Asea, Inc. v. Southern Pacific Transportation Company

669 F.2d 1242 (9th Cir. 1981)

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Nature of the Case

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Facts

P sold a transformer to the Los Angeles Department of Water & Power. The unit was transported by merchant vessel from Sweden to the Los Angeles harbor. Ds then took custody of the transformer and shipped it to North Hollywood, California. Upon its arrival, it was found that the transformer had shifted on the railroad car during transit despite being shored and braced. An electrical check revealed the transformer had shorted. Inspection indicated that, while the transformer was in the custody of Ds, it had suffered an impact measured at 1.8 on the recorder scale, equivalent to an impact at a speed in excess of 5 miles per hour. Internal inspection of the transformer revealed that it had sustained substantial damage during transit. P sued Ds. The parties engaged in extensive discovery for over one year. P served a series of requests for admissions pursuant to Rule 36(a). The admissions related to the condition of the transformer at the time D took custody of it, the impact revealed on the impact recorder tape, the location of the transformer at the time the impact occurred, the short discovered in the transformer after its arrival and the reasonable cost of repairing the transformer and returning it to the Los Angeles Department of Water & Power. To eighteen of these requests, the railroads responded on May 24, 1979: “Answering party cannot admit or deny. Said party has made reasonable inquiry. Information known or readily obtainable to this date is not complete. Investigation continues.” Each of the requests for admissions was accompanied by an interrogatory which asked that if the railroads' response was anything other than an unqualified admission, they should state the facts, documents, and witnesses upon which the response was based. The railroads answered these interrogatories by insisting they were '(not) applicable.' On further depositions, P became convinced that Ds had known the actual cause of the impact on the transformer for many months, and therefore could have admitted or denied the requests for admissions. The district court inquired about Ds present state of knowledge, and it insisted that 'the answers still stand.' The railroads claimed the information relevant to the requests for admissions was 'wholly within the hands of (P).' The district court granted P's motion to order the matters admitted. Ds were found liable and appealed.