Seguros Comercial Americas v. AMERICAN PRES. LINES

• Decision Date: 04 October 1995
• Docket Number: Civil Action No. H-95-1488.
• Citation: 910 F. Supp. 1235
• Parties: SEGUROS COMERCIAL AMERICAS S.A. de C.V., Plaintiff, v. AMERICAN PRESIDENT LINES, LTD., Defendant.
• Court: U.S. District Court — Southern District of Texas

910 F. Supp. 1235

SEGUROS COMERCIAL AMERICAS S.A. de C.V., Plaintiff, v. AMERICAN PRESIDENT LINES, LTD., Defendant.

Civil Action No. H-95-1488.

United States District Court, S.D. Texas, Houston Division.

October 4, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Dana Keith Martin, John Thomas Beard, Hill, Rivkins, Loesberg, Houston, TX, for plaintiff.

Gus A. Schill, Jr., Charles S. Kinzel, Trevor R. Jefferies, Royston, Rayzor, Houston, TX, for defendant.

MEMORANDUM AND ORDER

LAKE, District Judge.

I. Factual and Procedural History

This action involves the intended shipment of Reebok Tennis shoes, from Jakarta, Indonesia, to Leon, Mexico. The shipper was Reebok International, Ltd., a multinational company with offices worldwide. The consignee was RBK International (Mexico), S.A. de C.V. The plaintiff, Seguros Comercial America, S.A. de C.V. ("Seguros"), a Mexican insurance company, is the subrogee of RBK International (Mexico). The carrier is American President Lines, Ltd. ("APL"), a Delaware corporation with headquarters in California.

On January 17, 1994, APL issued a through bill of lading covering the contents of a container of 795 packages of footwear. The cargo was first shipped from Jakarta to Singapore aboard the M/V FAIRY EAGLE and then transferred to the M/V OOCL FAME for ocean transport to Long Beach, California. Once in California the cargo was discharged for overland transport to Leon, Mexico. The cargo proceeded by rail aboard Southern Pacific Railroad to San Antonio, Texas, and then by truck to Laredo, Texas. From Laredo a second trucker took the cargo to Nuevo Laredo, Mexico. Once in Mexico the goods were placed aboard a long-haul Mexican trucker, Transportes Lar-Mex ("TLM"), with Leon as the intended destination. During this trip the truck was hijacked by bandits near San Luis Potosi, Mexico. Mexican authorities investigated the crime but the cargo has not been recovered.

The carrier for each leg of the journey was either APL or a carrier selected and paid by APL. As a result, Seguros Comercial, the insurer and subrogee of RBK International (Mexico), sued APL in San Antonio for negligence in failing to provide adequate security for the transit in Mexico, for negligent entrustment of the goods to TLM during the carriage, for negligence under res ipsa loquitur, and for negligent bailment.¹ APL removed the case to the United States District Court, Western District of Texas, San Antonio Division, and venue was transferred to this court on May 3, 1995. Pending before the court is APL's Motion to Dismiss Based on Forum Non Conveniens (Docket Entry No. 17) to which Seguros has replied (Docket Entry No. 22).

II. Applicability of 49 U.S.C. § 11707 & 46 U.S.C.App. § 1300

As a preliminary matter the court must deal with Seguros' contention that either the Carmack Amendment, 49 U.S.C. § 11707 et seq., or the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.App. § 1300 et seq., requires the court to exercise jurisdiction over this case.

A. Carmack Amendment

The Carmack Amendment is an amendment to the Interstate Commerce Act that imposes liability on certain carriers for the loss of goods. 49 U.S.C. § 11707; see Reider v. Thompson, 339 U.S. 113, 70 S.Ct. 499, 94 L.Ed. 698 (1950). It applies to "a common carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission under subchapter I, II, or IV of chapter 105 of this title." 49 U.S.C. § 11707(a)(1). This jurisdiction does not extend to shipments by water, rail or motor carriers from a foreign country to the United States, see 49 U.S.C. §§ 10501, 10521, and 10561, unless a domestic segment of the shipment is covered by a separate domestic bill of lading for paid consideration. Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 703 (4th Cir.1993); Capitol Converting Equipment, Inc. v. LEP Transport, Inc., 965 F.2d 391, 394 (7th Cir. 1992). A bill of lading issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States is termed a "through" bill of lading. Id. Because a through bill of lading includes no separate domestic segment, the Carmack Amendment does not apply to such shipments. See id.; Tokio Marine & Fire Ins. Co. v. Hyundai Merchant Marine Co., 717 F.Supp. 1307, 1309 (N.D.Ill.1989); Fine Foliage of Florida, Inc. v. Bowman Trans., Inc., 698 F.Supp. 1566, 1571 (M.D.Fla.1988), aff'd, 901 F.2d 1034 (11th Cir.1990). See also Reider, 339 U.S. at 115-16, 70 S.Ct. at 501 (earlier version of Carmack Amendment does not cover goods shipped under a through bill of lading issued in a foreign country).

Whether a bill of lading is a through bill of lading is predominately a question of fact. LEP Transport, 965 F.2d at 394. The relevant factors include whether the final destination is designated on the bill of lading, the method by which the connecting carriers are compensated, and, more generally, the conduct of the carriers. Tokio Marine, 717 F.Supp. at 1309. Although in this case the final destination of the shipment was Mexico, not the United States, the analysis is the same. The test is where the obligation of the carrier as receiving carrier originated. See Reider, 339 U.S. at 117-18, 70 S.Ct. at 502. Here, APL's obligation originated in Indonesia and continued to Leon, Mexico.² The bill of lading recites that the "place of receipt is Jakarta," and the "place of delivery is Leon, Mexico."³ "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." State of Texas v. Anderson, Clayton & Co., 92 F.2d 104, 105 (5th Cir.), cert. denied, 302 U.S. 747, 58 S.Ct. 265, 82 L.Ed. 578 (1937).

Seguros' attempt to contradict the terms of the bill of lading by deposition testimony and by isolated language from APL's tracking papers that followed the movement of the cargo are not persuasive. The tracking papers clearly denote a carriage by through bill of lading.⁴ Plaintiff attempts to show by the deposition testimony of APL's Laredo employee, John M. Doran, that the through bill of lading governed only the land portion of this shipment, and was thus separate from the bill of lading that governed the ocean voyage.⁵ There is no evidence that a separate bill of lading was issued for the transit across the United States,⁶ however, and it is clear that Doran's deposition testimony refers not to any bill of lading, but to columns in APL's tracking records.⁷

The Tokio Marine indicia provide further evidence that a through bill of lading governed this shipment. The face of the bill of lading contains the final destination of Leon, Mexico. The connecting carriers are compensated by APL directly,⁸ and the carriers acted as contractors of APL and did not deal directly with RBK International (Mexico).⁹ See Tokio Marine, 717 F.Supp. at 1309. Because the court concludes that the shipment was governed by a through bill of lading it is not subject to the Carmack Amendment.

B. COGSA

The COGSA governs all bills of lading evidencing the contract of "carriage of goods by sea ... to ports of the United States, in foreign trade." 46 U.S.C.App. § 1300. The Act permits carriers to limit their liability to $500 per package:

Neither the carrier nor the shipper shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package ... unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

46 U.S.C.App. § 1304(5). This limitation protects carriers who are often unaware of the value of goods they ship and effectively requires shippers to bargain for greater protection. Tokio Marine, 717 F.Supp. at 1308; Ulrich Ammann Building Equip., Ltd. v. M/V Monsun, 609 F.Supp. 87, 89 (S.D.N.Y. 1985). Although COGSA normally covers "the period from the time when the goods are loaded on to the time when they are discharged from the ship," 46 U.S.C.App. § 1301(e), the provisions of COGSA may contractually be extended after the discharge of cargo from a ship. Toshiba Int'l Corp. v. M/V Sea-Land Express, 841 F.Supp. 123, 125 (S.D.N.Y.1994). Such an extension of COGSA is valid if evidenced in the bill of lading. Id.; Tokio Marine, 717 F.Supp. at 1310; cf. Mori Seiki USA, Inc. v. M/V Shin Kashu Maru, 702 F.Supp. 613, 614 (N.D.Tex. 1988) ("Parties to a bill of lading may extend its contractual benefits to a third party if they clearly express their intent to do so."). When so extended, the incorporated COGSA provisions only function as contractual terms and not otherwise by force of law. Croft & Scully Co. v. M/V Skulptor Vuchetich, 664 F.2d 1277, 1280 & n. 8 (5th Cir.1982) ("When COGSA does not apply of its own force but is incorporated into a maritime contract by reference, it does not have `statute rank;' rather, it is merely part of the contract, a term like any other."); Seguros Illimani S.A. v. M/V POPI P, 929 F.2d 89, 93 (2d Cir.1991) (accord); Toshiba Int'l, 841 F.Supp. at 125 (accord).

The Second, Third, Fourth, Fifth, and Ninth Circuits have held that contractual terms in a bill of lading that are inconsistent with COGSA control when COGSA is applied only by contract. See, e.g., Pannell v. U.S. Lines Co., 263 F.2d 497, 498 (2d Cir.) (definition of the term "package" that appeared in the bill of lading controlled over an inconsistent definition in COGSA), cert. denied, 359 U.S. 1013, 79 S.Ct. 1151, 3 L.Ed.2d 1037 (1959); PPG Indus., Inc. v. Ashland Oil Co.—Thomas Petroleum Transit Div., 527 F.2d 502, 507 (3d Cir.1975) (parties could have extended, but neglected to do so, COGSA's statute of limitations...