Polaris Engineering, Inc. v. Texas International Terminals, Ltd.

Filing 206

ORDER AND OPINION re 203 Joint Letter Regarding Discovery Dispute. (Signed by Magistrate Judge Andrew M Edison) Parties notified.(rcastro, 3)

Case 3:21-cv-00094 Document 206 Filed on 09/07/22 in TXSD Page 1 of 4
United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
POLARIS ENGINEERING, INC.,
Plaintiff.
VS.
TEXAS INTERNATIONAL
TERMINALS, LTD., et al.,
Defendants.

September 07, 2022
Nathan Ochsner, Clerk

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§ CIVIL ACTION NO. 3:21-00094
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ORDER AND OPINION
This litigation arises out of a series of contractual agreements between Texas
International Terminals, Ltd. (“TXIT”) and Polaris Engineering, Inc. (“Polaris”).
Under the relevant contracts, Polaris agreed to engineer, design, and construct a
crude processing facility (“Facility”) for TXIT. Polaris has sued TXIT for
nonpayment. TXIT refuses to pay Polaris because it contends that the Facility is
defective.
Discovery is well underway. As part of that process, Polaris recently
requested the opportunity to enter and inspect the Facility under Federal Rule of
Civil Procedure 34(a)(2). Rule 34(a)(2) provides that a party may request “to
permit entry onto designated land or other property possessed or controlled by the
responding party, so that the requesting party may inspect, measure, survey,
photograph, test, or sample the property or any designated object or operation on
it.” FED. R. CIV. P. 34(a)(2). The parties agree that a site inspection is appropriate
in this case and have worked together to set the parameters for that inspection.
There is one outstanding issue that the parties have asked me to resolve. TXIT
requests that Polaris’s representatives (including consultants, experts, and
counsel) provide a waiver of liability before entering the Facility. Polaris opposes
any effort to condition its right to inspect the Facility on its representatives waiving

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their personal rights to seek redress should they become injured during the
inspection as a result of TXIT’s negligence.
I am not the first federal judge to consider whether a party seeking to
conduct a Rule 34 inspection must agree to release and indemnify the party hosting
the inspection. In Hindle v. Nat’l Bulk Carriers, Inc., 18 F.R.D. 198 (S.D.N.Y.
1955), the first reported decision addressing this issue, a plaintiff sought
permission to board a ship in order to photograph and measure the location of an
alleged accident. The ship’s owner consented to the plaintiff’s request, but under
the condition that each person boarding the vessel sign a general waiver of liability.
In refusing to require the plaintiff to execute a liability waiver, the Hindle court
reasoned:
Defendant argues further that since persons coming aboard its
vessel pursuant to an order permitting boarding in aid of discovery
would be doing so “on their own business and not that of the vessel”,
[sic] the owner of the vessel is entitled to protection by way of a waiver
of liability. I cannot agree. It is unnecessary to determine now the
exact extent of the duty, if any, owed by the ship to persons who come
aboard for the purpose of obtaining evidence pursuant to court
authority. The extent of that duty, whatever it is, is fixed by law. The
ship, by permitting access, is not doing a favor and is in no position to
stipulate that, in the event of accident, it shall receive treatment more
favorable than that to which it would be entitled by law.
Id. at 199.
Since the Hindle decision was handed down almost 70 years ago, district
courts across the country have universally followed suit, holding that waiver
agreements to enter and inspect property are inappropriate. See, e.g., P.R. Ports
Auth. v. P/V Norwegian Epic, No. CV 21-1056, 2021 WL 5570330, at *3 (D.P.R.
Aug. 19, 2021) (refusing to require a Rule 34 inspection be conditioned upon
execution of a liability waiver); Wingard v. GR Catalyst Two LLC, No. 1:20-CV432, 2021 WL 6339599, at *2 (N.D.N.Y. July 20, 2021) (same); Spano v. CSX
Transp., Inc., No. 3:16-CV-245, 2017 WL 3332246, at *4 (W.D. Pa. Aug. 3, 2017)
(“CSXT may not require a release of liability in order for Spano to visit, inspect,
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photograph and video the inside of the train engine.”); Aderholt v. Bureau of Land
Mgmt., No. 7:15-CV-00162, 2016 WL 11782267, at *3 (N.D. Tex. Oct. 30, 2016)
(“But whatever hazards [the party seeking to inspect the premises] may face in
conducting the inspection, they do not require that [the same party] waive any
rights to pursue relevant discovery.”); Exxon Mobil Corp. v. Daybrook Fisheries,
Inc., No. CV 08-4654, 2009 WL 10680073, at *1 (E.D. La. Oct. 28, 2009) (holding
that a party seeking to inspect an industrial yard under Rule 34 does not have to
execute a liability waiver before being allowed on the premises); United States v.
Bunker Hill Co., 417 F. Supp. 332, 333 (D. Idaho 1976) (A party conducting a Rule
34 inspection “is not required to indemnify the [party hosting the inspection] . . .
before entering on the lands of the [party hosting the inspection] for purposes of
carrying out discovery procedures in preparation for trial.”).
Today, I join this growing chorus of judges refusing to require an individual
involved in a property inspection to enter into a liability waiver. As one district
court in Kansas succinctly noted: “[T]he Court considers it neither necessary or
wise to require [the party seeking to inspect the premises] to, as a condition to
conducting a proper inspection, waive any and all legal duties which [the premise
owner] might otherwise have in hosting the inspection.” White v. Union Pac. R.R.
Co., No. 09-cv-1407, 2011 U.S. Dist. LEXIS 40962, at *2 (D. Kan. Apr. 14, 2011).
“It is impossible to imagine that such a waiver would enhance the safety of the
inspection.” Id.; see also Swoope v. CSX Transp., Inc., No. 4:13-CV-0307, 2014
WL 12543864, at *5 (N.D. Ga. Aug. 13, 2014) (Although a waiver of liability “does
not give [the premise owner] license to intentionally injure” the party inspecting
the property, “there is little doubt that it attempts to remove . . . the obligation to
exercise ordinary care toward” those inspecting the site.). A party hosting a Rule
34 inspection should, like any premise owner who hosts a guest in the State of
Texas, be required to exercise reasonable care to protect the invitee from risks that
the owner is actually aware of, and also those risks that the owner should be aware
of after a reasonable inspection. See Motel 6 G.P., Inc. v. Lopez, 929 S.W.2d 1, 3
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(Tex. 1996). Accordingly, Polaris’s representatives will not be required to execute
releases or indemnity agreements before conducting the Rule 34 inspection at the
Facility.
Even though I hold that an individual participating in a Rule 34 inspection
should not be forced to waive any claims before entering the premises, I do
appreciate TXIT’s position that the operating crude processing facility at issue is,
by its very nature, an inherently dangerous place. To ensure that each member of
the Polaris team participating in the site visit is fully aware what is in store, TXIT
is ordered to provide these individuals written notice as to the potentially
dangerous conditions that exist at the Facility. The written notice should also warn
all persons participating in the Rule 34 inspection that if they agree to enter the
Facility, they risk encountering these and similar dangers and are obligated to take
reasonable precautions. This may include being required to wear personal
protective equipment provided by TXIT.
SIGNED this 7th day of September 2022.
______________________________
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE

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