggests that only a Purchase Order number is
required when there is an “emergency situation.” The parties disagree as to whether this was an emergency.
89
Established Facts in Joint Uniform Pretrial Order, Doc. 190 at 4—5; BASF’s Jamie Latuso stated that BASF sent
the Purchase Order to Man at 8:50 a.m., and Man received a separate email with the Purchase Order number at 9:02
a.m. Joint Stipulations in Lieu of Live Test. by Jamie Latuso, Doc. 174, at 3; Email chain, Tr. Ex. P-361 at 2; see
also Trial Test. of James Spinks, Trial Tr. vol. 5, 16, 31—32, Doc. 187.
90
Turner was the maintenance contractor for the BASF Geismar facility.
91
See Emails from Terry Bourgeois, Tr. Ex. P-361, at 2.
92
Email chain, Tr. Ex. P-361, at 2.
93
Trial Test. of James Spinks, Trial Tr. vol. 5, 31—32, Doc. 187.
16
56.
At 9:29 a.m., Mr. Mitchell forwarded Bourgeois’ email to two Man employees,
Michael Yu and Leigh Brashier, stating: “P.O. for the job the guys are on today.”94
57.
But there is a dispute as to how much of the Purchase Order was actually received
by Man, specifically, whether the full five page document or, as Man claims, only the
first two pages, were received.
58.
BASF counters with the Joint Stipulations of Fact in Lieu of Live Testimony by
Jamie Latuso, who stated that (1) she created the full five page Purchase Order for
Man’s work; (2) as the Purchase Order was created in BASF’s system, it automatically
included BASF’s terms and conditions; (3) upon her saving the Purchase Order,
(including automatically all of BASF’s terms and conditions) it was immediately faxed
to Man at 8:50 a.m.; and (4) the Purchase Order was “successfully processed,” meaning
that the purchase order – including the terms and conditions – was, in whole,
successfully transmitted to Man’s facsimile server. 95 Latuso further testified the
procurement department never received an automated notice error indicating any issue
with the transmission of the Purchase Order and further, that no one at BASF ever
received a communication from Man reporting an issue with the transmittal of the
Purchase Order.96
59.
There is also a dispute as to the scope of work Man was to perform pursuant to
whatever contract existed between BASF and Man and, regardless of what was called
for in the contract, the work which was actually performed. BASF contends that the
94
Email from Jerad Mitchell to Michael Yu and Leigh Brashier, Tr. Ex. P-70, at 1.
Dep. of Jamie Latuso, Tr. Ex. P-421, at 14:14—16:2; Joint Stipulations of Fact in Lieu of Live Test. by Jamie
Latuso, Doc. 174 at 3.
96
Dep. of Jamie Latuso, Tr. Ex. P-421, at 14:14—16:2; Joint Stipulations of Fact in Lieu of Live Test. by Jamie
Latuso, Doc. 174 at 3.
95
17
contract called for the removal of the bearing cap and associated bolts97 and that this
work was actually performed by Man, leading to the catastrophic failure of the
Compressor.98
60.
Man, on the other hand, contends that the only work it was contracted to do in
December was to replace the dry gas seals (which did not include the removal of the
bearing cap or associated bolts). It claims that this is the only work it performed, that it
performed this work well. It insists that its work was unrelated to the Compressor
failure. This issue is explored in detail in another section of this Ruling.
61.
After receiving the Purchase Order by fax and the Purchase Order number by
email, Man’s crew began performing work on the compressor.99
D. Man’s Work on the Compressor
62.
At around 9:25 a.m., after the Job Safety Analysis was issued,100 and after
receiving the Purchase Order by fax and the Purchase Order number by email, Man’s
crew began performing work on the Compressor.101
63.
Man’s crew consisted of James Spinks, Mervin McCon, James Landry, Kenny
Thompson and Alan McGill.102
64.
Man’s crew worked on the Compressor from the morning of December 28, 2011,
until the morning of December 30, 2011.103
97
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 54—55.
Id. at 58—62.
99
Trial Test. of James Spinks, Trial Tr. vol. 5, 16, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 210—11,
Doc. 187.
100
Safe Work Permit, Tr. Ex. J-4; Trial Test. of James Spinks, Trial Tr. vol. 5, 31—32, Doc. 187.
101
Trial Test. of James Spinks, Trial Tr. vol. 5, 16, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 210—11,
Doc. 187.
102
Trial Test. of James Spinks, Trial Tr. vol. 5, 13, Doc. 187. Only Thompson and Landry were with Spinks when
they arrived on December 28. Id. at 17, 186—87.
103
The Compressor was released to BASF on December 30, 2011 at 10:50 a.m. after Man removed its lock and
signed the lock-out/tag-out sheet. Trial Test. of James Spinks, Trial Tr. vol. 5, 107, Doc. 187.
98
18
65.
A central factual dispute is what work Man’s crew actually performed on the
Compressor. BASF contends the work included loosening and ultimately retightening
the bolts associated with the bearing caps and that its failure to retighten these bolts with
the proper torque resulted in the Compressor’s catastrophic failure.104 Man claims it only
performed the replacement of the dry gas seals which did not involve working on or
around these bolts.105
E. Man’s Completion of Work, Start-Up and Failure of Compressor
66.
On December 30, 2011, after completing the installation of the new seals, Man
reassembled the Compressor, cleaned up their work area, removed their locks, and, at
around 10:50 a.m., returned the Compressor to BASF.106
67.
The BASF operators then completed a pre-start-up checklist.107
68.
BASF started the Compressor at approximately 12:15 p.m., and, within 17
seconds, the Compressor experienced a catastrophic failure.108 The Compressor emitted a
loud noise, experienced extreme vibrations, sprayed oil from multiple locations, and
ceased operating.109
F. BASF’s Investigation and Root Cause Failure Analysis
69.
Aaron Rose, BASF engineer, was contacted at 1 p.m. on December 30, the date of
the accident, and was designated BASF’s lead investigator to head its Root Cause
Failure Analysis (“RCFA”).110
104
See, e.g., BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 5—6.
See, e.g., Trial Test. of James Spinks, Trial Tr. vol. 5, 22, 25, 53, 72, 104, 112, Doc. 187.
106
Trial Test. of James Spinks, Trial Tr. vol. 5, 107, Doc. 187; Leonard Landry estimated the turnover time to be
between 8 a.m. and 10 a.m. Trial Test of Leonard Landry, Trial Tr. vol. 3, 46, Doc. 185.
107
Recycle Compressor Normal Start Up Checklist, Tr. Ex. J-7.
108
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 17.
109
Id. at 17—18.
110
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 110, 123—25, Feb. 22, 2016, Doc. 183; Trial Test. of Aaron Rose,
Trial Tr. vol. 2, 9, Feb. 23, 2016, Doc. 184.
105
19
70.
Rose arrived at the scene at about 8:00 p.m. that same day to begin to investigate
the cause of the failure and the extent of the damages.111
71.
BASF appointed other BASF employees to the RCFA team, including Joe
Parsiola, Kyle Frederick, Kalen Jaworski and Richard Willwerth.112
72.
On December 31, Rose accompanied the Compressor to the Siemens TurboCare
facility in Houston, Texas where repairs were made on the Compressor.113
73.
The conclusion of the RCFA was that the loose bolts on the B side bearing cap
caused the failure.114 The RCFA was concluded when Rose “presented the RCFA
findings at a January 24, 2012, meeting,”115 less than a month following the event.116
74.
Man strenuously challenges the methodology and conclusions of the investigation
and RCFA.117 In addition, it filed a counterclaim alleging that BASF intentionally
spoliated critical evidence during the investigation.118 While BASF acknowledges
certain shortcomings of the RCFA,119 it argues for the integrity of the investigation’s
process and results.120 These allegations are considered and resolved elsewhere in this
ruling.
111
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 128, Doc. 183; Trial Test. of Aaron Rose, Trial Tr. vol. 2, 25, Doc.
184.
112
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 198—99, 204, Doc. 183.
113
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 165, Doc. 184.
114
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 231—34, Doc. 183.
115
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 23.
116
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 220-21, Doc. 183; Apollo Root Cause Chart, Tr. Ex. P-332. For Mr.
Rose’s full testimony regarding the chart and the different failure causes considered, see Trial Test. of Aaron Rose,
Trial Tr. vol. 1, 210-20, Doc. 183. See also Trial Test. of Joe Parsiola, Trial Tr. vol. 3, 185, Doc. 185.
117
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 13-25; Defendant’s Rebuttal to Plaintiff’s
Post-Trial Proposed Findings and Conclusions, Doc. 195 at 1—4.
118
Man’s First Suppl. & Am. Answer & Countercl., Doc. 26; Man’s Second Suppl. & Am. Answer & Countercl.,
Doc. 49.
119
The RCFA contained “certain imperfections” (BASF Corp.’s Post-Trial Proposed Findings and Conclusions,
Doc. 197 at 74), and its “documentation . . . left something to be desired.” (Id. at 73).
120
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 19—24, 72—75.
20
IV.
FINDINGS OF FACT
A.
Arguments of the Parties – the Contract
1. BASF’s Position121
75.
BASF argues that its Purchase Order was the contract that controlled the work
done on the Compressor.122 Man, on the other hand, argues that it was its December
Quote.123 There are different legal consequences that flow from it being one or the other.
76.
Specifically, BASF contends that Man’s December Quote was an offer124 and that
its Purchase Order was a counter offer.125 It argues that Man did not object or attempt to
renegotiate the terms of the Purchase Order and accepted its terms by performing the
work after the Purchase Order was sent and received.126 Invoking the so-called
“acceptance by performance” provision of the contract, it argues that by working on the
Compressor after the Purchase Order was issued by BASF and received by Man, Man
accepted the terms of the Purchase Order.127 BASF maintains its position is further
bolstered by the “long history of dealing between them, wherein the same purchase
order terms were governing…[and] Man Diesel never opposed BASF’s terms for work
performed in Louisiana.”128
77.
BASF argues that the testimony of Jamie Latuso and evidence submitted in
connection therewith establishes that, despite the testimony of Nick Granier to the
121
The cited record references in the sections summarizing the positions of the parties are those to which the parties
have directed the Court in their briefing.
122
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 56—57.
123
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 53—58.
124
BASF argues in the alternative that, even if the Quote was an offer, it did not accept that offer or any of its terms
and conditions. See BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 57.
125
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 54.
126
Id. at 54, 57.
127
BASF December Purchase Order, Tr. Ex. J-2, at 4.
128
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 57 n. 291 (citing Dep. of Linda Harris,
Tr. Ex. P-416-G, at 19—20).
21
contrary, Man received all five pages of its December Purchase Order and, by
“accepting by performance,” bound itself to the terms contained in all five pages. 129
78.
The full five-page Purchase Order provides important elements of the offer in the
allegedly unsent pages. The third page lists the price as $45,000.130 This price differs
from the $26,750.00 listed in the Quote. On the fourth page, the Purchase Order
expressly states that, if it is sent in response to a quote, then the terms of the Purchase
Order supersede the terms of the quote and shall be a rejection of same.131 Finally, the
fifth page provides that any cost or damage incurred by BASF as a result of a breach of a
warranty would be borne by Man.132
79.
Regardless of whether the entire Purchase Order was transmitted, both sides agree
that, at the very least, the entire first page was transmitted.133 This page of the Purchase
Order provides, in part:
THIS ORDER IS SUBJECT TO THE TERMS AND CONDITIONS
INCLUDED HEREWITH, AND SELLER AGREES TO BE BOUND
THEREBY. BY SHIPPING THE GOODS, OR BY ACKNOWLEDGING
RECEIPT OF THIS ORDER SELLER AGREES TO SUCH TERMS
AND CONDITIONS. ANY DIFFERENT OR ADDITIONAL TERMS
IN SELLER’S ACCEPTANCE FORM, IF ANY, ARE HEREBY
REJECTED.
129
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 11 (citing Dep. of Jamie Latuso, Tr.
Ex. P-21, at 14—16; Joint Stipulations of Fact in Lieu of Live Test. by Jamie Latuso, Doc. 174).
130
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 12 (citing BASF December Purchase
Order, Tr. Ex. J-2, at 3).
131
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 12 (citing BASF December Purchase
Order, Tr. Ex. J-2, at 4).
132
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 12 (citing BASF December Purchase
Order, Tr. Ex. J-2, at 5).
133
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 12 (citing BASF December Purchase
Order, Tr. Ex. J-2, at 1).
22
2. Man’s Position
80.
Man, on the other hand, claims that its Quote was accepted by BASF by
virtue of 1) BASF’s requesting Man’s assistance on an emergency basis, 2)
BASF’s receipt of Man’s Quote, 3) allowing Man onto its premises and 4)
allowing it to begin work in preparation for the Compressor repair, all before the
issuance of the Purchase Order.134
81.
Man disputes that it received all five pages of the Purchase Order; rather,
it claims that it only received the first two pages so that, even if the Purchase
Order is the controlling contract, only the first two pages are binding on Man.135
Therefore, argues Man, the warranty clause, the acceptance-by-performance
clause and the consequential damages clause, among others, are legally irrelevant
in this case.
82.
In any event, however, because Man’s Quote had already been accepted by virtue
of BASF’s silence and failure to object to it and by allowing Man to begin work,136
BASF’s Purchase Order was no more than “a unilateral [and unsuccessful] attempt to
modify the existing contract.”137
134
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 53-59.
In its briefing on pretrial motions, Man submitted the affidavit of Nick Granier who stated Man received only two
of the five pages. (Doc. 78-8, at 3.) At trial, Granier testified he did not see the document on December 28, but
reviewed it later. Trial Test. of Nick Granier, Trial Tr. vol. 8, 223—24, Doc. 190. As discussed infra, this issue is
resolved in BASF’s favor, largely based on the Joint Stipulations of Fact in Lieu of Live Testimony by Jamie
Latuso.
136
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 53—59.
137
Id. at 58.
135
23
B.
Findings of Fact - the Contract
83.
Man’s Quote was not an offer because both parties contemplated that a purchase
order would issue in response to the Quote. Rather the Court finds that the intent of both
parties was that BASF’s Purchase Order would constitute the contract between them.
84.
The following facts, among others, support the Court’s conclusion that Man’s
Quote was not an offer and that BASF’s Purchase Order constituted the contract between
BASF and Man:
In his December 27, 2011, email attaching the Quote, Man’s Jerad
Mitchell stated, “Please work with Nick to get a P.O. for this
opportunity.”138
In his December 28 email at 6:14 a.m., Mitchell again stated, “It is
possible that the P.O. is caught up due to the time frame we are
working in to support this opportunity. Can you please email Nick
and I a confirmation P.O. which supports the efforts we a [sic] putting
forth.”139
The Quote states, “We would need a purchase order before we can
lock in a firm date.”140 Further, the Quote states, “Tooling required to
perform scope finalized by client and MAN,” implying that the scope
needed to be finalized.141
The testimony of Man’s employees confirms the Quote was not an
offer and the Purchase Order controlled. James Spinks, Man’s
supervisor for the job, testified that he made sure he got the Purchase
Order before starting work on the Compressor.142 Man’s Nick Granier
also testified that “no work can be done until BASF issues the
purchase order [,]”143 and agreed that the Purchase Order is what
controls the scope of work.144
138
Email Chain, Tr. Ex. P-361, at 1 (emphasis added).
Email Chain, Tr. Ex. P-361, at 3 (emphasis added).
140
Quote, Tr. Ex. J-1, at 2 (emphasis added).
141
Quote, Tr. Ex. J-1, at 1 (emphasis added).
142
Trial Test. of James Spinks, Trial Tr. vol. 5, 16, Doc. 187.
143
Dep. of Nick Granier, Tr. Ex. P-416-L, at 44-45; see also Trial Test. of Nick Granier, Trial Tr. vol. 8, 234—35,
Doc. 190.
144
Trial Test. of Nick Granier, Trial Tr. vol. 8, 225, Doc. 190.
139
24
85.
Man did not reject or attempt to negotiate the Terms and Conditions of
the BASF Purchase Order before beginning work.145 Man was well
aware of how to do so.146 Indeed, on past occasions, if Man sought to
dispute the terms and conditions of a purchase order, it would attempt
to negotiate or revise the terms and conditions before beginning the
work.147 In the absence of such efforts, Man admitted that the
customer’s terms and conditions controlled.148
In conclusion, the Quote was not sufficiently precise and complete so that the
intended contract could be concluded by the BASF’s expression of its assent. It is clear
that the parties agreed that the Purchase Order would be the contract governing the work
to be done on the Compressor.
86.
The Court finds, even if the Quote were an offer, BASF did not accept its terms
expressly or by silence. BASF’s December 25, 2011, email to Nick Granier of Man
(“Would you have a crew available to assist changing the seal on C300 Wednesday 28th?
Can you give me a quote?”)149 cannot reasonably be construed as an acceptance of the
December 7 Quote. The email did not mention the Quote, and BASF specifically asked
145
Dep. of Barbara Lang, Tr. Ex. P-416-F, at 43:17—44:7.
Man previously negotiated supplemental terms and conditions with BASF that were only applicable in Texas. Dep.
of Linda Harris, Tr. Ex. P-416-G, at 19:15—20:21. No such negotiated terms covered work in Louisiana. Id. at 20:18—
21. However, this negotiation and Man’s corporate policy for handling customer-provided terms and conditions
evidences that Man was fully aware of how to reject terms and conditions or negotiate different arrangement with
their customers.
147
Dep. of Barbara Lang, Tr. Ex. P-416-F, at 41:6—43:4; Dep. of Linda Harris, Tr. Ex. P-416-G, at 17:7—18:12.
148
Ms. Lang testified:
Q: Now, if the customer has—going back to my hypothetical—has this purchase order that says our
terms and conditions control, and MAN Diesel does not contact the customer to negotiate but simply
begins work, would you agree with me that MAN Diesel is then bound by what the purchase order
said?
A: Yes.
Dep. of Barbara Lang, Tr. Ex. P-416-F, at 43:9—16.
Ms. Harris testified:
Q: . . . A quote is issued by M-A-N Diesel. The customer issues a purchase order that has its own
terms and conditions that do not waive consequential damages, and M-A-N doesn’t do anything as
far as responding to that; they just send a crew out and they start working. Under that scenario, the
customer’s terms and conditions control, correct?
A: That is correct.
Dep. of Linda Harris, Tr. Ex. P-416-G, at 18:17—25.
149
Email Chain, Tr. Ex. P-361, at 4.
146
25
Man to send it a quote. BASF’s other email (“Thanks in advance for the help.”)150 also
was not an acceptance. This email was sent in response to Granier’s December 26 email,
which did not mention the Quote and only stated that Man has “several people available”
and that Man would contact BASF the following morning to discuss the project.151 In
short, there was no express acceptance.
87.
Man argues, however, that even if its Quote was not expressly accepted, that
under Louisiana Civil Code article 1942, “When, because of special circumstances, the
offeree's silence leads the offeror reasonably to believe that a contract has been formed,
the offer is deemed accepted.”152 Based on the plain text, there are three requirements to
this article: (1) special circumstances, (2) silence by the offeree, and (3) reasonable belief
by the offeror that a contract has been formed. Man argues that all three requirements
were met. The Court disagrees.
88.
The parties argue as to whether there was an emergency here which would qualify
as “special circumstances” justifying acceptance by silence.
89.
While the evidence shows that this work requested from Man was not routine and
might even be fairly characterized as an emergency, nonetheless, these were not the kind
of “specialized circumstances” envisioned by Article 1942. The communications from
Man show that it anticipated and, indeed required, a BASF purchase order to issue before
its work on the Compressor itself would begin. This is exactly what happened.
90.
The Court further concludes that BASF’s allowing the Man crew to do some work
before the Purchase Order was issued was not an acceptance of the Quote. Even though
150
Email Chain, Tr. Ex. P-361, at 3.
Email Chain, Tr. Ex. P-361, at 3.
152
La. Civ. Code. art. 1942.
151
26
preparatory work began before the Purchase Order issued, both sides anticipated that a
purchase order would issue and actual work on compressor would not begin until that
happened.
91.
When that Purchase Order was issued and, at the very least, two pages of it were
received by Man, Man did not balk, Man did not protest, and Man did not attempt to
renegotiate. Rather, Man’s crew began to work on the Compressor.
92.
On the issue of whether all or only a part of the Purchase Order was received, the
Court concludes that the weight of the evidence favors BASF. The deposition testimony
of Jamie Latuso153 and the stipulation made in lieu of her live testimony154 along with the
circumstances surrounding same, convinces the Court that BASF sent and Man received
all five pages.
93.
In sum, the Court finds that the full five page Purchase Order constitutes the
contract existing between BASF and Man as regards the work done on the Compressor.
Man’s Quote was not an offer. Even if it was an offer, there was no express acceptance
or acceptance by silence.
C.
Arguments of the Parties – Investigation, RCFA and Alleged Spoliation of
Evidence
1. Man’s Position
94.
Man makes three separate but interrelated points in support of its spoliation
counterclaim: 155 first, Man was not advised as to BASF’s preliminary conclusion that
loose bearing cap bolts were discovered after the event, that loose bolts caused the
153
Dep. of Jamie Latuso, Tr. Ex. P-421, at 14—16.
Joint Stipulations of Fact in Lieu of Live Test. by Jamie Latuso, Doc. 174 at 3.
155
First Suppl. & Am. Answer and Countercl., Doc. 26; Second Suppl. & Am. Answer and Countercl., Doc. 49; The
counterclaim was the subject of a motion for summary judgment by BASF (Doc. 102) which was denied (Doc. 119).
154
27
failure, that Man was thought to be responsible, and that BASF was contemplating a
claim against Man for the damages, until after the Compressor was repaired and the bolts
and other evidence were lost and no longer able to be independently examined. Second,
when it was advised of these points, Man’s request to be allowed access to this evidence
was rebuffed. Third, Man was not invited to participate in BASF’s RCFA and, indeed,
was not even made aware that one was being conducted until after the evidence was no
longer able to be examined in its post-accident state.
95.
Independent of its spoliation claim, Man strenuously challenges the objectivity,
methodology and conclusions of BASF’s investigation and RCFA.156
96.
Because the Court’s decision potentially involves an adverse evidentiary
presumption that will affect its evaluation of fact questions of liability, the Court will
now consider the issues of BASF’s investigation, RCFA, and its alleged spoliation of
evidence.
97.
First, Man complains that it was denied access to the Compressor and the
opportunity to inspect it independently or participate in BASF’s investigation of the
accident. Indeed, for a significant period of time, Man was unaware that there was an
ongoing investigation and that Man was a potential target as a responsible party.
98.
Man contends that its crew members were initially escorted away from the area
of the Compressor and out of the plant shortly after the failure, and were therefore not
present for the discovery by Mason Cook of the loose bolts on the B side bearing cap.157
Man’s crew had no access to the compressor or any evidence until their crew members
156
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 13-25; Defendant’s Rebuttal to Plaintiff’s
Post-Trial Proposed Findings and Conclusions, Doc. 195 at 1—4.
157
See Trial Test. of James Spinks, Trial Tr. vol. 5, 75, Doc. 187.
28
were summoned back to the plant on the evening of December 31, 2011, to partially
dismantle the machine. This occurred under the direction and supervision of Aaron Rose
in order for him and Rene Scholz, the Siemens consultant, to make an assessment
regarding the extent of the internal damage to its components.158
99.
According to Man, neither Man’s crew on the scene nor Man’s management
were notified at that time of the failure or later that day that BASF considered Man at
fault for the failure and that BASF was contemplating a claim against it,159 although
BASF’s Management was already contemplating such a claim, as evidenced by company
internal emails such as the one sent to Kevin McCarroll (Services Director, BASF) on
December 31, 2011:
. . . Aaron Rose is assisting with the failure investigation and, at this time,
the failure is said to be mechanical in nature. The root cause is not clear
yet but, bolts on the bearing end caps were found loose . . . with the
discovery of the loose bolts, both Siemen’s (oversight) and/or Mann
(craftsman) may incur some or all liability for this event.160
100.
Man contends that other email exchanges between and among BASF plant
executives further confirm that, within days of the incident, both Siemens and MAN
Diesel were suspected of being at fault and causing whatever loss BASF was to
sustain.161
101.
Thus, says Man, BASF’s argument that Man’s crew had access to the evidence
shortly after the accident and could have been included in the investigation if they had
158
See Trial Test. of James Spinks, Trial Tr. vol. 5, 129—31, Doc. 187.
Man argues that its first notice was on January 18, 2012, when it received a formal demand letter from BASF.
Letter from Roth to Yura, Tr. Ex. J-45.
160
Email from Falsone to McCarroll regarding work done on compressor (BASF_MAN0002329), Tr. Ex. D-70
(emphasis added).
161
Trial Test. of Tom Yura, Trial Tr. vol. 1, 81, 84, Feb. 22, 2016, Doc. 183; Emails regarding compressor failure
(BASF_MAN 003343-003344), Tr. Ex. D-274; Emails from Yura inquiring whether statements have been taken
from Man (BASF_MAN 005480), Tr. Ex. D-275; Emails from Rose to Yura regarding no formal interviews have
been conducted (BASF_MAN 000284), Tr. Ex. D-276.
159
29
only asked, fails for four reasons: first, BASF did not tell Man’s crew or management
that BASF considered Man responsible, nor were they told that an RCFA had already
begun, nor was Man’s management invited to participate;162 second, Man’s on-site crew
members were ordinary millwrights, with no expertise in accident investigation or
analysis, and were given no notice that BASF Management had already reached the
tentative conclusion that their company might be held responsible for the damage; third,
after Man personnel completed loading the Compressor and personnel left the premises
on December 31,163 Man personnel were thereafter barred from the BASF facility,
without access to any evidence and have not, since then, set foot inside the BASF
plant;164 and finally, by the time Man was made aware of BASF’s preliminary
conclusions and intention to make claim against Man on January 18, 2012,165 the
evidence was no longer available for inspection.
102.
In sum, insists Man, BASF consciously decided to not reveal its preliminary
suspicions and possible future claim to Man until January 18, 2012, after critical evidence
could no longer be examined by Man, notwithstanding its (1) initial conclusion that
improperly loosened bolts was the cause of the failure, (2) that Man was likely
responsible, and (3) a claim against Man for damages might be made.166
103.
By letter dated January 18, 2012, BASF first placed Man on notice that Man
would be held responsible by BASF for this loss, estimated to be in the millions of
dollars.167
162
Trial Test. of Tom Yura, Trial Tr. vol. 1, 51, Doc. 183.
Trial Test. of Mervin McConn, Trial Tr. vol. 5, 189, Doc. 187.
164
Trial Test. of Nicholas Granier, Trial Tr. vol. 8, 212—14, Doc. 190.
165
Letter from Yura to Doiron, Tr. Ex. J-40; Trial Test. of Tom Yura, Trial Tr. vol. 1, 51, Doc 183.
166
Trial Test. of Tom Yura, Trial Tr. vol. 1, 84, Doc. 183; see also Correspondence dated January 2, 2012
(BASF_MAN0002207), Tr. Ex. D-268 (stating that Siemens was to be involved in investigation and Man was not).
167
Letter from Yura to Doiron, Tr. Ex. J-40; Trial Test. of Tom Yura, Trial Tr. vol. 1, 51, Doc. 183.
163
30
104.
After receiving that letter, Man replied by letter dated February 3, 2012, asking to
be included in any investigation,168 specifically requesting that it be allowed to attend any
investigation or testing, receive reports, and participate in root cause discussions,
unaware the RCFA was already complete and the culminating “brainstorming” discussion
had already been held.169
105.
But that request was rejected by BASF, who refused to permit Man
representatives to attend the root-cause analysis presentation170 and failed to mention that
BASF’s RCFA had already been completed on January 24 and Man’s only opportunity to
access the evidence or participate had already passed.171
106.
In addition to intentionally depriving Man from participating in the post-accident
investigation, Man accuses BASF of destroying, losing and failing to preserve important
pieces of evidence which would have helped the parties objectively identify the true
cause of the failure.
107.
The particular evidence about which MAN Diesel complains consists primarily of
(1) the four bearing cap bolts on the “B” side of the compressor or, indeed, of the sixteen
or more various other bolts found loose after the failure, (2) the pre-start-up checklist
completed by the BASF operations crew documenting their activities including the prestart-up drainage of the suction piping and the quantities of water drained, and (3)
168
Letter from Roth to Yura, Tr. Ex. J-45.
Letter from Roth to Yura, Tr. Ex. J-45; Letter from Roth to Yura dated February 3, 2012 (MAN Diesel 577), Tr.
Ex. D-269.
170
Letter from Roth to Yura, Tr. Ex. J-45; Letter from Roth to Yura dated February 3, 2012 (MAN Diesel 577), Tr.
Ex. D-269; Letter from Yura to Man (MAN Diesel 644-645), Tr. Exs. D-25 & J-47 (“Man will not be allowed to
participate in, or be privy to, any internal review or investigation conducted by BASF.”).
171
Trial Test. of Tom Yura, Trial Tr. vol. 1, 74-76, 99, Doc. 183; Letter from Yura to Man (MAN Diesel 644-645),
Tr. Ex. J-47.
169
31
documentation regarding the post-failure root cause findings or analysis conducted by
BASF which was required by BASF’s own internal policies.
108.
Loose bolts on the B-side bearing cap were noticed immediately after the
accident172 and emails sent shortly thereafter make clear that these loose bolts were
suspected of causing the accident.173
109.
Yet, the bolts were not preserved and, in the process of machining, the bolts were
either lost or mixed in with other fastening bolts so that BASF could no longer produce or
identify them for Man and its experts to examine.174
110.
Man argues that the loss of the bolts was a severe blow to its ability to defend
itself and, in support, offered the expert testimony of mechanical engineer and
metallurgist Dr. Thomas Shelton. Shelton testified regarding the potential of factual
findings, deductions and conclusions that might have been drawn by close or microscopic
examination of the four “suspect” bolts.175
111.
Dr. Shelton confirmed that had the bolts and other component parts of the
machine been subjected to proper inspection and evaluation, including microscopic
observation, the root cause of the failure regarding the bolts likely could have been
eliminated or confirmed.176
112.
Further, testimony by Manfred Chi of The Gear Works Out of Seattle Washington
(which performed repairs on part of the Compressor) confirmed that bolts identical to the
172
Email from Mayers regarding compressor failure (BASF_MAN001535), Tr. Ex. D-69.
Emails dated December 31, 2011, regarding work done on the compressor (BASF_MAN0002329), Tr. Ex. D-70.
174
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 17—18, 20—21, Doc. 184; Trial Test. of Tom Yura, Trial Tr. vol. 1,
82, Doc. 183; Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 157, Mar. 2, 2016, Doc. 190.
175
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 156—57 , 163, 171, 174, Doc. 190; Expert report of Tom
Shelton, Ph.D., Tr. Ex. D-283, at 8.
176
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 156—57, 163, 171, 174, Doc. 190; Expert report of Tom
Shelton, Ph.D., Tr. Ex. D-283.
173
32
ones on the bearing caps were neither rare nor unobtainable on the open market belying
any contention that these bolts could not have been segregated and preserved.177
113.
Man also complains about BASF’s loss of the pre-start-up checklist made by
BASF personnel before restarting the Compressor.
114.
In the immediate hours and days after the failure, while the RCFA was under way,
Leonard Landry wrote a report summarizing the activities that preceded the failure.178 At
that time, Landry was unquestionably aware of the magnitude of the failure and the effect
it would have on revenues generated by the unit where he had worked for years.179
115.
According to Landry, the checklist was to document completion of various tasks,
including drainage of the intake piping leading to the Compressor, and the “checklist”
was to be fully completed, including measurements of the quantity of water drained from
the pipes.180
116.
Landry conceded the form was completed, and, Man contends, it can hardly be
doubted that such evidence might have been critical to the investigation and analysis of
the cause of the loss; yet BASF did not preserve it.181
117.
Thus, when the bearing cap bolts and pre-start-up checklist would still have been
in its possession and the RCFA had just begun,182 it is clear that BASF was
contemplating a claim against Man for the failure and thus had an obligation to preserve
this important evidence.
177
Trial Test. of Manfred Chi, Trial Tr. vol. 3, 21—22, Feb. 24, 2016, Doc. 185.
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 116–18, Doc. 185.
179
Id.
180
Id.
181
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 112—14, Doc. 185.
182
Trial Test. of Tom Yura, Trial Tr. vol. 1, 81, 84, Doc. 183; Email from Falson to McCarroll regarding work done
on compressor during September turnaround (BASF_MAN0002329), Tr. Ex. D-70.
178
33
118.
Yet, Landry could not account for its disappearance admitting he did not see fit to
preserve this evidence.183
119.
Steve Kushnick, consultant and expert witness for Man, also testified how the loss
of the documentary evidence put him “at a disadvantage” in his own failure analysis and
impaired his ability to review and analyze evidence regarding the drainage of the suction
pipes and the quantity of liquid disgorged.184
120.
Finally, Man charges that BASF’s RCFA was an “institutional whitewash”185 in
that BASF failed to follow its own procedures and guidelines for conducting an RCFA
and, instead, followed a procedure intentionally designed to insure that its conclusion
would confirm its initial theory, i.e. that loose bolts caused the failure.
121.
BASF had an extensive, formal methodology and policy for conducting RCFAs
after significant accidents or failures, such as the one involved here.186
122.
Yet, says Man, Rose failed to follow those guidelines. For example, although the
RCFA guidelines allowed the team to consult with independent experts and even though
Rose initially proposed that the RCFA do so, that idea was ultimately ignored and
thereby rejected.187
123.
BASF’s RCFA policy required, inter alia, that the findings and results of the
RCFA, be documented, that documented recommendations be submitted to Management,
and that documented follow up procedures be articulated and confirmed.188
183
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 114, Doc. 185.
Trial Test. of Steve Kushnick, P.E., Trial Tr. vol. 9, 94—95, Mar. 8, 2016, Doc. 191.
185
Defendant’s Rebuttal to Plaintiff’s Post Trial Proposed Finding and Conclusions, Doc. 195 at 2.
186
Trial Test. of Tom Yura, Trial Tr. vol.1, 86—87, Doc. 183; BASF’s Guideline for RCFA, Tr. Ex. P-37 & Tr. Ex.
D-14.
187
Trial Test. of Tom Yura, Trial Tr. vol. 1, 83, Doc. 183; Trial Test. of Aaron Rose, Trial Tr. vol. 2, 8—9, Doc.
184; see also Tr. Exs. D-72 & D-68.
188
Trial Test. of Tom Yura, Trial Tr. vol. 1, 83, Doc. 183; Trial Test. of Aaron Rose, Trial Tr. vol. 2, 8—9, Doc.
184.
184
34
124.
Neither the findings, conclusions nor the analysis of the Root Cause Failure
Analysis were reduced to writing, as BASF policy regarding the conduct of RCFA’s
required, and thus “[a] final ‘written’ root cause report was never created”189 thus
depriving Man of an opportunity to learn of the alleged root cause before the machine
was rebuilt.
125.
BASF has denied the existence of any other document prepared by its RCFA team
in connection with what it claims is a multi-million-dollar loss for which it has brought
this lawsuit, notwithstanding its own, self-imposed obligation to have done so.
126.
While BASF has consistently maintained that it conducted a fair and objective
RCFA, none of the required documentation was kept except for an abstract “decision
tree” apparently utilized by Rose and evidently presented to several BASF Management
personnel at a meeting on January 24, 2012.190
127.
Even the January 24, 2012, meeting at which Rose presented the findings and
conclusions of the RCFA is devoid of minutes, notes, power points or any other
documentation.
128.
Man argues that the fact that no report, findings, or conclusions were made by
BASF, as its own RCFA policy required, makes clear that the investigation was not truly
an objective root cause investigation. Rather, it was an effort to support its almost
immediate conclusion that the cause of the accident was loose bolts for which Man was
allegedly responsible.
189
Email dated October 7, 2013, from David Nelson, Counsel for BASF, to Richard Chopin and Sarah Ney, Counsel
for Man, Doc. 21-4 at 2.
190
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 35—37, 41, Doc. 184.
35
2. BASF’s Position
129.
Not surprisingly, BASF defends its investigation, its RCFA, and the conclusions
flowing therefrom.191 While it concedes that its RCFA may not have been “perfect” and
its documentation “left something to be desired,”192 BASF claims that the RCFA was
adequately and completely performed and ultimately reached the right result as to the
cause of the event.193
130.
Further, BASF protests that its loss of evidence was inadvertent, innocent, and, in
any event, harmless.194
131.
BASF argues that it began investigating the root cause on December 30,
immediately following the failure. BASF assigned Reliability Engineer Aaron Rose to
lead a team to conduct its RCFA.195
132.
Further, BASF contends it was not legally required to perform an RCFA at all.196
BASF adds that, while standard methodologies exist, there is no one “right” way to
perform an RCFA.197 Rather, each company and individual is free to set their own
guidelines.198
133.
BASF does have a set of RCFA guidelines that Rose referenced during the RCFA
because he found them to be helpful.199
191
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 19-24, 72-75.
Id. at 73—74.
193
Id. at 19—24, 72—75.
194
Id. at 55.
195
Trial Test. of Tom Yura, Trial. Tr. vol. 1, 56—58, Doc. 183.
196
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 189, Doc. 190.
197
Id.
198
Trial Test. of Steven Kushnick, P.E., Trial Tr. vol. 9, 24—25, Doc. 191.
199
BASF’s Guideline for RCFA, Tr. Ex. P-37; Trial Test. of Aaron Rose, Trial. Tr. vol. 1, 201, Doc. 183; see also
Trial Test. of Thomas Yura, Trial Tr. vol. 1, 102, Doc. 183.
192
36
134.
The goals set for the RCFA included that “[b]y correct identification and
elimination of the causes for equipment failure, plant availability and effectiveness will
be improved.”200 As described in the BASF RCFA guidelines and by Rose, the purpose
of the RCFA was to find the cause of the failure in order to ensure that it did not occur
again, rather than determine the fault of any particular party.201
135.
Rose was not at work on the day of the failure but was called on that day to lead
the investigation. While en route to the BASF facility, Rose spoke with John Richard and
Joe Parsiola about the incident and their initial thoughts regarding the cause.202 Rose was
informed that the B Side bearing cap on the pinion had lifted and that there was some
speculation that there had been an explosion internal to the Compressor.203
136.
Parsiola also suggested that liquid intrusion could be a potential cause.204 At the
time of those calls, BASF maintains that, while Rose had some initial facts of the failure,
he had not ruled out any theories.205
137.
Rose arrived onsite at approximately 8:00 p.m.206 He performed a visual overview
of the machine to determine its damage condition.207
200
BASF’s Guideline for RCFA, Tr. Ex. P-37, at 1. BASF contends that Dr. Shelton agreed that Mr. Rose’s notes
reflected that he was trying to identify the problem, the reason for the failure, and the fix, so they could get the
compressor back into service, as directed by the guidelines. Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 188,
Doc. 190.
201
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 151, Doc. 183. Aaron Rose testified that his main concern in following
through this investigation was to ensure that he understood what mechanically had happened so that it would not
happen again when the machine was restarted. Id. at 167.
202
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 126—27, Doc. 183.
203
Id. Mason Cook testified that he had noticed that the bearing caps were lifted on the B side of the compressor. Dep.
of Mason Cook, Tr. Ex. J-86, at 38:1—8.
204
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 127, Doc. 183; Trial Test. of Joseph Parisola, Trial Tr. vol. 3, 179—80,
Doc. 185.
205
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 141, Doc. 183.
206
Id. at 128.
207
Id. at 141.
37
138.
Afterwards, Rose inspected the B Side bearing cap area, where he had been told
that the bearing cap had lifted.208 He found a gap between the top and bottom surfaces of
the bearing cover for the B Side of the Compressor. He also found that several bolts on
the B Side of the Compressor appeared to be loose. After first documenting their position
with photographs, he found that the bolts were loose enough to be unscrewed by hand.209
139.
Those included the bearing cap bolts, several smaller bolts that connect the
bearing caps to the gear case, and several bolts that connect an exhaust pipe to the
bearing caps.210 Rose, in the presence of BASF and Man employees, was able to screw
the B side bearing cap bolts in and out of the end cap by hand without difficulty.211
140.
Based on this, Rose initially hypothesized that there was no damage to the bolts or
to the threads in the bearing cap,212 indicating that the bolts were loose before the failure
and did not loosen as a result of the failure.213
141.
BASF contends that Rose asked Man personnel if they knew how the bolts could
have come loose, and they claimed to have no idea.214
142.
Rose similarly attempted to unscrew the bolts on the bearing caps on the A Side
of the Compressor by hand, but he could not do so.215
208
Id.
Id. at 142; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 92:13—18.
210
These are the bolts that would be removed to take the bearing cap off. Trial Test. of Aaron Rose, Trial Tr. vol. 1,
142, Doc. 183.
211
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 163, Doc. 184; Trial Test. of James Sprinks, Trial Tr. vol. 5, 75—76,
131, Doc. 187.
212
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 171, Doc. 183.
213
Id. at 170—71.
214
Id. at 163; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 187—88, Doc. 187.
215
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 147, Doc. 183.
209
38
143.
Later that night, Man’s crew returned to the facility to disassemble the
Compressor.216 During that disassembly, Man observed the damage to the Compressor.217
144.
Rose observed dusty, sandy debris along the bottom of the inlet when the elbow
was taken off and the inlet guide vane was visible.218 No one observed any water or
moisture in the bottom of the pipe.219
145.
The Compressor sustained catastrophic internal damages including destruction of
the Compressor’s gear box and the turbine blades.
146.
Once BASF determined that the damage was so severe that it could not be fixed
on site, Man was asked to disassemble the Compressor from the unit and to prepare it for
loading onto a truck for shipment to the Siemens TurboCare facility in Houston.220 Thus,
BASF maintains that, for a few hours immediately after the failure, Man was onsite until
the Compressor was shipped to Houston.221
147.
BASF insists that, despite Rose’s observation of the loose bearing cap bolts,
BASF conducted a full and impartial root cause analysis in order to rule out other
potential causes, since failure to correctly identify the cause could lead to future failures
at start-up.222
216
Id. at 151—52; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 186, Doc. 187.
Trial Test. of James Sprinks, Trial Tr. vol. 5, 79—81, Doc. 187.
218
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 153—55, Doc. 183; Photos taken night of failure at Geismar, Tr. Ex. P77, at 44.
219
Aaron Rose described the inside of the Compressor as being “bone dry.” Trial Test. of Aaron Rose, Trial Tr. vol.
1, 154—55, Doc. 183.
220
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 165, Doc. 183; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 189, Doc.
187.
221
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 164, Doc. 183; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 231—32,
Doc. 187.
222
Aaron Rose discussed the necessity of performing a full root cause failure analysis in his testimony:
Q: Mr. Rose, was your root cause investigation conclusion driven?
A: No, not at all. It couldn’t be. This is a multimillion dollar piece of equipment that caused
substantial financial disruption for not only our company but many others, over the course of 52 or
so day outage for this commodity. Beyond that, from a safety standpoint, you really don’t want these
kind of gases getting out into the atmosphere in the uncontrolled manner that this happened. We
217
39
148.
BASF argues that the RCFA team analyzed the evidence from the failure, first-
hand observations, and data gathered from instruments on the Compressor.223
149.
Rose also traveled to Houston, Texas to observe the Compressor as it was being
disassembled, repaired, and reassembled at TurboCare. There he personally observed the
damage to the internal components.224
150.
During the disassembly and repair, Rose and the TurboCare personnel extensively
photographed the Compressor. Rose observed that the damage to the A Side of the
Compressor (where the bolts were tight after failure) was much worse than the damage to
the B Side.225 Specifically, the pinion shaft, bearings, and bearing on the A Side of the
Compressor sustained more damage.226
151.
BASF insists that, after investigating the failure, Rose and the RCFA team began
an objective review of potential causes and the likelihood of said causes through the
creation of the fault tree.
152.
BASF maintains that its RCFA team fully considered other possible failure modes
and the physical evidence and correctly concluded that the loose bolts on the B side
were down for 52 days this time. Had I been wrong in my conclusion and this machine had done the
same thing again, we would have been down for over a year because there would not have been
another compressor . . . we would have had to remanufacture all of their rotating assembly which,
as I recall, took over a year after the fact to replace our spare parts. . . . There was no concern for
me in the conduct of this root cause analysis other than—other than being absolutely certain that
when I told them they could start that machines that it was going to start perfectly.
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 229—30, Doc. 183.
223
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 165, Doc. 183. Mason Cook and Aaron Rose discussed several possible
causes of the failure including the loose bolts, non-process slugging, and deadheading. Tr. Ex. J-86, Dep. of Mason
Cook, Tr. Ex. J-86, at 50:10—53:11 .
224
The majority of Mr. Rose’s time and education in Houston was related to the disassembly and measurement of the
machine and its condition so he could determine the timeline and the cause of the failure. Trial Test. of Aaron Rose,
Trial Tr. vol. 1, 197, Doc. 183. The Siemens personnel provided information regarding the design intent of the
machine, its tolerance, and other information about the operation of the Compressor. Id.
225
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 168, Doc. 183.
226
Id. at 149—50, 177—78, 183—85.
40
bearing cap caused the failure.227 The RCFA team used the “Apollo” RCFA program to
walk through a process of elimination procedure to find the most probable cause of the
failure.
153.
The RCFA team ruled out water intrusion early in the investigation because the
interior of the Compressor was extremely dry and there was no evidence that any liquid
had ever been in the Compressor during the failure228 and because a knockout drum
upstream of the Compressor that would catch any water in the pipe before it reached the
Compressor.229 If there had been any moisture in the pipe between the knockout drum
and the Compressor, BASF insists, it would have fallen down to the B Side of the
Compressor, not the A Side, and would have been drained at the elbow drain.230
154.
The fault tree created in BASF’s Apollo program provided the documentation for
some of the RCFA team’s analysis.231 BASF contends that the process used by the RCFA
team was logical and followed a natural progression wherein all causes—including those
proposed during this trial—other than the loose bolts were eliminated.
227
In particular, BASF argues that the RCFA team considered the inconsistent damage in the internal components,
which indicated differing conditions on the two sides (i.e., one side being loose while the other is tight), and that the
loose bearing cap on the south side. According to BASF, this indicated that the pinion shaft caused greater damage on
the north side because it was forced to be in close contact with the bearing, while it had more “give” on the south side
because the bearing cap was not properly tightened. The RCFA team considered other causes, but the evidence
consistently pointed to the loose bearing cap bolts on the south side of the Compressor. Trial Test. of Aaron Rose,
Trial Tr. vol. 1, 231—34, Doc. 183.
228
“We had not seen an indication of liquid whatsoever internal to that machine when we disassembled it very shortly
after the failure. And so while we had not necessarily ruled that out, that was a pretty large chunk of evidence
supporting that that wasn’t how this happened.” Trial Test. of Aaron Rose, Trial Tr. vol. 1, 169, Doc. 183. Water
intrusion was not included explicitly on the fault tree because it was ruled out so early. However, it was included as a
part of other theories on the fault tree. Trial Test. of Aaron Rose, Trial Tr. vol. 1, 232-34, Doc. 183; see also Trial
Test. of James Spinks, Trial Tr. vol. 5, 79, Doc. 187 (“Q: There was oil everywhere. Did you see any water, sir? A:
No, sir.”).
229
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 232—33, Doc. 183.
230
Id. at 233.
231
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 35, Doc. 184.
41
155.
Rose presented the RCFA findings at a January 24, 2012, meeting by discussing
the Apollo fault tree analysis, a detailed discussion of the mechanisms of the Compressor
that, says BASF, supported the eliminations made on the fault tree, and relevant
photographs.232
156.
After considering and eliminating numerous alternative causes, the RCFA team
determined that the loose bearing cap bolts caused the failure.233
157.
Rose testified that water intrusion could be ruled out early in the RCFA because,
as also noted by Dr. Lorenzo, no water was found in the Compressor.234
158.
The RCFA team was also able to rule out willful damage by a disgruntled BASF
or Turner employee by searching the tools held by BASF and Turner and finding that
neither party had access to the necessary tools to loosen the bolts.235
159.
BASF claims that its conclusion is further supported by the fact that, after the
Compressor was repaired and reinstalled, it was restarted successfully using the same
checklists as before the incident and has run successfully since the reinstallation.236 In
fact, the testimony establishes that the Compressor has been stopped and started several
times since the incident without any problems.
160.
Parsiola, as the production Manager for the EO Unit, testified that he was
completely comfortable with restarting the Compressor based upon the conclusions of the
RCFA.237
232
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 220—21, Doc. 183; Apollo Root Cause Chart, Tr. Ex. P-332; see also
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 210—20, Doc. 183 (concerning Mr. Rose’s full testimony regarding the
chart and the different failure causes considered); Trial Test. of Joe Parsiola, Trial Tr. vol. 3, 185, Doc. 185.
233
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 220, 224, Doc. 183.
234
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 169, Doc. 183. The construction of the facility, including the knockout
drum, is an additional reason for ruling out water intrusion. Id. at 232—33.
235
Id. at 172.
236
Id. at 202.
237
Trial Test. of Joseph Parsiola, Trial Tr. vol. 3, 222, Doc. 185.
42
161.
Rose testified that he was 100 percent sure that the loose bolts were the cause of
the Compressor failure.238
162.
BASF argues that, though Man and Siemens did not participate in the RCFA,
neither was prevented from performing their own investigation. No one denied Man
access to the Compressor while it was being rebuilt, says BASF. Man knew where the
Compressor was being sent for repairs, having disassembled and prepared the
Compressor for shipment.
163.
BASF insists that it was not biased in its performance of the RCFA and that it did
not limit the scope of the RCFA in order to avoid a finding of BASF liability.
164.
For instance, two of the first potential causes that were suggested by Joe Parsiola
to Mr. Rose during his drive to the BASF facility were water intrusion and combustion.239
Both of these potential causes are causes that could have been BASF’s fault; specifically,
the Operations Department, of which Mr. Parsiola was a member.240 Both of these
potential causes were fully vetted and ruled out during the RCFA.241
165.
In addition, Rose, who has participated in numerous RCFAs, testified that he has
never seen an incident where someone’s judgment during an RCFA was clouded by
potential liabilities.242
238
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 231, Doc. 183.
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 127, Doc. 183; Trial Test. of Joseph Parsiola, Trial Tr. vol. 3, 179-80,
Doc. 185.
240
Trial Test. of Joseph Parsiola, Trial Tr. vol. 3, 180, Doc. 185.
241
Id. at 185.
242
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 117, 121, Doc. 183; Trial Test. of Aaron Rose, Trial Tr. vol. 2, 46, Doc.
184.
239
43
166.
However, says BASF, out of an abundance of caution, Rose requested outside
party input to “keep him honest,” which he received during the January 24, 2012, RCFA
meeting.243
167.
Last, given the testimony of Butch Landry and Parsiola about the dangers of
working with EO and the importance of the lives of the people working at the facility,
BASF maintains that its culture of safety at BASF would have trumped individual
concern for liability.244
168.
BASF acknowledges that the documentation in the RCFA left “something to be
desired”245 but points out that Man’s expert, Tom Shelton, noted that Mr. Rose’s notetaking was more geared towards collecting information to key Mr. Rose’s memory as to
how to put the Compressor back into service, fix the Compressor, and schedule the
events.246
169.
Rose claimed that he did not take notes of the Man interviews because the
conversations with Man were less than helpful in determining the root cause. Man
personnel consistently claimed that they did not know how the bolts came loose.247 This
243
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 83, Doc. 184. Mr. Rose further testified that he was never denied the
help he needed in performing the RCFA. Id. at 82.
244
Mr. Landry and Mr. Parsiola both testified that they would have no reason to believe that any person at BASF
would allow fault to cloud their judgment during an RCFA. Trial Test. of Leonard Landry, Trial Tr. vol. 3, 92-93,
Doc. 185 (“The reason for these incident reports are [sic] for us to learn from our mistakes . . . if we make a mistake
we’ve got to fix them. . . . It’s all about safety at this point . . . We don’t want to hurt nobody. So a conflict of interest
for me to provide information, no, No. . . . Even if it put fault on me. . . . If it’s my fault, it’s my fault, okay? I’m
responsible for too many people out there.”); Trial Test. of Joseph Parsiola, Trial Tr. vol. 3, 178—79, Doc. 185 (“The
gases that we use in this process are toxic, they’re flammable and they’re extremely volatile. . . . whenever things
happen that are unexpected, people can get hurt. . . . I work with these guys on a daily basis. . . . I know these guys,
some of these guys’ wives and their kids. This is not a job responsibility job, you know, title issue. To me this is a
human issue, okay?”).
245
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 73.
246
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 188—89, Doc. 190.
247
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 167, Doc. 183.
44
information, said Rose, was unhelpful to determining the root cause, so it was not written
down.248
170.
Shelton said that Mr. Rose’s notes were consistent with Mr. Rose’s work and
responsibilities as a reliability engineer.249
171.
Rose and other BASF personnel admitted that the RCFA that was conducted was
not a perfect RCFA.250
172.
Despite these imperfections, BASF contends that the documentation made
through the fault tree and the evidence in this case is sufficient for this Court to find that
the RCFA reached the correct conclusion; that is, the loose bolts were more likely than
not the cause of the failure.
173.
Despite not having a “perfect” RCFA, says BASF, the RCFA team reached the
correct result: that it is more likely than not that the Compressor failure was caused by the
loose bolts on the B Side of the Compressor.
174.
BASF argues that the RCFA testimony and documentation along with the expert
testimony and the other evidence in this matter supports the conclusion that the most
probable cause of the failure is the loose bolts on the B Side of the Compressor.251
248
During trial, Rose admitted it was unusual to have no written notes of the interviews written down or a formalized
written report. Trial. Test. of Aaron Rose, Trial Tr. vol. 2, 85-86, Doc. 184. However, BASF argues this of no moment
because the interviews may not have provided helpful information. Additionally, this Court notes the “newness” of
the Apollo procedure and that the fault tree provides the various causes that were considered by the RCFA team in
determining the root cause. The Apollo program has the ability to self-document; hence, no written report was
produced. Trial Test. of Aaron Rose, Trial Tr. vol. 2, 86, Doc. 184.
249
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 189, Doc. 190.
250
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 202, Doc. 183. Kyle Frederick was asked to be a part of the RCFA team,
but testified that if he had any reservations about how he personally responded to the incident, that would be his only
one. Trial Test. of Kyle Frederick, Trial Tr. vol. 4, 133, Doc. 186.
251
While Man argues that microscopic metallurgical evaluation could have assisted the Court in confirming whether
the bolts were loose before start-up, BASF responds that Dr. Lorenzo testified that microscopic metallurgical
evaluation is not required to determine that the loose bolts were the cause of the Compressor failure. See Trial Test.
of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 63, Feb. 25, 2016, Doc. 186; see also id. at 61, 82 (While Dr. Lorenzo
agreed that some metallurgical testing could beneficial, he limited his testimony to specifically pieces that fail, corrode,
45
175.
With respect to Man’s charge that BASF repaired the Compressor before giving
Man an opportunity to inspect it and BASF’s loss of the subject bolts, BASF answers:
“BASF did not repair the Compressor or fail to preserve the bolts for metallurgical testing
with the intent to deprive [Man] of their evidence for trial.”252
D.
Findings of Fact – BASF’s Investigation, RCFA and Alleged Spoliation of
Evidence
176.
Within a day of the accident, BASF representatives believed that a) the loose B-
Side bearing cap bolts were a prime suspect in what caused the failure,253 b) Man might
be to blame and c) Man “may incur some or all liability for this event.”254
177.
Given these undisputed facts, and the fact that the investigation began on
December 30, the day of the failure, BASF had “notice that the evidence [was] relevant
to litigation or . . . should have known that the evidence may be relevant to future
litigation[]” and therefore had a “duty to preserve” it.255
178.
Under these circumstances, it is quite troubling to the Court that BASF did not
preserve the evidence nor notify Man of the potential claim until a formal demand letter
issued on January 18, 2012,256 by which time BASF’s RCFA was largely completed and
Man’s access to important, if not critical, evidence was forever lost.
break down or explode where the goal is to determine whether the original specifications were met. This case is not a
bolt failure case.).
252
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 55.
253
Email dated 12/31/2011, from McCarroll to Yura (BASF_MAN0002329), Tr. Ex. D-70; see also Email regarding
Compressor failure, Tr. Ex. D-71.
254
Email dated 12/31/2011, from McCarroll to Yura (BASF_MAN0002329), Tr. Ex. D-70 (“Mann (craftsman) (sic)
may incur some or all liability for this event.”).
255
Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 612 (S.D. Tex.2010) (quoting John B. v.
Goetz, 531 F.3d 448, 459 (6th Cir. 2008) (omission in original)). The legal implications of this finding on Man’s
spoliation claim is discussed in the Conclusions of Law section. See infra, Section V.B.
256
Letter from Yura to Doiron, Tr. Ex. J-39, at 1 (“BASF believes the compressor damage and our losses to be the
direct result of the negligence and/or improper workmanship of [Man]. This letter puts [Man] on notice of this claim
and the significant damages being sustained as a result.”); see also Letter from Roth to Yura, Tr. Ex. J-45.
46
179.
In Man’s February 3, 2012, response to BASF’s demand letter, Man rightly
complained:
Since the date of the incident, [Man] has not been involved in the analysis
or repair of the compressor. We have not received any technical reports,
and have not participated in any root cause analysis. Therefore, we cannot,
due to lack of sufficient information to justify such a belief, agree with
your contention that the compressor damage was a direct result of [Man’s]
negligence and/or improper workmanship [].257
180.
In that same letter, Man asked for “an opportunity to have a representative present
for any future inspections, tests, etc. and to take part in any ongoing root cause
discussions[.]”258
181.
BASF’s response of February 13, 2003 was blunt: “Man will not be allowed to
participate in, or be privy to, any internal review or investigation conducted by BASF.”259
Tom Yura, the author of that letter, failed to mention that BASF’s investigation and
repairs and RCFA had been completed for weeks, thus foreclosing any opportunity for
Man to conduct its own inspection, investigation or RCFA with the equipment in its postaccident state.260
182.
In BASF’s February 13 letter, BASF attempts to justify its conduct by pointing
out that Man “was present during the start-up of the compressor[,] witnessed the
catastrophic event [and was] the party who disassembled the compressor and prepared it
for transport.”261 It further maintains that BASF did “nothing to prevent” Man from
257
Letter from Roth to Yura, Tr. Ex. J-45.
Id.
259
Letter from Yura to Roth, Tr. Ex. J-47, at 1.
260
Id. at 1-2.
261
Id. at 1.
258
47
“visiting Siemen’s Houston facility or conducting whatever investigation it sought fit to
do regarding this matter.”262 BASF’s briefing argues the same.263
183.
The Court finds these arguments are baseless since 1) Man had no idea what
caused the Compressor failure at the time it occurred; 2) Man was not notified at the time
of the disassembly and up until January 18 that BASF considered Man to be at fault and
therefore had no reason to believe there was a need for such an investigation; 3) in any
event, Man’s millwright crew were not experts in mechanical engineering or accident
reconstruction and were not qualified to perform this kind of investigation; and 4) by the
time Man was put on notice, critical evidence had been lost and therefore, such an
inspection and investigation could no longer be performed.
184.
The Court finds that BASF’s decision not to notify Man of BASF’s working
hypothesis as to the cause of the Compressor failure and Man’s possible culpability in it
was consciously and deliberately made.264
185.
Thus, BASF deprived Man of the opportunity to have it or its experts a) inspect,
examine and photograph the Compressor in its original post-accident state to, for
instance, test BASF’s representations as to the placement of the subject bolts and caps
and the absence of fluids in certain parts of the compressor and associated piping; and b)
inspect, examine (microscopically or otherwise), test (non-destructively or otherwise) and
photograph the bolts which it was accused of having failed to properly tighten and which
BASF claims caused the accident.
262
Id.
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 23.
264
Of the emails introduced in support of this contention, Joseph Falsone’s January 1, 2012, email to Thomas Yura
is particularly telling as to the considered nature of its decision to not alert Man: “Regarding need for notice, I think
we are good as far as Siemens is concerned since they are involved in the investigation. . . . I need to understand the
contractual relationship with Mann (sic) to determine if we or Siemens need to put them on notice.” Tr. Ex. D-72
263
48
186.
BASF claims this conduct was innocent and inconsequential. The Court disagrees
and finds that this conduct was clearly knowing and deliberate. In a case with potentially
millions of dollars at stake, BASF was, or certainly should have been aware of the need
for preserving evidence for all interested stakeholders to examine. BASF was, or
certainly should have been aware that its conduct would deprive Man of important
evidence. Furthermore, the Court finds that these failures by BASF created a significant
impediment to Man’s defense.265
187.
However, although the Court finds that BASF knew that its conduct would
deprive Man of important evidence, Man has not proved that BASF’s conduct was for the
purpose of depriving Man of this evidence.266 There was no direct evidence of the reason
for BASF’s deliberate conduct. Certainly one reasonable inference from these undisputed
facts is that BASF desired to deprive Man of this evidence. But an equally plausible
inference is that BASF was in a hurry to get its Compressor back on line and its EO Unit
back in production so as to minimize its financial losses. 267
188.
In addition to depriving Man of the opportunity to inspect the Compressor in its
post-accident state, BASF failed to preserve the bolts which it claims were left untightened by Man. Despite the obvious importance of preserving the subject bolts for later
testing, BASF admittedly failed to do so.
265
See, e.g., Expert Report of Tom Shelton, Ph.D., Tr. Ex. D-283, at 8 (“The degree to which the bolts were
tightened at the time of the accident could have more probably than not been determined if the root cause failure
analysis had included a sufficient analysis and documentation of the bolts and bearing caps.”); Expert Report of
Steven Kushnick, P.E., Tr. Ex. D-284, at 62 (“Formal hardware inspection would have provided information useful
or pivotal in determining the issues in the failure of the C-300 compressor.”).
266
The legal implications of this finding are discussed in the Conclusions of Law section. See infra, Section V.B.
267
Indeed, this conclusion seems to be supported by Man’s expert Dr. Tom Shelton, who stated that the scanty notes
of RCFA leader Aaron Rose appeared to be directed toward answering the question “how do I get this thing back in
service; how do I get it fixed.” Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 188—89, Doc. 190.
49
189.
In addition to failing to preserve the bolts, BASF failed to preserve the pre-start-
up check list,268 which may well have proved an important piece of evidence on the issue
of whether the Compressor was properly checked for liquids before start up.
190.
However, the Court also finds that Man has failed to prove that BASF’s loss of
the bolts or checklist was done for the purpose of depriving a potential opposing party of
its use. Rather, as stated above, an equally plausible explanation is that BASF, in its rush
to return the “lifeline of the plant” and the “heart and soul of [their production] process”
to operational status and stem the financial bleeding caused by its loss, BASF cut legal
corners by avoiding what was clearly required of it: making this critical evidence
available for inspection, possible testing, and photographic documentation to all
concerned stakeholders. Man has failed to show, more probably than not, that it was the
former and not the latter.
191.
A separate but interrelated issue is Man’s attack on the methodology and
conclusions of BASF’s RCFA. The Court concludes that the methodology used by BASF
was sloppy at best and its conclusions unreliable.
192.
Clearly, this was no ordinary accident. BASF knew from the beginning that this
would involve the shutdown of a profitable part of its business for a significant period of
time and that this would result in millions of dollars of losses.269 Yet the manner in which
the investigation was carried out was strikingly amateurish.
268
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 112—14, Doc. 185 (admitting he realized it would have been a
“good idea” to preserve the evidence and that it was a “serious incident” but he “did not think to pick up those check
lists.”).
269
In BASF’s January 18, 2012, notice of claim and demand that Man notify its insurers, BASF’s Tom Yura spoke
of the “significant damages being sustained as a result [of the Compressor failure].” Tr. Ex. J-40, at 1.
50
193.
BASF’s Guideline for RCFA was introduced as Tr. Ex. P-37. It is clear under this
Guideline that an RCFA was required to be performed.270 Indeed, because this event
involved a unit shutdown and a “large, expensive repair (i.e., [greater than] $25,000
. . . ),” a “ ‘Formal’ RCFA” was called for.271
194.
The purpose of BASF’s RCFA procedure was to ensure the “correct identification
and elimination of the causes of equipment failure [so that] plant availability and
effectiveness will be improved.”272 “From this, corrective actions are then developed and
implemented.”273 Team members were responsible not only for determining the root
cause but also for “data and evidence collection, . . . recommending corrective actions
[and] reporting the results and recommendations from the RCFA.”274
195.
The RCFA procedure called for “information and data gathering” to be
“comprehensive.”275 An “[i]mpartial [r]epresentative (someone who has no stake in the
outcome)” was to be included on the team, and the team was permitted to utilize “vendor
representatives, witnesses [and] technical experts.”276 “Once the root causes have been
identified and validated, the RCFA Team should develop recommendations and propose
corrective actions to prevent or eliminate future recurrences.”277
196.
The Court finds that these procedures, designed to insure a fair, comprehensive,
open and objective investigation into what caused the event, were largely disregarded.
270
BASF’s Guideline for RCFA, Tr. Ex. P-37, at § 4.1: An RCFA “is to be performed” where an event occurred
“that resulted or could result in a Unit shutdown or product quality issues” or a [l]arge, expensive repair.” Even for
“smaller events,” “[a]n Informal RCFA should be performed.” Id. at §§ 4.1 & 4.1.2.
271
Id. at § 4.1.1.
272
Id. at § 1.
273
Id. at § 2.
274
Id. at § 5.2.
275
Id. at § 4.2
276
Id. at §§ 4.2.1 & 4.2.2.
277
Id. at § 4.7
51
197.
Aside from BASF’s own guidelines, there are a variety of nationally published
standards for the proper way to conduct an RCFA, including those issued by the
American Society of Mechanical Engineers, American Society of Testing Materials, and
the American Society of Metals.278 The Court accepts the opinion of expert witness Dr.
Tom Shelton that BASF’s RCFA did not follow or meet these standards.279
198.
The Court agrees with Shelton’s testimony that the RCFA and investigation did
not utilize the usual and standard tools and techniques which are used in this kind of
inquiry and, as a result, there is simply insufficient data280 to support the conclusions
reached by it.281
199.
The Court finds Aaron Rose’s explanations for these deficiencies unconvincing.
He admitted, for instance, that “it was not the usual practice” to conduct interviews not
documented in some manner; yet, his explanation for there being none in this case was:
“There isn’t a defined standard to say that that has to be documented.”282 His
explanations for having no written findings, conclusions, recommendations, or record of
the meeting in which he revealed same are equally unpersuasive.
200.
The Court is unimpressed by BASF’s argument that there is no legal requirement
that an RCFA be done at all. Since BASF’s own guidelines required an RCFA to be
performed and set parameters for the way it should be conducted and since the findings
and conclusions of its RCFA form a central part of its claim, it would have behooved
BASF to conduct the RCFA in a normal and acceptable manner. It did not.
278
Trial Test. of John Shelton, Ph.D., Trial Tr. vol. 8, 199—200, Doc. 190.
Id.
280
The Court agrees with Shelton’s conclusion that the photographs alone are insufficient to allow an adequate
conclusion to be drawn. Id. at 198.
281
Id. at 147—49, 155—75.
282
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 85, Doc. 184.
279
52
201.
The Court also agrees with Shelton that the return of the Compressor without
incident following repairs at TurboCare does not mean the RCFA reached an accurate
conclusion as to the cause of the failure.283
202.
In addition to being inadequately conducted and not properly documented, the
RCFA’s conclusion that loose bolts on the bearing cap were to blame fails to account for
the fact that there were many bolts loose after the accident, most of which, even under
BASF’s theory of the case, Man would have had no reason to touch. This point is
considered in more detail infra.
203.
In conclusion, the Court finds that BASF intentionally deprived Man of access to
important evidence. However, Man has failed to prove that BASF’s intent was for the
purpose of depriving Man of the evidence.
204.
As to BASF’s RCFA, the Court finds that it was poorly done and gives no weight
to its conclusions for the following reasons:
a. Rose began with the belief that loose bolts were to blame and did little
to rule out other possible causes during the approximate three weeks
the RCFA lasted.284
b. The bolts in question and receptacles, key evidence in the RCFA’s
working hypothesis, were not preserved, inspected microscopically, or
tested metallurgically.
283
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 193—94, Doc. 190.
The Court agrees with expert Steven Kushnick that the “Root Cause Failure [was] already a ‘done deal’ before
the RCFA meeting was ever held.” Expert Report of Steven Kushnick, P.E., Tr. Ex. D-284, at 27; see also Email
dated December 31, 2011, from Kevin McCarrol, Tr. Ex. D-70 (“The root cause is not clear yet, but the bolts on the
bearing end caps were found loose…”); Email dated January 1, 2012, from John Richard, Tr. Ex. D-71 (“We are
conducting an RCFA to ‘officially’ determine the reason for the failure, but during the initial investigation we found
that the bolts on the bearing end caps were only hand tightened.”). Also supporting this conclusion is the email
string quoted in Kushnik’s expert report, Tr. Ex. D-284, at 20-27.
284
53
c. Man was not informed or involved in the RCFA (although BASF’s
guidelines allowed for this)285 and was denied access to key evidence
once demand was made on it.
d. Although the RCFA had several other team members, 286 they did little
other than to gather information for Rose.
e. While Rose was authorized by RCFA guidelines to consult outside
experts287 and even considered doing this,288 he chose not to do so.289
f. Contrary to BASF’s own guidelines, the RCFA produced no
statements, findings, conclusions, recommendations of any kind nor
was there any written documentation of the meeting at which the
findings were presented.290
E.
Arguments of the Parties – Work Done by Man
205.
A key question is whether Man’s crew ever touched the subject bolts, either
intentionally in carrying out their assignment or inadvertently. A second question is
285
BASF’s Guideline for RCFA, Tr. Ex. P-37.
Team members included Joe Parisola, Kyle Frederick, Kalen Jaworski, and “go-between” Kritie Pickering. Trial
Test. of Aaron Rose, Trial Tr. vol. 2, 6—7, Doc. 184.
287
BASF’s Guideline for RCFA, Tr. Ex. P-37, at §§ 4.2.1 & 4.2.2.
288
Email dated January 2, 2012, from Rose to McCarrol (BASF_MAN000277), Tr. Ex. D-73 (“. . . If we have an
expert in turbo compressors who would be willing to assist with verifying details for the RCFA basically just to keep
me honest, I think that would be helpful.”); see also Email from Falsone to Yura (BASF_MAN0002356), Tr. Ex. D72 (“Kevin and I discussed the need for a third party expert to serve as a neutral observer. I think we are fine with
Aaron Rose there for now. Aaron should call for third party support if the analysis goes beyond his level of
expertise.”).
289
While Rose claims that these experts were consulted, the evidence shows that they were present only for the final
January 24 presentation of the conclusions of the RCFA. Trial Test. of Aaron Rose, Trial Tr. vol. 2, 82—83, Doc.
184.
290
The Court wholeheartedly agrees with Dr. Tom Shelton’s conclusion that “[T]he root cause analysis performed
by BASF did not contain sufficient documentation to support the conclusions reached and that would provide parties
with sufficient information to independently verify the results of the analysis.” Expert Report of Tom Shelton,
Ph.D., Tr. Ex. D-283, at 8.
286
54
whether Man’s work required it to check the subject bolts for tightness before returning
the Compressor to BASF.
1. BASF’s Position
206.
BASF contends Man’s crew loosened and then failed to properly retighten the B-
Side bearing cap bolts, which ultimately resulted in the catastrophic failure.291
207.
While BASF has no direct evidence that this is so, it points to the following
circumstantial evidence in support of its position.
The work Man agreed to perform on the Compressor was expressed in
the scope of work included in its Quote292 (issued only a day before
work began). This work necessarily required the loosening and
retightening of these bolts. The fourth and fifth steps in the Scope of
Work were to “[r]emove the main upper gear case cover”; and
“[i]nspect journals and bearings.” Both of these steps, if performed,
would have involved loosening the bearing cap bolts that were found
loose after the failure293 and which BASF maintains caused the
failure.294
The Quote was “the only scope of work that was present on the job
site…,”295 and therefore, suggests BASF, Man’s crew must have
followed it.
With the exception of a small leak, the Compressor had been operating
properly prior to Man’s work on the Compressor.
From the time that the Compressor was handed over to Man for repair
until the time that Man handed the Compressor back to BASF for startup, no one other than Man performed work on the Compressor.296
Yet, within a very short time after Man completed its work and
returned the Compressor to BASF for start-up, and within 17 seconds
of start-up, the Compressor failed.
291
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 55, 83.
Man Quote, Tr. Ex. J-1, at 1.
293
Dep. of Rene Scholz, Tr. Ex. P-416-J, at 82:7-84:11. See also Trial Test. of James Spinks, Trial Tr. vol. 5, 57, Doc.
187; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 161, Doc. 187.
294
See, e.g., BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 58-62.
295
Id. at 77-78.
296
Id. at 54; see also Trial Test. of James Spinks, Trial Tr. vol. 5, 35, 138, Doc. 187; Trial Test. of Roger Craddock,
Trial Tr. vol. 6, 34—35, 39, Doc. 188.
292
55
BASF further argues that, even if Man did not do so intentionally, it
must have loosened the bearing cap bolts during their work, even if
inadvertently. In removing the dry gas seals, Man admits it had serious
problems removing the seals due to dirt and polymer buildup, and Man
attempted several methods of removing the seals before they were
successful.298 These methods included pulling on the seals, hammering
and chiseling around the seals, using a heat gun, and spraying
lubricant.299 This work applied significant pressure and force to the
seals, which are within two to three inches of the bearing caps.300 In
fact, so much force was applied that several all-thread bolts were
repeatedly broken during the effort.
208.
“No [Man] employee can say with certainty that [Man] did not loosen
the bolts because no [Man] employee was on site for the entirety of the
job.”297
BASF’s expert, Dr. Fernando Lorenzo, suggests that Man was
responsible for loosening the bolts by opining that the loose bolts,
among other items, “all point to the faulty workmanship and deficient
working and supervision procedures on the part of [Man] . . .”301
In any event, BASF argues, even if Man did not work directly on these bolts, it
nonetheless should have inspected “other parts [of the Compressor] within the immediate
proximity of [Man’s] work that could have been affected by its work.”302 Since the
subject bolts were “within two to three inches” of the dry gas seals that Man admittedly
changed,303 had it done so, Man would have discovered the loose bolts, would have
tightened them, and would have consequently averted the catastrophe.304
297
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 83.
Trial Test. of Mervin McConn, Trial Tr. vol. 5, 171—72, Doc. 187.
299
Trial Test. of James Spinks, Trial Tr. vol. 5, 38—39, Doc. 187; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 27:14—
28:4.
300
Mr. Spinks testified that the work needed in order to remove the old dry gas seals “considerably slowed down [the]
job.” Trial Test. of James Spinks, Trial Tr. vol. 5, 44, Doc. 187.
301
Preliminary Report of Fernando Lorenzo, Ph.D., P.E., Tr. Ex. P-317, at 6.
302
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 84 (citing Trial Test. of Roger
Craddock, Trial Tr. vol. 6, 68, Doc. 188).
303
Id.
304
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 33—34, 84—85.
298
56
209.
While conceding that Man’s crew members deny having touched the bolts, BASF
argues there are significant discrepancies and inconsistencies within this testimony. 305
210.
In its Reply Memorandum, BASF argues that Man’s arguments generally are
supported by “incorrect citations, incorrect testimony, [] incorrect identification of
documents or testimony . . .” and an overstatement of “the testimony of several witnesses
by stretching what they have said beyond the metes and bounds of argumentation.”306
2. Man’s Position
211.
Not surprisingly, Man’s position is dramatically different. Man claims it did not
remove the bearing cap or touch the subject bolts, intentionally or inadvertently, and
therefore cannot be responsible for the Compressor’s failure, even if the loose bolts are to
blame. In support of this contention Man relies on the following points:
a. Unlike BASF, Man points to direct evidence, in the form of eyewitness
testimony, to support its position. The Man crew members who actually
performed the work on the Compressor uniformly deny that they touched the
bolts at issue.307
b. Furthermore, says Man, no witness or worker who testified by deposition or
trial (be they BASF, Turner or Siemens) testified that they saw Man workers
perform work on these bolts, including Rene Scholz, the Siemen’s consultant
hired to assist in the job.308
305
Reply Mem. of BASF Corp. to [Man’s] Post-Trial Findings of Fact and Conclusions of Law, Doc. 196 at 5—7.
Id. at 2 & nn. 2—6.
307
Trial Test. of James Spinks, Trial Tr. vol. 5, 112—13, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5,
209, Doc. 187; Dep. of Kenneth Thompson, Tr. Ex. P-416-E, at 45:2—13; Dep. of Alan Gill, Tr. Ex. P-416-D, at
40:11—25, 41:1—4.
308
Dep. of Rene Scholz, Tr. Ex. P-416-J, at 74:6—75:4, 41:2—17, 41:25—42:3, 42:10—15, 42: 16—20.
306
57
c. Man points to circumstantial evidence of its own. If, as BASF insists, its
Purchase Order (and not Man’s Quote) is the contract which controlled the
work being done by Man, the scope of work in the Purchase Order controlled
and included only the replacement of dry gas seals which would not have
required Man to remove the bearing caps and touch the associated bolts.309
d. Furthermore, if the Purchase Order controls, its issuance constituted, by its
very language, “a rejection” of Man’s Quote.310 Thus, argues Man, if the
scope of work contained in Man’s December Quote was rejected, as was
common practice at BASF, the scope of work was that created by BASF’s
Purchase Order, i.e. the changing of the dry gas seal alone.311
e. Every BASF or Turner Industries fact witness with personal knowledge of the
dry gas seal change job testified that loosening the bolts on the bearing cap
would not have been necessary for the replacement of the dry gas seals that
MAN Diesel was hired to change.312 Internal BASF emails sent as a part of its
post-event investigation also confirm that merely changing the dry gas seals
would not have required working on the bolts in question.313 Indeed, BASF
admits same in its post-trial briefing.314
309
BASF Purchase Order (BASF_MAN0000260-0000269), Tr. Ex. J-2;ee also, Trial Test. of Kyle Frederick, Trial
Tr. vol. 4, 123, Doc. 186.
310
BASF December Purchase Order (BASF_MAN0000260-0000269), Tr. Ex. J-2, at 1, 4.
311
Trial Test. of Kyle Frederick, Trial Tr. vol. 4, 123, Doc. 186.
312
Dep. of Steven Laiche, Tr. Ex. P-416-C, at 39:9—17, 39:25—40:03; Dep. of Grant Mayers, Tr. Ex. P-416-B, at
41:15—23; Dep. of Jonathon Richard, Tr. Ex. P-416-M, at 180:19—24, 193:10—14; Dep. of Rene Scholz, Tr. Ex.
P-416-J, at 74:25—75:04, 41:25—42:03, 42:10—15, 42:16—20.
313
Meeting Minutes dated 1-01-12 (BASF_MAN0007462), Tr. Ex. D-77; Email to Metzger from Rose regarding
bearing caps being prepped (BASF_MAN0003395), Tr. Ex. D-83.
314
Reply Mem. of BASF to [Man’s] Post-Trial Findings and Conclusions, Doc. 196 at 12 (“BASF does not dispute
that if the scope of the work was limited to changing the dry gas seals alone then the bearing end cap bolts would not
need to be loosened.”).
58
f. On December 28, before work began, James Spinks spoke to Turner
employees Mason Cook and Steve Laiche, during which time Spinks revealed
his understanding that the gear case did not need to be “split” since the job of
inspecting the bearings and journals quoted in BASF’s December Quote
would not have to be done and that only the dry seals would have to be
replaced.315
g. Man insists that all other documentary and testamentary evidence on this issue
shows that the actual work performed on December 28-30, was to change the
dry gas seals and nothing else.316
h. Man also points to the fact that BASF’s investigation revealed that some 20
bolts were found loose on the Compressor after the failure. Of these, some 1216 would not have been loosened as a part of removing the bearing caps.317
This, argues Man, supports Kushnick’s conclusion that all bolts (including the
bearing cap bolts) loosened as a result of the vibration associated with the
event itself and not any manipulation by Man employees.318 It also supports
the conclusion of metallurgist Dr. Tom Shelton, who testified that, “because
you have so many other loose bolts on this thing, and some of them not in
areas which are deformed, that vibration may have played a role in it . . .”319
315
Trial Test. of James Spinks, Trial Tr. vol. 5, 116—17, Doc. 187.
Man cites the following evidence: Dep. of Grant Mayers, Tr. Ex. P-416-B, at 41:15—23; Dep. of Jonathon
Richard, Tr. Ex. P-416-M, at 180:19—24, 193:10—14; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 74:25—75:04,
41:25—42:03, 42:10—20; Dep. of Steven K. Laiche, Tr. Ex. P-416-C, at 39:9—17, 39:25—40:03; Trial Test. of
James Spinks, Trial Tr. vol. 5, 19, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5, 211, Doc. 187.
317
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 29—30 (citing Compressor Schematic,
Tr. Ex. D-90, and Hand Written Notes of Aaron Rose, Tr. Ex. D-224); see also, Def.’s Post Trial Findings of Fact
and Conclusions of Law, Doc. 193 at 52; Expert Report of Steve Kushnick, P.E., Tr. Ex. D-284, at 29, 32, 61—62 .
318
Expert Report of Steven Kushnick, P.E., Tr. Ex. D-284, at 62.
319
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 203, Doc. 190.
316
59
i. Furthermore, Man argues that all bolts and fasteners that Man admittedly did
loosen, remove and then replace as part of the replacement of the dry gas seal
were all found to be “tight” after the failure.320
j. In any event, Man’s expert mechanical engineer Steve Kushnik, opined that
the cause of the failure was not loose bolts321 but “liquid in the suction
line.”322 So, even if Man did loosen the bolts, this could not have caused the
accidental shut-down of the Compressor.
212.
As to the charge that Man owed an obligation to inspect the subject bolts, even if
they did not work on them, Man replies that its only job was to replace the dry gas
seals,323 which it did correctly. Further, Man argues that BASF’s own start-up check list
demonstrates that the job of “inspecting all bearing caps to ensure they are secure”
belonged to BASF, not Man.324
213.
While Man concedes that its work was performed within inches of the bearing cap
bolts, it insists that those bolts were separated by a metal volute and that their hammering
could not have inadvertently loosened the bearing cap bolts.325
320
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 44 (citing Trial Test. of Aaron Rose,
Trial Tr. vol. 2, 27, Doc. 184); see also, Dep. of Rene Scholz, Tr. Ex. P-416-J, at 41:2-13; Trial Test. of Aaron Rose,
Trial Tr. vol. 2, 27, Doc. 184; Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol.4, 65, Doc. 186.
321
Expert Report of Steve Kushnick, P.E., Tr. Ex. D-284, at 61.
322
Id. at 62.
323
Trial Test. of James Spinks, Trial Tr. vol. 5, 15, 104, Doc. 187.
324
Defendant’s Rebuttal to BASF’s Post-Trial Proposed Findings and Conclusions, Doc. 195 at 10-11; see also,
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 47 (citing Recycle Start Up Checklist
(BASF_MAN 0000639), Tr. Ex. J-7, at item 8); Expert Report of Steve Kushnick, P.E., Tr. Ex. D-284, at 40. BASF
counters that “[w]hile the checklist does instruct the operators to inspect all bearing caps to ensure they are secure,
testimony [was] submitted that this inspections has always been a visual inspection and that BASF personnel [did]
not possess the necessary tools onsite to check the tightness of the bolts.” Reply Mem. of BASF to [Man’s] PostTrial Findings and Conclusions, Doc. 196 at 19; see also Rebuttal to BASF’s Post-Trial Proposed Findings and
Conclusions, Doc. 195 at 11.
325
See, e.g., Demonstrative aids showing compressor, Tr. Exs. D-277, D-278, & D-279; Trial Test. of James Spinks,
Trial Tr. vol. 5, 51, 113-15, Doc. 187.
60
F. Findings of Fact – Work Done by Man
214.
On this central factual dispute the Court finds that BASF has failed to carry its
burden of proof. While there is evidence pointing in both directions, the Court finds the
weight of the evidence favors Man.
215.
Man’s crew uniformly denied having touched these bolts.326 While BASF
correctly points out that there are some inconsistencies in parts of the accounts given by
Man’s crew members,327 on this key point they are consistent, and the Court finds the
testimony credible and consistent with the other evidence.
216.
Nor were any witnesses presented who claim to have seen Man’s crew work on
these bolts.328
217.
The parties envisioned that BASF’s Purchase Order would control the work done
on the Compressor. The Scope of Work in that document called only for the dry gas seals
to be changed. That being the case, Man’s crew would have had no reason to work on the
bearing caps since loosening the bolts on the bearing caps would not have been necessary
for the replacement of the dry gas seals that MAN Diesel was hired to change.329 BASF
agrees. “BASF does not dispute that if the scope of work was limited to changing the dry
gas seals alone then the bearing end cap bolts would not need to be loosened.”330
326
Trial Test. of James Spinks, Trial Tr. vol. 5, 112-13, Doc. 187; Trial Test. of Mervin McCon, Trial Tr. vol. 5,
209, Doc. 187; Dep. of Kenneth Thompson, Tr. Ex. P-416-E, at 45:2—13; Dep. of Alan Gill, Tr. Ex. P-416-D, at
40:11—25, 41:1—4.
327
Reply Mem. of BASF to [Man’s] Post-Trial Findings and Conclusions, Doc. 196 at 5—6.
328
Dep. of Grant Mayers, Tr. Ex. D-416-B, at 41:15—23; Dep. of Jonathon S. Richard, Tr. Ex. P-416-M, at
180:19—24, 193:10—14; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 74:24—75:04, 41:2—17, 41:25—42:03, 42:10—
15, 42:16—20.
329
BASF’s Purchase Order (BASF_MAN0000262), Tr. Ex. J-2, at 3; Dep. of Steven K. Laiche, Tr. Ex. P-416-C, at
39:9—17, 39:25—40:03; Dep. of Grant Mayers, Tr. Ex. P-416-B, at 41:15—23; Dep. of Jonathon S. Richard, Tr.
Ex. P-416-M, at 180:19—24, 193:10—14; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 74:25—75:04, 41:25—42:03,
42:10—15, 16—20.
330
Reply Mem. of BASF to [Man’s] Post-Trial Findings and Conclusions, Doc. 196 at 12. See also BASF’s
Purchase Order (BASF_MAN0000262), Tr. Ex. J-2, at 3; Dep. of Steven K. Laiche, Tr. Ex. P-416-C, at 39:9—17,
39:25—40:03; Dep. of Grant Mayers, Tr. Ex. P-416-B, at 41:15—23; Dep. of Jonathon S. Richard, Tr. Ex. P-416-
61
218.
But, argues BASF, Man’s crew must have worked on these bolts based on the
mistaken belief that the Man Quote controlled. This contention is belied by the
conversation Man’s crew chief, James Spinks, had with Turner’s Steve Laiche before
work began where Spinks expressed his opinion that, because he and his crew were only
going to be changing out the dry gas seals, they weren’t going to have to “split the case,”
which would require removing the bearing caps.331
219.
While BASF does not label it as such, BASF makes an argument akin to res ipsa
loquitur: because the Compressor catastrophically failed within 17 seconds of start-up,
because bearing cap bolts were found loose after the failure, and because Man was
working on or near these bolts, Man must have loosened the bolts and caused the failure.
220.
An important piece of evidence militates against such reasoning. If Man
undertook to remove the bearing caps and then failed to properly retighten them, one
would not expect to find loose bolts at locations on the Compressor which, even under
BASF’s expanded view of what Man did, were some distance from and unconnected with
the work which Man did. Yet, this was one of the findings of BASF’s investigation.332 Of
the some 20 bolts found loose on the Compressor after the Compressor failure, some 1216 of them would not have been loosened as a part of removing the bearing caps.333
M, at 180:19—24, 193:10—14; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 74:25—75:04, 41:25—42:03, 42:10—15,
42:16—20.
331
Trial Test. of James Spinks, Trial Tr. vol. 5, 116—17, Doc. 187. In Man’s brief, Man claims that Turner employee
Steve Laiche told Spinks that the gear case would not have to be split. Def.’s Post Trial Findings of Fact and
Conclusions of Law, Doc. 193 at 27. This is incorrect, as noted by BASF in its Reply Memorandum, Doc. 196 at 2,
13 & 2 n. 3. It is clear from Spinks’ testimony, that Spinks made this statement to Laiche and not vice versa.
Nonetheless, it shows that Spinks was under the belief before the work started that he would not need to remove the
bearing cap or associated bolts.
332
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 29—30 (citing Compressor Schematic,
Tr. Ex. D-90, and Handwritten notes of Aaron Rose, Tr. Ex. D-224); see also Def.’s Post Trial Findings of Fact and
Conclusions of Law, Doc. 193 at 52; Expert Report of Steve Kushnick, P.E., D-284, at 29, 32, and 61—62.
333
Expert Report of Steve Kushnick, P.E., D-284, at 32; Dep. of Rene Scholz, Tr. Ex. P-416-J, at 41:2—42:20;
Compressor Schematic (BASF_MAN0002577), Tr. Ex. D-90; Handwritten notes from Aaron Rose (BASF_MAN
0007652-0007658), Tr. Exs. J-36 & D-224.
62
221.
As to BASF’s alternative allegation that Man must have inadvertently loosened
the bolts during its work on the dry gas seal, which work was very close to the subject
bolts,334 the Court finds that this speculative assertion is belied by the fact that the bolts
were separated from Man’s work area by a metal volute which would have made such
highly unlikely, if not impossible.335
222.
BASF’s argument that, regardless of whether its crew loosened the bolts, Man is
nonetheless liable by failing to inspect the bolts before returning the Compressor to
BASF is equally unavailing. Man clearly had a duty to return the area of the Compressor
where it had replaced the seals in proper order, and this it did. 336 The Court finds that the
evidence does not support that Man had a duty, contractual, express or implied, to go
beyond that.
223.
Indeed, there was evidence submitted suggesting that BASF’s own operators had
the duty to “check all the bolts” on the Compressor.337 BASF concedes that its “checklist
does instruct [BASF] operators to inspect all bearing caps to ensure they are secure[,]”338
but argues that “this inspection has always been a visual inspection and . . . BASF
personnel do not possess the necessary tools onsite to check the tightness of the bolts.”339
Regardless, BASF failed to prove that this duty belonged to Man.
224.
In sum, BASF has failed to prove that Man’s conduct, negligent or not, was
responsible for the failure of the Compressor.
334
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 16.
See, e.g., Demonstrative aids showing compressor, Tr. Exs. D-277, D-278, & D-279; Trial Test. of James Spinks,
Trial Tr. vol. 5, 51, 113—15, Doc. 187.
336
Trial Test. of Aaron Rose, Trial Tr. vol. 2, 27, Doc. 184; see also Dep. of Rene Scholz, Tr. Ex. P-416-J, at 41:2—
13; Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 65, Doc. 186.
337
BASF Recycle Start Up Checklist, Tr. Exs. J-7 & D-1; see also BASF Corp.’s Post-Trial Proposed Findings and
Conclusions, Doc. 197 at 47.
338
Reply Mem. of BASF Corp. to [Man’s] Post-Trial Findings of Fact and Conclusions of Law, Doc. 196 at 19.
339
Id.
335
63
G. Arguments of Parties – Fault and the Cause of the Failure
225.
Given the Court’s conclusion that Man’s conduct was not the cause of the claimed
damages, issues of Man’s fault and the cause of the Compressor failure (loose bolts vs.
liquid ingestion) are academic ones and need not be resolved by the Court. Nonetheless,
the Court briefly considers them.
1. BASF’s Position
226.
BASF makes a broad based attack on Man’s work practices and documentation,
including its failure to make, keep, or provide to BASF work notes or a work report and
its failure to use torque wrenches.340
227.
More specifically, BASF’s strenuously argues that the loose bearing cap bolts
were caused by Man’s negligent failure to properly retighten them and/or Man’s failure
to ensure they were tight before returning the Compressor to BASF.
228.
After Man’s crew removed its lock from the Compressor and BASF completed its
pre-start-up checklist, the Compressor was started and immediately experienced a
catastrophic failure. BASF contends it is more likely than not that the bearing cap bolts
being left loose on the B Side of the Compressor caused the failure.
229.
BASF’s expert Fernando Lorenzo, Ph.D., opined that the loose bolts were the
most likely cause of the Compressor failure. Dr. Lorenzo agreed with the RCFA’s
determinations by concluding that, for a failure to have occurred after only seventeen
seconds of operation, the most likely cause of the failure was the presence of loose bolts
340
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 31-36; see generally Trial Test. of
Roger Craddock, Trial Tr. vol. 6, 58—66, Doc. 188.
64
on the B Side of the Compressor.341 In Dr. Lorenzo’s opinion, if the bolts had been
properly torqued, the failure most likely would not have occurred.342
230.
Dr. Lorenzo’s conclusions, BASF argues, are supported by several facts, the first
of which is the condition of the bolts after the failure. Dr. Lorenzo noted in his study of
the Compressor damage that the large Allen bolts found loose after the failure did not
appear to have any evidence of stretching or over-tension as a result of the incident.343
231.
The testimony provided by Manfred Chi of Seattle Gear Works also indicated that
the female threads were found to be used, but not damaged.344 Dr. Lorenzo confirmed
Aaron Rose and Manfred Chi’s assessments by looking at several pictures that were
taken after the incident that show the female threads were free from damage.345 Dr.
Lorenzo noted that there also appeared to be no necking or deformation in any of the
bolts, and Dr. Lorenzo affirmed that Aaron Rose’s ability to screw and unscrew the bolts
by hand following the incident provided further proof that the bolts, nor the threaded
holes in the bearing cover surface, were deformed.346
232.
BASF argues that no evidence was presented affirmatively demonstrating that
there was any damage to the bolts or the female threads in the bolt holes; BASF contends
341
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 3, 250, Doc. 185. Dr. Tom Shelton has also agreed that there
are indications in this case that the bolts may have been loose prior to start-up. Trial Test. of Tom Shelton, Ph.D., Trial
Tr. vol. 8, 201, Doc. 190.
342
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 69, Doc. 186.
343
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 5; Trial Test. of Aaron Rose, Trial Tr. vol. 1, 185,
Doc. 183.
344
Trial Test. of Manfred Chi, Trial Tr. vol. 3, 20, Doc. 185; Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 3,
253, Doc. 185. Dr. Lorenzo testified that Manfred Chi’s testimony confirms the fact that the bolts were loose and
simply backed out because there was no damage to the male or female threads. Trial Test. of Fernando Lorenzo, Ph.D.,
Trial Tr. vol. 3, 258, Doc. 185.
345
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 3, 258, Doc. 185.
346
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 5.
65
that testing under similar conditions indicates that the bolts would have experienced
localized plastic deformation had the bolts loosened during and because of the failure.347
233.
Since the bolts are strong enough to withstand the failure loads without damaging
the threads, BASF contends that there are only two other possibilities as to why the bolts
were found loose: (1) the bolts were loose to start with; or (2) the bolts had been
tightened, but had not been properly torqued and, consequently, backed out.348
234.
BASF points to Man’s expert Dr. Tom Shelton, who testified that, assuming the
design engineer had made the right calculation on what torque was to be put onto the
bolts,349 then all properly torqued bolts would have stayed tight instead of some—but not
all—backing out.350
235.
Dr. Lorenzo testified that the damage to the Compressor is consistent with the
bolts having been loose prior to start-up.351 Because the bolts on the B Side were left
loose or were not properly torqued, the parts of the B Side that could move with the
bearing cap had some give and could move away from the pinion shaft. In contrast, the A
Side was completely secured, had no place to move, and received the higher impact of
friction and grinding.352 The difference in damage between the A Side and the B Side is
347
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 6.
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 3, 259, Doc. 185. Dr. Shelton also testified that, if the bolts
had been properly torqued, the bolts would have been more resistant to vibration. Trial Test. of Tom Shelton, Ph.D.,
Trial Tr. vol. 8, 204, Doc. 190.
349
BASF points to the lack of testimony presented in this case that would suggest that the design engineer had not
made the correct calculations. Rather, the Compressor has successfully operated with no evidence of excessive
vibration at all times prior to this incident.
350
Trial Test. of Tom Shelton, Ph.D., Trial Tr. vol. 8, 206—07, Doc. 190.
351
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 6—7, Doc. 186; see also Trial Test. of Aaron Rose, Trial
Tr. vol. 1, 180, Doc. 183.
352
Trial Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 8—9, Doc. 186. see also Trial Test. of Aaron Rose, Trial
Tr. vol. 1, 184, 186, Doc. 183.
348
66
consistent with the reports made by TurboCare, the company to whom the Compressor
was sent for repair.353
236.
In conclusion, based upon the evidence presented at trial, BASF asks this Court to
conclude that it is more likely than not that Man’s negligent failure to tighten or properly
torque the bolts caused the Compressor failure.
237.
In addition, BASF argues that Man “was required to look over the Compressor
area where the bolts [were] located while cleaning up after the job.”354 BASF faults Man
for failing to check the bearing cap bolts, even if Man did not touch them as a part of
their work.355
238.
BASF then attacks Man’s alternative theory of causation: that the damage was
caused by liquid intrusion, wherein condensation formed in piping upstream from the
shutoff valve, moved downward and entered the A Side and B Side impellers.
239.
BASF argues that there are several reasons why the ingestion theory of Man’s
expert Steven Kushnick is wrong:
The Compressor is a centrifugal compressor that is not affected by the
presence of liquids in the gas stream in the same Manner as a
reciprocating compressor;356
When a centrifugal compressor experiences damage caused by liquid
ingestion, the damage will manifest as wear, specifically in the outlet
section of the impeller. Wear caused by liquid ingestion is caused by
the rapid acceleration of entrapped liquid to the point that cavitation
may develop and result in significant wear on the outlet of the
353
“There appears to be some amount of damage to the A location pinion bearing lower gear case saddle & bearing
cover. The amount of damage on the B location is approx. 50% of the A location.” Field Service Operations Daily
Status Report – January 8, 2012, Tr. Ex. P-135.
354
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 33 (citing Dep. of James Landry, Tr.
Ex. J-87, at 107:16—109:17).
355
BASF Corp.’s Post-Trial Proposed Findings and Conclusions, Doc. 197 at 33—34.
356
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 7.
67
impeller. No excessive or cavitation-type wear or damage was reported
or observed on the impellers.357
It is unlikely that failure due to liquid ingestion would present itself
within seventeen seconds of the start-up.358
The inlet guide vanes were set at 80 degrees at the time of the start-up,
which would deflect any liquid that would enter the inlet line and
prevent any liquid from reaching the impeller as a “slug.”359
The volutes and other areas of the Compressor were found dry after
the failure.360
Damage caused by a failure from liquid ingestion would be expected
to be consistent on both sides of the Compressor.361 Here, there was
more damage to the A Side of the Compressor.362
BASF’s start-up procedure includes in its steps draining any liquid that
may be present in the suction lines.363
2. Man’s Position
240.
Man argues that it carried out its assigned duties in a safe, proper and
workmanlike manner. As proof, it points the Court to the findings of BASF’s
investigation showing that the bolts associated with the changing of the dry gas seals
were found after the event to be properly tightened.364
357
See id.
See Trial Test. of Aaron Rose, Trial Tr. vol. 1, 170—171, Doc. 183. BASF further contends that Aaron Rose
testified that certain threads became embedded in the bottom of the clearance hole. According to BASF, Mr. Rose
testified that this damage would have occurred if the bearing cap was not secure and was able to be thrusted forcefully
upward during the start-up. Id. at 189. BASF also asserts that Aaron Rose testified that there is no history of significant
vibration for the Compressor that would loosen properly torqued fasteners in 17 seconds. Id. at 219—220.
359
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 7.
360
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 169, Doc. 183 (“We had not seen any indication of liquid whatsoever
internal to that machine when we disassembled it very shortly after the failure. And so while we had not necessarily
ruled that out, that was a pretty large chunk of evidence supporting that that wasn’t how this happened.”).
361
Expert Report of Fernando Lorenzo, Ph.D., Tr. Ex. P-317, at 8.
362
Trial Test. of Aaron Rose, Trial Tr. vol. 1, 168, Doc. 183.
363
Trial Test. of Leonard Landry, Trial Tr. vol. 3, 41—42, Doc. 185; Pre-Start Up Recycle Gas Loop Drain Checklist,
Tr. Ex. J-6.
364
Dep. of Rene Scholz, Tr. Ex. P-416-J, at 41:2—13; Trial Test. of Aaron Rose, Trial Tr. vol. 2, 27, Doc. 184; Trial
Test. of Fernando Lorenzo, Ph.D., Trial Tr. vol. 4, 65, Doc. 186.
358
68
241.
Even were the Court to find that Man worked on the bearing cap bolts, Man
argues that BASF failed to carry its burden of proof to show that the Compressor failure
was caused by these loose bolts or by any other acts or omissions of Man.
242.
Man insists that BASF’s contention that loose bearing cap bolts caused the
Compressor failure rests on a fatally flawed RCFA and the unreliable expert opinion of
BASF’s expert Fernando Lorenzo.
243.
Supported by the expert testimony of Tom Shelton,365 Man argues that the failure
to perform an adequate examination and analysis of the evidence prevents this Court
from determining whether the loose bolts caused the accident or were caused by the
accident.
244.
Man also points to its expert Steve Kushnick who opined that the loose bolts were
not the cause of the Compressor’s failure.366 Kushnick, indeed, argues that the more
severe damage to the opposite side of the Compressor “is inconsistent with loose bearing
cap bolts on the ‘B’ side.”367
245.
As to the cause of the Compressor failure, Man again looks to Kushnick who
opines that “liquids in the suction line to the [Compressor] more likely than not caused
the failure on 30 December 2011.”368
246.
Even if the bolts were the culprit, Man contends in the alternative that BASF has
failed to prove Man crew members even touched the subject bolts and, indeed, the great
weight of the evidence shows they did not.369
365
Expert Report of Tom Shelton, Ph.D., Tr. Ex. D-283, at 8.
Expert Report of Steven B. Kushnick, P.E., Tr. Ex. D-284, at 61.
367
Id.
368
Id. at 62.
369
See supra, Section IV.E.2 (concerning Man’s position regarding its work on the Compressor).
366
69
247.
As to BASF’s charge that Man should have checked to ensure the tightness of the
subject bolts (even if Man was not responsible for their loosening), Man argues that the
subject bolts were not within its scope of work and points to BASF’s checklist showing
BASF, not Man, was responsible for this task. 370 Further, Kushnick opined that BASF’s
maintenance contractor Turner could and should have tightened the subject bolts as a part
of its removal and replacement of insulation.371 Finally, Man faults the Siemens
representative for having failed in its supervisory capacity.372
H. Findings of Fact – Fault and the Cause of the Failure
248.
Failing to properly torque bolts on a piece of rotating (and vibrating) equipment is
shoddy workmanship and negligent conduct, a conclusion arguably so obvious that expert
testimony is not required. But BASF has failed to prove that Man is guilty of this
conduct.
249.
While BASF has presented evidence suggesting that some aspects of Man’s work
was deficient,373 it has failed to prove Man’s deficient work was a cause of the
Compressor failure.374
250.
In summary, the Court finds there are two separate reasons BASF has failed to
carry its burden of proof to establish Man’s work was negligently performed in a way
which caused the Compressor’s failure:
First, as is explored in detail elsewhere in this ruling, even if loose
bearing cap bolts caused the failure, BASF has failed to show that
Man’s crew was responsible for the loose bolts, either by a) loosening
and then failing to properly retighten the bolts, b) inadvertently
370
Recycle Start Up Checklist, Tr. Exs. J-7 & D-1.
Expert Report of Steven B. Kushnick, P.E., Tr. Ex. D-284, at 40—41.
372
Def.’s Post Trial Findings of Fact and Conclusions of Law, Doc. 193 at 49-53.
373
See generally Trial Test. of Roger Craddock, Trial Tr. vol. 6, 33-112, Doc. 188; Expert Report of Roger
Craddock, Tr. Ex. P-316.
374
As is discussed in the Conclusions of Law section, BASF must prove causation for both its contract and tort
claims. See infra, Section V.C.
371
70
loosening them while working in the area, or c) in simply failing to
inspect them following their work to ensure that they were tight;
251.
Second, aside from the question of whether Man did or did not loosen
the subject bolts, the Court finds that BASF has failed to prove that the
loose bearing cap bolts caused the failure.
While BASF’s expert Lorenzo posits a logical scenario regarding how the loose
B-side bearing cap bolts could have led to the shut-down of the Compressor, the Court
finds that his opinion relies and is dependent upon the findings of the flawed RCFA
which cannot bear the weight placed upon it.375
I.
Summary of Findings of Fact
252.
BASF contracted with Man to change dry gas seals on its Compressor.
253.
BASF’s Purchase Order (the entire Purchase Order) constituted the contract
between BASF and Man.
254.
Despite the fact that BASF knew the Compressor, bearing caps, and related
hardware were likely to be relevant evidence to future litigation, it failed to make this
evidence available to Man. However, Man failed to prove BASF’s actions were done for
the purpose of depriving it of evidence.
255.
Man adequately performed its assigned task of changing the dry gas seals on the
Compressor.
256.
BASF’s RCFA was poorly performed, inadequately documented and provides an
insufficient foundation for BASF’s contention or Fernando Lorenzo’s conclusion that
loose bolts caused the Compressor failure.
257.
BASF has failed to prove that any acts or omissions of Man played a role in the
failure of the Compressor.
375
See supra, Section IV.D.
71
V.
CONCLUSIONS OF LAW
A. The Contract
258.
“A party who demands performance of an obligation must prove the existence of
the obligation.”376 Accordingly, a “party claiming the existence of a contract has the
burden of proving that the contract was perfected between himself and his opponent.”377
259.
“A contract is formed by the consent of the parties established through offer and
acceptance.”378 “Unless the law prescribes a certain formality for the intended contract,
offer and acceptance may be made orally, in writing, or by action or inaction that under
the circumstances is clearly indicative of consent.”379
260.
“If there is a genuine dispute, it is left to the fact-finder to determine whether
there has been a ‘meeting of the minds’ between the parties so as to constitute mutual
consent.”380 “Moreover, ‘[t]he existence or nonexistence of a contract is a question of
fact and, accordingly, the determination of the existence of a contract is a finding of
fact.’”381
261.
The Court finds that Man’s Quote was not an offer. Louisiana doctrine has
explained:
To constitute a true offer, a declaration of will must be sufficiently precise
and complete so that the intended contract can be concluded by the
offeree's expression of his own assent, thereby giving rise to that “mutual
consent” of the parties which, in practical terms, is indistinguishable from
the contract itself.382
376
La. Civ. Code art. 1831.
Enter. Prop. Grocery, Inc. v. Selma, Inc., 38,747, p. 4 (La. App. 2 Cir. 9/22/04); 882 So. 2d 652, 655 (citing
Pennington Constr., Inc. v. R.A. Eagle Corp., 94-0575 (La. App. 1 Cir. 3/3/95); 652 So. 2d 637).
378
La. Civ. Code art. 1927.
379
Id.
380
SnoWizard, Inc. v. Robinson, 897 F. Supp. 2d 472, 478 (E.D. La. 2012) (citation omitted).
381
Id. (quoting Sam Staub Enters., Inc. v. Chapital, 2011-1050 (La. App. 4 Cir. 3/14/12); 88 So. 3d 690, 694).
382
Saul Litvinoff, Consent Revisited: Offer Acceptance Option Right of First Refusal and Contracts of Adhesion in
the Revision of the Louisiana Law of Obligations, 47 LA. L. REV. 699, 706 (1987).
377
72
262.
For the reasons detailed in its Findings of Fact, Man’s Quote was clearly not such
that an agreement could be reached by BASF’s mere acceptance. Rather, it is clear that
the Quote was merely a preparatory step towards BASF issuing its Purchase Order.
263.
BASF’s Purchase Order, on the other hand, was an offer and, for the reasons
detailed in its Findings of Fact, the Court finds that Man accepted that offer by beginning
work on the Compressor on December 28, 2011, following receipt of the Purchase Order
by Man.383
264.
As set out in the Findings of Fact section, the work to be performed (and which
was in fact performed) by Man per this contract was to replace the dry gas seals.384
B. Spoliation
1. Spoliation Introduction
265.
Man argues that it has satisfactorily shown that BASF committed the tort of
intentional spoliation of evidence under Louisiana law. Alternatively, Man claims that
BASF’s spoliation entitles Man to an adverse presumption.
266.
As will be demonstrated below, Man’s tort claim for spoliation is governed by
Louisiana law while Man’s effort to obtain an adverse presumption is governed by
federal law.
267.
To succeed under both federal and state law, the party urging spoliation must
prove that the alleged spoliator destroyed or lost evidence for the purpose of depriving his
opponent of its use.
383
See Illinois Cent. Gulf R. Co. v. Int'l Harvester Co., 368 So. 2d 1009, 1012 (La. 1979); Norris v. Causey, No. 141598, 2016 WL 311746, at *5 (E.D. La. Jan. 26, 2016).
384
BASF Purchase Order (BASF_MAN 0000262), Tr. Ex. J-2, at 3 (“Repl. C-300 mech seal”).
73
268.
While Man proved that BASF’s deliberate actions deprived Man of access to
important evidence, Man failed to prove BASF’s actions were for the purpose of
depriving Man of the use of this evidence. Thus, under either standard, Man has failed to
prove that BASF spoliated evidence.
2. Intentional Tort of Spoliation of Evidence
269.
Because jurisdiction in this case is based on diversity, the Court applies Louisiana
substantive law with respect to the tort of spoliation.385
270.
In Reynolds v. Bordelon, the Louisiana Supreme Court held that there was no
cause of action in Louisiana for negligent spoliation of evidence.386
271.
The Louisiana Supreme Court has not yet determined whether there is a cause of
action for intentional spoliation of evidence.387 However, this Court has performed an
“Erie guess” and determined that Louisiana does in fact recognize a cause of action for
intentional spoliation of evidence.388
272.
In Burge v. St. Tammany Parish, the Fifth Circuit set forth the standard for claims
of intentional spoliation of evidence under Louisiana law.389 Burge stated, “[t]he
Louisiana tort of spoliation of evidence provides a cause of action for an intentional
destruction of evidence carried out for the purpose of depriving an opposing party of its
use.”390
385
Hodges v. Mosaic Fertilizer LLC, 289 F. App'x 4, 7 (5th Cir. 2008) (citing Erie R. Co. v. Tompkins, 304 U.S. 64,
58 S. Ct. 817, 82 L. Ed. 1188 (1938)).
386
Reynolds v. Bordelon, 2014-2362, p. 14 (La. 6/30/15); 172 So. 3d 589, 600.
387
Hodges, 289 F. App'x at 7.
388
See Ruling and Order, Doc. 119 at 9 n. 5 (citing Bertrand v. Fischer, No. 09-0076, 2011 WL 6254091, at *3
(W.D. La. Dec. 14, 2011); Union Pump Co. v. Centrifugal Tech., Inc., No. 05-0287, 2009 WL 3015076, at *5—*6
(W.D. La. Sept. 18, 2009)); see also Burge v. St. Tammany Parish, 336 F.3d 363, 374 (5th Cir. 2003).
389
Burge, 336 F.3d at 363.
390
Id. at 374 (emphasis added) (citing Pham v. Contico Int'l, Inc., 99-945 (La. App. 5 Cir. 3/22/00); 759 So. 2d 880).
74
273.
The Fifth Circuit has relied on Burge several times in unpublished opinions and
held that a spoliation claim under Louisiana law requires that the destruction of evidence
be both intentional and for the purpose of depriving an opposing party of its use.391
While these cases are not binding, they are highly persuasive.
274.
Similarly, this Court has stated that, under Louisiana state law, “[s]poliation of
evidence is the intentional destruction of evidence to avoid providing it to an opposing
party.”392 Case law from other federal Louisiana district courts confirms this.393
275.
The Court has also reviewed jurisprudence from Louisiana appellate courts and
determined that this standard applies.394
276.
Thus, as this Court has explained:
Spoliation of evidence is the intentional destruction of evidence to avoid
providing it to an opposing party. For spoliation, the destruction must be
intentional. Whether the party had an obligation to preserve the evidence
391
See Adams v. Dolgencorp, L.L.C., 559 F. App'x 383, 387 (5th Cir. 2014) (affirming the denial of the plaintiff’s
motions for leave to amend her complaint and reasoning that neither of the two proposed amended complaints
“allege[d] facts showing any individual defendant intentionally destroyed the [evidence] ‘for the purpose of
depriving [plaintiff] of its use.’ ”) (quoting Burge v. St. Tammany Parish, 336 F.3d 363, 374 (5th Cir. 2003)); Kemp
v. CTL Distrib., Inc., 440 F. App’x 240, 247 (5th Cir. 2011) (holding that the Plaintiffs’ complaint “fail[ed] to even
plead the necessary elements of the tort [of intentional spoliation] under Louisiana law, namely, that (1) [defendant]
intentionally destroyed documents, and (2) that he did so with the purpose of depriving Plaintiffs of their use”).
392
Herster v. Bd. of Supervisors of Louisiana State Univ., 72 F. Supp. 3d 627, 639 (M.D. La. 2014) (emphasis
added) (citing Clavier v. Our Lady of the Lake Hospital, Inc., 2012-0560, p. 5 (La. App. 1 Cir. 12/28/12); 112 So. 3d
881, 886)).
393
See Union Pump Co., 2009 WL 3015076, at *6 (“Intentional spoliation requires a showing by a plaintiff that
evidence was destroyed with the intent to deprive another party of its use at trial.”); Bertrand, 2011 WL 6254091, at
*3 (relying on Union and reaching same conclusion); Pelas v. EAN Holdings, L.L.C., No. 11-2876, 2012 WL
2339685, at *3 (E.D. La. June 19, 2012) (“To state a claim for the tort of spoliation under Louisiana law the plaintiff
must plead facts sufficient to plausibly establish two elements: (1) intentional destruction of the evidence and (2)
destruction of the evidence was for the purpose of depriving the plaintiff of its use.”) (citing Kemp v. CTL
Distribution, Inc., 440 F. App’x 240 (5th Cir. 2011)).
394
See Tomlinson v. Landmark Am. Ins. Co., 2015-0276, p. 9 (La. App. 4 Cir. 3/23/16); 192 So. 3d 153, 160
(stating, post Reynolds, “Under this Court's jurisprudence, spoliation of evidence refers to the intentional destruction
of the evidence for the purpose of depriving the opposing party of its use at trial.”) (citations omitted); Zurich Am.
Ins. Co. v. Queen's Mach. Co., Ltd, 08-546, p. 9—10 (La. App. 5 Cir. 1/27/09); 8 So. 3d 91, 96 (same) (citations
omitted); Randolph v. Gen. Motors Corp., 93-1983 (La. App. 1 Cir. 11/10/94); 646 So. 2d 1019, 1027 (“We find
that the trial court imposition of liability upon the Parish under the theory of spoliation of evidence was clearly
wrong since the record does not indicate there was an intentional destruction of evidence by the Parish for the
purpose of depriving the opposing parties of its use.”).
75
is central to the spoliation analysis. Evidence must be preserved when
“the need for the evidence in the future” is foreseeable.395
277.
The Court has found that Man proved BASF’s evidence destruction was
intentional and done when it knew, or certainly should have known that it would deprive
Man of this evidence. But Man has not shown that BASF’s actions were taken for the
purpose of depriving Man of access to the evidence.
278.
While the Court has serious reservations about the wisdom of applying
Louisiana’s standard under these circumstances,396 it reluctantly does so.397
3. Adverse Presumption (federal law)
279.
“[F]ederal courts . . . apply federal evidentiary rules rather than state spoliation
laws in diversity suits.”398 Thus, in this case, federal law governs the use of evidentiary
presumptions and adverse inferences based on spoliation.399
280.
Under federal law, “[s]poliation of evidence ‘is the destruction or the significant
and meaningful alteration of evidence.’ ”400
395
Herster, 72 F. Supp. 3d at 639 (citations omitted).
It seems to this Court that a spoliation remedy is appropriate, regardless of motivation, where a party, aware of
the need to preserve evidence for potential litigation and that its destruction will deprive another party or potential
party of that evidence, nonetheless knowingly destroys that evidence.
397
See June Med. Servs. LLC v. Kliebert, 158 F. Supp. 3d 473, 528 n. 64 (M.D. La. 2016) (“However much a district
court may disagree with an appellate court, . . . [it] is not free to disregard the mandate or directly applicable holding
of the appellate court.”) (quoting Whole Woman's Health v. Cole, 790 F.3d 563, 581 (5th Cir. 2015), modified, 790
F.3d 598 (5th Cir. 2015), rev'd and remanded sub nom. Whole Woman's Health v. Hellerstedt, 136 S. Ct. 2292, 195
L. Ed. 2d 665 (2016), as revised (June 27, 2016)).
398
Condrey v. SunTrust Bank of Ga., 431 F.3d 191, 203 (5th Cir. 2005) (citing King v. Ill. Cent. R.R., 337 F.3d 550,
556 (5th Cir. 2003)).
399
See King, 337 F.3d at 556 (citations omitted).
400
Guzman v. Jones, 804 F.3d 707, 713 (5th Cir. 2015) (quoting Rimkus Consulting Grp., Inc. v. Cammarata, 688 F.
Supp. 2d 598, 612 (S.D. Tex. 2010)); see also Rimkus, 688 F. Supp. 2d at 612 (“Spoliation is the destruction of
records or properties, such as metadata, that may be relevant to ongoing or anticipated litigation, government
investigation or audit”) (citation omitted)).
396
76
281.
Spoliation also includes “ ‘the failure to preserve property for another's use as
evidence in pending or reasonably foreseeable litigation.’ ”401
282.
“Allegations of spoliation, including the destruction of evidence in pending or
reasonably foreseeable litigation, are addressed in federal courts through the inherent
power to regulate the litigation process if the conduct occurs before a case is filed or if,
for another reason, there is no statute or rule that adequately addresses the conduct.”402
283.
“When inherent power does apply, it is ‘interpreted narrowly, and its reach is
limited by its ultimate source—the court's need to orderly and expeditiously perform its
duties.’ ”403
284.
“ It is well established that a party seeking the sanction of an adverse inference
instruction based on spoliation of evidence must establish that: (1) the party with control
over the evidence had an obligation to preserve it at the time it was destroyed; (2) the
evidence was destroyed with a culpable state of mind; and (3) the destroyed evidence was
‘relevant’ to the party's claim or defense such that a reasonable trier of fact could find that
it would support that claim or defense.”404
401
Ashton v. Knight Transp., Inc., 772 F. Supp. 2d 772, 799 (N.D. Tex. 2011) (quoting Silvestri v. Gen. Motors
Corp., 271 F.3d 583, 590 (4th Cir. 2001)).
402
Rimkus, 688 F. Supp. 2d at 611 (citations omitted); see also Yelton v. PHI, Inc., 284 F.R.D. 374, 378 n. 2 (E.D.
La. 2012) (quoting affirmed magistrate’s order which recognized that, because there was no allegation that the
spoliating party “violated any discovery order or other directive by the Court[,]” the spoliation motions were
“properly stated pursuant to this Court’s inherent powers, and not Rule 37.”).
403
Rimkus, 688 F. Supp. 2d at 611 (quoting Newby v. Enron Corp., 302 F.3d 295, 302 (5th Cir. 2002) (footnote
omitted)).
404
Rimkus, 688 F. Supp. 2d at 615–16 (citing Zubulake v. UBS Warburg LLC (Zubulake IV), 220 F.R.D. 212, 220
(S.D.N.Y. 2003)).
77
285.
Concerning the first requirement, “[g]enerally, the duty to preserve arises when a
party ‘ “has notice that the evidence is relevant to litigation or . . . should have known
that the evidence may be relevant to future litigation.” ’ ”405
286.
The Fifth Circuit has recognized that “[a] party's duty to preserve evidence comes
into being when the party has notice that the evidence is relevant to the litigation or
should have known that the evidence may be relevant.”406
287.
“Generally, the duty to preserve extends to documents or tangible things (defined
by Federal Rule of Civil Procedure 34) by or to individuals ‘likely to have discoverable
information that the disclosing party may use to support its claims or defenses.’ ”407
288.
As one district court within this circuit explained:
These general rules [about the duty to preserve] are not controversial. But
applying them to determine when a duty to preserve arises in a particular
case and the extent of that duty requires careful analysis of the specific
facts and circumstances. It can be difficult to draw bright-line distinctions
between acceptable and unacceptable conduct in preserving information
and in conducting discovery, either prospectively or with the benefit (and
distortion) of hindsight. Whether preservation or discovery conduct is
acceptable in a case depends on what is reasonable, and that in turn
depends on whether what was done—or not done—was proportional to
that case and consistent with clearly established applicable standards. . . .
[T]hat analysis depends heavily on the facts and circumstances of each
case and cannot be reduced to a generalized checklist of what is acceptable
or unacceptable.408
405
Rimkus, 688 F. Supp. 2d at 612 (quoting John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008) (omission in
original) (quoting Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir. 2001))). See also Zubulake IV, 220
F.R.D. at 216 (“The obligation to preserve evidence arises when the party has notice that the evidence is relevant to
litigation or when a party should have known that the evidence may be relevant to future litigation.”) (quoting
Fujitsu Ltd., 247 F.3d at 436).
406
Guzman, 804 F.3d at 713 (citing Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 612 (S.D.
Tex. 2010)).
407
Rimkus, 688 F. Supp. 2d at 612-13 (quoting Zubulake v. UBS Warburg LLC (Zubulake IV), 220 F.R.D. 212, 21718 (S.D.N.Y. 2003) (footnotes omitted)).
408
Rimkus, 688 F. Supp. 2d at 613 (footnotes omitted).
78
289.
Concerning the second requirement (culpability), different circuits adopt different
standards for the level of culpability required for an adverse presumption.409 For
example, “[t]he First, Fourth, and Ninth Circuits hold that bad faith is not essential to
imposing severe sanctions if there is severe prejudice, although the cases often emphasize
the presence of bad faith.”410
290.
However, the Fifth Circuit “permit[s] an adverse inference against the spoliator or
sanctions against the spoliator only upon a showing of ‘bad faith’ or ‘bad conduct.’ ”411
291.
“Bad faith, in the context of spoliation, generally means destruction for the
purpose of hiding adverse evidence.”412
292.
Other circuits that require a finding of bad faith for a spoliation claim have
utilized a similar standard. For instance, in Mathis, the Seventh Circuit remarked, “What
remains—the possibility of an adverse inference—depends on persuading the court that
the evidence was destroyed in ‘bad faith’. [(citation omitted)] That the documents were
destroyed intentionally no one can doubt, but ‘bad faith’ means destruction for the
purpose of hiding adverse information.”413 In Greyhound Lines, Inc. v. Wade, the Eighth
Circuit explained:
A spoliation-of-evidence sanction requires “a finding of intentional
destruction indicating a desire to suppress the truth.” [Stevenson v. Union
Pac. R.R. Co., 354 F.3d 739, 746 (8th Cir. 2004)]; see Richter v. City of
Omaha, 273 Neb. 281, 729 N.W.2d 67, 71–73 (2007) (unfavorable
inference where “spoliation or destruction was intentional and indicates
409
See Rimkus, 688 F. Supp. 2d at 614—15.
Id. at 614 (collecting cases from these circuits).
411
Guzman, 804 F.3d at 713 (quoting Condrey v. SunTrust Bank of Georgia, 431 F.3d 191, 203 (5th Cir.2005)); see
also Consol. Aluminum Corp. v. Alcoa, Inc., 244 F.R.D. 335, 344 (M.D. La. 2006) (“although courts in other circuits
may permit the imposition of an adverse inference instruction based upon the gross negligence of the spoliating
party, the Fifth Circuit has held that such a sanction may only be imposed upon a showing of ‘bad faith’ or
intentional conduct by the spoliating party.” (citations omitted)).
412
Guzman, 804 F.3d at 713. (citing Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir.1998)).
413
Mathis, 136 F.3d at 1155 (emphasis in original); see also Faas v. Sears, Roebuck & Co., 532 F.3d 633, 644 (7th
Cir. 2008) (relying on Mathis and holding same).
410
79
fraud and a desire to suppress the truth”). “Intent is rarely proved by direct
evidence, and a district court has substantial leeway to determine intent
through consideration of circumstantial evidence, witness credibility,
motives of the witnesses in a particular case, and other factors.” Morris v.
Union Pac. R.R., 373 F.3d 896, 902 (8th Cir. 2004). . . .
The ultimate focus for imposing sanctions for spoliation of evidence is the
intentional destruction of evidence indicating a desire to suppress the
truth, not the prospect of litigation. Morris, 373 F.3d at 901.414
293.
Even in those circuits that do not require a finding of bad faith for spoliation, the
courts provide a similar definition of bad faith. For example, in Micron Tech., Inc. v.
Rambus Inc., the Delaware district court imposed the dispositive sanction of dismissal
against the defendant.415 The district court recognized negligent spoliation but noted that
culpability was a factor in assessing sanctions.416 On appeal, the defendant argued that
the district court erred in determining that it acted in bad faith.417 In that context, the
Federal Circuit provided the following description of bad faith:
To make a determination of bad faith, the district court must find that the
spoliating party “intended to impair the ability of the potential defendant
to defend itself.” Schmid, 13 F.3d at 80. See also Faas v. Sears, Roebuck
& Co., 532 F.3d 633, 644 (7th Cir. 2008) (“A document is destroyed in
bad faith if it is destroyed ‘for the purpose of hiding adverse information.’
”) (citation omitted); In re Hechinger Inv. Co. of Del., Inc., 489 F.3d 568,
579 (3d Cir. 2007) (noting that bad faith requires a showing that the
litigant “intentionally destroyed documents that it knew would be
important or useful to [its opponent] in defending against [the] action”);
Anderson v. Cryovac, Inc., 862 F.2d 910, 925 (1st Cir. 1988) (finding bad
faith “where concealment was knowing and purposeful,” or where a party
“intentionally shred[s] documents in order to stymie the opposition”);
Gumbs v. Int'l Harvester, Inc., 718 F.2d 88, 96 (3d Cir. 1983) (noting that
an adverse inference from destruction of documents is permitted only
when the destruction was “intentional, and indicates fraud and a desire to
suppress the truth”) (citation omitted). The fundamental element of bad
faith spoliation is advantage-seeking behavior by the party with superior
access to information necessary for the proper administration of justice.418
414
Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007).
Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1316 (Fed. Cir. 2011).
416
See Micron Tech., Inc. v. Rambus Inc., 255 F.R.D. 135, 148-49 (D. Del. 2009).
417
Micron, 645 F.3d at 1316.
418
Id. at 1326.
415
80
Micron ultimately remanded to the district court to provide grounds for its finding of bad
faith.419
294.
Numerous district courts within the Fifth Circuit have also found that, to
constitute bad faith, the spoliating party must essentially act with the purpose of
destroying the evidence. For instance, in Consolidated Aluminum Corp., this Court
explained, “[f]or the spoliator to have a ‘culpable state of mind,’ it must act with
fraudulent intent and a desire to suppress the truth.”420 In Tammany Parish Hospital
Service District No. 1 v. Travelers Property Casualty Co. of America, the Eastern District
of Louisiana explained that “[t]he theory of spoliation of evidence refers to an intentional
destruction of evidence for [the] purpose of depriving opposing parties of its use.”421 In
Thomas v. Tangipahoa Parish School Board, the Eastern District of Louisiana recently
explained:
The Fifth Circuit has not further defined “bad faith” in the
spoliation context, but has defined it under Louisiana law as
[t]he opposite of “good faith,” generally implying or
involving actual or constructive fraud, or a design to
mislead and deceive another, or a neglect or refusal to
fulfill some duty or some contractual obligation, not
prompted by an honest mistake as to one's rights or duties
but by some interested or sinister motive. The term bad
faith means more than mere bad judgment or negligence, it
implies the conscious doing of a wrong for dishonest or
morally questionable motives.
Industrias Magromer Cueros y Pieles S.A. v. Louisiana, 293 F.3d
912, 922 (5th Cir. 2002) (emphasis added); compare Black's Law
Dictionary BAD FAITH (10th ed. 2014) (“dishonesty of belief,
purpose, or motive”) with id. GOOD FAITH (“A state of mind
consisting in (1) honesty in belief or purpose, (2) faithfulness to
419
Id. at 1328.
Consolidated Aluminum Corp., 244 F.R.D. at 343–44.
421
St. Tammany Par. Hosp. Serv. Dist. No. 1 v. Travelers Prop. Cas. Co. of Am., 250 F.R.D. 275, 277 (E.D. La.
2008) (citing Burge v. St. Tammany Parish Sheriff's Office, No. 91-2321, 96-0244, 2000 WL 815879, at *3 (E.D.
La. June 22, 2000), aff'd sub nom. Burge v. St. Tammany Par., 336 F.3d 363 (5th Cir. 2003)).
420
81
one's duty or obligation, . . .or (4) absence of intent to defraud or to
seek unconscionable advantage.”). As these definitions emphasize,
the evidence must show that a party had a dishonest, deceptive or
culpable state of mind for the court to find that the party acted in
bad faith.422
295.
Applying this standard, the Court finds that Man has failed to sustain its burden of
proving that BASF destroyed evidence in bad faith, i.e., for the purpose of depriving Man
of the evidence. This rule seems just in situations where the destroyer of evidence is
unaware of the possible significance of the evidence in future litigation or is unaware that
his actions will result in the permanent loss of the evidence. Here BASF knew or should
have known of the importance of the evidence in contemplated litigation and knew that
its conduct would foreclose Man’s access to it permanently. However, the Court is bound
to follow the rule in this Circuit and therefore finds Man is not entitled to the adverse
presumption.423
C. Man’s Liability
1. Burden of Proof
296.
“In Louisiana tort cases and other ordinary civil actions, the plaintiff, in general,
has the burden of proving every essential element of his case, including the cause-in-fact
of damage, by a preponderance of the evidence[.]”424
297.
“Proof by direct or circumstantial evidence is sufficient to constitute a
preponderance, when, taking the evidence as a whole, such proof shows that the fact or
causation sought to be proved is more probable than not.”425
422
Thomas v. Tangipahoa Par. Sch. Bd., No. 14-2814, 2016 WL 3542286, at *2 (E.D. La. June 29, 2016).
See supra, 75 nn. 396-97.
424
Lasha v. Olin Corp., 625 So. 2d 1002, 1005 (La. 1993) (citations omitted).
425
Id. (citations omitted).
423
82
2. Breach of Contract
298.
Article 1994 of the Louisiana Civil Code provides that “[a]n obligor is liable for
the damages caused by his failure to perform a conventional obligation.”426
299.
Thus, “[t]o succeed on a breach of contract claim, the plaintiff must prove (1) the
obligor undertook an obligation to perform; (2) the obligor failed to perform the
obligation (the breach); and (3) the obligor's failure to perform resulted in damages to the
obligee.” 427
300.
Considering all of the evidence, and for the reasons detailed above, the Court
finds that BASF has failed to prove its breach of contract claim by a preponderance of the
evidence. Man clearly undertook the obligation to change the dry gas seals on the
Compressor, and that contract was governed by the entire Purchase Order. Man
performed its obligations under that agreement, so there was no breach of contract.
Further, even if Man had breached, as detailed above, BASF has failed to prove by a
preponderance of the evidence that any such failure to perform caused the damages that
BASF claims. Accordingly, BASF’s breach of contract claim fails.
3. Tort Liability
301.
The Louisiana Supreme Court has explained:
Under Louisiana jurisprudence, most negligence cases are resolved by
employing a duty/risk analysis. The determination of liability under the
duty/risk analysis usually requires proof of five separate elements: (1)
proof that the defendant's substandard conduct was a cause-in-fact of the
plaintiff's injuries (the cause-in-fact element); (2) proof that the
defendant's conduct failed to conform to the appropriate standard (the
breach element); (3) proof that the defendant had a duty to conform his
conduct to a specific standard (the duty element); (4) proof that the
426
La. Civ. Code art. 1994 (emphasis added).
Cent. Facilities Operating Co. v. Cinemark USA, Inc., 36 F. Supp. 3d 700, 712 (M.D. La. 2014) (citing Favrot v.
Favrot, 2010-0986, p. 14—15 (La. App. 4 Cir. 2/9/11); 68 So. 3d 1099, 1108–09).
427
83
defendant's substandard conduct was a legal cause of the plaintiff's injuries
(the scope of liability or scope of protection element); and (5) proof of
actual damages (the damages element). If the plaintiff fails to prove any
one element by a preponderance of the evidence, the defendant is not
liable.428
302.
The Louisiana Supreme Court has further explained the following concerning the
causation requirement:
Generally, the initial determination in the duty/risk analysis is cause-infact. Cause-in-fact usually is a “but for” inquiry, which tests whether the
accident would or would not have happened but for the defendant's
substandard conduct. Where there are concurrent causes of an accident,
the proper inquiry is whether the conduct in question was a substantial
factor in bringing about the accident. To satisfy the substantial factor test,
the plaintiff must prove by a preponderance of the evidence that the
defendant's conduct was a substantial factor bringing about the
complained of harm. . . . Whether the defendant's conduct was a
substantial factor in bringing about the harm, and, thus, a cause-in-fact of
the injuries, is a factual question to be determined by the factfinder.429
303.
Considering all of the evidence, and for the reasons detailed above, the Court
concludes that BASF has not proven by a preponderance of the evidence that Man’s
alleged failure to tighten the bolts was a substantial factor in bringing about the
Compressor failure. Indeed, BASF has failed to satisfy its burden of proving by a
preponderance of the evidence that any act or omission by Man was a cause-in-fact of the
Compressor failure. BASF has not proven that, but for Man’s conduct, the accident
would not have occurred. As a result, BASF cannot prevail on its tort claim.
428
429
Perkins v. Entergy Corp., 2000-1372, p. 7 (La. 3/23/01); 782 So. 2d 606, 611 (citations omitted).
Id. at 611—12 (citations omitted).
84
VI.
SUMMARY
304.
The Court finds that BASF and Man entered into a contract under which Man was
to change the dry gas seals on its Compressor. BASF’s entire five-page Purchase Order
constituted that contract.
305.
Even though BASF knew that the Compressor, bearing caps, and related
equipment would likely be relevant evidence to future litigation, BASF knowingly failed
to make such evidence available to Man. However, Man failed to prove by a
preponderance of the evidence that BASF acted for the purpose of depriving Man of
evidence. Accordingly, Man’s spoliation claim is dismissed with prejudice, and it is
entitled to no adverse presumption.
306.
Nevertheless, BASF failed to prove by a preponderance of the evidence that Man
breached its contract or that, even if there was a breach, Man’s breach caused BASF’s
damages. Consequently, BASF’s breach of contract claim is dismissed with prejudice.
307.
Similarly, BASF has failed to prove that any act or omission of Man was a cause-
in-fact of the failure of the Compressor. BASF has specifically failed to prove that it is
more likely than not that the loose bolts caused the Compressor failure. As a result,
BASF’s tort claim is dismissed with prejudice.
Signed in Baton Rouge, Louisiana, on September 30, 2016.
S
JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
85
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