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ATLANTIC PIPE LINE CO. v. DREDGE PHILADELPHIA

November 3, 1965

ATLANTIC PIPE LINE COMPANY
v.
DREDGE PHILADELPHIA, her engines, boilers, tackle, apparel, etc. and American Dredging Company, Owner of the Dredge Philadelphia. The ATLANTIC REFINING COMPANY v. DREDGE PHILADELPHIA, her engines, boilers, tackle, apparel, etc. and American Dredging Company, Owner of the Dredge Philadelphia. UNITED STATES of America, v. The ATLANTIC REFINING COMPANY, Atlantic Pipe Line Company, Dredge Philadelphia, and American Dredging Company



The opinion of the court was delivered by: KIRKPATRICK

 These three actions in admiralty, consolidated for trial on the issues of liability, involve five parties - The Atlantic Refining Company, Atlantic Pipe Line Company (its wholly owned subsidiary), the United States, American Dredging Company, owner of the Dredge "Philadelphia", and the Dredge "Philadelphia" in rem. The Pipe Line Company seeks to recover for damage to its pipe line, the Refining Company for loss of its oil, and the United States for damage caused by the escape of oil into its naval basin.

 In January 1961, the Refining Company had a great quantity of fuel oil stored in its tank farm - a collection of some 40 or more large storage tanks not far from the junction of the Schuylkill and Delaware Rivers. The Pipe Line Company owned a pair of 30-inch pipe lines, laid down in 1959, running down some several miles from the tank farm pumphouse to a terminal at Fort Mifflin on the Delaware at which tankers could discharge their oil cargoes into the pipe lines. At the point where they crossed the Schuylkill River, the pipe lines had been laid in a trench at the bottom of the river.

 At about 10:30 on the morning of January 22, an employee of the Navy Department noticed a large quantity of heavy oil on the surface of the Schuylkill River. A great deal of the oil (at first thought by the employee to be coming from a ship going downstream at the time) was driven by a high wind into the United States naval basin, near the mouth of the Schuylkill, where it fouled a number of naval vessels anchored there, causing damage to the ships, compelling the expenditure of a large sum for cleaning the basin and ships and a suspension of work at the basin until it could be cleaned up. The oil, as was discovered later, came from holes which had been punched sometime on January 19 in the southerly (No. 4) pipe line where it crossed the river under the water. *fn1"

 Earlier in the morning of the same day (at about 5:45 A.M.) the Refining Company's employees, having been notified that a ship was at the terminal and would be ready to discharge oil at six o'clock, opened a valve at tank 826, the largest and most elevated of the storage tanks, which allowed oil to run into No. 4 pipe line and thence through the holes in the pipe into the Schuylkill River.

 At about 7:11 A.M. the Refining Company's pumpman discovered, by dialing a Varec gauge in the pumphouse, that approximately 19,250 barrels of oil had escaped from the tank since the last time it had been gauged, at 2:40 A.M. The employees at the pumphouse promptly began an investigation to find out what had become of the missing oil. They did not, however, close the valve which was letting the oil flow out of the tank into the 30-inch pipe line until 9:17 A.M. by which time some 2,000 barrels more *fn2" had escaped. At 9:45 the valve was again opened, the tanker began to discharge its cargo at 10:10 and pumped oil through the punctured line into the Schuylkill River until 10:45 when the valve was finally closed. This operation accounted for the loss of an additional 6,808 barrels of oil.

 On January 19 the Dredge "Philadelphia" was working on the Schuylkill River deepening the channel in pursuance of contracts made by the Dredging Company with the Government and the City of Philadelphia. The dredge, having no motive power, was being advanced by hauling on lines affixed to anchors placed forward in the river beyond the limits of the area to be dredged. A part of the operation of dredging is the alternate raising and lowering of two pointed steel columns, known as spuds, each weighing about 35 tons, placed at the rear end of the dredge. Their function is to hold the vessel in place while the cutterhead at the forward end is in operation. The normal way of lowering a spud is by allowing it to fall free, of its own weight, and become imbedded in the river bottom.

 At some time between 6:00 A.M. and 2:00 P.M. on January 19 the dredge lowered one of the spuds by a free fall drop directly over pipe line No. 4, striking it and making the holes from which the oil subsequently escaped. The location of the pipe line was well known to the operators of the dredge and the time when the spuds would be over the pipe line could have been closely approximated. Allowing the spud to fall free in the immediate vicinity of the pipe line was a negligent act.

 The pipe line was found to have two holes in the top. The hole toward the westerly side of the river was the larger of the two, and there the metal was pressed inward, while directly below it was a third hole - a smaller one with the metal pressed outward. In addition to making a study of a number of photographs of the pipe, I made a personal inspection of the damaged section and witnessed a demonstration with a wooden replica of the pointed end portion of the spud, which was agreed to be correct in form and dimensions. The model was fitted into the holes, and I do not see how anyone who saw the demonstration could fail to be convinced that all three holes were caused by the spud. There can be no question but that the dropping of a 35-ton, pointed steel column would generate enough force to go through the sand and gravel above the pipe line and penetrate both sides of the pipe. A construction inspector for the Corps of Engineers gave his opinion that the damage to the pipe line was caused by an anchor. There was opinion evidence contradicting this theory and, in addition, the captain of the only vessel shown to have been in the neighborhood testified that his ship did not drop an anchor.

 The testimony of several employees of the Dredging Company, together with that of the government inspector of construction who was aboard the dredge on January 19 part of the time, was that no spud was dropped within the pipe line area (45 feet on each side of the pipe) but that every time a spud was lowered it was "backed down," that is, its descent was controlled by machinery. There was undisputed testimony that the captain of the dredge had given orders to that effect, but he was not on board during the critical hours. If the spud had been backed down, it would not have even dented the pipe. The testimony on this point was not directly contradicted, but the evidence to the contrary, particularly the condition of the punctured pipe as shown by the photographs and the demonstration with the model of the spud point, plus the fact that the dredge admittedly "walked" over the pipe line, all taken in connection with the complete absence of any believable evidence of any other possible cause, is in my judgment unanswerable and compels the conclusion that the damage was produced by the spud.

 The Dredging Company argues strenuously that the fact that the holes on the top of the pipe were only seven feet nine inches apart, whereas the spuds were sixteen feet apart, makes it an impossibility that they could have produced the punctures. However, the holes need not have been made by more than one spud. A possibility is that the spud was backed down to 40 feet in accordance with instructions and released either through failure of the brake or deliberately. It might then have descended free for the next foot and made the smaller hole in the top of the pipe and, this purchase having been found not sufficient to hold the dredge, it might have been raised and dropped again almost immediately and penetrated through the pipe, the dredge having moved just enough during the interval to account for the spacing between the holes. I do not suggest that there is any evidence that that is what happened. It is cited merely to illustrate that the discrepancy in the distance between the holes and the distance between the spuds does not mean that it was physically impossible for the dredge to have done the damage. It is not intended to say that the captain's orders with regard to lowering the spud were not given. I believe that they were, but they were certainly disregarded either intentionally or negligently.

 A great volume of testimony was taken with respect to the painting of rings upon the casing of the spuds in order to give the mate, who directed their raising or lowering and who could see only the top of the spuds from where he was stationed, a means of determining how deep the point of the spud was. There was a sharp conflict as to whether this work was done before or after the accident. In view of the finding which I have made, the whole matter is immaterial. The marks were useful only if the spuds were backed down and held in position. When a spud was dropped, of course, it was out of control and the marks were useless to prevent damage.

 The Dredging Company has devoted a considerable amount of its argument to the proposition that the right of a vessel using navigable waters is paramount to that of the owner of submarine structures, which means that in case of accident the burden is on the owner of the structure to show that it was so maintained that it would not be an obstruction to navigation. This principle may be accepted without reservation, but it does not include the right to negligently damage the structure and in this case the dredge could not prudently assume that a dropped spud would not penetrate the material covering a pipe at a depth of 45 feet.

 A contested issue was whether the pipe line, which was otherwise properly designed and constructed, should have been equipped with devices which would either warn of a break in the line under the river or would automatically close the valves on the river bank upon the occurrence of such a break. Much of the evidence upon the point consisted of widely divergent opinions of experts. It sums up to (1) the fact that submarine sections of pipe lines are very rarely equipped with such devices, (2) expert opinion that they should be more generally used, and (3) expert opinion that, because of the nature of crude oil, particularly when pumped directly into a line from ships, they are likely to be quite undependable or give so many false alarms that they are undesirable. I can only ...


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