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MORAN v. PITTSBURGH-DES MOINES STEEL CO.

July 29, 1949

MORAN
v.
PITTSBURGH-DES MOINES STEEL CO. et al.



The opinion of the court was delivered by: GOURLEY

History of Litigation

This is a retrial of an action for wrongful death. Plaintiff sues as Administratrix of the Estate of her husband, Patrick J. Moran. The defendants are Pittsburgh-Des Moines Steel Company, a partnership, John E. Jackson, individually, a member of the partnership, and Pittsburgh-Des Moines Company, a corporation. The subject matter of the suit is the recovery of damages occasioned to the plaintiff by the death of her husband in a disaster which took place in the city of Cleveland, state of Ohio, on October 20, 1944.

 The action is a most involved, complicated and intricate proceeding. The trial commenced on November 8, 1948 and terminated on January 5, 1949. The record is voluminous and comprises seven different volumes.

 At the first trial the Court granted the defendants' motion for involuntary non-suit and dismissed the action against all the defendants. The plaintiff appealed, the Circuit Court reversed and held that sufficient evidence existed in the record to require the consideration of the jury. Moran v. Pittsburgh-Des Moines Steel Co., et al., 3 Cir., 166 F.2d 908.

 Substantially the same evidence was presented by the plaintiff that was introduced at the first trial. In addition thereto, direct testimony was offered that the catastrophe or the accident was caused through negligence of the defendants. In other words, in the first trial the basis upon which the plaintiff premised her right to recover related to testimony, direct or circumstantial, from which inferences could be drawn that the defendants were negligent. In the second trial, in addition to the proof just referred to, direct testimony was offered that the accident or catastrophe was caused by the negligence of the defendants.

 The jury returned a verdict in favor of all the defendants, and the matter now before the Court relates to a motion for a new trial filed on behalf of the plaintiff.

 History of Instrumentality Which Caused the Disaster.

 The tragic accident in which Patrick J. Moran lost his life was a poignant episode in the development of the bold and ingenious engineering for which Americans have become famous. The East Ohio Gas Company is an operating public utility engaged in the selling of natural gas for industrial and consumers' use in the city of Cleveland, state of Ohio. A problem arose in connection with meeting the demands of the company for making available an adequate supply of natural gas, and the immediate problem was the storage thereof. A plan was worked out whereby natural gas at a temperature of 250 degrees below zero Fahrenheit becomes liquid, and the condensation in volume was so great that 600 cubic feet of the natural gas became one (1) cubic foot of the liquid gas. Arrangements were made whereby three spherical tanks were constructed, commencing in the year 1940, sufficient to hold fifty million cubic feet of the natural gas. The success of this storage venture increased the demand for gas and resulted in East Ohio Gas Company in the year 1942 to look for a further expansion of storage facilities. The new tank to be built was to have storage capacity of two of the earlier ones or sufficient to hold 100 million cubic feet of natural gas.

 History of Construction of No. 4 Cylindrical Tank.

 The Pittsburgh-Des Moines Company was engaged in the fabrication and design of tanks and materials. The Pittsburgh-Des Moines Steel Company secured business for the corporation and engaged in the construction of tanks and different instrumentalities that were designed and fabricated by the Pittsburgh-Des Moines Company.

 The No. 4 cylindrical tank was constructed through contractual arrangements between East Ohio Gas Company and Gas Machinery Company. The Gas Machinery Company let a sub-contract to the Pittsburgh-Des Moines Steel Company for the design, construction and fabrication of the No. 4 tank. Although the contract was let by Gas Machinery Company with the defendant partnership, the defendant corporation and the individual defendant, John E. Jackson, a member of said partnership, were active and took part in one way or the other in the matters relating to the design, fabrication and construction of said tank.

 East Ohio Gas Company executed the formal contracts for the construction of No. 4 tank with Gas Machinery Company since said company had certain patent rights which had to be recognized by East Ohio. Gas Machinery in turn sub-contracted with Pittsburgh-Des Moines Steel Company, the partnership defendant, for the actual design, fabrication and construction of the tank.

 Due to the overlapping of the many business relations between the corporate defendant, the partnership defendant and the individual defendant, the Court left for the determination of the jury whether or not one or all of the defendants were involved in the construction of the No. 4 cylindrical tank, and if one or all of the defendants were responsible for the catastrophe which caused the death of Patrick J. Moran. That is, which one or all of the defendants, severally or jointly, engaged in the design, fabrication and construction of the No. 4 cylindrical tank, and whether or not the affairs of one or all of the defendants were so interwoven and intermingled that the acts of one became the acts of the others.

 Tank No. 4 was completed in May of 1943, and after the tank was filled, the defendants were paid and left the job. All went well for nearly thirteen months when on the afternoon of October 20, 1944, No. 4 tank ruptured and gas escaped in great quantities. There was a fire, an explosion and a frightful diaster in which lives were lost and property destroyed. One of the lives was that of the plaintiff's decedent, who worked with the East Ohio Gas Company but not in the operation connected with the liquefaction and storage of gas.

 Applicable Law.

 Federal jurisdiction is based solely on diversity of citizenship, and the familiar situation exists in which the federal court applies state law and takes its law from the authorized decisions of the state where the action arose. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487.

 In diversity of citizenship cases, the federal courts, when deciding questions of conflict of laws, must follow the rules prevailing in the states in which they sit. The conflict of laws rule to be applied must, therefore, be determined by the law of Pennsylvania. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477; Alcaro et al. v. Jean Jordeau, Inc., 3 Cir., 138 F.2d 767; Smyth Sales v. Petroleum Heat & Power Co., 3 Cir., 128 F.2d 697; Boyle et ux. v. Ward, 3 Cir., 125 F.2d 674; Anthony P. Miller, Inc., v. Needham et al., 3 Cir., 122 F.2d 710.

 In view of the foregoing, the question arises- What is the Pennsylvania rule of conflict of laws relating to recovery upon a tort claim where the facts have occurred outside of Pennsylvania?

 The Pennsylvania rule is that the liability of the defendant is to be based on the place of the tort or the wrong. Boyle et ux. v. Ward, Supra.

 For purposes of diversity jurisdiction, a federal court is in effect only another court of the state. The questions which, therefore, arise as to the plaintiff meeting the burden of proof required to support a right to recover was governed by the law of Ohio. Stoner v. New York Life Ins. Co., 311 U.S. 464, 61 S. Ct. 336, 85 L. Ed. 284; Cities Service Oil Co. v. Dunlap, 308 U.S. 208, 60 S. Ct. 201, 84 L. Ed. 196; Woods v. Interstate Realty Co., 69 S. Ct. 1235.

 The substantive rights of the parties are determined by the law of Ohio where the tank was built and the catastrophe occurred, since under the law of conflicts the Ohio rule controls. Boyle v. Ward, supra; Alcare v. Jean Jordeau, Inc., supra; Smyth Sales v. Petroleum Heat & Power Co., supra.

 Since the catastrophe occurred in Ohio, the question is one of tort law, and under the law of Pennsylvania it is necessary to look to the Ohio authorities to determine the law. Moran v. Pittsburgh-Des Moines Steel Co., et al., supra.

 The Ohio courts have ruled that a manufacturer is responsible not merely to the consumer of the article, but also to a person in the vicinity of its use who is injured by the manufacturer's lack of due care. White Sewing Machine Co. v. Feisel, 28 Ohio App. 152, 162 N.E. 633; Moran v. Pittsburgh-Des Moines Steel Co., et al., supra; Gilbride v. Laffel Co., Ohio App., 47 N.E.2d 1015.

 The appellate courts in Ohio have not definitely ruled on the question as to whether or not the principle of liability just enunciated would have application to a chattel attached to the real estate, and which is out of control of the party who constructed or attached the chattel. However, the Circuit Court held that if the Ohio courts were confronted with the problem, they would in accordance with the development of the law shown in its previous decisions, extend the liability of the manufacturer to negligence involved in building the structure even though that structure was affixed to another's land. Moran v. Pittsburgh-Des Moines Steel Co., et al., supra.

 Many questions arose in the trial of the case as to whether the admissibility of evidence was to be governed by the law of Ohio, Pennsylvania, or the Federal Rules. Since the admissibility of evidence, in the absence of a statutory requirement or restriction, and none existed in this action, is a matter of procedure rather than substance, the Court applied Rule 43(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A.

 'Rule 43. Evidence

 '(a) Form and Admissibility. In all trials the testimony of witnesses shall be taken orally in open court, unless otherwise provided by these rules. All evidence shall be admitted which is admissible under the statutes of the United States, or under the rules of evidence heretofore applied in the courts of the United States on the hearing of suits in equity, or under the rules of evidence applied in the courts of general jurisdiction of the state in which the United States court is held. In any case, the statute or rule which favors the reception of the evidence governs and the evidence shall be presented according to the most convenient method prescribed in any of the statutes or rules to which reference is herein made. The competency of a witness to testify shall be determined in like manner.'

 As a result testimony was admitted which was proper under the rules of evidence heretofore applied in the courts of the United States, or which was admissible under the rules applied in the courts of Pennsylvania.

 The plaintiff's motion for a new trial is premised generally under five different classifications:

 I. The refusal of the Court to submit the issue of negligence in designing and building Tank No. 4 in a cylindrical form.

 II. Rulings of the Court in reference to the testimony of James O. Jackson.

 III. Error in exclusion of evidence offered by plaintiff.

 IV. Error in admission of evidence offered by defendant.

 V. Error in the instructions to the jury.

 In order to thoroughly and intelligently consider the various questions which have been presented by the plaintiff in the motion for new trial, each general topic and sub-classification which is set forth will be evaluated separately.

 I. The Refusal of the Court to Submit the Issue of Negligence in Designing and Building Tank No. 4 in a Cylindrical Form.

 Said claim of negligence is set forth in the second amended complaint. The plaintiff alleged that the defendants were guilty of recklessness and negligence in the following respects, to wit:

 '(a) In designing and constructing said tanks, and particularly the cylindrical tank without adequate outside dykes for each tank so as to retain said liquid gas in the event of a rupture of the walls of any tank.

 '(b) In providing and using steel of such defective composition and improper treatment that it was of insufficient strength and toughness to resist the strains created in said tank when filled with liquid natural gas, and was likely to be brittle and to rupture upon slight impact or strain, and particularly in using steel which was defective and which failed to conform to the specifications required in the following respects:

 '(aa) It had a 'Charpy Impact Test Strength' of such a low character that it was brittle at the temperatures of liquid natural gas and wholly unfit for use in such a tank; and showed an actual 'Charpy Impact Test Strength' of about 2 or 3 foot lbs. whereas the specifications required a test strength of not less than 10 foot lbs; and said specifications should in fact have required a test strength of not less than 15 foot lbs.

 '(bb) It was of an excessively coarse 'grain.'

 '(cc) It was improperly 'banded' so that it was likely to fracture and break in one plane.

 '(dd) It contained an excessive amount of impurities so that said steel was 'dirty' within the meaning of that expression in the manufacture of steel.

 '(ee) It contained more carbon than was proper and too little nickel, in the alloy.

 '(ff) It had not been properly 'normalized.'

 '(gg) It had not been adequately or accurately tested as to impact strength before being placed in said tank.

 '(c) In designing and building said tanks at a place where there was almost continuous vibration and ground tremors, such that the rock wool used as insulation for the cylindrical tank was likely to disintegrate and collapse and to lose a substantial part of its insulating effect; and so that the steel of the tank was likely to become fatigued and be rendered increasingly brittle and subject to fracture.

 '(d) In failing to reduce the strains and stresses which had been created in said cylindrical tank in the process of erecting it and welding its constituent parts, by an appropriate heat treatment, peening or otherwise.

 '(e) In so designing and constructing said tanks that any spillage or drainage therefrom would be drained into a covered pit or sump, and in failing to provide an anti-flashback guard for the said pit.

 '(f) In designing the said tank so defectively and improperly that great internal strains were set up by the presence of liquid gas therein, which strains were due to the differences in contraction of the component parts of said tank.

 '(g) In designing and constructing the connecting pipes and valves which connected the various tanks with the general liquefying system of said plant in such a manner that there was inadequate protection against sudden surges of pressure in said tank.

 '(h) In designing and constructing said cylindrical tank in such a manner that no device was provided for agitating the liquid contents thereof or otherwise protecting against the hazards of vapor pressure within said liquids, and so as to avoid the hazards of surge or 'bumping' arising therefrom.

 '(i) In failing to design or provide an effective cushioning device to protect the said cylindrical tank and its constituent members, and particularly the inner shell thereof, from the dangers of continued vibration and the fatigue resulting therefrom.

 '(j) In designing and constructing said fourth tank in the form of a cylinder instead of a sphere when said cylindrical form was likely to rupture when put to the use for which it was designed; and in further constructing said cylindrical tank without adequate engineering data warranting its substitution for the spherical form which had been formerly used. (Emphasis supplied.)

 '(k) In failing to provide adequate supports or materials of sufficient strength to support the weight of said cylinder and its liquid contents, and in failing further to make adequate laboratory tests to determine the effect of extremely low temperatures upon the materials thus used in the presence of the strains incidental to the weight and support of such a structure and the vibrations encountered at the site of said tanks.

 '(l) In using for insulation in the cylindrical tank a substance untested for such purposes, and which the defendants knew or ought to have known was likely to disintegrate and lose much of its insulating value, and in failing to provide adequate insulation between the inner and outer walls of said tank.

 '(m) In so designing and erecting said cylindrical tank as to make it difficult, if not impossible, to keep the insulation in proper position or to replace defective insulation or to repair adequately leaks in the structure of said tank when such leaks should appear.

 '(n) In failing to make adequate tests of the effects of liquid gas upon the materials and alloys used in said structure before attempting to erect said plant and particularly the cylindrical tank.

 '(o) In designing, planning and erecting said tanks at a place and in such close proximity to each other that any leakage from one or the other of said tanks was likely to cause conflagrations and explosions in the other tanks.

 '(p) In so designing said tanks without any adequate safety devices or safeguards around them so as to permit said gas, in the event of leakage, to be protected against fires and explosions; and particularly in failing to equip said tanks with outside sprinkler systems or with Fosmite or carbon dioxide safety provisions.

 '(q) In so designing and constructing said tanks that there was no adequate provision to give warning by automatic machinery or otherwise of the fact that leakage was taking place, or that a rupture or fracture of the inner shell of said tank had taken place.

 '(r) In giving instructions to the employees of The East Ohio Gas Company after leakage from the cylindrical tank had begun, to cause the frost spots resulting from said leakage to be removed by the process of applying steam blowers, when said process was hazardous and dangerous and was likely to cause ruptures to be enlarged and made more dangerous; and when further, said employees of The East Ohio Gas Company ought to have been instructed immediately to withdraw said liquid gas from said tank.

 '(s) In designing said system of tanks in such a manner as to fail to provide a spare or storage tank available for the storage of liquid gas in the event that one of said tanks developed ruptures or leakage, such as to require an immediate and early emptying thereof.

 '(t) In failing to give proper warnings to the employees of The East Ohio Gas Company or to the general public of the great hazards involved in working in or about said plant.'

 In brief, it is the plaintiff's contention that it was error to reject testimony which would establish that the No. 4 cylindrical tank was not as safe, or that it was more dangerous than if a spherical tank had been constructed- this testimony to prove either or both of the following theories:

 (a) That said action on the part of the defendants was evidence to be considered by the jury in determining whether negligence existed.

 (b) That said action on the part of the defendants constituted negligence.

 It is urged that this question was adjudicated affirmatively in plaintiff's favor by the Circuit Court, and that the trial judge failed to follow the mandate of the appellate court. No objection was made by the defendant during the first trial to evidence being presented in support of said allegation of negligence, but strenuous objection was presented at the retrial.

 In connection with the question as to the trial court being bound by the mandate of the Circuit Court relative to the allegation of negligence, 'the use of a dangerous cylindrical form for tank No. 4 instead of the spherical form,' the defendant contended that the matter was not argued before the Circuit Court and that, therefore adjudication was not made of this question, and it was proper to object to testimony introduced to establish said allegation of negligence. The defendants' contention seems to be supported if reference is had to the reply brief of the appellant where the plaintiff states that the defendants do not attempt to dispute or explain in any way any specific items of negligence. The only consideration which the Circuit Court gave to the specific items of negligence was a statement that it was believed ...


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