Centraal Stikstof Verkoop., NV v. Alabama St. Docks Dept.

• Decision Date: 15 August 1969
• Docket Number: No. 24045.,24045.
• Citation: 415 F.2d 452
• Parties: CENTRAAL STIKSTOF VERKOOPKANTOOR, N.V., Appellant, v. ALABAMA STATE DOCKS DEPARTMENT and Gulf American Fire & Casualty Company, a Corporation, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

415 F.2d 452 (1969)

CENTRAAL STIKSTOF VERKOOPKANTOOR, N.V., Appellant, v. ALABAMA STATE DOCKS DEPARTMENT and Gulf American Fire & Casualty Company, a Corporation, Appellees.

No. 24045.

United States Court of Appeals Fifth Circuit.

August 15, 1969.

Rae M. Crowe, John Grow, Mobile, Ala., for appellant; Armbrecht, Jackson & DeMouy, Mobile, Ala., of counsel.

Mitchell G. Lattof, Mylan R. Engel, Special Asst. Attys. Gen., Engel & Smith, Diamond, Lattof & Favre, Mobile, Ala., Robert P. Bradley, Asst. Atty. Gen., MacDonald Gallion, Atty. Gen., Montgomery, Ala., for appellees.

Before GODBOLD and SIMPSON, Circuit Judges, and McRAE, District Judge.

SIMPSON, Circuit Judge.

On September 24, 1965, appellant, Centraal Stikstof Verkoopkantoor, N.V. (C.S.V.), filed a complaint against Alabama State Docks Department (Docks) and Gulf American Fire & Casualty Company (Gulf). The complaint alleges that Docks had breached its storage contract with C.S.V. Relief was sought against Gulf as surety on its bond with Docks. Both Docks and Gulf moved to dismiss the complaint on the grounds that (1) Docks was an agency of the State of Alabama and immune from suit, and (2) if the immunity defense had been waived, C.S.V. was barred by the two year statute of limitations set out in the Interstate Commerce Act, Title 49, U.S.C., Section 16(3) (b).¹ The motions to dismiss were granted by the court below under Rule 12, F.R. Civ.P. as to both Docks and Gulf and this appeal was taken. As to Docks, we affirm. We reverse and remand for further proceedings below as to Gulf.

In Centraal Stikstof Verkoopkantoor, N.V., v. Walsh Stevedoring Co., 5 Cir. 1967, 380 F.2d 523, C.S.V. unsuccessfully attempted to recover damages from its stevedore Walsh and Dock's liability insurer, United States Fidelity & Guaranty Company. Consequently C.S.V. now attempts to fasten liability upon Docks and its statutory surety as a public warehouseman, Gulf American. The facts are set out below.

C.S.V. unloaded a cargo of commercial fertilizer called nitrolime in good condition in September 1959 in a warehouse of Docks in Mobile, Alabama. A uniform warehouse receipt was issued. The nitrolime was damaged when a sprinkler system in the warehouse was activated. The contention of C.S.V. is that the nitrolime was improperly stored in that it was piled over the sprinkler system and the corrosive tendencies of the nitrolime on the metal components of the sprinkler system caused it to discharge.

This résumé demonstrates a fact which will prove crucial in this Court's determination, i. e.: Docks' role was solely that of a warehouseman. C.S.V.'s own stevedore unloaded the ship which carried the nitrolime. The stevedore transferred the fertilizer to Docks' warehouse. There the goods remained in storage until the accident (a period of more than three months). It is apparent that Docks was never involved in the transportation of the fertilizer. It merely stored the nitrolime for a fee.

I. Alabama State Docks Department

The appellant states that the federal courts have jurisdiction over this controversy because Docks in addition to the Treaty of Friendship, Commerce and Navigation between the United States and the Netherlands, is subject to a myriad of Federal statutes and regulations; i. e.: The Interstate Commerce Act, Title 49, U.S.C., § 1 et seq.; the Shipping Act, Title 46, U.S.C., § 801 et seq.; and various Coast Guard regulations relating to the proper storage of cargo, 33 C.F.R. 126.01, et seq. C.S. V. then concludes that since Docks has generally entered into the sphere of interstate and foreign commerce, Docks has waived its sovereign immunity² under the principles enunciated in Parden v. Terminal Railway of Alabama State Docks Department, 377 U.S. 184, 196, 84 S.Ct. 1207, 1215, 12 L.Ed.2d 233 (1964):

"Where a state\'s consent to suit is alleged to arise from an act not wholly within its own sphere of authority but within a sphere — whether it be interstate compacts or interstate commerce — subject to the constitutional power of the Federal Government, the question whether the State\'s act constitutes the alleged consent is one of federal law."

At first blush, the appellant's complaint appears to support the assertion that Docks has entered into a federally regulated sphere. If this is true, under the Parden principle the question of waiver of sovereign immunity would be one of federal law. Close scrutiny reveals that C.S.V. has no right to federal relief.

C.S.V. can gain little solace from the Treaty of Friendship, Commerce and Navigation. The provisions of the Treaty relied upon by C.S.V. merely provide that nationals and companies of the Netherlands will have fair and equitable treatment in this country. These provisions do not aid C.S.V. because Docks is not attempting to apply Alabama law in a manner which discriminates against the Netherlands or C.S.V. To the contrary, anyone seeking to sue Docks as an agency of the State of Alabama would have to surmount the sovereign immunity question. Further we do not deem a mere entry into an area regulated by international treaty as an automatic waiver of sovereign immunity. As long as the sovereign immunity claim does not prevent federal relief which would otherwise be attainable, we see no virtue in invoking federal jurisdiction. Here no relief is possible because no discrimination is evidenced.

The appellant steadfastly maintains that Docks entered into a federal zone because it operates a terminal railroad, provides wharfinger services, operates United States bonded warehouses, furnishes harbor pilots, submits to Coast Guard inspections and regulations, and complies with the requirements of the Interstate Commerce Act and the Shipping Act when applicable. The real question here is not whether Docks as a railroader, or a wharfinger, or as an employer of harbor pilots is regulated by federal law. Rather, the essential issue is whether Docks as a warehouseman has entered into a federally regulated sphere in which a federal remedy is available. To determine this question an examination of the statutes alleged in the appellant's complaint is necessary.

The reliance by C.S.V. upon the Shipping Act, Title 46, U.S.C., Section 801 et seq. is misplaced. Admittedly the Section 801 definition of common carriers covered by the Act includes "other persons * * * carrying on the business of forwarding or furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier by water". Thus ostensibly, Docks is covered by the Act. However, assuming arguendo that this Court can assert jurisdiction without the case being first submitted to the Maritime Commission, C.S.V. does not cite and we cannot find any statutory provision in the Shipping Act which provides a remedy to a shipper for damages to cargo allegedly caused by a warehouseman. Thus C.S.V. has no federal remedy under the Shipping Act.

The appellant more emphatically argues that certain provisions of the Interstate Commerce Act, Title 49, U.S.C., Sections 3(1), 8, 9, and 20(11) provide a federal cause of action. C.S.V. claims that Docks is a common carrier under the Act because Title 49, U.S.C., § 1 states that:

"(1) The provision of this chapter shall apply to common carriers engaged in —

(a) The transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used under common control, management, or arrangement for a continuous carriage or shipment;" (emphasis added)

and Title 49, U.S.C., § 1(3) (a) states in part:

"The term `transportation\' as used in this chapter shall include * * * all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage and handling of property transported." (emphasis added)

The appellant argues that these provisions should be interpreted as providing coverage over a person who stores goods because he is rendering a service in connection with transportation and is therefore a common carrier.

We disagree. As we read the language, Section 1(3) (a) states that services rendered by a common carrier in connection with transportation of goods shall be covered by the Act. The section cannot be read to classify mere storers as common carriers.

This view is consistent with the common law which has traditionally refrained from classifying warehousemen as common carriers. See 56 Am.Jur., Warehouses 36, p. 321; 93 C.J.S. Warehousemen & Safe Depositaries § 2, p. 397. The essential historical difference between the two is that a common carrier is charged with a higher standard of care than the warehouseman. As a further indication that a warehouseman is not contemplated as a common carrier under the Interstate Commerce Act, we note that the Carmack Amendment, Title 49, U.S.C., § 20(11) which provides a remedy for damages to cargo caused by common carriers, has not been applied to warehousemen. General American Transp. Corp. v. Indiana Harbor Belt R. Co., 7 Cir. 1951, 191 F.2d 865. Consequently we conclude that the various sections of the Interstate Commerce Act cited by the appellant are not applicable because Docks is not a common carrier in this particular set of circumstances.

C.S.V. is then left with only the Coast Guard regulations to support its argument that C.S.V. is entitled to seek federal relief. Unquestionably these regulations apply and have been enforced upon Docks. The hard fact remains however that these regulations provide no cause of action for a private concern which is seeking damages for destroyed cargo. The rules are essentially safety regulations and can only be enforced by the United States.

The appellant relies on Lauritzen v. Chesapeake Bay Bridge and Tunnel District, E.D.Va.1965, 259 F.Supp. 633, modified 4 Cir. 1968, 404 F.2d 1001, for the proposition that acquiescence to federal regulations constitutes a waiver of sovereign immunity. That case is...