Tokio Marine & Nichido Fire Ins. Co. v. Rickmers
| Decision Date | 21 July 2011 |
| Docket Number | CIVIL ACTION NO. H-09-886 |
| Parties | TOKIO MARINE & NICHIDO FIRE INSURANCE COMPANY, LTD., Plaintiff, v. M/V SOPHIE RICKMERS, her tackle, apparel, etc. in rem, and SOPHIE RICKMERS SCHIFFAHRTSGESELLSCHAFT, in personam, Defendants, v. EASTERN CAR LINER, LTD., EASTERN CAR LINER AMERICAS, INC., RICKMERS-LINIE GMBH CIE KG, and RICKMERS-LINIE AMERICA, INC., in personam, Third Party Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Pending are Defendant Eastern Car Liner, Ltd.'s Motion for Partial Summary Judgment and Eastern Car Liner (Americas), Inc.'s Motions for Summary Judgment and Partial Summary Judgment (Document No. 42), and Rickmers-Linie GmbH & Cie KG, Rickmers-Linie (America), Inc., and the Sophie Rickmers' Motion for Partial Summary Judgment (Document No. 43).1 After carefully consideringthe motions, responses, replies, and the applicable law, the Court concludes for the reasons that follow that both motions should be denied.
This is a maritime cargo loss case arising from the on-deck ocean carriage of forty-eight sections of wind turbine towers aboard the M/V Sophie Rickmers. In February, 2009, while the M/V Sophie Rickmers was transiting the Pacific Ocean from Pohang, South Korea to Galveston, Texas, twenty of the wind turbine tower sections were lost overboard and five of the remaining sections allegedly suffered physical damage.
Mitsubishi Power Systems, Inc. ("Mitsubishi") acquired the forty-eight tower sections from Dongkuk S&C Co. Ltd. and insured the cargo with Plaintiff Tokio Marine & Nichido Fire Insurance Company ("Tokio Marine").2 Mitsubishi and/or its affiliate, Mitsubishi Power Systems Americas, Inc. ("Mitsubishi America") engaged Third Party Defendant Eastern Car Liner, Ltd. ("Eastern"), a Japanese entity with its principal place of business in Tokyo, Japan, to carry the cargo from Pohang, South Korea to Galveston, Texas as the non-vessel operating common carrier, or NVOCC.3 Eastern subcontracted with Rickmers-Linie GmbH CIE KG ("Rickmers Germany"), a foreign entity with its principal place of business in Hamburg, Germany, to transport the cargo aboard the M/V Sophie Rickmers.4
The overall arrangements between Mitsubishi and Eastern for the carriage of the turbine units involved three documents: the "Master Booking Note,"5 the "Individual Booking Note,"6 and the "Waybill,"7 each of which incorporates Eastern's "bill of ladingclauses."8 The parties agree that the bill of lading clauses govern the terms of their agreement, but disagree on whether certain clauses are rendered null and void by Japan's 1992 Law of International Carriage of Goods at Sea ("1992 Japan COGSA").9
Eastern moves for partial summary judgment, asserting that it is entitled to limit its liability based on the bill of lading clauses. Tokio Marine, as Mitsubishi's subrogee, contends that 1992 Japan COGSA governs this dispute and that its higher limitation of liability applies.
Rickmers-Linie GmbH & Cie KG and the M/V Sophie Rickmers ("Rickmers Defendants") also move for summary judgment, contending that they are entitled to limit their liability under the Hague Rules based on the Rickmers-Linie GmbH & Cie KG's Bill of Lading ("Rickmers GmbH Bill of Lading").10 Tokio Marine argues that the higher limit under the Hague-Visby Rules applies to the cargo, or,if the Hague Rules apply, that Mitsubishi was not given a fair opportunity to declare a higher value for the goods, and therefore cannot be subject to the bill of lading's limit of liability.11
Rule 56(a) provides that summary judgment should be rendered "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).12 Once the movant carries this burden, the burden shifts to the nonmovant to show that summary judgment should not be granted. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials in a pleading, and unsubstantiated assertions that a fact issue exists will not suffice. Id. "[T]he nonmoving party must set forth specific facts showing the existence of a 'genuine' issue concerning every essential component of its case." Id.
In considering a motion for summary judgment, the district court must view the evidence "through the prism of the substantiveevidentiary burden." Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2513 (1986). All justifiable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 106 S. Ct. 1348, 1356 (1986). "If the record, viewed in this light, could not lead a rational trier of fact to find" for the nonmovant, then summary judgment is proper. Kelley v. Price-Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir. 1993). On the other hand, if "the factfinder could reasonably find in [the nonmovant's] favor, then summary judgment is improper." Id. Even if the standards of Rule 56 are met, a court has discretion to deny a motion for summary judgment if it believes that "the better course would be to proceed to a full trial." Anderson, 106 S. Ct. at 2513.
Eastern and Tokio Marine agree that because Mitsubishi agreed to the cargo being carried on deck, the wind turbine tower sections were not "goods" as defined by the United States Carriage of Goods by Sea Act ("U.S. COGSA"),13 and that U.S. COGSA therefore isinapplicable. The parties further agree that Japanese law applies to the interpretation of the contract of carriage.14 Japanese law, in turn, makes 1992 Japan COGSA applicable of its own force to the contract of carriage, because the cargo in this case was "from a loading port or to a discharging port, either of which is located outside Japan."15 Unlike U.S. COGSA, 1992 Japan COGSA applies to both on-deck and below-deck cargo.16
A party who intends to raise an issue about a foreign country's law must give notice by a pleading or otherwriting. In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court's determination must be treated as a ruling on a question of law.
FED. R. CIV. P. 44.1. This rule provides courts with broad authority to conduct their own independent research to determine foreign law but imposes no duty upon them to do so. See Carey v. Bahama Cruise Lines, 864 F.2d 201, 205 (1st Cir. 1988)("[Rule] 44.1 empowers a federal court to determine foreign law on its own, but does not oblige it to do so."); Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 155 n.3 (2d Cir. 1968) (Friendly, J.) (same).
The parties therefore generally carry both the burden of raising the issue that foreign law may apply in an action and the burden of adequately proving foreign law to enable the court to apply it in a particular case. See Whirlpool Fin. Corp. v. Sevaux, 96 F.3d 216, 221 (7th Cir. 1996) (); Restatement (Second) Conflict of Laws § 136 cmt. f (1971) ("[T]he party who claims that the foreign law is different from the local law of the forum has the burden of establishing the content of the foreign law."). Where parties fail to satisfy either burden, the court "is entitled to look to its own forum's law in order to fill any gaps."Banco de Credito Indus., S.A. v. Tesoreria Gen., 990 F.2d 827, 836 (5th Cir. 1993); see also Carey, 864 F.2d at 205 (); Commercial Ins. Co. of Newark, N.J. v. Pacific-Peru Constr. Corp., 558 F.2d 948, 952 (9th Cir. 1977) (same); Restatement (Second) Conflict of Laws § 136 cmt. h (1971) ("[W]here either no information, or else insufficient information, has been obtained about the foreign law, the forum will usually decide the case in accordance with its own local law except when to do so would not meet the needs of the case or would not be in the interests of justice.").
The parties agree that Japanese law governs, and each has offered affidavits of well-credentialed Japanese attorneys to assist the Court in correctly determining and applying Japanese maritime law to the facts of this case. Pursuant to Rule 44.1, the Court has considered other relevant materials and sources as well.
Tokio Marine contends that Eastern's liability is limited by Article 13(1)(2) of 1992 Japan COGSA. Eastern counters that its liability is limited to the more stingy terms of Eastern's Bill of Lading Clause 14 ("Deck Cargo") (adopting the £100 per package or per unit proviso of Article 4(5) of the Hague Rules), or alternatively, Eastern's Bill of Lading Clause 25 ("Settlement ofClaim") (limiting liability to 100,000 Japanese yen per package or per unit).
When the National Diet of Japan enacted 1992 Japan COGSA, as a general rule it prohibited as "null and void" the inclusion of special bill of lading provisions that would limit a carrier's liability beyond what the 1992 enactment allowed. Thus, Article 15 of 1992 Japan COGSA, "Prohibition of special agreement," provides:
(1) Any special agreement which is contrary to the provisions of Articles 3 to 5, Article 8, Article 9, or Articles 12 to 14 and is not in favor of the shipper, receiver, or holder of the bill of lading, shall be null and void. A benefit of insurance in favor of the carrier or similar agreement shall also be null and...
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