Styling Plastics v. Neptune Orient Lines

• Decision Date: 31 July 1987
• Docket Number: No. C-87-0179 RFP.,C-87-0179 RFP.
• Citation: 1988 AMC 351,666 F. Supp. 1406
• Court: U.S. District Court — Northern District of California
• Parties: STYLING PLASTICS CO., LTD., Plaintiff, v. NEPTUNE ORIENT LINES, LTD., Interocean Steamship Corp., Seattle Stevedoring Co., Stevedoring Services of America, Does 1 through 20, inclusive, Defendants.

666 F. Supp. 1406

1988 AMC 351

STYLING PLASTICS CO., LTD., Plaintiff, v. NEPTUNE ORIENT LINES, LTD., Interocean Steamship Corp., Seattle Stevedoring Co., Stevedoring Services of America, Does 1 through 20, inclusive, Defendants.

No. C-87-0179 RFP.

United States District Court, N.D. California.

July 31, 1987.

Fredrick G. Harris, Walnut Creek, Cal., for plaintiff.

J. Stewart Harrison, Kelly C. Wooster, Brobeck, Phleger & Harrison, San Francisco, Cal., for defendants.

MEMORANDUM AND ORDER GRANTING MOTION TO DISMISS

PECKHAM, Chief Judge.

INTRODUCTION

Plaintiff moves for partial summary judgment and defendant moves for summary judgment on the issue of whether plaintiff's action is time barred as against any of the defendants. Plaintiff's action was not commenced until November 14, 1986, nearly two years after the "misdelivery" at issue in this case. Defendant, Neptune Orient Lines et al. ("Neptune") contends that the Carriage of Goods by Sea Act ("COGSA"), as well as the express terms of the bill of lading, compel the application of a one-year time limitation wherein suit must be brought after delivery of the goods or the date when the goods should have been delivered.

Plaintiff asserts that California law applies pursuant to California Code of Civil Procedure section 338 which provides a three year statute of limitation in cases of conversion. Plaintiff also contends that conversion is a "deviation" which deprives the carrier and his agents of the benefits of the bill of lading. Finally, plaintiff appears to argue that the bill of lading is an adhesion contract and is therefore unenforceable.

STATEMENT OF FACTS

The parties have stipulated to the following facts. Two ocean containers of hand puppets were shipped by plaintiff from Taiwan to Oakland, California, aboard the Neptune Orient Lines under a bill of lading. Defendant Interocean Steamship Corporation acted as local agent for Neptune. Defendant Stevedoring Services of America acted as discharging stevedore and agent for Neptune.

The vessel arrived in Oakland and the two containers were discharged from the vessel to the pier by Stevedoring Services of America on November 21, 1984 and placed in the container terminal yard to await pick up. Stevedore Services did not receive the original or a copy of the bill of lading. On November 23, 1984 two truckers from Express Freight Systems arrived at the Oakland pier and presented a custom's clearance document describing the containers and the contents. According to the declaration of Stevedore Services terminal manager, Jacques Lira, the information on the document presented by the truckers was checked against the information contained in the Consignee's Receipts For Delivery documents previously provided to Stevedore Services by Interocean.

The customary procedure for delivering cargo on behalf of Neptune required a customs document and a paid delivery order. If the trucker did not have a paid delivery order, a verbal release from Interocean's freight cashier consenting to the release was sufficient. The Express Freight System truckers did not present a paid delivery order. Mr. Lira called Interocean's office but he stated in his declaration that there was no response. Either no one answered or he did not talk to a freight cashier. He stated that if someone had told him the charges were not paid, he would not have delivered the containers. Mr. Lira authorized the terminal clerk to deliver the cargo.

Plaintiff brought suit against the carrier, Neptune, its agent Interocean, and Stevedore Services of America over one year after the date the cargo was delivered or should have been delivered.

The pertinent sections of the bill of lading provide the following:

A) Subcontracting

iii) If an action for loss or damage is brought by the merchant, by any insurer against charterer, underlying carrier, servant, agent, independent contractor, or subcontractor, including Stevedores, Carpenters and Watchmen, such persons shall be entitled to avail himself of the defenses and limits of liability which the carrier is entitled to evoke under this contract. (emphasis added).

B) Carrier's Liability

i) The provisions of the Carriage of Goods by Sea Act of the United States shall govern before the shipment is loaded on and after it is discharged from the vessel while the shipment is in the custody and possession of the carrier in a container yard or terminal. (emphasis added).

C) Notice of Loss, Time Bar

ii) The Carrier shall be discharged from all liability whatsoever in respect of the Goods unless suit is brought within one year of their delivery or the date when they should have been delivered. (emphasis added).

DISCUSSION

Summary judgment is proper when there is no genuine issue of material fact or when, viewing the evidence in the light most favorable to the moving party, the movant is clearly entitled to prevail as a matter of law. See Bank of California, N.A. v. Opie, 663 F.2d 977, 979 (9th Cir. 1981); State ex rel. Edwards v. Heimann, 633 F.2d 886, 888 (9th Cir.1980). Once a summary judgment motion is made and properly supported, the adverse party may not rest on the mere allegations of his pleadings, but must set forth specific facts showing that there is a genuine issue for trial. See Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir.1983); Ruffin v. County of Los Angeles, 607 F.2d 1276, 1280 (9th Cir.1979), cert. denied, 445 U.S. 951, 100 S.Ct. 1600, 63 L.Ed.2d 786 (1980).

I. COGSA and the Bill of Lading Compel Application of a One-Year Time for Suit

The Carriage of Goods by Sea Act provides in relevant part:

Every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea to or from ports of the United States, in foreign trade, shall have effect subject to the provisions of this chapter.

46 U.S.C. section 1300.

The carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered....

46 U.S.C. section 1303(6) (emphasis added).

The COGSA provision expressly grants the protection of a time limitation from suit to carriers of cargo by sea. The Act refers to the "carriage of goods" which, pursuant to section 1301, refers to the period of time when the goods are loaded on to the ship up until the time when they are discharged from the ship. The Act does not itself extend these protections to the time period after discharge from the ship or to non-carriers.

However, the Act does provide that:

Nothing contained in this chapter shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.

46 U.S.C. section 1307 (emphasis added).

The extension of COGSA may be contractually accomplished by the terms of the bill of lading, which may incorporate the time limitation for suit from the COGSA provision. The bill of lading, as in this case, may extend certain immunities, exemptions, and limitations to certain non-carriers as long as the bill of lading clearly and expressly extends such COGSA provisions to a non-carrier who is an agent of the carrier. This will be a valid derogation of the common law and will be given effect. See Grace Line, Inc. v. Todd Shipyard Corp., 500 F.2d 361, 367, 371 (9th Cir.1974), (citing Herd v. Krawill Machinery Corp., 359 U.S. 297, 304-305, 79 S.Ct. 766, 770-71, 3 L.Ed.2d 820 (1959)).

Although COGSA does not itself extend protection to non-carriers, in this case the bill of lading contains provisions which extend the carrier's protection to its agents and stevedores. Such a provision is called a "Himalaya Clause"¹ and has been held to be a valid contractual extension by the Ninth Circuit. See Tessler Brothers Ltd. v. Italpacific Line, 494 F.2d 438 (9th Cir. 1974); Grace Line, Inc. v. Todd Shipyards Corp., 500 F.2d 361 (9th Cir.1974).

In Herd v. Drawill Machinery Corp., 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820

(1959), the Supreme Court considered the issue of extension of COGSA limitations to stevedores. In Herd, no reference to agents or independent contractors of the carrier were made in the bill of lading. The court found that the bill of lading showed no intention to limit the liability of stevedores.² The Ninth Circuit in Tessler Brothers Ltd. v. Italpacific Line, 494 F.2d 438 (9th Cir.1974), stated: "We and other courts interpret Herd to mean that under certain circumstances parties to a contract of carriage may limit a stevedore's liability, but only if the intent to do so is clearly expressed." Id. at 442.

The Ninth Circuit stated in Grace Line Inc. v. Todd Shipyards Corp., 500 F.2d 361 (9th Cir.1974): "The Herd opinion might be interpreted to mean that a bill of lading, if it clearly and expressly extends a COGSA exemption, immunity or limitation to a non-carrier who is an agent of the carrier, is a valid derogation of the common law and will be given effect." Id. at 371. The court goes on to quote from Herd:

`Contracts purporting to grant immunity from or limitation of liability must be strictly construed and limited to intended beneficiaries, for they are not to be applied to alter familiar rules visiting liability upon a tortfeasor for the consequences of his negligence, unless the clarity and the language used expresses such to be the understanding of the contracting parties.'

Id. at 371 (quoting Herd, 359 U.S. at 304-305, 79 S.Ct. at 770-771).

Like the case before this court, Timco Engineering, Inc. v. Rex & Co., 603 F.Supp. 925 (E.D.Penn.1985), involved an action by the shipper of goods against the carrier and stevedore for misdelivery of cargo to a...