Opinion
CIVIL ACTION NO. H-00-1938
August 9, 2001
MEMORANDUM AND ORDER
I. INTRODUCTION
Pending before the Court are motions for summary judgment filed by Mediterranean Shipping Co., S.A. (hereinafter, "Mediterranean") and Venture Transport, Inc. (hereinafter, "Venture"). The Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331 (2001). Having carefully considered the motions, the responses, the pleadings, the record and the applicable law, the Court is of the opinion that the Defendants' motions for summary judgment should be GRANTED.
Although this case has maritime elements, the Court assumes without deciding that federal question jurisdiction is applicable rather than admiralty jurisdiction. See Lucky-Goldstar, Intern. (America) Inc. v. Phi bro Energy int'l, Ltd., 958 F.2d 58 (5th Cir. 1992) (holding that admiralty jurisdiction requires a contract to be "wholly maritime"); Patria v. M/VSEA LA ND ATLANTIC, No. Civ. A. 99-3454, 2000 WL 815876, at *1 (E.D. La. Jun 22, 2000) (holding that contracts containing both water and land transportation are intermodal or "mixed" contracts that fall outside of admiralty jurisdiction).
II. FACTUAL HISTORY
The facts in this case are largely undisputed. The Plaintiff, Vesta Forsikring AS (hereinafter, "Vesta") is an insurer of Ulstein Propellor. Ulstein Propellor contracted with both Mediterranean and Venture to ship a marine thruster from Felixstowe, England to LaRose, Louisiana. Mediterranean shipped the thruster from England to New Orleans, Louisiana pursuant to what was apparently a through bill of lading. Once the thruster arrived at New Orleans, it was placed on a truck and moved overland to LaRose, Louisiana by Venture pursuant to its own straight bill of lading.
Both Venture and Mediterranean assert that they were hired directly by Ulstein Propellor, a charge that the Plaintiff does not deny.
Court notes in passing that Venture asserts that the marine thruster originated in Oslo, Norway. Although the record is unclear, the difference is not dispositive as the Carmack Amendment requires only that a shipment be between a "place in the United States and a place in a foreign country." 49 U.S.C. § 1350 1(1)(E). Both Norway and England are, of course, foreign countries.
A through bill of lading is one by which an ocean carrier agrees to transport goods to their final destination. Someone else (e.g. railroad, trucker, or air carrier) performs a portion of the contracted carriage." See Mannesman Demag Corp. v. Nt/V Concert Express, 225 F.3d 587, 588 n. 3 (5th Cir. 2000) (citations omitted). in contrast, a straight bill of lading "specifies a consignee to whom the carrier is contractually obligated to deliver the goods." Black's Law Dictionary 160 (7th ed. 1999). In such a case, no intermediary is employed.
Unfortunately, on March 18, 1999, while in route to LaRose, Louisiana, the thruster was damaged. Another vehicle suddenly stopped in front of the truck carrying the thruster, and when the truck driver applied the brakes to avoid a collision, the thruster broke loose from its restraints and was damaged. Subsequently, Venture received two letters sent on Vesta's behalf by Ewig International Recovery Department. The first letter was sent on November 15, 1999. The second letter was sent on March 15, 2000.
III. STANDARD OF REVIEW
Summary judgment is proper "if 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." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of "informing the Court of the basis of its motion" and identifying those portions of the record "which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In adjudicating a motion for summary judgment, the Court must view all facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) ( citing United States v. Diebold, inc., 369 U.S. 654 (1962)).
Once the moving party meets its burden, the nonmoving party must "go beyond the pleadings" and designate "specific facts" in the record "showing that there is a genuine issue for trial." Id. at 324. An issue is "genuine" if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-49 (1986). A failure on the part of the nonmoving party to offer proof concerning an essential element of its case necessarily renders all other facts immaterial and mandates a finding that no genuine issue of fact exists. Saunders v. Michelin Tire Corp., 942 F.2d 299, 301 (5th Cir. 1991).
The primary inquiry here is whether the material facts present a sufficient disagreement as to require a trial, or whether the facts are sufficiently one-sided that one party should prevail as a matter of law. Anderson, 477 U.S. at 251-52. The substantive law of the case identifies which facts are material. Id. at 248. Only disputed facts potentially affecting the outcome of the suit under the substantive law preclude the entry of a summary judgment. Id.
IV. DISCUSSION
1. Venture's Motion for Summary Judgment
Venture argues that the Cannack Amendment, 49 U.S.C. § 14706 (2000), applies to this case, and thus, acts as both sword and shield. First, Venture contends that § 14706 provides the Plaintiffs sole avenue of relief, and as a result, the Plaintiffs state law claims are preempted. However, Venture also argues that because the letters it received do not constitute notice as required by the Carmack Amendment, the Plaintiff is now time-barred from prosecuting its federal claim as well.
(a) The Carmack Amendment extends to the facts in this case
As a threshold question, the Court must determine whether the Carmack Amendment is applicable to this case. Section 14706, which establishes liability for carriers underreceipts and bills of lading, applies only if jurisdiction exists under subchapter I or III of chapter 135. In turn, § 13501(1)(E) permits jurisdiction over transportation by a motor carrier where property is transported between a place in the United States and a place in a foreign country, but only to the extent that the transportation is in the United States. Because the shipment in this case traveled from a "place in a foreign country" to a "place in the United States," the Court concludes that the shipment falls within § 13501(1)(E)'s ambit.
In response, however, the Plaintiff argues that the thruster falls outside § 13501(1)(E)'s reach because Venture only transported the thruster between two points in Louisiana. Because its movements within the United States were solely within one state, the Plaintiff argues that the Carmack Amendment was never applicable to begin with. In essence, the Plaintiff seeks to treat Venture's segment as a separate shipment. There is, however, contrary authority with analogous facts.
In Project Hope v. M/V IBN SINA, the Second Circuit recently dealt with a case where a shipment was to be transported from Winchester, Virginia to Norfolk, Virginia by an overland transporter, and to Norfolk to Cairo, Egypt by an oceangoing transporter. 250 F.3d 67, 75 (2d Cir. 2001). Unfortunately, the shipment was damaged during the Virginia segment of travel.
In holding that these facts triggered § 1350 1(1)(E), the Second Circuit applied a number of principles. Where multiple carriers are responsible for different legs of a generally continuous shipment, courts must look to the shipment's final destination as intended at the time the shipment commenced. Id at 75. This is true even when the domestic portion of travel falls solely within a single state. Id. In such a case, the Cannack Amendment applies throughout the shipment, even to a carrier that is responsible only for an intrastate leg. Id. (citing Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042 (5th Cir. 1976)). Notably, the Second Circuit did not think it was of consequence that the overland transporter had issued a straight bill of lading. It was enough that the shipment was intended from the outset to travel between a place in the United States and a place in a foreign country.
The facts of this case are analogous. Because the thruster was intended from the outset to be delivered from England to LaRose, Louisiana, it falls within the ambit of § 1350 1(1)(E). Thus, fact that Venture issued a straight bill of lading for its portion of the journey is not dispositive. See Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042, 1044 (5k" Cir. 1976) (holding that in determining the reach of the ICC's jurisdiction, it mattered not whether a carrier's routes were wholly within one state; the determinative factor was whether the transported goods either (1) originated in transit from, or (2) were ultimately bound for destinations outside of Texas); State of Texas v. United States, 866 F.2d 1546, 1556 (5th Cir. 1989) (noting that in adjudicating any question of whether a shipment qualifies as "interstate commerce, " courts must look to the "essential character" of the shipment; of particular relevance is the shipper's fixed and persisting intent at the time of shipment). As such, the Court holds that the Carmack Amendment is applicable in this case.
(b) The Carmack Amendment preempts all state law claims
The Fifth Circuit has long held that the Carmack Amendment generally preempts state law claims arising out of the shipment of goods. See Accura Systems, Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874, 876 (5th Cir. 1996). Accordingly, the Court holds that the Plaintiffs state law claims are preempted, and that its sole remedy lies with the Carmack Amendment.
(c) The limitations period bars this suit
Although the Plaintiff has defended solely on the grounds that the Carmack Amendment is inapplicable, Venture must still show that it is entitled to have the claims against it dismissed. As such, Venture argues that the Plaintiff has failed to provide sufficient notice of its claims.
Claims must satisfy the minimum filing requirements as provided by 49 C.F.R. § 1005.2 (b) (2000). In particuiar, claimants must file a written communication that (1) contains facts sufficient to identify the shipment; (2) assert liability for the alleged damage; and (3) make a claim for the payment of a specified or determinable amount of money. 49 C.F.R. § 1005.2 (b) (2000). Moreover, the written communication must be filed within the time limits specified in the bill of lading. Id. Venture's bill of lading, in compliance with § 14706(e)(1), specifies a nine-month filing period.
In this case, neither of the Plaintiffs two letters satisfy the requirements of § 14706 or 49 C.F.R. § 1005.2 (b) (2000). The first letter was sent on November 15, 1999. Although the letter purports to enclose "documents in support of the captioned claim for which we hold [Venture] responsible," it does not specify an amount of damages. Nor does it make claim for an amount that is "determinable." In order to be "determinable," an amount must be "determinable, as a matter of mathematics, from a perusal of the documents submitted in support of the notice of claim." Salzstein v. Bekins Van Lines Inc., 993 F.2d 1187, 1190 (5th Cir. 1993) (citations omitted). The burden lies with the claimant to "say exactly what it seeks, rather than for the carrier, against its self-interest, to say what the claimant deserves." ld Because the Plaintiff's November 15, 1999 letter has not claimed a specified or determinable amount of money, it fails to fulfill § 1005.2(b)'s requirements.
Likewise, the Plaintiffs March 15, 2000 letter fails to satisfy § 1005.2(b). A claim must be filed within the time limits specified in the bill of lading or the contract of carriage or transportation. 49 C.F.R. § 1005.2 (b). The bill of lading in this case states that "other important rules and procedures" may be found in the "Tariffs." Section 2(b) of Venture's Motor Freight Commodity Tariff VTI-100 requires claims to be filed in writing within nine months after the delivery of the property. Although the March 15, 2000 letter specifies an amount of damages, it falls outside the nine month claims period. Because the Plaintiff has failed to file a timely claim with the requisite specificity against Venture, its case must be dismissed.
2. Mediterranean's Motion for Summary Judgment
Although the Plaintiffs Response to Mediterranean's Motion for Summary Judgment is hardly the model of clarity, the Court infers that the Plaintiff seeks to resist Mediterranean's Motion on three grounds. First, the Plaintiff apparently argues that because Mediterranean issued a "through" bill of lading, Mediterranean remains liable even after it has discharged its cargo to an inland carrier. In support, the Plaintiff cites Mannesman Demag Corp. v. M/V Concert Express, 225 F.3d 487 (5th Cir. 2000), for the proposition that a carrier can be contractually responsible for "oncarriage" to an inland destination. However, to the extent that Mannesman so held, it merely enforced contractual terms, an unremarkable proposition that does not help the Plaintiff here as the bill of lading clearly disavows any liability.
Alternatively, should the Plaintiff have cited Mannesman for its treatment of the term, "delivery" — and assuming that Mannesman's holding is not limited solely to maritime law — the case is nonetheless inapplicable. In Mannesman, the Fifth Circuit addressed the question of when "delivery" occurred in the context of a through bill of lading: when the inland carrier took control over the goods and began inland transportation, or when the goods arrived at their ultimate destination as specified in the through bill of Lading?
Applying common law principles, the Fifth Circuit reiterated that delivery is "not defined by receipt by the consignee, but rather occur[s] when the carrier ha[s] properly surrendered the goods in accordance with its contractual duties." Mannesman, 225 F.3d at 594 (citations omitted). Accordingly, "delivery" occurred once the cargo was transferred to the inland carrier. Were such a definition to be applied in this case, Mediterranean would escape liability since the accident occurred long after the thruster was transferred to the possession of Venture.
Although the copy ofMediterranean's bill of lading provided to the Court is reduced to the point of illegibility, a representative of Mediterranean has declared the relevant portions to be as stated below. Because the Plaintiff has not contested its veracity, the Court accepts this to be correct for the purposes of adjudicating this Motion.
3. SUBSTUTUTION [sic) OF VESSEL, THROUGH TRANSPORT, TRANSHIPMENT AND FORWARDING. The Carrier agrees to carry the goods from the Port of Loading to the Port of Discharge. . . . If boxes 5 and/or 9 are filled out, the Carrier will, acting as shipper's agent, only arrange for transport of the cargo by other Carriers from the place of origin to Port of Loading and/or from Port of Discharge to destination, and during such segments of Through Transport, handling and storage of the goods shall be subject to the freight contacts and tariffs of the other Carriers. It is expressly understood that the Carrier's liability as "Carrier" applies only from Port of Loading to Port ofDischarge under the Bill ofLading, and only while the goods remain in its actual custody and control, whether as Carrier or bailee. All forwarding and transhipping shall be for the account and risk of the goods. Copies of contracts of pre-Carriers or on-Carriers, as well as their tariffs, may be obtained from MSC upon request.
17. PERIOD OF RESPONSIBILITY. The Carrier or his agent shall not be liablefor loss or damage to the goods during the period before loading and after discharge from the vessel, howsoever such loss of damage arises. Goods in the custody of the Carrier or his servants before loading and after discharge, whether being forwarded to or from the transshipment [sic] at any of the whole transport are in such custody at the sole risk of the Merchant and the Carrier shall not be liable for loss or damage arising or resulting from any cause whatsoever.See Kelly Declaration, Exh. A (emphasis added).
Second, the Plaintiff asserts that Mediterranean is liable because clause 3 of the bill of lading provides for the inland carrier's tariff to be applied to segments of through transport. However, this 8 provision merely shifts liability onto the inland carrier — it says nothing about Mediterranean's liability.
Finally, the Plaintiff contends that because the bill of lading is unsigned by both the shipper and the carrier, Mediterranean may not rely on its terms. In support, the Plaintiff cites TempeiSteel Corp. v. Landstar inway, inc., 211 F.3d 1029 (7th Cir. 2000), and argues that an "originating carrier continues to be liable for the carriage of the on-carrying party if their contract provides for delivery to a destination beyond that at which it carries its own conveyances under a through bill of lading, no matter who selected the on-carrier."
The Court disagrees. Tempel Steel stands for the proposition that actual notice of terms and conditions is required. If a business had to "scrounge for limitations that have not been flagged by the carrier," then no actual notice was provided and a limitation of liability may not be enforced. Id at 1031. In this case, however, Mediterranean's bill of lading clearly refers to "terms, conditions, limitations and exceptions on "page 1." The attached "page 1" contains the limitations previously cited in footnote 6. Accordingly, the Plaintiff cannot argue that it did not receive actual notice.
The Plaintiff also relies on Calmaquip v. West Coast Carriers, Ltd, 650 F.2d 633 (5th Cir. 1981). In Calmaquip, the Fifth Circuit declined to read terms contained in an unsigned booking note into the contract ofcarriage. Calmaquip's result, however, was implicitly based on the same grounds as Tempel Steel: that a party may not be held to terms for which it had no notice. Id. at 639. In contrast, however, this case does not deal with a mere bookkeeping note, but rather a bill of lading, the document that contains the terms of carriage. Notably, the Plaintiff here does not argue that it lacked knowledge of these terms.
In addition, the Court notes that Calmaquip's result was based only partially on the presence of an unsigned note. Calmaquip v. West Coast Carriers, Ltd, 650 F.2d 633 (5d1 Cir. 1981). Rather, the Fifth Circuit also relied on the fact that the carrier was paid an additional fee by the shipper to complete inland carriage. In contrast, here, the record is devoid of any evidence that any such fee was paid to Mediterranean. In fact, it is uncontroverted thatthe inland carrier, Venture, was directly hired by Ulstein Propellor.
In fact, these cases highlight an underlying flaw in the Plaintiffs argument. The Plaintiff does not argue that no contract exists. Rather, it seeks to profit from the contract while avoiding some of its more onerous terms. This cannot be. Indeed, if Calmaquip, Tempel Steel or any other case did act to void Mediterranean's bill of lading, then the Plaintiff would have no cause of action. Under § 14706, carriers are liable to persons "entitled to recover under the receipt or bill of lading." Without a valid bill of lading, no liability attaches. Thus, regardless of whether the bill of lading is valid or invalid, the Plaintiff is precluded from recovery.
VI. CONCLUSION
In light of the foregoing discussion and analysis, it is the judgment of the Court that the Defendants' motions for summary judgment be hereby GRANTED.
It is so ORDERED.