St. Paul Fire and Marine v. Delta Air Lines
| Decision Date | 10 October 2008 |
| Docket Number | No. 07 Civ.1912(GWG).,07 Civ.1912(GWG). |
| Citation | 583 F.Supp.2d 466 |
| Parties | ST. PAUL FIRE AND MARINE INSURANCE COMPANY, as subrogee of Movers, Inc., Plaintiff, v. DELTA AIR LINES, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
James Paul Krauzlis, Badiak & Will, LLP, Mineola, NY, for Plaintiff.
Francis Allen Montbach, Michael Lane Calder, Mound Cotton Wollan & Green-grass, New York City, for Defendants.
St. Paul Fire and Marine Insurance Company ("St.Paul"), as subrogee of Movers, Inc., has sued Delta Air Lines, Inc. for damages arising out of 21 contracts for the interstate shipment of fresh seafood. Delta now moves for summary judgment on the ground that Movers' letters to Delta claiming loss did not provide Delta with adequate information. The parties have consented to disposition of this matter by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons stated below, Delta's motion is denied.
Movers is a freight forwarder that arranges for the interstate air shipment of seafood. See Deposition of David Beach 6:10-21, annexed as Ex. 3 to Affirmation in Support of Defendant's Motion for Summary Judgment, filed June 6, 2008 (Docket # 21) ("D.Aff."). For each of the 21 shipments of seafood at issue in this case, Delta issued an air waybill stating that the shipments "are subject to governing rates, rules and classifications stated in [Delta's] most recent ATPCO Tariff." See Ex. 1 to D. Aff. The rules in that tariff in effect at the time of the 21 shipments provided as follows:
G60 CLAIM PROCEDURE
(A) (Not applicable to/from Canada) All claims, including claims for overcharges, must be made to Delta in writing within sixty (60) days after the date of acceptance of the shipment by Delta.
Delta shall not be liable in any action brought to enforce a claim, except for overcharges, unless the provisions of Rule No. G60 have been complied with by the claimant, and unless such action is brought within two years from the date Delta accepted the shipment for transportation.
Ex. 2 to D. Aff. The tariff contains no further requirements for the contents of a claim.
Within 60 days of each of the 21 shipments, Movers sent a letter to Delta stating: "A problem has been experienced with the shipment." See Ex. 8 to D. Aff. Each letter provided the date and number of the air waybill, the destination, and the total dollar value of the shipment. Id. Each letter concluded with the following sentence: "This is to serve as notice of formal claim against you." Id.
Delta has moved for summary judgment asserting that St. Paul's claims are barred by the tariff's notice-of-claim provision.1
Rule 56(c) of the Federal Rules of Civil Procedure states that summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact "may reasonably be resolved in favor of either party" and thus should be left to the finder of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). There are no issues of fact in dispute with respect to the instant motion.
Actions for loss or damage to interstate air shipments are governed by federal common law. See, e.g., Nippon Fire & Marine Ins. Co. v. Skyway Freight Sys., Inc., 235 F.3d 53, 59 (2d Cir.2000); N. Am. Phillips Corp. v. Emery Air Freight Corp., 579 F.2d 229, 233-34 (2d Cir.1978); accord Arkwright-Boston Mfrs. Mut. Ins. Co. v. Great W. Airlines, Inc., 767 F.2d 425, 427 (8th Cir. 1985); First Pa. Bank, N.A. v. E. Airlines, Inc., 731 F.2d 1113, 1115-19 (3d Cir.1984). Thus, federal jurisdiction is properly based upon 28 U.S.C. § 1331, which "support[s] claims founded upon federal common law as well as those of a statutory origin." Illinois v. City of Milwaukee, 406 U.S. 91, 100, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972); Nippon, 235 F.3d at 59 n. 2.
Under federal common law, a notice-of-claim clause, such as the one contained in Delta's tariff, is enforceable as long as the time limit is not unreasonable. The West Arrow, 80 F.2d 853, 856 (2d Cir.1936); The J.L. Luckenbach, 65 F.2d 570, 573 (2d Cir.1933). The Supreme Court in Georgia, Florida & Alabama Railway v. Blish Milling Co., 241 U.S. 190, 36 S.Ct. 541, 60 L.Ed. 948 (1916), explained:
Ordinarily the managing officers, and those responsible for the settlement and contest of claims, would be without actual knowledge of the facts of a particular transaction. The purpose of the stipulation [in the bill of lading providing for the filing of claims for loss or damage] is not to escape liability, but to facilitate prompt investigation. And, to this end, it is a precaution of obvious wisdom, and in no respect repugnant to public policy, that the carrier by its contracts should require reasonable notice of all claims against it even with respect to its own operations.
At issue in the present case is whether the 21 letters complied with the notice-of-claim provision of the contract of carriage. The governing provisions, quoted above, do not require a particular format for a claim; nor do they require the inclusion of specific information. See Exs. 1-2 to D. Aff. Delta, however, asserts that a notice of claim must include the nature of the loss and the amount of damages. See D. Mem. at 8.
Before addressing the merits of the dispute, we examine what sources of federal law should guide our decision. Prior to 1972, courts looked to the federal common law to determine whether common carriers had been given adequate notice of claims, including when courts were deciding cases governed by the Carmack Amendment to the Interstate Commerce Act ("I.C.A.") now codified at 49 U.S.C. §§ 11707, 14706. See, e.g., Ins. Co. of N. Am. v. Newtowne Mfg. Co., 187 F.2d 675, 680-81 (1st Cir. 1951); Del., Lackawanna & W. R.R. v. United States, 123 F.Supp. 579, 582 (S.D.N.Y.1954); Bond Stores v. Overland Package Freight Serv., 171 Misc. 135, 137-38, 13 N.Y.S.2d 928 (Mun.Ct.1939). In 1972, however, the Interstate Commerce Commission issued regulations addressing the standards for a notice of claim under the I.C.A. See Processing of Loss and Damage Claims, 37 Fed.Reg. 4257 (Mar. 1, 1972) (codified at 49 C.F.R. § 1005.2). After the promulgation of these regulations, courts no longer used federal common law to determine the adequacy of notice of claim in cases governed by the I.C.A. inasmuch as "the very fact that the regulations identify a properly constituted claim as one that contains certain minimum filing requirements distinguishes the standard established by the I.C.C. regulations from the standard established by the case law." Pathway Bellows, Inc. v. Blanchette, 630 F.2d 900, 903 n. 5 (2d Cir.1980) (citing Wis. Packing Co. v. Ind. Refrigerator Lines, Inc., 618 F.2d 441, 446 (7th Cir.1980)).
Despite the inapplicability of these regulations, Delta cites a number of cases governed by the I.C.A. for the purpose of establishing the legal requirements for the notice of claim here. See D. Mem. at 5 (citing Pathway Bellows, 630 F.2d at 903 n. 4); Molloy v. Allied Van Lines, Inc., 267 F.Supp.2d 1246, 1255 (M.D.Fla.2003); Gen. Elec. v. Brown Transp. Corp., 597 F.Supp. 1258, 1260, 1264 (E.D.Va.1984); D. Mem. at 7 (citing Adelman v. Hub City Los Angeles Terminal, 856 F.Supp. 1544, 1550 n. 9 (N.D.Ala.1994)). These cases have no relevance, however, because they rely on the I.C.C. regulations to determine the adequacy of notice rather than federal common law. See Arkwright-Boston Mfrs., 767 F.2d at 427-28 ().
Unlike the I.C.C. regulations, federal common law does not specifically define the standard for adequacy of a notice of claim under contracts of carriage. The Supreme Court has held that a notice of claim Blish Milling, 241 U.S. at 198, 36 S.Ct. 541. Generally, courts look to the purpose of notice-of-claim clauses in determining whether a claim is adequate under the common law. See, e.g., Am. Synthetic Rubber Corp. v. Louisville & Nashville R.R., 422 F.2d 462, 468 (6th Cir.1970); Thompson v. James G. McCarrick Co., 205 F.2d 897, 901 (5th Cir.1953); Minot Beverage Co. v. Minneapolis & St. Louis Ry., 65 F.Supp. 293, 295 (D.Minn. 1946); Louisville & Nashville Ry. v. Patton, 288 Ky. 450, 156 S.W.2d 474, 476 (1941); Adler Upholstery Fabrics v. Akers Motor Lines, Inc., 54 Misc.2d 360, 361, 282 N.Y.S.2d 560 (Civ.Ct.1967). That purpose is to "insure that the carrier may make a prompt and thorough investigation of the claim." Pathway Bellows, 630 F.2d at 903 n. 5; accord Blish Milling, 241 U.S. at 196, 36 S.Ct. 541 (). The court in Minot Beverage Co. explained:
That the provision must be interpreted in the light of its purpose seems both reasonable and necessary, for nothing in the context of the provision aids in explaining the meaning of the word `claim.' To confine the term to narrower limits than the situation against which the parties intended to guard would seem unreasonable. For theory, not intent and practicality, would then determine its meaning.
Here, Delta asserts that the notice of claim must specify the amount of the...
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