Carmack Amendment Not Applicable to Shipment Originating Overseas

23 a. owl bill of lading clause 5(b)(2) 14 3. ocean world lines, inc. ("owl"), who is the defendant-third-party-plaintiff-6 -2- and limitations of liability of the ocean carrier provided for in the bill of lading and the 11 18 damage to the cargo shall be determined purposes. section 14706(a)(2) does not mean that a freight forwarder, if it plays any role 33 8 5 25 "a bill of lading is simply an acknowledgment by a carrier that it has received the for the second circuit 2 j.a. 82, 88. white horse, as is typical for most shippers, did not declare the value of the because neither was a receiving rail carrier for carmack purposes. "k" line received the 5. djuric trucking, inc. ("djuric"), who is the other third-party-defendant- 14 14 8 -12- 2. royal & sun alliance insurance, plc ("royal & sun"), who is the plaintiff-3 the third leg of the trip, and which crashed into an overpass, damaging the law � 10-11 (4th ed. 2006)). destination. an nvocc will issue a bill of lading to the shipper but does not undertake 4 the jurisdiction of the [stb]." second, that carrier must "receiv[e]" the 19 12 goods for shipment. second, it is a contract of carriage; third, if the bill is negotiated, it 12 [i]n the event that this bill covers shipments to or from the united states, 3 14706(c)(1)(a); see also sompo, 456 f.3d at 59-60 (discussing parties' ability to contract 12 sorkin, goods in transit � 3.01. 14 is no receiving rail carrier that "receives" the property "for [domestic rail] july 6, 2007, a djuric truck picked up the printing press and subsequently crashed into a ____________________________________ that 2 djuric's motion to dismiss. id. at 397. lastly, the court held that yang ming and djuric, 5 11 times outside of the tackle-to-tackle period." 2a-v michael f. sturley, benedict on must defend under rule 12 against the plaintiff's claim as well as the third-party 15 requires a receiving carrier to issue a bill of lading, regardless of whether that carrier 19 the property and is providing transportation or service subject to jurisdiction under "[r]outine bill of lading clauses explicitly provide for cogsa's application . . . to the 18 own and operate its own vessels. instead, it enters into service contracts whereby it 26 receiving rail carrier, which would have to issue a carmack-compliant bill 20 2 united states court of appeals1 13 limitation of the carriage of goods by sea act ("cogsa"), 46 u.s.c. � 30701 note.7 20 3 22 21 second, the cogsa $500 per-package limitation was spelled out in clause 23(3): 5 11 roque, 578 f.3d 164, 169 (2d cir. 2009). purchases large blocks of cargo space at a discount from vessel-operating common appellee. djuric is the owner of the truck which carried the printing press during 8 carmack liability. other carrier utilized by the carrier for any parts of the transportation the shipment [sic] 9 10 carmack's applicability would be satisfied. not only must the defendants a) be stb- press crashed into an overpass. the five most important entities in this story are: 17 for the southern district of new york (hellerstein, j.). consistent with the supreme 29 21 forum selection clause in the yang ming sea waybill, or, in the alternative, for partial 16 ____________________________________ but rather by cogsa, and that, therefore, the $500 per-package limitation applied as 6 controls possession of the goods and is one of the indispensible documents in financing 2 9 decision to use motor transport for one leg of the journey does not render them subject to 8 calabresi, circuit judge: 6 23 18 29 issued a bill of lading to white horse, promising delivery to the consignee via 6 16 in light of regal-beloit, we readily reject all of these arguments. third, the owl bill of lading included what is known as a himalaya clause. a these arguments also. royal & sun now appeals on the liability limitation issues.13 20 9 and extra freight has been paid in which case clause 10 shall apply and the id. at *10 (second alteration in original). transported the cargo to the port of long beach, california, without incident, but union substantially the same as the first two sentences in � 14706(a)(1). the only difference is 23 where, as here (because djuric is a motor carrier), what is at issue is the version of 11 28 12 transport into an inland location in the united states. in such a case, there 13 7 17 7 we review a district court's grant of summary judgment de novo. e.g., sousa v. 12 17 a sea waybill is like a bill of lading, except that bills of lading are negotiable, while forwarder. we decline to create such an end run around regal-beloit. loss or damage shall be adjusted pro-rata on the basis of such declared 16 damages. owl filed its answer on june 29, 2007, and on july 3, 2007, it impleaded the aforementioned limitations of liability set forth in this provision shall receives the property at the shipment's point of origin for overseas 11 the law of this circuit at the time of the district court's decision, we now, of course, on december 20, 2007, 21 15 damaged on a truck or on a train. we therefore apply regal-beloit's interpretation of � iv. conclusion docket nos. 08-4324-cv (l), 08-4481-cv (xap) 7 the latter requirement is not satisfied here. moreover, although carmack does provide 3 12 9 38 16 8 yang ming and djuric originally cross-appealed the district court's denial of their carmack bill of lading." id. owl moved for partial summary judgment on the ground that it could not be liable to 20 4. yang ming marine transport corp. ("yang ming"), who is one of the two third- 22 chicago from norfolk, having been carried there by the norfolk southern railroad. on 13 the yang ming sea waybill, accepted by owl, also contained several terms cargo in china for intermodal transport, not in the united states for rail transport. "that 4 sought to recover from owl its outlay of �63,824.62, which, at the time the complaint 18 in transport under an intermodal through bill of lading originating across the ocean, is 3 that the yang ming bill of lading contained a covenant not to sue yang ming's indiana, and was damaged during the last leg of the journey when the truck carrying the 6 the supreme court interpreted in regal-beloit, see 2010 wl 2471056, at *8-10, are 15 24 4 royal & sun first asserts that owl contracted into carmack liability by virtue of 25 17 under regal-beloit, all three defendants are subject to the $500 liability limitation 6 cf. 46 u.s.c. � 40102(17) (defining "ocean common carrier" as "vessel-operating provided, however, that the goods at said times are in the actual custody 4 1 b. yang ming sea waybill clause 7(2)(b) inapplicable to owl, yang ming, and djuric. limitation. go to norfolk, virginia, on the m/v yang ming milano, owned by the vocc yang 36 court royal & sun's right to sue. on that basis, the court denied yang ming's and believe that regal-beloit applies in this context too. the two sentences in � 11706(a) that defendant-third-party-plaintiff-appellee, 26 waybills are not. see sompo, 456 f.3d at 56 n.4 (citing 1 t. schoenbaum, admiralty is the owner of the vessel that took the printing press across the 9 carmack. id.15 10 12 the movement of commodities and merchandise." 1-2 saul sorkin, goods in transit � for property it receives for transportation under this part. that rail carrier and any other 8 8 position of "k" line in regal-beloit: they obtained the property "for overseas transport press from bremerhaven, germany to bourbon, indiana, by way of the port of norfolk, [motor] transport [and freight forwarders]." 2010 wl 2471056, at *8 (quoting 49 u.s.c. yang ming marine transport corp., djuric trucking, inc., 1 dismiss, or, in the alternative, for summary judgment. royal & sun alliance ins. plc v. 1 like most clauses paramount, this one extends cogsa beyond the tackle-to-tackle 2 carrier that delivers the property and is providing transportation or service subject to the comparable to a surface freight forwarder who undertakes to deliver the cargo to owl's summary judgment motion and denied yang ming and djuric's motion to 23 intermodal transport, also known as multimodal transport, is transport consisting of 24 goods in transit � 2.03(3). for domestic transport. see regal-beloit, 2010 wl 2471056, at *8. as explained above, see fed. r. civ. p. 14(c)(2) ("the third-party plaintiff may demand judgment in the 13 second, clause 5(d)(3) of the bill of lading provided: 6 8 15 8 1. white horse machinery ltd. ("white horse"), who is not a party to this case.1 transportation under this part,' where `this part' is the stb's jurisdiction over domestic alliance insurance, plc appeals the judgment entered by the united states district court 2. the yang ming sea waybill on june 15, 2006, owl issued a bill of lading4 17 22 ming. final delivery was to be made thereafter in bourbon, indiana. on june 16, 2006, 7 royal & sun for more than the $500 per-package limitation, or $3500 in total. the next parties agreed that they would withdraw the cross-appeal if we were to hold that the 1 we direct the clerk of the court to amend the official caption as noted. version of carmack that applies to rail carriers, 49 u.s.c. � 11706, must also be followed 14 15 15 15 21 carmack bill of lading must be issued: 1 12 rather than the initial carrier. see id. at *10. similarly, yang ming and owl are in the north bergen, n.j., for defendant-third-party- 31 -1- 12 1 on july 5, 2006, yang ming arranged for djuric to pick up the packages in space. in this particular instance, owl's bill of lading provided that the shipment would does not become a receiving carrier simply by accepting goods for further transport from shipment would undermine cogsa and international, container-based multimodal transportation," [49 u.s.c.] � 11706(a), and thus no carrier that must issue 13 and direct contract with the carrier in respect of the particular stage of the 15 of lading. it follows that carmack does not apply if the property is 15 12 white horse was the exporter and shipper of the printing press.2 that "[a] freight forwarder is both the receiving and delivering carrier," 49 u.s.c. � david l. mazaroli, new york, n.y., for 19 multiple modes of transport--that is, more than one of truck, rail, sea, and air. 1-3 saul ocean world lines, inc., 4 2 9 himalaya clause extends contractual protections that would otherwise apply only to the and groupage operators, underlying carrier, road and rail transport operators and any 20 lading described the printing press, and provided that seven packages consisting of the jurisdiction of the board under this part are liable to the person entitled to recover under 4 transport was to be intermodal.5 than the carrier would be. see 3-13 saul sorkin, goods in transit � 13.16(1)(c). 10 see id. at *4-5. j.a. 87. because its provisions can be departed from by private contract, the carmack 10 or herself out to provide transportation for hire by water in interstate commerce, or in the actual transportation of the cargo. instead the nvocc delivers the shipment to an day, djuric and yang ming moved to dismiss all claims against them on the ground of a 9 id. owl did not declare a higher value for the cargo or pay the higher rate. plaintiff-appellee. value for the cargo and paying a correspondingly higher rate: 5 8 3 3 5 14 also demanded judgment in royal & sun's favor against them.11 subcontractors. the district court rejected that argument. see royal & sun alliance ins. company is generally willing to assume the risk of loss or damage for a cheaper price of cogsa rather than to carmack, because none of them "`receiv[ed]' the property `for 27 3 2 the owl bill of lading, issued on june 15, 2006, contained numerous boilerplate 11 08-4324-cv (l), 08-4481-cv (xap) ocean world lines, inc., 572 f. supp. 2d 379 (s.d.n.y. 2008). the district court held on april 10, 2007, royal & sun, asserting the rights of white horse by virtue of 24 6 15 9 *12, and that "[a]pplying two different bill of lading regimes to the same through 4 receiving rail carrier--but not the delivering or connecting rail carrier--to 26 covered by this bill." id. a "sub-contractor" was defined to include "owners and waybill. the terms and circumstances of each are as follows. transport to inland destinations in the united states under bills of lading which provided 10 in the event this bill covers the goods moving to or from a port of final 5 23 court's recent holding in kawasaki kisen kaisha ltd. v. regal-beloit corp., --- s.ct. ---, the printing press traveled under the owl bill of lading and the yang ming sea 14 carriage of goods by sea act (cogsa)." 3-14 saul sorkin, goods in transit � 14.15. admiralty � 43 (2008); see also id. n.5 (collecting numerous cases involving such thereof any particular document which must be issued in order to make ii. proceedings in the district court value. that cogsa would govern the entire journey. "k" line then subcontracted with the invalidated. because no such invalidation has occurred, yang ming did not agree to extend to agents and servants of the ocean carrier, and sometimes to others, the defenses contrary result "would in effect outlaw through shipments under a single bill of lading," background 22 11 2 follow the holding of regal-beloit and therefore affirm the judgment of the united words, "in the event clause 7(1) is held inapplicable to such multimodal transportation." 16 41 1 40 though liable to owl to the extent of owl's liability to royal & sun, were not royal & sun advances several arguments on why the carmack amendment, 49 clause 5(b)(2) of its bill of lading. that clause states that owl's liability for loss or by the merchant before shipment and agreed to by the carrier, and are 17 -3- 18 4 25 waybill renders yang ming subject to carmack. but clause 7(2)(b) begins with the 12 -4- carmack that covers motor carriers and freight forwarders, 49 u.s.c. � 14706. we 13 ocean in the first leg of the journey. yang ming issued a sea waybill to owl. -14- 14 the day after owl's bill of lading was issued to white horse, yang ming issued a sea 8 rather, "union pacific was a mere delivering carrier, which did not have to issue its own contention. even if we assume arguendo that all three defendants are stb-regulated printing press would be shipped from bremerhaven, germany, to bourbon, indiana. the plc v. ocean world lines, inc., 572 f. supp. 2d 379, 397-98 (s.d.n.y. 2008). djuric first, the rail carrier must "provid[e] transportation or service subject to 2010). this court had previously held otherwise. see sompo japan ins. co. of am. v. 11 defendant and the third-party plaintiff."). 20 id. at *11, that "[n]one of carmack's legislative versions have applied to the inland printing press. djuric did not issue its own bill of lading. out of the carmack amendment in the rail context). owl, therefore, did not contract 24 in practice almost all shippers decline to declare a value, because a maritime insurance in addition to arguing that carmack applies to the defendants of its own force, -13- 34 11 appellee. owl is the non-vessel-operating common carrier ("nvocc")2 4 amendment, however, is not such a national law. see 49 u.s.c. �� 14101(b)(1), subchapter i or iii of chapter 135 or chapter 105 are liable to the person entitled to 2471056, at *8. "carmack applies only to transport of property for which carmack a. regal-beloit 12 24 a carmack-compliant bill of lading. the initial carrier in that instance 17 32 policy arguments made by the court are equally applicable here. the court says that a compare 49 u.s.c. � 11706(a) ("a rail carrier providing transportation or service royal & sun argues that all three defendants are "motor carriers" subject to stb defendants-appellees. 21 10 20 17 10 "a himalaya clause is a provision in an ocean carrier's bill of lading which purports to 2.01 (footnote and internal quotation marks omitted). between owl and royal & sun. id. at 396. the court then refused to apply yang bridge overpass, damaging the cargo. royal & sun paid white horse's claim, and before: calabresi, b.d. parker, and raggi, circuit judges. 28 ii. carmack and intermodal through bills of lading after regal-beloit union pacific railroad company for rail carriage to the final destinations. "k" line 23 applying the holding and principles of regal-beloit, we conclude that carmack is as an initial matter, one might ask whether regal-beloit, which interpreted the plaintiff's favor against the third-party defendant. in that event, the third-party defendant that they refer to rail carriers instead of motor carriers and freight forwarders.14 relevant to this litigation. first, the yang ming waybill also had its own himalaya 9 8 14706(a)(2), we take this statement to mean only that when a freight forwarder "receives" goods has been declared on the face hereof with the consent of the carrier 23 18 union pac. r.r. co., 456 f.3d 54, 60-69 (2d cir. 2006); see also rexroth hydraudyne 5 received at an overseas location under a through bill that covers the 22 28 packages; instead, white horse bought insurance from royal & sun. ("vocc"),3 14 6 -8- 7 in this case, a printing press was shipped on a three-leg journey from germany to 7 19 id. at *8 (quoting 49 u.s.c. � 11706(a)) (alterations in original). 3 commerce from the united states who assumes or has liability for safe transport and who 25 summary judgment on the ground that they were protected by the $500 per-package 4 10 peter d. clark, clark, atcheson & reisert, kisen kaisha ltd. v. regal-beloit corp., --- s.ct. ---, 2010 wl 2471056, at *8 (june 21, pacific's train subsequently derailed in oklahoma, and allegedly destroyed the cargo. 13 30 across an ocean and then to [an] inland destination[] in the united states," and their subject to the jurisdiction of the board under this part shall issue a receipt or bill of lading straightforward. in that case, a vocc, "k" line, received cargo in china for intermodal plaintiff's claim; and the action proceeds as if the plaintiff had sued both the third-party 19 jurisdiction as defined in 49 u.s.c. � 13102(14), and that owl and yang ming are 5 1. the owl bill of lading 30 discussion 2 recover under the receipt or bill of lading."). the supreme court has recently held that the carmack amendment "does not 19 13 -6- 4 39 3 provisions of the carriage of goods by sea act of the united states." 1-2 saul sorkin, carriers (voccs). it then contracts with shippers to ship smaller amounts of cargo in that 10 shipping and carriage that owl would arrange. otherwise specifically provided elsewhere herein) also govern before the 9 the motion also presented another ground for dismissal of the claims against djuric-- -7- 14 16 2 regal-beloit's application of those principles to the facts of regal-beloit is clause and clause paramount, both rolled into clause 7(1) of the bill: subchapter i or iii of chapter 135 shall issue a receipt or bill of lading for property it forwarders.--a carrier providing transportation or service subject to jurisdiction under entity issuing the bill of lading to the subcontractors of the issuing entity as well.10 11706(a) to � 14706(a)(1) as well. jurisdiction over domestic rail transport. carmack thus requires the 2 package . . . . omitted). 4 3 16 provided that the transportation would be subject to the $500 per-package liability 27 1 13 essentially maritime contracts does not put `k' line within carmack's reach and thus 22 2 17 yang ming and djuric pursuant to fed. r. civ. p. 14(c). as permitted by rule 14(c), into carmack liability. accordingly, we affirm the judgment of the district court. i. standard of review 3 virginia. 9 j.a. 183. that is, clause 7(2)(b) applies only if clause 7(1), the clause paramount, is motion to dismiss on the forum-selection ground. at oral argument, counsel for those 6 and the 5 27 9 the forwarder is treated as both the receiving and delivering carrier for carmack multimodal import transport, not for domestic rail transport. -9- then cogsa shall be compulsorily applicable and shall (except as may be to white horse. the bill of 22 29 "a nonvessel operating common carrier (nvocc) by water is one who holds himself third-party-defendants-appellees.1 b. carmack does not apply in the case before us 1 i. the journey of the printing press textor, llp, new york, ny, for third-party- 5 issue a bill of lading. 5 19 erroneously fails to issue such a bill." id. at *10. there is a two-part test for whether a 7 -11- `k' line chose to use rail transport to complete one segment of the journey under . . . 1 13 operators of vessels (other than the carrier), stevedores, slot chartered owners, terminal referred to as a clause paramount, which states that the bill of lading is subject to the 14 owl not only requested contribution and indemnity from yang ming and djuric, but clauses). in carrier's tariff, is paid. august term, 2008 7 9 destination in the united states, the carrier's limitation of liability in 10 6 35 carriage where the loss or damage occurred and received as evidence required to issue a carmack bill of lading. to hold otherwise would be to say that the 30 15 b. the bills of lading declared value (if higher) shall be substituted for the limit and any partial common carrier"). 16 cogsa $500 per-package liability limitation applied to them. because we so hold, we 9 17 property "for transportation under this part," where "this part" is the stb's 5 2010 wl 2471056 (june 21, 2010), the judgment of the district court is affirmed. us$500 per package or customary freight unit unless the value of the 9 27 7 11 6 regulated carriers or freight forwarders, but b) one of them also must receive the property 13 11 another carrier in the middle of an international shipment under a through bill." id. the tackle-to-tackle period is the time between the loading of the goods onto the ship [f]or carmack's provisions to apply the journey must begin with a conclude that the defendants are entitled to the cogsa $500 per-package limitation. of the carrier or any underlying carrier or sub-contractor. 11 6 10 having rejected all of royal & sun's arguments for carmack liability, we [b]y the provisions contained in any . . . national law, which provisions oral argument on these motions was held before the district court on february 19, 7 ming's forum selection clause, holding that yang ming could not limit to a particular 15 a vessel-operating common carrier, unlike an nvocc, does operate its own vessels. 18 and citation omitted). union pacific also was not a receiving rail carrier, for "[a] carrier 25 -10- 17 20 a. the course of the shipment1 10 royal & sun's second contractual argument is that clause 7(2)(b) of yang ming's 1 independent contractor employed by the carrier in performance of the carriage." id. 6 domestic rail segment of an import shipment from overseas under a through bill," id. at 8 5 counsel), cichanowicz callan keane vengrow & 11 11 merchant, and would have applied if the merchant had made a separate "a maritime bill of lading in international trade will generally contain a provision often iii. royal & sun's contractual arguments 37 u.s.c. � 14706, and not the cogsa $500 per-package limitation, should apply to owl. states district court for the southern district of new york (hellerstein, j.). 21 royal & sun claims that various defendants contracted into carmack liability. we reject 7 owl, being a nvocc, is a middleman that does not 10 in regal-beloit, the supreme court held that the carmack amendment "does not 2008. on august 19, 2008, the district court issued an opinion and order that granted apply to a shipment originating overseas under a single through bill of lading." 2010 wl j.a. 183. the waybill defined "underlying carrier" as "any water, rail, motor, air or plaintiff-appellant. 8 14 goods are loading [sic] on and after they are discharged from the vessel -5- to its rights. 7 1 chicago, illinois and deliver them to their final destination. the packages arrived in 26 2 inserted in this bill and the applicable "ad valorem" freight rate, as set out appellant. royal & sun insured white horse's shipment and became subrogated 16 7 5 21 otherwise liable to royal & sun beyond the $500 per-package limitation. id. at 398-400. 21 waybill6 terms, as is typical for bills of lading. first, it included a clause paramount, which b.v. v. ocean world lines, inc., 547 f.3d 351, 355 (2d cir. 2008). although sompo was 7 12 does not operate the vessel on which the goods are transported. thus an nvocc is that the liability of owl, as a nvocc, was not governed by the carmack amendment ocean carrier for transportation." 1-1 saul sorkin, goods in transit � 1.15(8) (footnote 3 id. clause 23(4) allowed a shipper to avoid the package limitation by declaring a higher 18 13 4 12 3 16 13 the receipt or bill of lading."), with 49 u.s.c. � 14706(a)(1) ("motor carriers and freight subrogation, sued owl in the southern district of new york, and sought $125,851.38 in � v. � the holding of regal-beloit is based on the second part of that test: � 11706(a)). djuric, like union pacific in regal-beloit, "was a mere delivering carrier" plaintiff-appellant, period.8 carriers or freight forwarders, only one of the two regal-beloit requirements for was filed, converted to $125,851.38. 19 the court held that carmack did not apply to "k" line or to union pacific, royal & sun alliance insurance, plc 14 to owl. this bill of lading similarly indicated that yang ming would take the transport," id. at *13. the validity of these points does not turn on whether the cargo was 16 "freight forwarders" as defined in 49 u.s.c. � 13102(8). we need not address that does not require it to issue carmack bills of lading." id. at *10 (internal quotation marks cannot be departed from by private contract to the detriment of the 18 in a case involving the applicability of the carmack amendment, royal & sun 13 and their discharge from the ship. 1-5 saul sorkin, goods in transit � 5.13(1)(c). 3 property for domestic motor or rail transportation within the meaning of � 14706(a)(1), 16 10 does not cross-appeal that determination. be applicable unless the nature and value of the goods have been declared 2 respect to the goods shall in no event exceed u.s. dollars $500 per apply to a shipment originating overseas under a single through bill of lading." kawasaki deem the cross-appeal withdrawn and we do not address it. royal & sun alliance insurance, plc v. ocean world lines, inc. 22 such . . . national law applicable[.] 12 receives for transportation under this part. that carrier and any other carrier that delivers joseph de may, jr. (paul m. keane, of 17 18 15 party-defendants-appellees. yang ming, a vessel-operating common carrier 4 if cogsa applies then the liability of the carrier shall not exceed (argued: august 5, 2009 decided: july 20, 2010) plaintiff in regal-beloit would have won, if only it had called "k" line a freight 24 4