Opinion
No. C 01-3344 CW
March 27, 2003
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Defendant Star Trans Container Line Limited (Star) moves for summary judgment on the grounds that Plaintiffs' complaint was untimely filed. Plaintiffs America Asia Trading Co. (A A) and China Pacific Property Insurance Co., Ltd. oppose the motion on factual and legal grounds. The matter was heard on February 28, 2003. Having considered all of the papers filed by the parties and oral argument on the motion, the Court DENIES the motion.
BACKGROUND
On August 4, 2000, A A hired Star, an international freight forwarder, to arrange the shipment of 361 cartons of artificial flowers and plants from Dalian, China to Oakland, California. That same day Star consigned the shipment to Rich Shipping Company, an ocean carrier, which issued a bill of lading to Star. On August 5, 2000, Star in turn issued a bill of lading naming A A as consignee and A A's delivery agent, U.S. Group Consolidator, Inc., as a party to be notified of the cargo's arrival. On August 31, 2000, Rich Shipping Company sent an arrival notice/freight bill to U.S. Group Consolidator, Inc., designating September 1, 2000 as the estimated date of arrival for the shipment. On September 1, 2000, which was the Friday before the Labor Day weekend, the ship arrived in Oakland. The cargo was unloaded and transferred to a Marine Terminals Corporation bonded warehouse. Defendant has not submitted any evidence to show that Plaintiffs were notified of the ship's actual arrival, or any evidence of when the cargo was unloaded and Plaintiffs' agent could have received the goods. On September 5, 2000, A A's customs broker, Bayshore Customhouse Broker, retrieved the shipment and cleared it through customs. On September 7, 2000, the shipment was delivered by truck to A A's facilities in Hayward. A portion of the cargo was damaged by wetting and mildew. On September 13, 2000, A A had an independent surveyor examine the extent of damage, to the shipment.
On September 4, 2001, A A and its insurer, China Pacific Property Insurance Co., Ltd. filed this complaint alleging that Star breached its obligations under the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1300 et seq., and the Harter Act, 46 U.S.C. § 190et seq., to deliver the goods as contracted for in the bill of lading by delivering a portion of the goods in damaged condition. Plaintiffs alleged damages in the amount of $8,763.05 plus pre-judgment interest and costs.
The Court notes that COGSA applies to shipments of goods between a United States and a foreign port, and that the Harter Act applies to shipment between domestic ports. See North River Ins. Co. v. Fed Sea/Fed Pac Line, 647 F.2d 985, 987 (9th Cir. 1981).
LEGAL STANDARD
Summary judgment is properly granted when no genuine and disputed issues of material fact remain, and when, viewing the evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Eisenberg v. Insurance Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 1987).
The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true the opposing party's evidence, if supported by affidavits or other evidentiary material. Eisenberg, 815 F.2d at 1289. The court must draw all reasonable inferences in favor of the party against whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Intel Corp. v. Hartford Accident Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991).
Material facts which would preclude entry of summary judgment are those which, under applicable substantive law, may affect the outcome of the case. The substantive law will identify which facts are material. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986).
Where the moving party bears the burden of proof on an issue at trial, it must, in order to discharge its burden of showing that no genuine issue of material fact remains, make a prima facie showing in support of its position on that issue. UA Local 343 v. Nor-Cal Plumbing. Inc., 48 F.3d 1465, 1471 (9th Cir. 1994). That is, the moving party must present evidence that, if uncontroverted at trial, would entitle it to prevail on that issue. Id.; see also International Shortstop. Inc. v. Rally's. Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). Once it has done so, the non-moving party must set forth specific facts controverting the moving party's prima facie case. UA Local 343, 48 F.3d at 1471. The non-moving party's "burden of contradicting [the moving party's] evidence is not negligible." Id.
DISCUSSION
Defendant argues that the statute of limitations set forth in COGSA bars Plaintiffs' suit because it was not filed one year from the date of delivery of the goods. Defendant contends that delivery occurred on September 1, 2000, when the shipment arrived in Oakland. Plaintiffs did not file suit until September 4, 2001.In support of its summary judgment motion, Defendant submits several documents to establish that the shipment arrived in Oakland on September 1, 2000. These documents are an arrival notice issued to U.S. Group Consolidator, Inc. indicating September 1, 2000, as the estimated date of arrival; a United States Customs release form for the shipment noting September 1, 2000, as the arrival date; and a survey report by McLaren's Toplis noting the same.See Chan Decl. Exs. D-F.
In their opposition, Plaintiffs raise several evidentiary objections to the documentary evidence submitted by Defendant. First, they contend that Mr. Chan's declaration is inadmissible because he lacks personal knowledge. Second, they assert that Defendant failed to disclose Mr. Chan as well as exhibits D and E to his declaration to Plaintiffs prior to filing its motion for summary judgment. Finally, Plaintiffs state that Defendant failed to respond to discovery requests which would have provided Plaintiffs with exhibits D and E. Pursuant to Federal Rules of Civil Procedure 37(c)(1) and 37(b)(2)(B) Plaintiffs request that the Court prohibit Defendant from using exhibits D and E in support of its summary judgment motion.
Federal Rule of Civil Procedure 56(e) provides in part that "[s]upporting . . . affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. . . ."
Federal Rule of Civil Procedure 37(c)(1) provides in part that a party's failure to disclose, unless such failure is harmless, may result in that party's not being "permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed." Federal Rule of Procedure 37(b)(2)(B) provides in part that failure to comply with a court order to provide discovery may result in "[a]n order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence."
In its reply to Plaintiffs' opposition Defendant argues that Plaintiffs' evidentiary objections are groundless. Defendant maintains that as President of its American affiliate Mr. Chan is competent to testify about Defendant's procedures relating to shipments to the United States and qualified to testify as to the meaning of the documents attached to his declaration. Defendant also submits evidence that Mr. Chan was disclosed to Plaintiffs on January 17, 2003, before the motion for summary judgement was filed on January 24, 2003, see Kelly Decl. ¶¶ 3-4, and maintains that exhibits D and E had been subpoenaed by Plaintiffs and thus were in Plaintiffs' possession well before that date as well. See id.
¶¶ 5-8. Finally, Defendant asserts that Plaintiffs should not be heard to argue undue prejudice because Defendant's responses to Plaintiffs' discovery requests were transmitted on February 11, 2003, one day after they were formally due and one day after Plaintiffs submitted their opposition to Defendant's summary judgment motion, because the Court had instructed Plaintiffs to seek more time to respond to the summary judgment motion if needed.
The Court overrules Plaintiffs' objections arid finds that Defendant has made a prima facie showing that the shipment at issue arrived in Oakland on September 1, 2000, and that Plaintiffs have not set forth specific facts controverting that finding.
Notwithstanding Defendant's prima facie showing that the shipment arrived in Oakland on September 1, 2000, Defendant does not prevail on summary judgment. COGSA § 1303(6) states in relevant part that "the carrier . . . shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods." 46 U.S.C. § 1303(6). However, as Defendant notes, COGSA does not expressly set forth when "delivery" occurs for purposes of the statute of limitations analysis.
As the Fifth Circuit noted when it addressed the question, " [n]o court of appeals has decided when `delivery' occurs for purposes of section 1303(6)," but the district courts have developed various interpretations.Servicios-Expoarma v. Industrial Maritime Carriers. Inc., 135 F.3d 984, 987-88 (5th Cir. 1998). The Fifth Circuit adopted a new interpretation. It concluded that "`[d]elivery' occurs when the carrier places the cargo into the custody of whomever is legally entitled to receive it from the carrier." Id. at 992. That determination in turn hinges on the general duty of delivery under maritime law which "requires that a carrier unload the cargo onto a dock, segregate it by bill of lading and count, put it in a place of rest on the pier so that it is accessible to the consignee, and afford the consignee a reasonable opportunity to come and get it," a general rule that can be modified by the customs, regulations, or law of the port of destination.Id. at 993 (internal citations omitted). InServicios-Expoarma, the custom and laws of the port of destination required the carrier to deliver cargo to an authorized customs warehouse pending clearance. Id. Accordingly, once the goods had been placed in the customs warehouse, "delivery" for purposes of § 1303(6) had occurred and the one-year limitations period began to run.Id.
One of the interpretations of "delivery" that had developed in the district courts holds that "delivery occurs only when the consignee has a reasonable opportunity to inspect the goods for damage." Id. (internal citations omitted). Courts in this district have followed this interpretation of § 1303(6). In National Packaging Corp. v. Nippon Yusen Kaisha, 354 F. Supp. 986, 987 (N.D. Cal. 1972), another judge in this district explained, "Just as `delivery' does not mean actual physical transfer, neither does it mean discharge from the ship, without more." The National Packaging court reduced the concept of "proper delivery" under § 1303(6) to a simple formula: "discharge + notice + opportunity to receive." Id. That formula was recently followed in Bigge Equip. Co. v. Maxpeed Int'l Transp. Co., 229 F. Supp.2d 968, 976 (N.D. Cal. 2001), which stated that "`delivery' under COGSA occurs when the recipient of the cargo receives notice of the discharge and has had an opportunity to inspect it for defects."
In this case, Defendant argues, it should prevail under either the Fifth Circuit's interpretation of "delivery" or under the formula developed in National Packaging. Defendant contends that just as in Servicios-Expoarma, the one-year statute of limitations should begin to run once the goods were discharged to the Marine Terminal Corporation bonded warehouse on September 1, 2000. Alternatively, it argues that just as in National Packaging, the one-year statute of limitations should begin to run on September 1, 2000, because Plaintiff received advance notice through its delivery agent of the cargo's expected arrival on that date and could have taken delivery at that time. Plaintiffs assert that Defendant has failed to show that "delivery" occurred under the National Packaging court's interpretation of the term.
Defendant argues that two further points are instructive in determining the meaning of "delivery" under § 1303(6): First, the "tackle-to-tackle" rule in COGSA § 1301(e) defines a carrier's duty of care as running only from the time the goods are loaded on the ship until the time the cargo is released from the ship's tackle at port. Second, the language in Defendant's standard bill of lading states, in part, that "[d]elivery of the goods shall be received by the consignee directly from the ship's tackle as the goods come to hand in unloading or as soon as available if discharged on Carrier's wharf." In light of the case law discussed above, the Court declines to entertain a narrower definition of "delivery" for purposes of § 1303(6), as suggested by Defendant's arguments.
Among the interpretations of "delivery" set forth above, this Court finds the interpretation developed by the National Packaging court the most persuasive because it hinges on a reasonableness determination, holding that "delivery" occurs when the recipient of the cargo has had a reasonable opportunity to receive the goods.National Packaging, 354 F. Supp at 987. Although Defendant has made a prima facie showing that the ship carrying the goods arrived in Oakland on September 1, 2000, Defendant has failed to make aprima facie showing of "delivery" under the National Packaging court's interpretation of the term. Defendant does not show that Plaintiffs had notice of the ship's actual arrival on September 1, 2000, or that the goods were unloaded at that time, or that Plaintiffs had an opportunity to receive the cargo on that date. Indeed, evidence submitted by Defendant indicates that "it is standard procedure in the shipping business that an ocean carrier . . . notify the consignee or its agent in advance of a shipment's arrival date . . . to enable the consignee to obtain customs clearance and entry of the shipment up to 72 hoursin advance of the shipment's arrival." Chan Decl. ¶ 8 (emphasis in original). This statement begs the question whether notice of the shipment's expected arrival, which was transmitted to Plaintiffs' delivery agent on August 31, 2000, was adequate to trigger the statute of limitations, and Defendant states no authority that it was. Furthermore, Defendant does not show that Plaintiffs had an opportunity to receive the goods on September 1, 2000, despite the holiday weekend.
Alternatively, even if the Court were to adopt the Fifth Circuit's interpretation of "delivery," Defendant has failed to make a prima facie showing that it complied with the customs and laws of the port of Oakland for proper delivery by discharging the goods to the Marine Terminal Corporation bonded warehouse, and it has failed to show when that discharge occurred. Therefore, genuine issues of material fact remain in dispute.
Because the Court finds that Defendant has not made a prima facie showing that there is no material factual dispute, it need not decide whether Federal Rule of Procedure 6(a) applies to the statute of limitations in COGSA.
Federal Rule of Procedure 6(a) provides:
In computing any period of time prescribed or allowed by . . . any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday . . . in which event the period runs until the end of the next day which is not one of the aforementioned days. . . . As used in this rule . . . "legal holiday" includes New Year's Day, Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, [and] Christmas Day. . . .
If Federal Rule of Procedure 6(a) applied to the statute of limitations in COGSA, a proposition that Defendant disputes, Plaintiffs would not be time-barred by the statute of limitation set forth in COGSA section 1303(6) even if the shipment's arrival on September 1, 2000, were determined as the date of delivery from which the statute of limitation begins to run. Because September 1, 2001, was the Saturday before Labor Day weekend, the next possible date for filing a claim would have been Tuesday, September 4, 2001, when Plaintiffs in fact filed their complaint.
CONCLUSION
For the foregoing reasons, Defendant's motion for summary judgment is DENIED.