Caterpillar pays $46 million to settle engine fire lawsuit

The following is the text of a news release from Cunningham Bounds LLC:

(MOBILE, Ala.) (June 10) — A week before the start of a scheduled three-week jury trial, the law firm of Cunningham Bounds LLC obtained a $46 million settlement for its clients, Bender Shipbuilding and Repair Company Inc. and an international ship operator, in a product liability lawsuit filed against Caterpillar Inc. for an explosion and fire caused by a defective engine onboard the M/V Sherman, a ship that was under construction at the time. 

In October 2005, Bender Shipbuilding entered into a contract with the ship operator for the construction of a series of state-of-the-art vessels, including the M/V Sherman. The contract price for the M/V Sherman was almost $27 million. On May 14, 2008, while the vessel was still under construction, one of its 3516B Caterpillar marine engines threw a rod during routine testing, causing a massive fire that burned the ship to its hull. Everyone who was on the ship at the time of the explosion was safely evacuated. 

In their lawsuit, the plaintiffs alleged that the Caterpillar engine installed on the M/V Sherman was defective at the time of its original manufacture and delivery. The engine that failed weighed 17,000 pounds, had thousands of parts, was the size of a commercial truck, and was severely damaged in the fuel fed fire that burned for almost 24 hours. Discovery in the lawsuit revealed that the engine failure was caused by a missing oil plug. The missing plug was the size of a nickel, and had been left out of the crankshaft in the innermost part of the engine when it was manufactured. The missing oil plug starved part of the engine of oil, which led to the engine’s catastrophic failure.

“This was a hard-fought case with highly regarded and very capable defense firms from New Orleans, Mobile, and Birmingham. The litigation took place in four courts, involved 40 depositions, required the testimony of over a dozen retained experts, and lasted for almost four years. It is a credit to the hard work, persistence and professionalism of our entire team that we were able to find the missing proverbial needle in the haystack, and crack this case wide open,” said Skip Finkbohner of Cunningham Bounds. 

A resolution of this magnitude would not have been possible without the early efforts of Cunningham Bounds attorneys Steve Olen and Steve Nicholas, who handled the initial proceedings in the federal district and bankruptcy courts. Specifically, they fought and won critical battles over the appropriate forum for the litigation and which laws should apply. 

George W. “Skip” Finkbohner of Cunningham Bounds LLC, along with his law partner, Lucy E. Tufts, served as co-lead counsel for the plaintiffs. Also representing the plaintiffs were Victor T. Hudson and William W. Watts of Pipes Hudson & Watts LLP.

By Professional Mariner Staff