All Pacific Trading, Inc. v. Vessel M/V Hanjin Yosu

• Decision Date: 22 October 1993
• Docket Number: No. 92-55550,92-55550
• Citation: 7 F.3d 1427
• Parties: 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.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1427

7 F.3d 1427

1994 A.M.C. 365

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.

Argued and Submitted Aug. 2, 1993.

Decided Oct. 22, 1993.

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 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 submitted, we raised the issue of whether the notice of appeal conferred jurisdiction over the vessel Hanjin Yosu. The district court's judgment specifies that liability is in personam against Defendant Hanjin, Inc. and in rem against Defendant Hanjin Yosu, except as to the claims of three plaintiffs in which liability is only against Defendant Hanjin, Inc. in personam. The notice of appeal does not specify that the vessel is appealing:

COMES NOW Hanjin Container Lines, Ltd. and Korea Shipping Corporation and appeal from the judgment for $466,617.97 principal and $140,575.65 interest in favor of plaintiffs on March 23, 1992....

Fed.R.App.P. 3(c) requires that "[t]he notice of appeal shall specify the party or parties taking the appeal." In Torres v. Oakland Scavenger Co., 487 U.S. 312, 108 S.Ct. 2405, 101 L.Ed.2d 285 (1988), the Supreme Court held that the failure to name a party taking an appeal was jurisdictional. Id. at 314, 108 S.Ct. at 2407. The purpose of a specific designation is to provide notice to the court and to the opposing parties as to the identity of the appellant or appellants. Id. at 318, 108 S.Ct. at 2409. This enables appellees and the court to determine whether "a losing party not named in the notice of appeal should be bound by an adverse judgment or held liable for costs or sanctions." Id.

Although the vessel's name appears in the caption of the notice of appeal along with other Defendants, the caption cannot be read as a designation of the vessel when the text of the notice of appeal designates specific Defendants as appellants and does not include the Defendant vessel. See National Ctr. for Immigrants' Rights v. INS, 892 F.2d 814, 816-17 (9th Cir.1989) (recognizing that it is possible to describe fewer than the entire group of potential appellants); Allen Archery, Inc. v. Precision Shooting Equipment, Inc., 857 F.2d 1176, 1177 (7th Cir.1988). See also United States v. Tucson Mechanical Contracting, Inc., 921 F.2d 911, 913-914 (9th Cir.1990). Defendant Hanjin, Inc. argues that it is appealing in two capacities--as defendant and as a claimant of the vessel, and it was unnecessary to designate either capacity in the notice of appeal. Defendant asserts that "[t]he only basis on which this Court could invoke Torres for the proposition that Hanjin Yosu had to be named in the appeal is if it determines that the vessel had an independent legal existence and a separate set of liabilities."

We are reluctant to collapse the distinction between the vessel and its owner in these circumstances. Generally, a vessel is viewed as a juristic person, responsible in rem for the acts and omissions of her personnel, separate and distinct from her owner. Canadian Aviator, Ltd. v. United States, 324 U.S. 215, 224, 65 S.Ct. 639, 644, 89 L.Ed. 901 (1945); The Barnstable, 181 U.S. 464, 467, 21 S.Ct. 684, 685, 45 L.Ed. 954 (1901). Although the legal fiction of vessel apart from owner has not been applied when it would frustrate Congressional purpose limiting liability, see Consumers Import Co. v. Kabushiki Kaisha, 320 U.S. 249, 252-53, 64 S.Ct. 15, 16-17, 88 L.Ed. 30 (1943); Place v. Norwich & N.Y. Transp. Co., 118 U.S. 468, 502-04, 6 S.Ct. 1150, 1161-63, 30 L.Ed. 134 (1886), or providing a convenient forum, Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 23-25, 80 S.Ct. 1470, 1473-74, 4 L.Ed.2d 1540 (1960), plaintiffs often sue owners in personam and vessels in rem, see Exxon Corp. v. Central Gulf Lines, Inc., --- U.S. ----, ----, 111 S.Ct. 2071, 2073, 114 L.Ed.2d 649 (1991), urging different legal theories and remedies. See, e.g., Melwire Trading Co. v. M/V Cape Antibes, 811 F.2d 1271, 1273 (9th Cir.), amended on other grounds, 830 F.2d 1083 (1987); Churchill v. F/V FJORD, 892 F.2d 763, 767-772 (9th Cir.1988) (affirming dismissal of in rem action, but reversing comparative fault allocation against in personam defendants), cert. denied, 497 U.S. 1025, 110 S.Ct. 3273, 111 L.Ed.2d 783 (1990). In this case, the district court appears to have made the distinction both in its reasoning and judgment. On appeal, we are required to examine both.

In rem maritime actions are available " 'only in connection with a maritime lien.' " Hunley v. Ace Maritime Corp., 927 F.2d 493, 496 (9th Cir.1991) (quoting Melwire Trading Co., 811 F.2d at 1273). Congress...