Royal Smit Transformers BV v. Onego Shipping & Chartering

Case: 17-30543 Document: 00514583051 Page: 1 Date Filed: 08/02/2018

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

August 2, 2018

No. 17-30543

Lyle W. Cayce

Clerk

ROYAL SMIT TRANSFORMERS BV; AXA VERSICHERUNG AG; HDI-

GERLING INDUSTRIE VERSICHERUNG AG; BASLER

SACHVERSICHERUNG AG; ERGO VERSICHERUNG AG,

Plaintiffs - Appellants

v.

ONEGO SHIPPING & CHARTERING, BV; ILLINOIS CENTRAL

RAILROAD COMPANY; BERARD TRANSPORTATION, INCORPORATED,

in personam,

Defendants - Appellees

Appeal from the United States District Court

for the Eastern District of Louisiana

Before HIGGINBOTHAM, SMITH, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

Royal SMIT tried to ship a few of its transformers from the Netherlands

to Louisiana. It contracted with an intermediary to arrange the transport. The

transformers were damaged along the way, so Royal SMIT and its insurers

tried to sue the carriers with whom the intermediary had contracted. But the

district court concluded they were precluded from doing so because of a

Himalaya Clause in the company’s agreement with the intermediary. The

court granted summary judgment in favor of the carriers. That decision was

appealed, and we affirm.

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No. 17-30543

I.

Plaintiff Royal SMIT Transformers B.V. (“Royal”) is a company based in

the Netherlands that manufactures large power transformers. In November

2015, Royal sold three of its transformers to Entergy Louisiana, LLC, for use

at one of its substations in St. Gabriel, Louisiana. The transformers were

insured by the co-plaintiffs-appellants AXA Versicherung AG, HDI-Gerling

Industrie-Versicherung AG, Basler Sachversicherung AG, and Ergo

Versicherung AG.

One month later, Royal contracted with Central Oceans USA, LLC

(“Central Oceans”) to facilitate the delivery of the three transformers from the

Port of Rotterdam to St. Gabriel. The arrangement was established by a

multimodal through bill of lading 1 between the parties.

The delivery comprised three legs: ocean transportation from Rotterdam

to New Orleans, rail transportation from New Orleans to St. Gabriel, and truck

transportation to Entergy’s substation. Central Oceans contracted with the

defendants to carry out each part of the journey: Onego Shipping & Chartering,

B.V. (“Onego”) provided the ocean carriage to New Orleans; Illinois Central

Railroad Company (“IC”) provided rail carriage to St. Gabriel; and Berard

Transportation, Inc. (“Berard”) provided truck carriage to the final destination.

All of these arrangements were negotiated separately. The defendants

were not involved in—nor aware of—the agreement between Central Oceans

and Royal, and Royal was not a party to the contracts Central Oceans signed

1 “Multimodal” transport refers to a delivery that entails some combination of air,

land, and sea travel. 1 T. Schoenbaum, Admiralty and Maritime Law, § 10-4 (5th ed. 2017).

A “bill of lading” refers to a document that memorializes the terms of a shipping agreement.

Id. § 10-11. And a “through bill of lading” refers to a bill of lading that allows cargo owners

to contract with an intermediary for a multimodal transportation in a single transaction.

Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 25–26 (2004). The intermediary, in turn, arranges

for the transportation with various carriers.

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with the defendants. Each defendant negotiated its agreement with Central

Oceans independently and memorialized its terms in separate documents.

The terms of the agreement between Royal and Central Oceans were

initially set forth in a Request for Transport Quotation (“RFQ”) issued by

Royal, which incorporated terms from two other documents: a Shipment of

Transformers Procedure and a General Terms and Conditions of Purchase. The

Terms and Conditions stated that Central Oceans would be held liable “for all

cases of loss or damage suffered by [Royal] . . . caused by [Central Oceans’s]

performance” of the contract. It also anticipated that Central Oceans might

subcontract with a third party to perform part of its duties. It warned that

Central Oceans was “not release[d] . . . from any obligation or liability” as a

result of subcontracting its duty, but was still required to “indemnify [Royal]

in full against [resultant liability].” Further, Central Oceans was required to

“bind [the] third party fully to the provisions of these terms and conditions.”

The Terms and Conditions did not, however, specify whether or to what extent

the third parties were liable to Royal.

The Purchase Order between the parties noted that “[a]ll services

provided” were pursuant to the RFQ, and “expressly den[ied] the applicability

of any other terms and conditions.” Notwithstanding this provision, the parties

then executed the through bill of lading, which stated that its “provisions . . .

apply to all claims against [Central Oceans] relating to the performance of the

Multimodal Transport Contract.”

Like the Terms and Conditions, the bill also anticipated that, as Royal’s

intermediary, Central Oceans would facilitate the transport by contracting

with other entities. Those entities were designated as agents acting on behalf

of Central Oceans. Central Oceans, in turn, was liable for their actions:

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10. Basis of Liability

....

(c) [Central Oceans] shall be responsible for the acts

and omissions of his servants or agents when any such

servant or agent is acting within the scope of his

employment, or of any other person of whose services

he makes use for the performance of the Contract, as

if such acts and omissions were his own.

The bill of lading limited both the amount and source of Royal’s recovery

if something went wrong. Specifically, it set a per-package limitation on

liability in accordance with requirements set by the Carriage of Goods by Sea

Act (“COGSA”), 46 U.S.C. § 30701, note § 4(5). And, relevant to the present

appeal, it also contained a Himalaya Clause, which prohibited Royal from

suing Central Oceans’s subcontractors:

15. Defenses and limits for [Central Oceans],

Servants, etc.

....

(b) [Royal] undertakes that no claim shall be made

against any servant, agent, or other persons whose

services [Central Oceans] has used in order to perform

the Multimodal Transport Contract and if any claim

should nevertheless be made, to indemnify [Central

Oceans] against all consequences thereof.

(c) However, the provisions of this Contract apply

whenever claims relating to the performance of the

Multimodal Transport Contract are made against any

servant, agent or other person whose services [Central

Oceans] has used in order to perform the Multimodal

Transport Contract, whether such claims are founded

in contract or in tort. In entering into this Contract,

[Central Oceans] . . . does so not only on his own behalf

but also as agent or trustee for such persons.

The transformers were delivered to the final destination in January

2016, where an inspection revealed that the transformers had been damaged

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by “excessive vibration” somewhere along the journey. 2 Royal and its insurers 3

then sued Central Oceans and the defendants on September 12, 2016, for

breach of contract, fault, and negligence, seeking over $1,600,000 in damages.

Notably, the complaint alleged that “Royal . . . contracted with Central Oceans

. . . pursuant to” the through bill of lading. It did not mention the RFQ or

Purchase Order.

Central Oceans filed a motion to transfer venue three months later,

relying on the mandatory forum selection clause in the multimodal through

bill of lading. Royal’s opposition again did not contest the applicability of the

bill of lading; rather, it was based on convenience to the remaining defendants,

who were “not privy to the contractual forum select clause” therein. Royal

admitted, in fact, that its “claims against Central Oceans [were] under the”

multimodal bill of lading, and it justified its opposition to transfer in part by

relying on the bill.

The district court granted the motion in part, severing Royal’s claims

against Central Oceans and transferring them to the Western District of

Virginia. The court noted that “[n]o one disputes the validity of the forum

selection clause” in the bill of lading, and that Royal must abide by the terms

it negotiated with Central Oceans. The court also concluded that the claims

against the defendants could not be transferred because they were not bound

by the clause.

The remaining defendants collectively filed a summary judgment motion

on April 21, 2017, arguing that they were protected from suit by the Himalaya

Clause. In response, Royal submitted an affidavit from Niek Vehreschild, its

Strategic Procurement Manager, denying that Royal agreed to this clause.

2 The record does not establish where the damage occurred or which carrier caused it.

3 For clarity, we will continue to use “Royal” to refer to these entities collectively.

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Vehreschild asserted, “In engaging Central Oceans . . . for the transportation

services at issue . . . [Royal] did not agree to be bound by any contractual terms

barring [Royal] from filing any action and seeking recovery for damages

sustained to its transformers from any . . . entities involved in their transport.”

Royal also submitted certain documents received from the defendants during

discovery, which outlined the terms of their carrier agreements with Central

Oceans.

The district court granted the defendants’ motion. Relying on two

Supreme Court opinions, Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14

(2004) and Kawasaki Kisen Kaisha, Ltd. v. Regal-Beloit Corp., 561 U.S. 89

(2010), the court concluded that “actual carriers who fall within the scope of

Himalaya Clauses can rely on those clauses to limit their liability.” The court

also observed that enforcing Himalaya Clauses that shield downstream

carriers from liability had become “common practice.” Because the defendants

fell within the scope of the Himalaya Clause’s protection, they could not be

sued. Royal timely appealed.

II.

This court reviews grants of summary judgment de novo, applying the

same standard as the district court. Star Fin. Servs., Inc. v. Cardtronics USA,

Inc., 882 F.3d 176, 179 (5th Cir. 2018). Summary judgment is appropriate “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).

Once the movant carries its burden, the nonmovant must point to specific

evidence that demonstrates a genuine dispute of material fact exists. See

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

A.

We begin by addressing a preliminary legal question that is not

contested by the parties, yet has never been addressed by our court: whether

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the specific type of Himalaya Clause at issue here is enforceable. We hereby

join our sister courts in the Second and Ninth Circuits in concluding that it is.

Cf. Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 762 F.3d 165 (2d Cir.

2014); Fed. Ins. Co. v. Union Pac. R.R. Co., 651 F.3d 1175 (9th Cir. 2011).

As the Supreme Court has noted, through bills of lading are central to

modern maritime commerce, which has embraced “door-to-door transport

based on efficient use of all available modes of transportation by air, water,

and land.” Kirby, 543 U.S. at 25 (citation omitted); see William Coffey,

Multimodalism and the American Carrier, 64 TUL. L. REV. 569, 593 (1989)

(observing that the through bill of lading is the “dominant instrument of

trade”). The through bill allows a cargo owner to arrange for a complex

transportation of goods in a single transaction, “rather than [having] to

negotiate a separate contract” for each leg. Kirby, 543 U.S. at 26; see also Regal-

Beloit, 561 U.S. at 109. Accordingly, through bills promote efficient

contracting—a point of emphasis in this area of law. See Regal-Beloit, 561 U.S.

at 109; Kirby, 543 U.S. at 29.

Himalaya Clauses “extend[] the bills’ defenses and limitations on

liability to parties that sign subcontracts to perform services contemplated by

the bills.” Regal-Beloit, 561 U.S. at 94. In other words, they operate much like

the mountain range by the same name, creating a barrier between the cargo

owner and downstream carriers that can be neither scaled nor circumvented.

The Supreme Court has twice enforced Himalaya Clauses in through

bills. See Kirby, 543 U.S. at 31–32; Regal-Beloit, 561 U.S. at 109–10. Kirby, in

particular, demonstrates the strong protection such Clauses afford. There, the

Court held that two different Himalaya Clauses introduced by separate bills of

lading within the same multimodal transportation were enforceable. 543 U.S.

at 36. The two clauses limited the amount of damages the cargo owner could

receive from the intermediary’s subcontractors. Id. at 32. Despite the fact that

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the Clauses did not specifically name to whom they applied (instead naming

“any servant” of the intermediary), id. at 31, and the fact that the cargo owner

was not even a party to one of bills, id. at 33–34, the Court held that both

protected a downstream carrier from the cargo owner.

In Regal-Beloit, the Court enforced a Himalaya Clause that afforded a

very different protection to downstream carriers: a forum selection clause

negotiated between the cargo owner and intermediary. 561 U.S. at 109–10.

Applying the terms of the through bill of lading, the Court held that “any suit

relating to the cargo” filed by the cargo owner against downstream carriers had

to be conducted in Japan, id. at 110–11, regardless of any practical difficulties

this might cause.

Here, the through bill of lading’s Himalaya Clause protects downstream

carriers from being sued by Royal. Although it offers a protection distinct from

what was provided in Kirby and Regal-Beloit, we see no reason why the result

should be different.

In reaching the same conclusion, both the Second and Ninth Circuits

acknowledged a potential pitfall—namely, that such Himalaya Clauses

implicate a longstanding policy in maritime law against agreements that

improperly limit the recovery to which the cargo owner is entitled. See Sompo

Japan Ins. Co., 762 F.3d at 181; Fed Ins. Co., 651 F.3d at 1180. Indeed, COGSA

itself states:

Any clause, covenant, or agreement in a contract of

carriage relieving the carrier or the ship from liability

for loss or damage to or in connection with the goods,

arising from negligence, fault, or failure in the duties

and obligations provided in this section, or lessening

such liability otherwise than as provided in this

chapter [this note], shall be null and void and of no

effect.

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46 U.S.C. § 30701, note § 3(8). As the Supreme Court has observed, this

provision was enacted in response to abuses by common carriers that were able

to leverage their bargaining advantage over the cargo owner by “insert[ing]

clauses in bills of lading exempting themselves from liability for damage or loss

. . . and capping any damages awards.” Vimar Seguros y Reaseguros, S.A. v.

M/V Sky Reefer, 515 U.S. 528, 534–35 (1995). Indeed the courts themselves

had long before fashioned a similar rule to protect the cargo owner’s

“unquestioned right . . . to recover full damages from a noncarrying vessel.”

United States v. Atl. Mut. Ins. Co., 343 U.S. 236, 239–42 (1952).

Both the Second and Ninth Circuits concluded that Himalaya Clauses

shielding a common carrier’s agents from suit did not run afoul of this general

prohibition, though the justifications for this conclusion differed slightly. The

Second Circuit observed that the Supreme Court had two major concerns about

such clauses: (1) that the cargo owner might not receive full recovery, and (2)

that actual carriers would not be properly incentivized to exercise due care.

Sompo Japan Ins. Co., 762 F.3d at 182–83 (citing Atl. Mut. Ins. Co., 343 U.S.

at 241–42; Hart v. Pa. R. Co., 112 U.S. 331, 340 (1884)). It noted that neither

was violated because the Clause does not “exonerate[] a common carrier or its

agent from liability for damages caused by their negligence.” Id. at 182.

Instead, it is properly construed as “an ordering mechanism” that “regulate[s]

who will be responsible to whom”—specifically, the common carrier to the cargo

owner, and the actual carriers to the common carrier. Id. at 182–83.

Accordingly, the cargo owner would still receive the recovery to which it was

entitled (albeit perhaps through more inconvenient means). And the actual

carriers, which remain liable to the common carrier for mistakes, would still

be incentivized to exercise due care. Id.

The Ninth Circuit relied on a single Supreme Court opinion, Sky Reefer.

Fed. Ins. Co., 651 F.3d at 1179–80. In Sky Reefer, the Supreme Court

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established a distinction between limitations on liability, which are

impermissible in certain cases, and “mechanisms for [the] enforcement” of that

liability, which are permissible. Sky Reefer, 515 U.S. at 534–35. The Court then

concluded the bill of lading’s forum selection clause fell into the latter category,

despite the fact that it would impose heightened transaction costs on the cargo

owner’s ability to vindicate its interests. Id. at 533–36. The Ninth Circuit,

relying on Sky Reefer, held that the Himalaya Clause was akin to a forum

selection clause—that is, “an enforcement mechanism rather than a reduction

of the carrier’s obligations to the cargo owner below what COGSA guarantees.”

Fed. Ins. Co., 651 F.3d at 1180 (quoting Sky Reefer, 515 U.S. at 539) (internal

quotation marks omitted). Like the Second Circuit, the court acknowledged—

and was unaffected by—the fact that the Himalaya Clause might “make it

more difficult as a practical matter for [the cargo owner] to recover damages.”

Id.

As the reasoning of our sister courts highlights, the bottom line is this: a

Himalaya Clause that protects downstream carriers from suit by a cargo owner

does not, in and of itself, limit the cargo owner’s ability to receive the recovery

to which it is entitled. Here, for example, Royal agreed with Central Oceans to

a COGSA-authorized damages limitation. The mere fact that Royal must

recover its remedy only from Central Oceans does not prevent it from receiving

the full measure of that bargain. Moreover, nothing in the Himalaya Clause

precludes Central Oceans from suing the defendants to recoup its losses from

Royal. Accordingly, the extension of Kirby and Regal-Beloit is appropriate. We

hold that the downstream carriers are entitled to the protection of such

Himalaya Clauses.

B.

As noted, Royal does not contest this legal conclusion. Instead, Royal

contends that the Himalaya Clause was never meant to be enforced. Its

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argument is notable for what it does not state. Royal does not contest that the

Clause is part of a multimodal through bill of lading, which established other

contractual obligations between itself and Central Oceans. It does not contest

that the Himalaya Clause, by its clear terms, blocks Royal from suing the

Clause’s beneficiaries. Nor does Royal contest that the defendants qualify as

those beneficiaries.

Instead, Royal argues that there is a material issue of fact as to whether

the parties agreed to be bound by the Himalaya Clause within the bill of lading.

It cites (1) evidence that allegedly shows Royal neither negotiated nor agreed

to the Himalaya Clause and (2) evidence that allegedly suggests the

defendants executed other agreements independent of the bill of lading. 4 The

district court concluded that neither strand of evidence should impact the

enforcement of the Himalaya Clause. We agree.

4 Royal also notes in passing that there is a dispute as to whether Central Oceans

should qualify as a freight forwarder or non-vessel operating common carrier (“NVOCC”),

which are two types of intermediaries. The defendants assert that Central Oceans is an

NVOCC, but Royal points out that Central Oceans referred to itself as a freight forwarder in

a letter Royal received.

Both roles serve as middlemen between cargo owners and actual carriers in the

negotiation of multimodal transports. Whereas the freight forwarder largely coordinates and

organizes the various deals with the carriers, the NVOCC participates as a party to the

transactions. See 1 Schoenbaum, § 10-7; compare Constructores Tecnicos, S. de R.L. v. Sea-

Land Serv., Inc., 945 F.2d 841, 846 (5th Cir. 1991) (defining the freight forwarder role), with

GIC Servs., L.L.C. v. Freightplus USA, Inc., 866 F.3d 649, 657 (5th Cir. 2017) (defining the

NVOCC role).

Admittedly, whether an intermediary participates as a freight forwarder or an

NVOCC has some legal significance in other contexts. 1 Schoenbaum, § 10-7 (noting

differences in their status as “carriers” under the law). But Royal fails to offer any

explanation as to its impact on the interpretation of a through bill of lading, which can be

issued by freight forwarders and NVOCCs alike. Michael Crowley, The Limited Scope of the

Cargo Liability Regime Covering Carriage of Goods by Sea: The Multimodal Problem, 79 TUL.

L. REV. 1461, 1462 (2005). Notably, Kirby concerned a bill of lading issued by a freight

forwarder, 543 U.S. at 19, and Sompo Japan Insurance Co., which relied on Kirby, concerned

a bill of lading issued by an NVOCC, 762 F.3d at 168, 184. Accordingly, even if Royal’s

assertion that Central Oceans is a freight forwarder has merit, the dispute is immaterial.

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1.

As to the former, Royal highlights the Vehreschild affidavit, which

asserted that Royal did not intend to be so bound; the provision in its purchase

order that expressly denied terms or conditions not contained in the purchase

order or RFQ; and specific provisions in the RFQ that, according to Royal,

demonstrate that subcontractors were meant to be held liable to Royal. But,

again, Royal does not dispute the validity of the through bill of lading itself as

a binding maritime contract. Royal’s complaint, in fact, asserted that it

“contracted with Central Oceans . . . pursuant to” the multimodal through bill

of lading.

Particularly in light of these concessions, we discern several problems

with Royal’s argument. First, this court has long held that, “by filing a lawsuit

for damages under the bill of lading, [the party] has accepted the terms of the

bill of lading, including . . . unnegotiated” clauses. Mitsui & Co. (USA), Inc. v.

Mira M/V, 111 F.3d 33, 36 (5th Cir. 1997) (rejecting the party’s claim that the

bill in question was “a contract of adhesion which it did not negotiate and

which therefore should not bind it”). As noted above, Royal’s complaint plainly

relied on the bill of lading as the basis for its suit, omitting all other documents

that memorialized the agreement. And, as noted, Royal has not challenged the

validity of the bill of lading itself as a binding agreement. Its attempt to

disavow the application of the Himalaya Clause within this agreement because

the clause was not part of its negotiations is foreclosed by Mitsui.

Furthermore, to the extent that Royal would have us look to extrinsic

evidence to discern an intent contrary to the plain text of the bill of lading,

basic principles of maritime law governing the interpretation of contracts

foreclose such an argument. Specifically, much as for ordinary contract

interpretation, we “may not look beyond the written language of the document

to determine the intent of the parties unless the disputed contract provision

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is ambiguous.” Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 332–33 (5th

Cir. Unit A Aug. 1981); cf. Kirby, 543 U.S. at 31–32. Further, to the extent a

bill of lading’s terms differ from prior agreements, the bill of lading supersedes

them. See W. India Indus., Inc. v. Tradex, 664 F.2d 946, 949–50 (5th Cir. 1981)

(noting that parties may agree to terms in a bill of lading that are different

from a prior agreement and “thereby make a new and different contract”

(quoting N. Pac. Ry. Co. v. Am. Trading Co., 195 U.S. 439, 463 (1904))); 1 T.

Schoenbaum, Admiralty and Maritime Law, § 10-11 (5th ed. 2017) (“The terms

of the bill of lading may supersede an earlier term or agreement negotiated

between the parties unless it is specifically preserved in the bill of lading.”).

Accordingly, insofar as Royal would have us read out a clear provision in the

bill of lading based on an affidavit concerning Royal’s private intention or

conflicting provisions in prior agreements, its argument must be rejected. 5

Last, we agree with the district court that Royal’s argument runs afoul

of Supreme Court guidance. A point of emphasis in Kirby was the importance

of protecting downstream carriers according to the text of through bills of

lading. There, the Court applied the terms of a Himalaya Clause protecting a

downstream carrier from the cargo owner despite the fact that the through bill

of lading was negotiated between the common carrier and another actual

carrier higher up in the chain—not the cargo owner. Kirby, 543 U.S. at 32–35.

Rejecting the cargo owner’s argument that it should not be bound by a

Himalaya Clause to which it had not agreed, the Court highlighted the

complexity of multimodal transactions and the extreme, “even impossible”

5 We add that, contrary to Royal’s assertions, there does not appear to be any conflict

between the bill of lading and the RFQ. In its sole references to the defendants, the RFQ only

requires Central Oceans’s agents to abide by its terms. These provisions do not explicitly

require that the defendants be liable to Royal. To the contrary, the RFQ merely states that

Central Oceans remains liable for their actions. We discern no conflict between the Himalaya

Clause and the RFQ’s terms.

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burden it would place on downstream carriers if they were required “to assure

themselves that their contractual liability limitations provide true protection.”

Id. at 35.

The Supreme Court’s reasoning looms large here. Royal seeks to override

the plain text of its own through bill of lading based on private intentions and

agreements between Royal and Central Oceans. The defendants were never

made privy to either source. Yet, by Royal’s logic, downstream carriers should

not be able to rely on the plain text of a through bill of lading to which the cargo

owner agreed; instead, they must conduct a thorough search for other

agreements between the cargo owner and intermediary that might evince

contradictory provisions or intent. As the district court noted, such a burden

is, if anything, more extreme than what the Supreme Court concluded was

untenable in Kirby. And it would certainly hinder the underlying policy goal of

this area of the law generally and through bills specifically—namely, efficient

contracting. See id. at 25–26, 29.

We therefore agree with the district court that Central Oceans’s

arguments seeking to undermine the plain terms of the through bill are

irrelevant; the defendants are entitled to rely on that plain text.

2.

Next we consider Royal’s citation to documents that allegedly show the

defendants did not understand the bill of lading as enforceable “to the

exclusion” of their individual agreements. Royal cites documents that record

these agreements for support, but have no binding legal authority. 6 Here

again, we disagree.

6 Royal also references in passing the defendants’ arguments in response to Central

Oceans’s motion to transfer—i.e., that the bill of lading’s forum selection clause did not apply

to them because they were not parties to the contract. Royal does not explain what

significance—legal or otherwise—this should have. We fail to see why the defendants’

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The key is Royal’s concession that its bill of lading with Central Oceans

is a through bill of lading. As noted, through bills have become the “dominant

instrument of trade,” Coffey, 64 TUL. L. REV. at 593, in international maritime

commerce precisely because they allow cargo owners to avoid having to

contract separately with actual carriers. Kirby, 543 U.S. at 25–26. Instead,

that task is passed on to the intermediary, which must coordinate the network

of shipping contracts required to complete the delivery. Accordingly, the

downstream carriers will come to specific agreements with the intermediary,

but these agreements do not, in and of themselves, affect the terms of the

Himalaya Clause in the through bill of lading. In other words, the contracts

between downstream carriers and an intermediary do not impact the

protections negotiated by that intermediary with the cargo owner. Cf. id. at 36

(defining—in a far more complex multimodal transport involving numerous,

coordinated entities—the downstream carrier’s protection from the cargo

owner by sole reference to the through bills of lading).

In other words, it is not merely usual, but expected that the defendants

would have come to separate arrangements regarding the transportation. And

the existence of such agreements does not weaken the binding effect of a

Himalaya Clause in applicable through bills of lading. Indeed, allowing such

individual agreements to call into question the terms of the through bill of

lading would seem to turn the industry practice on its head.

We add that all three of the documents highlighted by Royal are

consistent with standard practice. The documents attributed to Berard and IC

are copies of their bids to Central Oceans to serve as a carrier to the transport.

Similarly, Onego’s non-negotiable bill of lading is a common means by which

argument concerning a forum selection clause of the bill of lading should preclude or affect

their argument that the Himalaya Clause expressly protects them from being sued.

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downstream carriers memorialize their contracts as part of a multimodal

transport. See 1 Schoenbaum, § 10-11 (noting that such bills serve as mere

receipts, not separate contracts). 7 We decline to deprive the defendants of the

Himalaya Clause’s protection on this basis. 8

In short, Royal has again failed to articulate a basis for overriding the

clear terms of the through bill of lading.

III.

The summary judgment is AFFIRMED.

7 Royal’s argument that Onego’s bill of lading is a separate contract with Royal itself

is solely based on the fact that Royal is listed as a “shipper” on the document. To the extent

this argument is relevant, its error is clear from the document itself. Central Oceans is listed

as the Merchant on a signed page within the same document. That same page includes

signatures only from representatives of the Carrier (Onego) and the Merchant (Central

Oceans). This is immediately followed by the Conditions of Carriage between the Merchant

and Carrier. Onego and Central Oceans are clearly the parties between which the bill of

lading was formed. Moreover, Royal admitted in its response to the Defendants’ Statement

of Uncontested Material Facts that “the Defendants did not sign a contract with Royal.”

8 We also note that the presence of a through bill renders the sole case Royal cites for

support—an unpublished district court opinion from another jurisdiction—inapplicable. See

LIG Ins. Co. v. ZP Transport, Inc., Civ. A. No. 14-4007, 2015 WL 4725004, at *4 (N.D. Ill.

July 31, 2015) (noting that application of Kirby and Regal-Beloit was inappropriate because

they involved through bills).

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