Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 85-9005

• Decision Date: 15 September 1986
• Docket Number: No. 85-9005,85-9005
• Citation: 799 F.2d 697
• Parties: SWIFT TEXTILES, INC., Plaintiff-Appellant, v. WATKINS MOTOR LINES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 697

799 F.2d 697

SWIFT TEXTILES, INC., Plaintiff-Appellant, v. WATKINS MOTOR LINES, INC., Defendant-Appellee.

No. 85-9005.

United States Court of Appeals, Eleventh Circuit.

Sept. 15, 1986.

Edwin D. Robb, Jr., Savannah, Ga., for plaintiff-appellant.

John B. Miller, Savannah, Ga., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Georgia.

Before HILL and VANCE, Circuit Judges, and BROWN, ^* Senior Circuit Judge.

JOHN R. BROWN, Circuit Judge:

A shipper whose goods were damaged in transit appeals from the District Court's ruling that its claim is barred by a statute of limitations contained in the carrier's tariff and incorporated by reference into the bill of lading. We conclude that the shipment in question came within ICC jurisdiction as a "continuation of foreign commerce" and that the bill of lading sufficiently incorporated the statute of limitations contained in the carrier's tariff. We therefore affirm.

How Swift Wasn't

The facts of this case are simple and not in dispute. Swift Textiles, Inc. (Swift) contracted to buy certain textile spinning machinery from a Swiss corporation. The machinery was placed in containers in Switzerland, shipped by rail to Hamburg, and loaded aboard a ship. The bill of lading issued by the ocean carrier shows Swift as the notify party in Savannah, Georgia and Swift's customs broker as the consignee.

The containers actually were unloaded in Charleston, South Carolina and trucked to Savannah under the ocean bill of lading. Upon their arrival in Savannah, they were stored temporarily until Swift's customs broker arranged with Watkins Motor Lines (Watkins) to truck the containers from Savannah to LaGrange, Georgia, their intended destination inland. The transit from Savannah to LaGrange was under a short form bill of lading prepared by Swift's customs broker. The bill of lading was a preprinted standardized form which provided that the shipper was "familiar with all the terms and conditions of the [Uniform Domestic Straight B]ill of [L]ading ... set forth in the classification or tariff which governs the transportation of the shipment and the said terms and conditions are hereby agreed to by the shipper...." The short form bill of lading also provided that the shipment would be subject to the terms of the "Uniform Domestic Straight Bill of Lading set forth ... in the applicable motor carrier classification or tariff...."

At the time of shipment, Watkins had on file with the Interstate Commerce Commission (ICC) a classification providing for a two year and one day statute of limitations for bringing suit after a claim was denied. Watkins' tariff, also on file with the ICC, expressly incorporated the classification. Watkins had no tariff on file with the Georgia Public Service Commission and presumably was not authorized to make intrastate shipments in Georgia.

While en route to LaGrange, one of the containers partially slid off the truck chassis transporting it and the contents were damaged. Swift filed a claim for the damage with Watkins and it was denied on April 19, 1982. Swift filed the present suit on May 13, 1985, more than three years after the denial of its claim. The District Court granted summary judgment for Watkins on the grounds that the applicable two year and one day statute of limitations contained in Watkins' tariff had run. Swift appeals.

When Is an Intrastate Shipment Not An Intrastate Shipment?

The first issue before us on appeal is whether the shipment of the textile spinning machinery from Savannah, Georgia to LaGrange, Georgia is covered by the Carmack Amendment, 49 U.S.C. Sec. 11707, formerly 49 U.S.C. Sec. 20(11). Among other things, the Carmack Amendment (amending the Interstate Commerce Act) allows carriers to provide in their contracts with shippers statutes of limitations for bringing civil suits of not less than two years. ¹ Thus, if the Carmack Amendment applies, Watkins had the authority to set its statute of limitations for bringing damage claims at two years and one day (as it did in its tariff), and Swift's claim is barred. If, on the other hand, the Carmack Amendment does not apply, then the applicable statute of limitations presumably must be determined by resort to state law, a question not reached by the District Court.

The Carmack Amendment applies when the ICC has jurisdiction over the shipment in question, 49 U.S.C. Sec. 11707(a). Among the shipments over which the ICC has jurisdiction are shipments "between a place in ... the United States and a place in a foreign country to the extent the transportation is in the United States...." 49 U.S.C. Sec. 10521(a)(1)(E) (the "continuation of foreign commerce" provision). Swift first argues that the Carmack Amendment does not apply to the shipment because it was an intrastate shipment under a separate bill of lading, not a "continuation of foreign commerce."

The nature of a shipment is not determined by a mechanical inspection of the bill of lading nor by when and to whom title passes but rather by "the essential character of the commerce," United States v. Erie R.R. Co., 280 U.S. 98, 102, 50 S.Ct. 51, 53, 74 L.Ed. 187, 206 (1929), reflected by the "intention formed prior to shipment, pursuant to which property is carried to a selected destination by a continuous or unified movement," Great N. Ry. Co. v. Thompson, 222 F.Supp. 573, 582 (D.N.D.1963) (three-judge district court).

It is well-settled that, in determining whether a particular movement of freight is interstate or intrastate or foreign commerce, the intention existing at the time the movement starts governs and fixes the character of the shipment.... [T]emporary stoppage within the state, made necessary in furtherance of the interstate carriage, does not change its character.

State of Texas v. Anderson, Clayton & Co., 92 F.2d 104, 107 (5th Cir.) (shipper intended cotton for export when cotton sent from Rochester, Texas to Houston; thus not an intrastate shipment), cert. denied, 302 U.S. 747, 58 S.Ct. 265, 82 L.Ed. 578 (1937).

A significant case on point applying the "intent" test is North Carolina Utilities Commission v. United States, 253 F.Supp. 930 (E.D.N.C.1966) (three-judge district court). In NCUC, a retail hardware chain received an order of iron and steel products from Belgium for distribution to eight retail stores located in various inland North Carolina cities. The order arrived by ocean carrier at the port of Wilmington, N.C. and was stored in facilities owned by the State Ports Authority for several days while the retail chain conducted an updated inventory needs determination at its various outlets. The goods then were loaded onto trucks and shipped under new bills of lading to each of the eight stores. The issue before the Court was whether the transportation by truck from Wilmington to the various inland cities was intrastate or a "continuation of foreign commerce."

The Court applied a totality of the circumstances test, see Atlantic Coast Line R.R. Co. v. Standard Oil Co., 275 U.S. 257, 268-69, 48 S.Ct. 107, 110, 72 L.Ed. 270, 275 (1927), and held that the truck shipments represented a "continuation of foreign commerce" because they were intended to be part of the larger Belgium to inland North Carolina import shipment. Significant factors relied on by the Court were that the retailer owned no distribution or storage facility in Wilmington; the goods were held in Wilmington in a state-owned warehouse for periods of usually not more than three days; the retailer owned no retail outlets in Wilmington; and no ad valorem tax was paid on the goods as they were temporarily stored in Wilmington. 253 F.Supp. at 936. In short, the retailer intended the goods to come to rest at its inland stores; it served no purpose for the goods to be in Wilmington other than for the retailer to conduct a brief inventory and then forward the goods to their intended destinations. "Wilmington ... is but a mere link in the chain of foreign commerce that continues until the goods have arrived at their intended destination, that is, at the individual ... stores." Id.

In our case, it cannot be disputed that the shipment was intended to begin in Switzerland and end in LaGrange, Georgia. There was no reason for the container to come to rest in Savannah other than for the consignee's customs broker to make arrangements for the Savannah to LaGrange leg of the journey. Applying the "intent" analysis, the fact that Watkins issued a separate bill of lading for the final intrastate leg of the journey is not significant. See Erie R.R. Co., 280 U.S. at 102, 50 S.Ct. at 53, 74 L.Ed. at 207 ("[The character of the shipment] is not affected by the fact that the transaction is ... completed under a local bill of lading which is wholly intrastate...."). Thus, the shipment was a "continuation of foreign commerce," the Carmack Amendment applied to the shipment, and the statute of limitations and the tariff on file with the ICC bars Swift's claim.

Swift also argues that, under the reasoning contained in Reider v. Thompson, 339 U.S. 113, 70 S.Ct. 499, 94 L.Ed. 698 (1950), the Carmack Amendment does not apply to this shipment. In Reider, a railroad received a shipment of wool at New Orleans for transportation to Boston and it issued a through bill of lading for the shipment. When the shipment arrived in a damaged condition in Boston, the shipper sued the railroad under the Carmack Amendment. While ordinarily there would be no question but that the Carmack Amendment applied to the interstate shipment from New Orleans to Boston, the case was complicated by the fact the wool was originally transported to New Orleans via steamship from Buenos Aires, Argentina. The railroad argued that the domestic railroad leg of the shipment was merely a portion of a "through foreign shipment" conducted under a "supplemental bill of lading," and the Carmack Amendment did not apply to such a foreign shipment. See ...