Only in conditions where ship owners fired up cold boilers, using Bunker C. fuel, when winds were blowing from the north, under not too dry or not too wet conditions, would possible damage occur. Under such conditions, the smoke particles could have turned to sulpheric acid, and had a corrosive effect on the vehicle paint (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
The Court found that the defendants did not fire up the boilers, and thus, were not directly negligent. Only the ship owners could have fired up the boilers when leaving the docks. The shipyard employees were clearly not directly responsible for the "light off" procedure and thus, could not be held responsible for any damage caused by such a procedure. Had Nissan chosen to sue the ship owners, the Court noted, the vessels could have been seized under admiralty process, and the ship owners could have been liable for the damage. However, since Nissan chose to pursue only Maryland Shipbuilding, and sought only to show they were negligent, Nissan was not able to collect damages based on the theory of negligence.
However, the second question of negligence referred to whether the company employees were negligent through their failure to stop the ship owners from "lighting off" improperly. Nissan urged that Maryland Shipbuilding employees had a "duty" to require vessels to "light off" with distilled fuels, only from ports further from the Nissan land, and should have enforced the use of emission control devices. The Court noted, however, that these options were not practical or economically feasible for either the defendant or the ship owners. Thus, the defendant was not acting unreasonably in their failure to enforce such restrictions (46 U.S.C., 222-224, 229). Further, experts in the case testified that the use of an EPS device, or an external plume scrubber, was impractical, and would have been costly and ineffective (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
Even more to the point, negligence requires proof of a lack of due care. Maryland Shipbuilding showed that, following the first incident of smoke damage, the company altered the "Plant Information and Regulation" sheet to ask ship owners not to "light off" if the wind was blowing from the west, and asked that they use alternate fuel sources. The ship owners, however, continued to "light off." The Court found that Maryland Shipbuilding acted reasonably during the incidents, and attempted to prevent future incidents. Thus, the company was not negligent (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
Recovery based on the concept of trespass was also found to be unsupported. According to the common law principles set forth in the Restatement, trespassing is the invasion of another person's possession of land by entry. To be exact, the Restatement says, "A claim in trespass ordinarily seeks damages for a physical intrusion onto property. Where the intrusion is permanent, or if it is serious or persistent, the suit sounds in trespass" (Restatement, 821D, comment d.). In this case, Maryland Shipbuilding did not interfere with Nissan's possession of the land. Further, according to the Restatement, no damages can be recovered from trespass that was unintentional and non-negligent (Restatement, 166). Thus, even if Maryland Shipbuilding were found to be trespassing via the soot emissions, Nissan could not collect any damages from such a charge (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
It should be noted here, however, that this finding is relative to the charges being heard using common law, rather than Maryland law. Under Maryland law, the soot emissions from the Maryland Shipbuilding vessels can be considered trespass, and as such, establishes their liability without the needed component of fault. In North Central RR Co. v. Oldenburg & Kelley, Inc., 122 Md. 236, 89 a. 601 (1914), for example, the plaintiff was awarded damages based on smoke damage alone. However, under Restatement, this does not apply.
Finally, in order to collect damages, Nissan had to show that, in lack of any above criteria, Maryland Shipbuilding was liable under the concept of nuisance. To show nuisance, however, Nissan had to show Maryland Shipbuilding invaded their interest and enjoyment of the property through either intentional or unintentional invasion, where the unintentional invasion is seen as such because of negligent or dangerous activity (Restatement, 821(a) - 822(a)). However, even under these circumstances, according to Restatement 821F, one is only liable if "significant harm" is present.
In this case, the Court determined "significant harm" was not shown. According to the Court, the rights of use of the land needed to be examined in terms of normal business operations and not in particular relation to Nissan's business. Since the port Maryland Shipbuilding used had been in operation for several years without complaint, the Court decided it was the particular aspect of Nissan's business, that of new car paint, that made the situation possible (Nissan Motor Corp. v. Maryland Shipbuilding, 1982). Therefore, it was the business of Nissan, not the smoke, which caused the harm.
Furthermore, the Court examined the "location, character, and habits" of the area, as per Restatement 828. Both properties existed in an area that was zoned as M-3, or Heavy Industrial. Within the same area, chemical and pesticide plants, other industrial plants, oil refineries, and coal burning oil refineries operated. As a result, smoke, dust, and soot in the air were common occurrences, as was black smoke from other ships coming into the port (Nissan Motor Corp. v. Maryland Shipbuilding, 1982). Therefore, Nissan implied acceptance of such conditions when they leased the land, since they knew the area was zoned industrial.
Still another factor to consider in a nuisance issue is the frequency of the invasion in comparison with the utility of the conduct of the defendant (Restatement, 821F). The Court determined that of the seven incidents found to cause any form of harm to Nissan's vehicles, only two incidents actually resulted in required repainting of the vehicles. In the other five incidents, the employees at the time observed the fallout, and immediately washed the vehicles to avoid damage. Thus, no damage occurred. Further, Nissan could have avoided the problem, the Court determined, by using a common coating called "cosmoline." Such a coating would have prevented, or at least minimized, the damage done, and was a common coating for stored vehicles (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
In terms of the conduct of the defendant, the Court determined the importance of their work outweighed the occasional harm done to Nissan's vehicles. Maryland Shipbuilding employed 1750 persons and purchased nearly $24 million per year in materials to Baltimore area business. If Maryland Shipbuilding were required to refuse certain customers, their business would likely suffer (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
As a result of the analysis above, it was clear to the Court that Maryland Shipbuilding was not liable for damages that occurred from smoke and soot emissions of vessels located at their pier. The employees of the company did not fire up the boilers that caused the smoke, were not responsible for the conditions causing the smoke, attempted to suggest to ship owners alternate "light up" procedures, conducted their business in a legal and responsible manner, and contributed greatly to the economy of the area. Thus, the company was not liable for damages resulting from smoke.
Once the issue of smoke damage was decided, the next issue was the damage alleged by the paint spraying activities of the company. In the original complaint, Nissan claimed damages resulting from six separate occurrences between 1980 and 1981. According to their records, the first occurrence of paint damage happened when employees of the company were painting the American Merchant vessel on May 22 and 23 in 1981. The second occurrence was between August 26th and 27th in the same year. All other instances of alleged paint damage were thrown out of the suit due to a lack of evidence (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
Unlike the smoke incidents, Maryland Shipbuilding did not admit to the damage in these cases. According to their defense, the paint damage may have come from other sources. The Court, however, after hearing the facts, disagreed. According to evidence, the vehicles in question were damaged by the same paint as that being used on the specific days in question at the shipyard (Nissan Motor Corp. v. Maryland Shipbuilding, 1982). The Court also found, unlike in the smoke incidents, that substantial damage was sustained. Expert testimony showed that the paint contamination in 1981 was "considerable," and Nissan produced records showing nearly 1700 vehicles were affected in a single incident, and 143 were affected in the other (Nissan Motor Corp. v. Maryland Shipbuilding, 1982).
However, as with the smoke incidents, the Court had to find, using Restatement (Second) of Tort principles, that Maryland Shipbuilding was legally responsible for the damage to the vehicles through negligence. First, the Court noted that, unlike the smoke damage incidents, the employees of the company were "acting within the scope of their…