MSC Mediterranean Shipping Co. v. Airlift Marine Servs. PVT Ltd.

• Decision Date: 13 January 2022
• Docket Number: 18 Civ. 10788 (JPC) (OTW)
• Citation: 579 F.Supp.3d 484
• Parties: MSC MEDITERRANEAN SHIPPING COMPANY S.A., Plaintiff, v. AIRLIFT MARINE SERVICES PVT LTD. and Airlift (U.S.A.), Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

579 F.Supp.3d 484

MSC MEDITERRANEAN SHIPPING COMPANY S.A., Plaintiff,

v.AIRLIFT MARINE SERVICES PVT LTD. and Airlift (U.S.A.), Inc., Defendants.

18 Civ. 10788 (JPC) (OTW)

United States District Court, S.D. New York.

Signed January 13, 2022

Randolph H. Donatelli, Lyons & Flood, LLP, Great Neck, NY, for Plaintiff.

Marc Ian Kunkin, Teresa H. Dooley, Casey & Barnett, LLC, New York, NY, for Defendant Airlift (U.S.A.), Inc.

Airlift Marine Services PVT Ltd., Pro Se.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

JOHN P. CRONAN, United States District Judge:

On May 13, 2015, Brian Diver was seriously injured at work when a bundle of large granite slabs crushed him as he unloaded a shipping container. Diver filed suit in New Jersey state court against several entities involved in the transportation of that cargo, including Plaintiff MSC Mediterranean Shipping Company S.A. ("MSC"), the carrier that transported the container across the Atlantic Ocean. MSC later settled with Diver, and now seeks indemnification from the company that arranged for its trans-Atlantic carriage, Defendant Airlift (U.S.A.) Inc. ("Airlift USA"). Following a bench trial on written submission, the Court finds that MSC's bill of lading with Airlift USA requires indemnification under these circumstances, and awards MSC $888,682.81 in damages, including attorneys’ fees and disbursements from the New Jersey litigation, plus prejudgment interest in the amount of $44,392.03.

I. Findings of Fact

"In an action tried on the facts without a jury," the Court "find[s] the facts specially and state[s] its conclusions of law separately." Fed. R. Civ. P. 52(a)(1). "As with any civil case, the plaintiff bears the burden of proving the elements of [the plaintiff's] claim by a preponderance of the evidence.... [I]t is within the province of the district court as the trier of fact to decide which testimony should be credited." Wilson v. Calderon , 367 F. Supp. 3d 192, 195-96 (S.D.N.Y. 2019) (internal quotations and citations omitted).

A. The Container's Journey

MSC is an "ocean common carrier of cargo," while Airlift USA is a "non-vessel-operating common carrier," or NVOCC. Dkt. 116 ("Stipulated Facts") ¶¶ 1-2. An NVOCC acts as a middleman between shippers and ocean common carriers "that arrange[s] for shippers the transportation of cargo aboard a vessel." Scholastic Inc. v. M/V KITANO , 362 F. Supp. 2d 449, 456 (S.D.N.Y. 2005). "In a run-of-the-mill shipping transaction, the actual shipper will arrange for the shipment of good through an NVOCC, who will issue its own ‘house’ bill of lading to its customer [i.e. , the shipper]. The NVOCC will arrange for the shipment of goods with a steamship line ... who will issue a bill of lading covering the goods shipped."

Fubon Ins. Co. Ltd. v. OHL Int'l , No. 12 Civ. 5035 (RJS), 2014 WL 1383604, at *2 (S.D.N.Y. Mar. 31, 2014) (citation omitted). "A ‘bill of lading’ is the primary contractual document between a shipper and a carrier." Laufer Grp. Int'l v. Standard Furniture Mfg. Co. , No. 19 Civ. 10885 (JPO), 2020 WL 4735123, at *3 n.1 (S.D.N.Y. Aug. 14, 2020).

Pacific Granite (India) sold granite slabs to Pacific Granite Inc., which resold them to Elite Stone Importers, an importer and distributor of granite and marble in Tinton Falls, New Jersey. Stipulated Facts ¶ 22; R. 566.¹ On April 11, 2015, Airlift USA issued a bill of lading for the transit of those slabs from Mundra, India to New York. R. 39.² The Shipper is listed as Pacific Granite (India), the Consignee as Pacific Granite Inc., and the Notify Party as Elite Stone Importers. Id.

At the time of the shipment, Airlift USA had a service contract with MSC. Stipulated Facts ¶ 23. That service contract provides that "shipments made hereunder shall be subject ... to the terms and conditions of MSC's bill of lading, and all said provisions are hereby incorporated in this Contract by reference." R. 34. On April 12, 2015, MSC issued a bill of lading (the "Bill of Lading") for trans-Atlantic carriage of the granite slabs from Mundra to New York City. Stipulated Facts ¶ 15; R. 16. The Bill of Lading lists Defendant Airlift Marine Services PVT Ltd. ("Airlift Marine") of Chennai, India as the Shipper and Airlift USA as both the Consignee and the Notify Party. R. 16. The Bill of Lading further describes the items to be shipped as eight packages of "polished [and] leathered random slabs," with a "shipped on board date" of April 12, 2015. Id. (capitalization changed).

To protect the granite slabs during transportation and to facilitate their handling, Pacific Granite (India) packed the slabs into wooden bundles before placing them in a container sub-leased to MSC. Stipulated Facts ¶¶ 19, 22. Under the sub-lease, MSC was responsible for the maintenance and repair of the container. Id. ¶ 20. After the ocean journey on MSC's vessel, G&G Transport Services, a transportation company hired by Elite Stone Importers, delivered the container of slabs by truck from the port in New York City to Elite Stone Importers's facility in Tinton Falls, New Jersey. Id. ¶ 18. Airlift USA, as the NVOCC, never took physical possession of the cargo or its container. Id. ¶ 17.

Brian Diver had worked for Elite Stone Importers since 2011, and his duties included unpacking cargo from arriving containers. R. 259. On May 13, 2015, following G&G Transport Services's delivery of the container of granite slabs to the Tinton Falls facility, Diver began to unpack the container. Stipulated Facts ¶ 3; R. 130-31. As he inspected some of the slabs in the container, one of the bundles toppled, crushing him. R. 131, 175-76. Diver was trapped underneath the granite slabs for approximately five hours and had to be extracted on a stretcher through a hole cut into the side of the container, with assistance from a local hospital's trauma team. R. 190-91. He suffered serious injuries to his face, right arm, and other parts of his body. R. 922.

B. The Cause of the Accident

During discovery in the New Jersey litigation, three primary theories of causation for Diver's injuries were explored: (1) poor packing of the bundles of slabs, (2) a defect in the floor of the shipping container, and (3) an unstable chassis³ supporting the shipping container. The Court runs through the evidence supporting each theory in turn.

Diver repeatedly testified at his two depositions that the slabs in the container were poorly packed. See, e.g., R. 132 (The bundle came from "India ... [a]nd not one of our better packing India [sic]."); R. 136 ("[T]his was a poorly packed container."); R. 140 (When inspecting the container, "I noticed how poorly packed this really was."); R. 142 (When considering which bundle to take out first, "I recall thinking ... they're all that bad [i.e. , poorly packed]."); R. 228 (The container was "in the ... top 10 or 15" "most poorly packed container[s]" Diver had ever unloaded.). The packing flaws that Diver noticed included mismatched nuts and bolts clinching the dunnage together, a nail insufficiently hammered to secure its board, and a joint that was not properly toe-nailed, which is a technique used to stabilize boards. R. 301-02. Diver commented that "[i]t seem[ed] whoever was packing this was never trained in any way, shape or form to use tools." R. 302. Diver explained that such loose, unsecured packing is dangerous: "[I]f the [slabs] were cinched tight together and they're flat on the bottom, as long as everything is held together, they should stand up straight and stay that way. When they're loose, any little jiggle and they can go either way; left, right." R. 305-06. Following his usual practice of documenting concerns to protect Elite Stone Importers in the event of damage or a dispute, Diver photographed what he considered to be defective packing before starting to unload. R. 283-84, 301-02, 307-08.

Both Diver and MSC retained expert witnesses in the New Jersey litigation to opine on the packing of the granite slabs. Diver retained Dr. Sher Paul Singh, a Professor Emeritus of Packaging at Michigan State University with experience consulting on packaging, transportation, and material handling. R. 932-39. Dr. Singh opined that the "loads had a high degree of instability" and "were neither properly packaged nor secured ... [in compliance with] federal and international regulations [and] ... industry practices in the United States." R. 933-34. He explained that the granite was shipped vertically and with "clamping mechanism[s] of wood and metal," rather than in crates, which resulted in "top-heavy ... and extremely unstable loads." R. 955-56, 963.

MSC retained Captain Philip I. Anderson, the Chief of the Technical Department at the National Cargo Bureau. R. 1057. Captain Anderson agreed with Dr. Singh that "the packaging was deficient ... because of [its] loose components" and was not compliant with recognized standards. R. 1066. According to Captain Anderson, the slabs’ poor packing and high center of gravity gave them "a tendency ... to lean," and thus made them "likely to collapse and topple with minimal disturbance." Id. He claimed, though, and contrary to Dr. Singh, that the general packing method the shipper used is common, albeit poorly applied in this case, which "resulted in the creation of loose, unstable[ ] bundles." R. 1071.

Diver also testified that the floor of the shipping containers had "[p]lywood patches," "uneven edges at the seams, [and] uneven height on the edges of the seams." R. 162. Diver recalled that as he approached the bundles inside the shipping container, "the floor was a bit spongy," and stepping on it "caused the wood that was supporting" the bundles to fall. R. 131; see also R. 287-88 (explaining that by "spongy," Diver meant "[b]ouncy" due to poor fastening). In other words, "stepping too close" to the bundle "bounced [it] or something." R. 131; see also R. 175 (describing his suspicion, "[w]ith[out] 100 percent certainty," that "[s]tepping on the spongy floor released enough pressure to make the wood...