## Facts

- The Harmony was a large container ship carrying cargo on a route between the United States and South America.
- In Newport News, Virginia, the vessel loaded, among other cargo, containers of calcium hypochlorite (calhypo), a heat-sensitive oxidizing chemical.
- PPG Industries, Inc. (PPG) manufactured and shipped the calhypo.
- Calhypo was identified in international shipping codes and industry warnings as dangerous cargo that can decompose, self-heat, and explode if exposed to heat or if heat cannot dissipate.
- PPG’s shipping materials included documentation warning that the calhypo should not be exposed to heat.
- Despite those warnings, the calhypo was stowed in a location in the hold that exposed it to heat, raising the risk that its temperature would rise during the voyage.
- After the vessel sailed toward South America, an explosion occurred off the coast of Brazil, followed by a fire.
- The parties agreed that the explosion was caused by PPG’s calhypo.
- The vessel and all cargo aboard were a constructive total loss.
- The ship-owning interests and cargo interests sued PPG in admiralty, asserting strict liability under COGSA and negligence theories, including a failure-to-warn claim.
- After a bench trial, the district court found PPG solely liable for the casualty.
- PPG took an interlocutory appeal to the Second Circuit under 28 U.S.C. § 1292(a)(3).

## Issues

1. Whether PPG was strictly liable under COGSA § 4(6) for the explosion caused by its calhypo shipment.
2. Whether PPG could be held liable under a general maritime negligence theory apart from the COGSA framework.
3. Whether PPG was liable for negligent failure to warn under COGSA § 4(3), including whether an adequate warning would have prevented the loss.

## Decision

- The Second Circuit reversed the district court’s determination that PPG was strictly liable under COGSA § 4(6).
- The Second Circuit reversed the district court’s ruling imposing liability on PPG under a general negligence theory.
- On the failure-to-warn claim under COGSA § 4(3), the Second Circuit affirmed that PPG had a duty to warn and that PPG breached that duty.
- The Second Circuit also affirmed the district court’s factual finding that PPG’s calhypo caused the explosion.
- The court vacated the judgment and remanded because the district court did not decide whether a proper warning, if given, would have prevented the harm (the causation element for the failure-to-warn theory).
- Disposition: affirmed in part, reversed in part, vacated in part, and remanded.

## Legal Principles

- COGSA supplies the governing framework for allocating responsibilities and remedies between carriers and shippers for cargo loss and damage during carriage.
- Under COGSA § 4(6), a shipper is not automatically strictly liable for all harm caused by dangerous cargo; strict liability depends on the statutory conditions, including the carrier’s knowledge and consent regarding the cargo’s dangerous character.
- Under COGSA § 4(3), a shipper may have a duty to warn the carrier of dangers connected to the shipment that are not adequately communicated or otherwise known, and breach can be shown by providing incomplete or insufficient hazard information for safe stowage and carriage.
- A failure-to-warn claim requires proof of causation, including a showing that an adequate warning would have changed the carrier’s conduct in a way that would have avoided the loss.
- Appellate review in admiralty respects district-court factfinding unless clearly erroneous, but a judgment cannot stand when required findings on an element such as causation are missing.

## Conclusion

In re the Harmony held that PPG could not be held strictly liable under COGSA § 4(6) and could not be held liable on a free-standing general negligence theory on the record presented, but PPG did have and breach a COGSA § 4(3) duty to warn about risks tied to its calhypo; because the district court did not determine whether an adequate warning would have prevented the explosion and loss, the Second Circuit vacated the judgment and remanded for further proceedings on causation.


In re the Harmony, 533 F.3d 83, 2008 AMC 1848 (2008)