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PENNSYLVANIA R. CO. v. UNITED STATES

March 5, 1953

PENNSYLVANIA R. CO.
v.
UNITED STATES et al.



The opinion of the court was delivered by: FORMAN

- I-

This suit is brought by the Pennsylvania Railroad Company a corporation of the State of Pennsylvania, pursuant to the provisions of 28 U.S.C. § 2201 for a declaratory judgment to determine whether the plaintiff, the seven primary defendants, the United States of America; The Kilgore Manufacturing Company, a corporation of Ohio (upon which service has not been made and which has not appeared voluntarily); National Carloading Corporation, a corporation of Delaware; Isbrandtsen Company, Inc., a corporation of New York; James Healing Company and Healing & Son, Inc., corporations of New Jersey; The Baltimore and Ohio Railroad Company, a corporation of Maryland; or any or either of them was guilty of negligence which proximately caused the explosion and resulting damage suffered by some eight to ten thousand persons, firms and corporations located in the City of South Amboy, New Jersey, and its immediate vicinity. Plaintiff also sued for a judgment declaring whether the plaintiff and any of the other claimants or defendants are entitled to judgments against, or contribution or indemnity from, the United States of America or any other defendant.

 Plaintiff also joined as defendants seven parties who sustained damages in the explosion or are representatives of such persons, with the view that they would be representative of the thousands of claimants injured by the blast. This group of defendants is made up of Harold G. Hoffman and Albert W. Barber, residents and citizens of the City of South Amboy, New Jersey; the City of South Amboy and the County of Middlesex, bodies politic of New Jersey; Rose Lynch, as administratrix and prosequendum of the Estate of Charles D. Lynch, deceased; A. Borup, trading as American Radio Sales and Service, and New Jersey Bell Telephone Company, a corporation of New Jersey.

 - II -

 A summary of the facts alleged in the complaint follows: The Kilgore Manufacturing Company (hereinafter referred to as Kilgore) manufactured under contract with the Government of Pakistan a large quantity of anti-tank and anti-personnel mines together with detonators and fuses for said mines, all of which contain explosives classified as Class A by the Interstate Commerce Commission and the United States Coast Guard. These operations were requested and financed by the United States Government. Pakistan employed National Carloading Corporation, a customs broker and forwarder of import and export freight, to expedite the shipment of these explosives from Kilgore's factories in Ohio to the Atlantic seaboard and to arrange for loading them on vessels.

 National Carloading Corporation engaged space on the S.S. Flying Clipper, owned and operated by Isbrandtsen Company, Inc., (hereinafter referred to as Isbrandtsen) to carry the mines from the Port of New York to Karachi, Pakistan. Pennsylvania Railroad Company owned and operated a pier at South Amboy, New Jersey, which for a long time prior to May 19, 1950, was the only one in the Port of New York from which explosives were permitted to be unloaded from freight cars and transported by water. On May 8, 1950, rear Admiral Ed. H. Smith, the Commanding Officer of the Third United States Coast Guard District, issued a directive prohibiting issuance of a permit by the Captain of the Fort of New York for loading or discharging any amount of Class A explosives at South Amboy. The first named seven defendants knew of this directive. Other facilities for loading and unloading existed at Artificial Island in the Delaware River.

 At the request of Kilgore, The Baltimore and Ohio Railroad (hereinafter referred to as the B. & O. Railroad) placed ten freight cars for the transportation of explosives at the disposal of Kilgore on May 10 and May 12. On May 13, James Healing Co., agent of National Carloading Corporation, applied to the Commandant of the Navy Depot at Earle, New Jersey for permission to load the mines through the Navy facilities at Earle, New Jersey for permission to load the mines through the Navy facilities at Earle, which application was denied. On May 13 and 14, Kilgore, at the direction of National Carloading Corporation, issued shipping orders to the B. & O. Railroad pursuant to which each car of explosives was consigned to James Healing Co., c/o U.S. Navy, Earle, New Jersey, for forwarding to Leonardo, New Jersey, for loading on SS. Flying Clipper. The route specified was via the B. & O. Railroad and Central Railroad of New Jersey. Kilgore and National Carloading Corporation knew that permission to use the Earle facilities had been denied, and they planned to divert the shipments elsewhere if a Navy permit was not eventually obtained.

 National Carloading Corporation falsely represented in a letter of May 15, 1950 to Admiral Smith that Kilgore was ordered to route the cars to New York, deferring their movement until May 14, and that through a misunderstanding some of the cars were shipped earlier and might be in New York City by the following day. A request was made to allow the cars to move over the Pennsylvania munitions pier in South Amboy. The same information was communicated to Isbrandtsen and the Coast Guard. On May 16, Isbrandtsen asked the Acting Commandant of the Third Coast Guard District, substituting for Admiral Smith during the latter's illness, to overrule Admiral Smith's directive, which request was refused. Thereupon Captain H. w. Stinchcomb, Captain of the Port of New York, communicated by telephone the contents of the National Carloading Corporation's letter to the Coast Guard Headquarters in Washington, advising that in view of the facts stated therein, a hazardous condition existed in the New York area and that it should be deemed an emergency justifying an exception to Admiral Smith's directive. Without further investigation Coast Guard Headquarters authorized issuance of permits by the Coast Guard allowing transfer of the explosives at South Amboy from railroad freight cars to the lighters of James Healing Co. for loading on the SS. Flying Clipper at anchorage 49-G, near Leonardo, New Jersey, on May 18, 1950.

 Thereupon the Coast Guard in New York informed National Carloading Corporation, Isbrandtsen and James Healing Co. that such permits would be issued. In addition, on May 16, 1950, Captain Stinchcomb advised the Pennsylvania Railroad and others that the Coast Guard would issue permits for the loading on lighters at South Amboy of 1,800 cases of dynamite in two carloads, manufactured by Hercules Powder Company for shipment to Afghanistan via the same ship.

 The complaint went on to allege that Healing & Son, Inc., the owners of the lighters involved in the explosion, and James Healing Co. filed on the admiralty side of the court a petition for limitation of liability. Answers denying the right of said petitioners to limit their liabilities were filed and over eight thousand claims were filed in that proceeding. As of April 30, 1952, over seven thousand claimants had filed actions to recover damages suffered as a result of the explosion against the first group of defendants in this court, in the Superior Court of New Jersey, in the United States District Court for the Eastern District of New York, in the United States District Court for the Southern District of New York, in the United States District Court for the District of Ohio, Northern Division, and in the state courts of Ohio. The aggregate of all the claims was approximately $ 40,000,000. None of the actions have been tried and some are not at issue. A number of suits have been brought in this court against the United States under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., and are not yet at issue.

 Plaintiff prays for an order

 '* * * restraining the further prosecution, until the final determination of this action, of all actions for damages sustained by any person or persons as a result of the explosion at South Amboy, May 19, 1950, against the plaintiff, or any of the parties to this action, other than defendant The Kilgore Manufacturing Company, unless it appear herein.

 '2. for judgment declaring:

 '(a) The rights and other legal relations of the parties to this suit, as well as all persons, firms and corporations who suffered damages as a result of the explosion at South Amboy on May 19, 1950 as between themselves and to each other;

 '(b) Whether any one or more of the parties to this action were guilty of wanton and wilful negligence; what parties to this action were guilty of negligence that proximately caused the explosion, and which of the parties to the action were not guilty of negligence which proximately caused the explosion;

 '(c) What party or parties to this action are entitled to contribution or indemnity, entire or partial, from any other party to this action;

 '(d) Whether the damages suffered by any claimant as a result of the said explosion at South Amboy on May 19, 1950 shall be determined by a Referee or Master or by the Court, or by a jury or juries, after the liability and responsibility therefor of the parties to this action, or any or either of them has been determined.

 '3. For an order enjoining and restraining any persons residents of New Jersey from prosecuting in the Courts of any other State, or in any other Court of the United States, any action or proceeding against any of the parties to this action who shall be served with process herein, or be subject to its jurisdiction, for damages arising out of the explosion at South Amboy aforesaid.

 '5. That the Court may be pleased to admit as parties hereto any other claimants for damages sustained as a result of said explosion that may desire to be admitted as parties hereto on the ground that the group of claimants herein named as defendants will not adequately represent the interests of all claimants who sustained damages as a result of said explosion.'

 Plaintiff alleges that by the procedure designed in its complaint this court can determine all the legal rights and liabilities of those responsible for the explosion and that the findings will be res judicata as to who was responsible and will be binding on all those in the class of claimants represented by the second group of defendants in this suit. Only the issue of the ...


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