Opinion
Civil Action No. 03-2459, Section "C" (2).
November 3, 2004
ORDER AND REASONS
This matter is before the Court on Defendant's, Bargelink, L.L.C. ("Bargelink"), Motion for Summary Judgment. (Rec. Doc. 12). The Motion was set for hearing on July 7, 2004 without oral argument and taken under submission. Subsequently, the Court permitted the parties time for additional discovery (Rec. Doc. 23), as Plaintiff Intermetals Corporation believed the results might affect its Opposition to Defendant's motion. The Court granted Plaintiff's motion to set the respective deadlines for supplemental briefing for September 30 and October 7, 2004. (Rec. Doc. 26). The Court further ordered that these deadlines be postponed, with Defendant's supplemental memorandum due by October 18, 2004, and any opposition by Plaintiff due by October 22, 2004. (Rec. Doc. 28). Ultimately, however, neither party filed supplemental briefing on Defendant's original Motion for Summary Judgment.
After a thorough review of the law, the record, the Motion, and the memoranda filed in support thereof and in opposition thereto, Defendant Bargelink's Motion for Summary Judgment is GRANTED.
I. BACKGROUND
This matter arises out of an inland contract of carriage allegedly entered into by Intermetals Corp. and American Commercial Barge Line ("ACBL"), and a contract for transportation services between Plaintiff and Defendant. Plaintiff is the owner of 138 prime hot dipped galvanized coils, which allegedly sustained water damage aboard the barge, DM 3009, owned and operated by ACBL. Defendant is a "non-asset based freight logistics company" that arranges transportation services by barge. (Rec. Doc. 12, Ex. D, Schulingkamp Aff.). On October 31, 2002, Plaintiff contracted with Bargelink to procure transportation for the coils from New Orleans, Louisiana to East Liverpool, Ohio. Defendant procured ACBL, which owns 50% of Bargelink, to carry the coils by barge from New Orleans to East Liverpool.
A pertinent provision of the contract between Intermetals Corp. (the Shipper) and Bargelink (the Supplier), contained in Section 9, is a restriction on liability which provides as follows:
[Defendant] Supplier's engagement is limited to arranging with the Carrier for the transportation services herein provided, and Supplier shall have no liability for loss, damage or delay to the shipment, howsoever occurring, after the shipment has been loaded on board the Carrier's barges. Not withstanding the above, should any claims by [Plaintiff] Shipper arise from handling or stowage, wherever occurring, Shipper specifically also agrees to pursue said claims against the actual cargo handlers or cargo stowers, such as vessel owner's, stevedores or barge terminal operators and [Defendant] Supplier shall not be responsible for any such claims."
(Rec. Doc. 12, Ex. A, "Sale of Transportation Services", [hereinafter the "Contract"])
On or about November 25, 2002, the coils arrived in New Orleans via the M/V LEEDS CASTLE, an ocean going vessel. The coils were subsequently discharged from the M/V LEEDS CASTLE and loaded onto ACBL Barge DM 3009. Plaintiff alleges that the barge took on water and developed a list. Plaintiff alleges further that the coils were damaged as a result.
Approximately two months later, ACBL filed for bankruptcy. Plaintiff subsequently filed suit against Defendant on August 28, 2003, alleging that (1) Defendant negligently chose ACBL as the carrier; (2) Defendant failed to deliver the subject cargo in the same good order and condition as it was delivered to New Orleans; and (3) Defendant breached its obligations under the relevant bills of lading, charter parties, contracts of carriage, contract of sale of transportation services, statutes and/or laws applicable thereto and/or the unseaworthiness of the Barge DM 3009. (Rec. Doc. 1).
Defendant moves for summary judgment asserting that as a matter of law (1) it is not a carrier, a non-vessel owning common carrier, or a freight forwarder who held itself out as one who "not merely [arranges] with common carriers for the transportation of goods but rather [delivers] them safely to a consignee"; and (2) that any other liability that could be assessed against it has been contractually waived by Plaintiff. (Rec. Doc. 12 at 6, 8). Plaintiff argues that genuine issues of material fact remain as to whether Plaintiff is a carrier or a freight forwarder and that Plaintiff did not waive Defendant's liability. Plaintiff further alleges that there is a question of genuine fact as to whether Defendant had knowledge of the ACBL barge's unseaworthiness. (Rec. Doc. 14 at 7).
II. STANDARD OF REVIEW
A district court can grant a motion for summary judgment only when the "`pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)). When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute . . . [to be] `genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] `material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
"If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Engstrom v. First Nat'l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24, and Fed.R.Civ.P. 56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly supported motion. See Anderson, 477 U.S. at 248. "If the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50 (citations omitted).
III. LAW AND ANALYSIS
A) Defendant is not a Carrier as a Matter of Law
Defendant argues that it is not a Carrier, a Non-Vessel Operating Common Carrier ("NVOCC"), or a Freight Forwarder who held itself out as performing carrier functions. The relevance of the categorical distinction in this context — i.e. whether Defendant falls into a "carrier status" or is only an ordinary freight forwarder — pertains to the applicability of the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. app. § 1300- 1315; and the Harter Act, 46 U.S.C. app. §§ 190-91. If not designated as a carrier or NOVCC, the Defendant is not subject to the general restriction on waiver of liability for failure to provide a seaworthy vessel or use due diligence to provide a seaworthy vessel. See, e.g., 46 U.S.C. app. §§ 190- 91; 46 U.S.C.A. app. § 1304.
Both Defendant and Plaintiff argue that F S Int'l Inc. v. M/V Feng Chang, 1997 WL 539918 (E.D. La. Aug. 29, 1997), sets forth the factors a district court should look to in making this determination. Relying on Zima Corp. v. Roman Pazinski, 493 F.Supp. 268, 273 (S.D.N.Y. 1980), the court in M/V Feng Chang set forth four factors to consider in determining carrier status: 1) the way the parties' obligation is expressed in documents relating to the agreement; 2) the history of dealings between the parties; 3) whether the party had issued a bill of lading; and 4) how the party made its profit. M/V Feng Chang, 1997 WL 539918, at *1.
Two other opinions issued from the Eastern District of Louisiana, one authored by the same judge (McNamara, J.), have utilized this four factor test. See Somerset Marine, Inc. v. Olympic Marine Comp., 2001 WL 128304, at *4 (E.D. La. Feb. 14, 2001) and Macsteel Intern. USA Corp. v. Barge RF 347B, 2001 WL 40894, at *2 (E.D. La. Jan. 16, 2001).
As controlling authority, however, the Fifth Circuit has expressly declined to adopt the so-called Zima test. See Sabah Shipyard SDN. BHD. v. M/V Harbel Tapper, 178 F.3d 400, 405 n. 2 (5th Cir. 1999). The Fifth Circuit instead adheres to the plain language of COGSA to determine an entity's status as carrier or non-carrier. Id. See also Pacific Employers Ins. Co. v. M/V Gloria, 767 F.2d 229, 234 (5th Cir. 1985).
Under COGSA, "[t]he term `carrier' includes the owner or the charter who enters into a contract of carriage with a shipper." 46 U.S.C. app. § 1301(a) (emphasis added). A "contract of carriage" is one that is covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea. . . ." 46 U.S.C. app. § 1301(b). To determine whether a party is a COGSA carrier under prevailing Fifth Circuit authority, the Court looks to COGSA's plain language and focus on whether the party entered into a contract of carriage with a shipper. See Sabah Shipyard, 178 F.3d at 405; Pacific Employers Ins., 767 F.2d at 234.
Under this COGSA standard, Defendant is clearly not a carrier as it issued no bill of lading or similar document of title to Intermetals Corp. The Contract between Plaintiff shipper and Defendant supplier is entitled "Sale of Transportation Services". The Contract purports to be a type of agency whereby Defendant agreed to procure transportation services for Plaintiff on the terms set forth in the Contract in exchange for a consideration based on the weight shipped.
The Contract also adds to the freight rate charged by Defendant "the amount of any new or increased Federal or State Taxes (except net income taxes), fees or charges, that may hereafter be charged to and paid by [ACBL] on account of the transportation services rendered hereunder, including the amount of any User Charge or Toll imposed, levied or collected . . . by [ACBL] while engaged in the transportation services rendered hereunder, and any such charge, fee or toll levied upon or measured in any way by use of fuels or oils." (Rec. Doc. 12, Ex. A).
The Contract is distinct from a bill of lading in the following ways: First, the contract does not expressly include the title of the coils. Absent this express reference, it cannot effectuate a transfer of the coils as a contractual instrument. Second, the date of the Contract suggests that it is not a bill of lading. A Bill of Lading is typically issued after a carrier receives the goods. 46 U.S.C. § 1303(3) (providing that " [a]fter receiving the goods into his charge the carrier . . . shall . . . issue to the shipper a bill of lading. . . .") (emphasis added). If the timing of the issuance of the bill of lading were otherwise, then the carrier could not verify with any accuracy "the apparent order and condition of the goods" upon receipt, as COGSA requires of the carrier by listing the condition of the goods in the bill of lading. 46 U.S.C. § 1303(3)(c). Here, the Contract was entered into on October 31, 2002, almost a full month prior to November 25, 2002 when Defendant received the goods and transferred the coils to ACBL's Barge DM 3009. As far as the timing of the Contract, therefore, it is does not make sense that it would serve as a bill of lading.
Third, the Contract does not include two of the three "showing[s]" a carrier must make on the face of the bill of lading. As discussed above, the Contract does not contain "the apparent order and condition of the goods" required under § 1303(3)(c). It also does not contain "[t]he leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts." See 46 U.S.C. § 1303(3)(a).
Most important, the "Straight Bill of Lading" issued by ACBL on November 28, 2002 does comply with the requirements under 46 U.S.C. § 1303(3). (Rec. Doc. 12, Ex. B). This document is clearly the bill of lading that is determinative this case, as it evidences a contract of affreightment between Plaintiff and ACBL, not between Plaintiff and Defendant. On the face of the bill of lading, moreover, it appears it was issued three days after ACBL received the goods. Finally, the document evidences Plaintiffs ownership of the coils. That ACBL was the carrier, and not Bargelink, is supported by the affidavit testimony of David Schulingkamp, Bargelink President of Defendant.
In the affidavit, Mr. Schulingkamp states: "Bargelink is a non-asset based freight logistics company that specializes in arranging for transportation of goods by barge."(Rec. Doc. 12, Ex. D). He further states that "Bargelink has never held itself out to [Plaintiff] as the actual carrier but specifically restricted its role to hiring barges to transport [Plaintiff's] cargo and coordinating or arranging additional services as requested." Id. He finally also states that "Bargelink does not own, maintain or operate any barges or other vessel[s]." Id.
In contrast, the Contract appears to be an ordinary service contract. In many paragraphs, the Contract describes three parties: the shipper (Plaintiff), the carrier (ACBL), and the supplier (Defendant). In one such section, the "[s]uppliers' (sic) engagement is limited to arranging with the Carrier for the transportation services herein provided." Nowhere in that document does Defendant supplier purport to assume any more responsibility than arrangement of the transportation services.
Because the Contract is not a bill of lading or other similar document indicating the title of goods, the Contract between the Plaintiff and Defendant is not a contract of carriage. As such, under prevailing Fifth Circuit authority in Sabah Shipyard and Pacific Employers Ins., there is no genuine issue of material fact as to Defendant's status as a non-carrier under COGSA.
The Court notes, too, that the issuance of a bill of lading by ACBL, and not Bargelink, disqualifies Defendant as a carrier under the first and third Zima factors. See Order and Reasons, supra, Part III.A at 5. The second and fourth Zima factors (history of parties' dealings and the manner of Defendant's profit generation, respectively) were not addressed in the briefing.
B) The Waiver of Liability Effectively Waives All of Plaintiff's Claims.
Because Bargelink operated as a supplier of transportation services, and not a carrier, it is not subject to any restriction on waiver of liability. Waivers of liability are recognized and enforced in maritime law except as expressly repudiated. Cf. 46 U.S.C. app. §§ 190- 91; 46 U.S.C. app. § 1304; 46 U.S.C. § 688, et seq. (adopting 45 U.S.C. § 55). Ordinary freight forwarders are free to limit their liability to other parties as long as such limitation is consented to by the other party. Hoogwegt U.S., Inc. v. Schenker Intern., Inc., 121 F.Supp.2d 1228, 1231-33 (N.D. Ill. 2000). Accordingly, the following contractual waiver is controlling, as the parties consented to the restriction on liability in Section 9 of the Bargelink-Intermetals Corp. Contract, which provides:
[Defendant] Supplier's engagement is limited to arranging with the Carrier for the transportation services herein provided, and Supplier shall have no liability for loss, damage or delay to the shipment, howsoever occurring, after the shipment has been loaded on board the Carrier's barges. Not withstanding the above, should any claims by [Plaintiff] Shipper arise from handling or stowage, wherever occurring, Shipper specifically also agrees to pursue said claims against the actual cargo handlers or cargo stowers, such as vessel owner's, stevedores or barge terminal operators and [Defendant] Supplier shall not be responsible for any such claims."
(Rec. Doc. 12, Ex. A).
The essential aspect of this waiver is that Defendant and Plaintiff contractually agreed that Defendant "shall have no liability for loss, damage or delay to the shipment, howsoever occurring," after the shipment has been loaded on board the Carrier's barges. This waiver of liability encompasses nearly each of Plaintiff's claims. It does not, however, effectuate a waiver of Defendant's contractual liability in Section 6 for failure to insure that the "Carrier . . . tender[s] barges which are in a condition suitable for the cargo to be carried." ( Id.)
In this case, Plaintiffs chief complaint is that Defendant negligently chose a Carrier when ACBL Barge DM 3009 proved unseaworthy. The premise of Plaintiff's contention is that Bargelink allegedly knew or should have known information concerning ACBL's financial condition, and that Bargelink was acting on behalf of ACBL instead of honoring its contractual obligations to provide Plaintiff with a seaworthy vessel for the transportation of its coils. (Rec. Doc. 14 at 7). Bargelink replies that its "corporate structure and corporate relationship is wholly irrelevant" to the issue of the validity of the waiver of liability. (Rec. Doc. 22 at 3).
The Court agrees with Bargelink that allegations of some collusion between Bargelink and ACBL to the Plaintiff's detriment are vague, speculative and unavailing. To reiterate, Defendant's sole duties under the Contract were "limited to arranging with the Carrier for the transportation services herein provided." (Rec. Doc. 12, Ex. A). While an aspect of arranging those transportation services included insuring that the Carrier tendered seaworthy barges, the Contract provides in Section 6 that "[l]oading of the barges shall constitute [Plaintiff's] acceptance of the condition and suitability of the barges for the intended cargo." ( Id.) After Plaintiff conducted an inspection of DM 3009 and loaded the cargo (the loading was also Plaintiff's contractual responsibility), it accepted the condition of the barges. Plaintiff thereby waived Defendant's contractual liability for providing such barges, and with that, its potential liability for loss, damage or delay to the shipment. "howsoever occurring." Therefore, all Plaintiff's claims against Defendant have been contractually waived.
The fact that Plaintiff declined to support these allegations in supplemental briefing despite additional discovery reinforces this conclusion.
IV. CONCLUSION
As a matter of law, Defendant does not possess Carrier Status because it did not enter into a contract of carriage with Plaintiff. Additionally, Plaintiff waived any liability Defendant may have incurred with its consent to the "Sale of Transportation Services" agreement. Furthermore, Defendant could no longer be liable for any unseaworthiness once Plaintiff accepted the vessel's suitability by its loading the coils aboard the ACBL Barge DM 3009.
Accordingly, Defendant's, Bargelink, L.L.C., Motion for Summary Judgment is GRANTED. IT IS ORDERED, ADJUDGED AND DECREED that the Complaint by Intermetals Corp. be DISMISSED WITH PREJUDICE.