Hasbro Industries Inc. v. St. Constantine

Appellants Hasbro Industries, Inc., and A.A. Importing, Inc., were owners or underwriters of cargo destroyed when a fire broke out aboard the M/S St. Constantine, a cargo ship owned by the St. Constantine Maritime Co., Ltd. Appellants filed claims in a limitation proceeding brought by the vessel under the Limitation of Liability Act, 46 U.S.C. §§ 190-195 (1976). The claims were based upon the carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 1300-1315 (1976). The district court found that the fire started when a lube oil line valve fractured due to excessive engine vibration and the absence of a necessary pipe support bracket, causing oil to spill onto the hot exhaust manifold and ignite. The crew was unable to extinguish the blaze because of inadequate training in firefighting techniques. The court concluded that the shipowner had notice of the defects and lack of training and was therefore liable because it failed to exercise due diligence to ensure that the vessel was seaworthy and that the crew was properly trained. The shipowner has not appealed. Appellees A/S Garonne-Glittre and Barber Lines A/S intervened as plaintiffs in the proceedings below. Appellees were time charterers and subcharterers, respectively, of the vessel, with whom appellants had contracted for the transport of their goods. Appellants cross-claimed against appellee-charterers, alleging that the charterers were also liable because their duty to exercise due diligence was identical to the duty owed by a shipowner under COGSA, so that a breach of that duty by the shipowner was necessarily a breach by the charterers. The district court disagreed, finding that the charterers were absolved from liability because they had acted with the due diligence expected of reasonably prudent time charterers. We affirm.