7 F.3d 1427 (9th Cir. 1993), 92-55550, All Pacific Trading, Inc. v. Vessel M/V Hanjin Yosu

Docket Nº:92-55550.
Citation:7 F.3d 1427
Party Name:ALL PACIFIC TRADING, INC., a corporation, Plaintiff, and Tokio Fire & Marine Ins. Co., Ltd.; Fireman's Fund Insurance Co.; International Cargo & Surety Insurance Company; Malayan Overseas Insurance Corporation; Shin Kong Fire & Marine Insurance Co., Ltd.; Compass International, Janka, Ltd.; Rockwell International Corp.; USA Maxam, Inc.; A.O.K. Inte
Case Date:October 22, 1993
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1427

7 F.3d 1427 (9th Cir. 1993)

ALL PACIFIC TRADING, INC., a corporation, Plaintiff,

and

Tokio Fire & Marine Ins. Co., Ltd.; Fireman's Fund

Insurance Co.; International Cargo & Surety Insurance

Company; Malayan Overseas Insurance Corporation; Shin Kong

Fire & Marine Insurance Co., Ltd.; Compass International,

Janka, Ltd.; Rockwell International Corp.; USA Maxam,

Inc.; A.O.K. International, Inc.; Newell Company; VSI

Hardware Industries; Scitech Medical Products, Inc.;

American Trading & Production Corporation, Plaintiffs-Appellees,

v.

VESSEL M/V HANJIN YOSU; Crystal Shipping Line, Defendants,

Hanjin Container Line, Inc.; Korea Shipping Corporation,

Defendants-Appellants.

No. 92-55550.

United States Court of Appeals, Ninth Circuit

October 22, 1993

Argued and Submitted Aug. 2, 1993.

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David E.R. Woolley, Williams Woolley Cogswell Nakazawa & Russell, Long Beach, CA, for defendant-appellant.

Joseph P. Tabrisky & Michael W. Lodwick, Fisher & Porter, Long Beach, CA, for plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California.

Before: BROWNING, FARRIS and KELLY, [*] Circuit Judges.

PAUL KELLY, Jr., Circuit Judge:

M/V Hanjin Yosu (formerly the Korea Wonis One), a vessel under Korean flag, and its owner, the Hanjin Container Line, Inc. (formerly the Korea Shipping Corp. and hereinafter referred to as Hanjin, Inc.), seek to appeal the district court's judgment in favor of numerous Plaintiffs in an admiralty action. 1 The Plaintiffs are the owners of goods, or their subrogated insurers, damaged during carriage on the Hanjin Yosu. Consolidating their arguments, Defendants appeal on two grounds: (1) Plaintiffs did not have any relationship with Defendants sufficient to create a cause of action against Defendants, because Plaintiffs transferred the goods to intermediary non-vessel operating common carriers, who then transferred the goods to Defendants; and (2) even if Defendants are liable, the district court did not correctly apply the statutory liability limitation of $500 per package or customary freight unit. Our jurisdiction arises under 28 U.S.C. § 1291 and we affirm.

Background

The nine Plaintiffs are the owners or subrogated insurers of various goods transported on the Hanjin Yosu in April 1988. Eight of these shippers did not deliver their goods directly to the Hanjin Yosu. 2 Rather, they delivered the goods to several different non-vessel-operating common carriers (NVOCCs), who issued bills of lading to the shippers. The NVOCCs then delivered the goods to the Hanjin Yosu, which issued entirely separate non-negotiable bills of lading to the NVOCCs (the "Hanjin bills of lading"). Some of the transactions involved several NVOCCs transferring the cargo to each other in succession before delivering the cargo to the vessel.

An NVOCC is an intermediary between the shipper of goods and the operator of the vessel that will carry the goods. Generally, an NVOCC combines the goods of various shippers into a single shipment, contracts with a vessel for the transportation of the goods, and delivers the goods to the vessel, usually in a sealed container. See NLRB v. International Longshoremen's Ass'n, 447 U.S. 490, 496 n. 8, 100 S.Ct. 2305, 2309 n. 8, 65 L.Ed.2d 289 (1980). NVOCCs perform a function similar to overland freight forwarders, consolidating small shipments from multiple shippers into large, standard-sized reusable containers that can be quickly loaded on

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and off ships and onto trucks or other types of transportation. See National Customs Brokers & Forwarders Ass'n v. United States, 883 F.2d 93, 101 (D.C.Cir.1989).

As defined by statute, an NVOCC is a "common carrier that does not operate the vessels by which the ocean transportation is provided, and is a shipper in its relationship with an ocean common carrier." 46 U.S.C.App. § 1702(17). Conversely, an NVOCC is considered a carrier in its relationship with the shipper of the goods. National Customs Brokers, 883 F.2d at 101.

The original shipper of the cargo receives a bill of lading from the NVOCC upon delivery of the cargo to the NVOCC. The NVOCC receives an entirely separate bill of lading from the actual carrier, on which the owner of the cargo may or may not be named. In this case, the cargo owners were not named on the Hanjin bills of lading.

Once loaded on board the Hanjin Yosu, the cargo suffered $466,617 in water damage (before interest and costs) while the vessel was docked in Pusan, Korea. The damaged cargo included goods from several different shippers and NVOCCs, for which nine different bills of lading were given by the Hanjin Yosu. The Hanjin bills of lading were identical in all material respects. In the district court, the parties stipulated to the amount of damages, ownership of the cargo, and the cause of the damage. On appeal, Defendants concede the unseaworthiness of the Hanjin Yosu and their lack of due diligence to maintain the seaworthiness of the vessel.

Discussion

The case comes before the court on stipulated facts, and involves only questions of law, which we review de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). Plaintiffs presented two claims to recover the damages to their goods: an in rem action against the vessel and an in personam action against the shipowner. Defendants responded that Plaintiffs lacked a relationship with Hanjin, Inc. sufficient to support an in personam claim, and that there was no in rem jurisdiction over the Hanjin Yosu.

I. Appellate Jurisdiction Over The M/V Hanjin Yosu

After the case had been...

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