Fluence Energy, LLC v. M/V BBC Fin.
| Decision Date | 08 February 2022 |
| Docket Number | 3:21-cv-01239-BEN-JLB |
| Parties | FLUENCE ENERGY, LLC, a Delaware limited liability company, Plaintiff, v. M/V BBC FINLAND, bearing International Maritime Organization No. 9593684 the “Vessel”, its cargo, apparel, tackle, and appurtenances, etc. in rem, Defendant. |
| Court | U.S. District Court — Southern District of California |
Plaintiff FLUENCE ENERGY, LLC, a Delaware limited liability company (“Fluence”) brings its Verified Complaint, in rem, against Defendant M/V BBC FINLAND, bearing International Maritime Organization No. 9593684 (the “Vessel”), its cargo, apparel, tackle, etc., in rem, for breach of a maritime contract and negligence, seeking arrest and money damages. See Complaint, ECF No. 1 (“Compl.”).
Before the Court is Claimant Briese Schiffahrts GmbH & Co. KG MS Filsum's (“Owner”) Motion to Vacate the Arrest of the Vessel and Dismiss the Case (the “Motion”). Owner brings the Motion pursuant to Rule E(4)(f) of the Supplemental Rules for Admiralty or Maritime Claims of the Federal Rules of Civil Procedure (“Rule E(4)(f)”). After considering the papers submitted, supporting documentation, the parties' oral arguments, and applicable law, the Court DENIES (1) Owner's Motion to Vacate the Arrest of the Vessel, ECF No. 40-1; and (2) Owner's Motion to Dismiss the Case, ECF No. 40-1.
Fluence alleges breach of maritime contract and negligence resulting from damage to marine cargo aboard the Vessel, occurring while in route from Hai Phong, Vietnam to San Diego, California. Compl. at 3[1], ¶ 10; 8, ¶ 42; 9, ¶ 49.
Fluence “provides grid-scale, industrial-strength energy storage by lithium batteries, referred to as Gen6 Cubes (“Cubes”).” Compl. at 2 ¶ 5. The Cubes are manufactured in Vietnam, packed into containers, and shipped to the United States. Id. at 2-3, ¶ 5.
“On February 25, 2021, Fluence . . . contracted with DB Schenker (“DBS”) to serve as a Non-Vessel-Operating Common Carrier [(“NVOCC”)] in booking the loading, stowage, and carriage of the cargo[3]. . . and preparing the necessary shipping contracts with the Vessel interests.” Id. at 4, ¶ 14. Pursuant to “the contract of carriage, DBS agreed to ship the cargo . . . from the” Hai Phong port to locations in California. Id. at 5, ¶ 17.
“Between February and April 2021 . . . the Cargo [was transported] by truck in 333 containers from the[] Vietnam factory to the [port in] Hai Phong . . . .” Id. at 4, ¶ 15. On April 15, 2021, the Cubes were properly loaded in apparent good order and condition at the Hai Phong port for carriage to San Diego, California. Id. at 3, ¶ 10; 7, ¶ 39. Fluence alleges the total value of the cargo aboard the Vessel was $109, 677, 308.50. Id. at 5, ¶ 22.
Also on April 15, 2021, “DBS entered into four written maritime contracts titled ‘SCHENKERocean Non-Negotiable SEA WAYBILL for Combined Transport . . . .'” (the “Sea Waybills”), wherein DBS agreed to accept and safely load and carry Fluence's Cargo aboard the Vessel. Id. at 5, ¶19. DBS agreed to “discharge the Cargo at San Diego, California . . . .” Id. Fluence's Cargo was the only cargo carried aboard the Vessel for that voyage. Id. at 5, ¶ 20. The Vessel “had the non-delegable duty to safely load, stow, carry, and deliver the Cargo in good order and condition to San Diego in accordance with the terms and conditions of the Sea Waybills.” Id. Fluence signed the Non-Negotiable Sea Waybill, which redacts the Shipper/Exporter for reasons not explained to the Court but shows the Vessel as the BBC Finland; the port of loading as Hai Phong, Vietnam; and the port of discharge as San Diego, California. Exhibit 1 to Compl., [4] ECF No. 1-2 at 2.
On April 28, 2021, “rolling, pitching, and pounding with persistent heavy sea spray over the deck” of the Vessel was reported, causing the Vessel to make course and speed changes. Compl. at 6, ¶ 23. “Because of a subsequent report of smoke in the cargo holds, the Vessel . . . .” diverted to Aomori, Japan to assess for damage. Id. at 6, ¶ 24.
The Vessel arrived in Japan on May 8, 2021. Id. at 6, ¶ 25. “Upon arrival at the pier, the Vessel's interests and surveyors . . . investigate[d] the scope of damage to the Cargo.” Id. “All containers were discharged . . . for inspection . . . to assess any damage to the containers and the potential need for salvage, repacking, and continued transshipment.” Id. at 6, ¶ 27. Fluence alleges “the attending surveyors indicated that a cause of the collapsed and damaged containers in the Vessel's holds was due to improper usage of twist locks and insufficient lashing to the containers . . . .” Id. at 6, ¶ 28. An estimated 179 of 333 containers holding the Cargo suffered some damage, with an estimated 87 containers deemed damaged to the extent they could not safely be reloaded. Id. at 6, ¶ 29. Consequently, 87 containers remain in Japan. Id. at 7, ¶ 30.
On June 18, 2021, the Vessel left Aomori, Japan for San Diego, California but the Vessel was only partially loaded and therefore, “short the number of containers contracted for in the Sea Waybills.” Id. at 7, ¶ 33. On or about July 8, 2021, the Vessel arrived in San Diego, California. ECF No. 7 at 7. Fluence estimates $30 million in damages to the Cargo caused by the Vessel, depending on the results of inspection. Compl. at 7, ¶ 35.
On February 25, 2021, Fluence and DB Schenker[5] entered into a contract of affreightment, [6] in which DB Schenker agreed to move Fluence's Cargo from Hai Phong, Vietnam to San Diego, California. Declaration of Mattias Becker, ECF No. 50 (“Becker Decl.”) at 2, ¶ 4; see also ECF No. 51 (“Oppo.”) at 9; Compl. at 4. ¶ 14.
On March 1, 2021, DB Schenker entered into a charter party or contract of affreightment, the “Booking Note, ” with BBC Chartering Carrier GmbH & Co. KG (“BBC”).[7] Declaration of Thomas Bock, ECF No. 40-3 (“Bock Decl.”) at 2-3, ¶ 6; Exhibit A to Bock Decl.; Declaration of Matthew P. Vafidis, ECF No. 48 (“Vafidis Decl.”) at 3, ¶ 10; Exhibit D to Vafidis Decl.; see also Motion at 6; Oppo. at 9. The Booking Note arranged for the Vessel to carry an unspecified amount (but no less than 250 Cubes) of Fluence's Cargo. Exhibit A to Bock Decl. at 5; Exhibit D to Vafidis Decl. at 59.; see also Motion at 6. On April 1, 2021, DB Schenker and BBC executed an Addendum to the Booking Note, which provided specifics on the Cargo being shipped. Exhibit E to Vafidis Decl. at 65; see also Oppo at 9. Special Clause B(i) of the Booking Note reads:
In case the Contract evidenced by this Bill of Lading covers a shipment to or from a port in the United States, including any U.S. territory, the U.S. Carriage of Goods by Sea Act of the United States of America 1936 (U.S. COGSA) shall apply . . . . In the event that U.S. COGSA applies, then the carrier may, at the Carrier's election commence suit in a court of proper jurisdiction in the United States in which case this court shall have exclusive jurisdiction.
Exhibit A to Bock Decl. at 7; Exhibit D to Vafidis Decl. at 61.
On April 13 and 14, 2021, Fluence's Cargo was loaded on the Vessel in Haiphong, Vietnam. Becker Decl. at 3, ¶ 7; Exhibit A to Becker Decl. at 5; see also Oppo. at 9. Also on April 14, 2021, BBC issued four bills of lading (the “Bills of Lading”), which named Fluence as the shipper, BBC as the carrier, and Schenker, Inc. as the consignee (or freight forwarder). Bock Decl. at 3, ¶ 7; Exhibit B to Bock Decl. at 11, 16, 22, 25; Vafidis Decl. at 3, ¶ 9; Exhibit C to Vafidis Decl. at 41, 46, 52, 55; see also Motion at 6. Special Clause B(iv) of the Bills of Lading included the following terms:
Whenever the U.S. COGSA applies, whether by virtue of carriage of cargo to or from the U.S. or otherwise, any dispute arising out of or in connection with the Contract of carriage evidenced by this Bill of Lading shall be exclusively determined by the United States District Court for the Southern District of Texas, and in accordance with the laws of the United States. Merchant further agrees to submit to the jurisdiction of the Southern District of Texas and to waive any and all objections to venue.
Exhibit B to Bock Decl. at 12, 17, 23, 26; Exhibit C to Vafidis Decl. at 42, 47, 53, 56.
On April 15, 2021, DB Schenker (through Schenker Deutschland AG) issued four Sea Waybills on behalf of NVOCC and affiliate entity, SchenkerOcean. Becker Decl. at 3, ¶ 8; Exhibit B to Becker Decl.; see also Oppo. at 10.
On July 8, 2021, Fluence filed suit alleging (1) breach of maritime contract of carriage and (2) negligence. Compl. at 7-9. On the same day, Fluence filed two Ex Parte Applications requesting the Court arrest the Vessel, appoint a substitute custodian, and permit normal operations of the Vessel while under arrest. ECF Nos. 5, 6. On July 9, 2021, this Court granted in part Fluence's Ex Parte Applications, authorizing the arrest of the Vessel and allowing for normal operations while under arrest, but denying appointment of a substitute custodian. ECF No. 7.
On July 16, 2021, Fluence and Owner filed a Joint Motion to Appoint a Substitute Custodian and a Joint Motion to Release the Vessel From Arrest. ECF Nos. 16, 19. The Court granted both Motions. ECF Nos. 18, 21.
On August 13, 2021, the Vessel answered Fluence's Complaint, listing forum non conveniens and improper venue as affirmative defenses. ECF No. 26 at 7-8, ¶¶ 17, 18. The Vessel based these assertions on the terms of the Bills of Lading. Id. at 7, ¶ 17.
On October 15, 2021,...
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