Binladen BSB Landscaping v. M.V. Nedlloyd Rotterdam, Her Engines, Boilers, Etc., Nedlloyd Lijnen B.V. (Nedlloyd Lines)
| Decision Date | 03 April 1985 |
| Docket Number | D,No. 463,463 |
| Citation | 759 F.2d 1006 |
| Parties | BINLADEN BSB LANDSCAPING, Plaintiff-Appellee, v. M.V. "NEDLLOYD ROTTERDAM", HER ENGINES, BOILERS, ETC., NEDLLOYD LIJNEN B.V. (NEDLLOYD LINES), Defendant-Appellant. ocket 84-7710. |
| Court | U.S. Court of Appeals — Second Circuit |
J. Scot Provan, New York City (Richard H. Sommer, Arthur E. Hoffmann, Jr., Esq., Kirlin, Campbell & Keating, New York City, of counsel), for defendant-appellant.
John E. Cone, Jr., New York City (William R. Connor III, Helen M. Benzie, Lawrence B. Brennan, Bigham Englar Jones & Houston, New York City, of counsel), for plaintiff-appellee.
Before MANSFIELD, OAKES and NEWMAN, Circuit Judges.
We are once again called upon to interpret Sec. 4(5) of the Carriage of Goods by Sea Act, 46 U.S.C. Sec. 1304(5) (1982) ("COGSA" or "the Act"), which limits the carrier's and ship's liability to "$500 per package ..., or in case of goods not shipped in packages, per customary freight unit," unless the shipper explicitly declares a higher value. Appellant here, a Netherlands ocean carrier, appeals from a judgment of the Southern District of New York awarding $80,332.00 damages against it after a bench trial before Judge Abraham D. Sofaer, based on its role in the untimely death of more than 10,000 plants shipped overseas in two containers on board its ship, the M.V. "Nedlloyd Rotterdam." The district court applied the $500 "per package" limit of Sec. 4(5). We hold instead that the plants were "goods not shipped in packages" within the meaning of the Act and accordingly reverse and remand the case for a determination of damages limited to $500 "per customary freight unit" used in shipments of this type.
In June 1980, appellee Binladen BSB Landscaping ("Binladen"), a Swiss company, contracted with appellant Nedlloyd Lijnen B.V. ("Nedlloyd") to ship ten refrigerated containers loaded with plants from two locations in the United States to Saudi Arabia, where the plants were to adorn the palace grounds of that country's crown prince, who is now its king. Binladen and its agents packed and filled the containers, which were delivered to Nedlloyd and loaded on the M.V. "Nedlloyd Rotterdam," a fully containerized vessel, for the journey.
Although most of the plants in eight of the ten containers arrived in Saudi Arabia intact and healthy, those within the remaining two containers were brittle and lifeless when opened and inspected by a Binladen employee in Jeddah.
In early 1982 Binladen brought a maritime action in the Southern District of New York for damages against Nedlloyd and against the M.V. "Nedlloyd Rotterdam." 1 Nedlloyd denied responsibility for the plants' death and also asserted an affirmative defense based on the limited liability provision of COGSA. In a pretrial memorandum of law Nedlloyd argued that neither container carried "packages"; rather, it contended, each of the two containers was a "package" in which the plants inside were shipped. Nedlloyd therefore claimed that its liability was limited to $500 per container. Alternatively it proposed that the plants were "goods not shipped in packages" and that its liability accordingly must be limited to $500 per customary freight unit, which it contended was also the container. Binladen counter-argued that the plants were individually prepared for shipping and that each therefore counted as a package under COGSA. It also argued that deficiencies in Nedlloyd's bill of lading served to strip the carrier of the benefit of COGSA's liability limits.
At trial in 1984 before Judge Sofaer, virtually all of the six days of testimony was devoted to evidence on liability. Evidence pertaining to the COGSA limitations on liability came out almost entirely in the exhibits, including the bills of lading and several depositions submitted in evidence during the trial. The latter show that one of the containers whose contents perished was the single container shipped from Houston, number ITLU-720073-6. Its bill of lading described the contents as follows:
The other spoiled container had been shipped from Miami under a bill of lading that covered five containers. That bill described a similar type of shipment:
PARTICULARS FURNISHED BY THE SHIPPER
NO. OF PKGS. DESCRIPTION OF PACKAGES AND GOODS
Further itemization in the "Description" column listed the "NO. PCS." in the container in which plants died, SCXU-488906, as 2436.
Deposition testimony introduced at trial revealed that the Houston container was loaded chiefly with cacti and that the Miami container carried nearly twenty sorts of plants and trees. Although the parties agreed that the Miami plants were individually potted, 2 they disputed the nature of the packing of the plants in the Houston container.
The deposition testimony of Antonio Eduardo Ramirez, the owner of Garden World Nursery in Laredo and the individual who had loaded the Houston container, included an item-by-item breakdown of the packing methods used. Read in conjunction with the nursery invoices for the sale, this testimony revealed that approximately 2,000 items were individually boxed, tied, or wrapped, more than 2,000 others had been boxed or tied in an unspecified manner, and the remainder had simply been stacked into piles. 3 Ramirez indicated that large sheets of cardboard, approximately 2 1/2' by 4', had been used to separate different kinds of plants and different sections of the container
Except for reference to the number of containers and plants, none of the foregoing information appeared on the bills of lading. Moreover, the deposition testimony of Philip Elsazsser, the former Binladen employee who had inspected the sorry cargo The bills of lading setting forth the shipping contracts between Binladen and Nedlloyd were on the standard form employed by Nedlloyd. These forms, in small print on the back, included a "U.S.A. CLAUSE" that expressly incorporated the provisions of COGSA, although it did not explicitly recite the $500 package limit. A blank space on the front of each bill of lading was labeled "EXCESS VALUATION" and referred the reader to a clause on the reverse side setting forth a pounds sterling100 sterling liability limit per package or unit. Still another provision limited liability to $2 per kilo gross weight. The parties stipulated that Binladen prepaid to Nedlloyd $14,245.36 each for the five refrigerated containers shipped from Miami under the one bill of lading and $15,420.50 for the transport of the refrigerated container shipped from Houston.
remnants in Jeddah and who had actually walked through the Houston container, related that he saw no individual pots or boxes in that container. In support of that testimony, Binladen offered photographs taken by Elsazsser during the inspection. No boxes or individual wrapping or tying are evident in these photographs.
Judge Sofaer found that the carrier had failed to ensure that the proper temperatures, humidity and ventilation conditions were maintained in the containers during the voyage, and he therefore held Nedlloyd responsible for the loss. 593 F.Supp. 546 at 547-50 (1984). Having found Nedlloyd liable, Judge Sofaer then turned to the question of damages and the application of the COGSA $500 per package limit on carrier liability. He did not mention or make findings concerning Binladen's claim that the COGSA limit on liability was wholly inapplicable. Instead, he found that because the "bills of lading disclose the contents of the containers" and because the "parties did not unambiguously agree on a definition of package," the two containers themselves were not "packages" under the Act. 593 F.Supp. at 550-51. The Judge further stated that "[e]ach plant in the two reefers was individually wrapped, potted or separated [and that] some were individually boxed." Id. at 551. He thereupon rejected Nedlloyd's argument that its liability should be limited to $500 per container and he awarded damages of $80,332.00 plus interest.
This appeal followed. On appeal, Nedlloyd does not dispute Judge Sofaer's conclusion on liability; it argues only that the Judge incorrectly awarded damages in excess of those permitted by COGSA's Sec. 4(5).
Since the enactment of COGSA half a century ago courts have struggled to interpret Sec. 4(5) of the Act, which drastically limits the liability of carriers and ships as follows:
In resolving disputes between shippers and carriers over the consequences of the $500 per package limit on carrier liability the principal difficulty has lain in defining the meaning and scope of the word "package," a term left undefined by Congress. That problem has been exacerbated by the adoption of new methods of preparing and assembling goods for shipment. Allied International American Eagle Trading...
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