HONOLULU (CN) - Litigation over a fatal 2011 fireworks explosion in Hawaii belongs in federal court because of an underlying government contract, attorneys told the 9th Circuit on Tuesday.
The April 8, 2011, explosion at Waikele Self Storage in Waipahu occurred as Donaldson Enterprises workers took a break from dismantling 1-inch firework tubes known as "Sky Festivals."
The storage facility contained three imported fireworks shipments seized in Honolulu by federal law enforcement over a three-year period, according to a report by the U.S. Chemical Safety Board. Donaldson was disposing of the shipments pursuant to a subcontract from VSE Corp. of Alexandria, Va.
VSE handles the storage for "large amounts of government-seized property, such as counterfeit goods, livestock, and in this case, illegal fireworks," the Chemical Safety Board said.
Donaldson had military-ordnance background and gave an attractive bid, but VSE "was unaware that ... the company had no experience with fireworks disposal," a CSB official said, according to the statement.
When Donaldson found that some fireworks were exploding rather than burning with diesel fuel, it had employees open up the aerial shells, extract the black powder and keep all the materials in boxes.
Regulators said the combination of large amounts of explosive materials inside boxes increased the explosion hazard by more than 450 times.
When the materials in a room exploded and then caused a fire, three employees in that room suffered fatal burn injuries, while two others succumbed to carbon monoxide poisoning. A supervisor who had been making a call just outside the building escaped with minor injuries.
The Chemical Safety Board said the shipments "were labeled for consumer use, but actually contained far more explosive materials typical of those used for professionally produced public displays."
VSE removed the lawsuits it faces in connection to the explosion to federal court, but a federal judge soon ordered the four cases remanded to the First Circuit Court.
Seeking a reversal Tuesday from the 9th Circuit, VSE's lawyers told a three-judge appellate panel that the a "casual nexus" between the contracted work allows VSE to "set forth a plausible or colorable federal defense."
Judge Richard Clifton chimed in: "I'm having trouble seeing how colorable this defense is if in fact the government itself is not liable."
Kurt Hamrock, the VSE attorney, said that federal officials had agreed with the VSE's plan to destroy the fireworks using diesel fuel and overseen the process before the deadly accident.
Steven Hisaka, an attorney for one of the men killed in the warehouse, disagreed that VSE worked closely with government officials since it had a $25 million contract for seized items around the country.
Nothing in the contract between VSE and the government discusses how to dispose the fireworks, and VSE signed off on the disposal method after the contract was signed, Hisaka said.
Though officials signed off on VSE soaking the contraband in diesel fuel and burning it, VSE did not have approval in letting workers cut holes into the shells to let the diesel soak better, he added. Hisaka said officials also never signed off on the boxing of the dismantled fireworks parts.
The government had not worked closely enough with VSE for it to be a government actor, he said.
When Judge Johnnie Rawlinson asked if VSE had operated without approval, Hamrock said: "Yes, Your Honor, the decision of the subcontractor to manipulate the fireworks in certain ways, by cutting and then by dismantling, that was not reviewed and approved by the" government.
Judge Clifton questioned the focus on venue.
"This detour has apparently delayed the case for a couple of years," he said. "Is it that important to be in state court as opposed to federal court to justify the time it's taken?"
Hisaka responded that he thought it would be faster in state court and that they would have already been to court if it were not for the motions.
Judge Atsushi Tashima rounded out the panel.
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