Petition — Maislin Transport of Delaware v. Farrell Lines, Inc.
Supreme Court brief1980
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Supreme Court, U.S.
80-165 ici:
DN ilacdischinesciisie AUG 4 1980
MICHAEL RODAK, JR., CLERK
In THE
Supreme Court of the United States
Octoser TERM, 1980
Maistin Transport or DeLAwaRE and
Maistin Transport Ltp.,
Petitioners,
—against—
FarrELL Lines, INcorroratrep, As Successor by
Merger to American Export Lines,
Respondent.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
JosepH S. Rosen tTHAaL
Counsel for Petitioner
1140 Avenue of the Americas
New York, New York 10036
(212) 575-9100
Questions Presented for Review
1. Where an ocean carrier of goods under a through bill
of lading, including an inland voyage, contracted with an
inland carrier for the latter to carry the goods on the in-
land voyage, on an inland bill of lading prepared by the
ocean carrier; the inland bill of lading stated that where the
freight rate is dependent on value, the shipper is required
to state in writing the agreed or declared value of the
shipment; the inland carrier’s filed tariff stated that where
no value for the goods is shown on the bill of lading, it is
understood that the shipment has a released value of
$500.00; the spaces on the inland bill of lading for both
freight rate and valuation of the goods were left blank; the
freight rate paid by the ocean carrier to the inland carrier
was based on the released value of $500.00, although the
actual value was greater; and the ocean carrier and the
inland carrier had had a course of conduct under which
the ocean carrier had prepared the inland bills of lading,
the spaces for freight rate and valuation had been left
blank and the ocean carrier had paid the minimum, or re-
leased value, freight rate, did the Carmack Amendment (49
U.S.C., Sec. 20(11), in effect at the applicable times per-
mit the inland carrier to avail itself of the limitation of
liability of $500.00, for damage to the goods en route?
2. Assuming the same facts as are contained in the
previous question, do the provisions of 49 U.S.C., Section
10730, presently in effect, permit the inland carrier to avail
himself of the said limitation of liability, for damage to the
goods en route?
Parties to the Proceeding
The title of this action in the United States District
Court for the Southern District of New York, where this
action was commenced, was as follows:
UNITED STATES DISTRICT COURT
SoutHerN District or New York
77 Civ. 4175 (LFM)
Gorpon H. Mooney, Limirep,
Plaintiff,
—-against—
TerrLtotH & Kennepy B.V., American Exporr Lings,
Inc., SEABRIDGE INTERNATIONAL SHIppine Limirep, Mats-
Lin Transport oF DELAWARE and Maisuin TRANSPORT
LIMITED,
Defendants,
. The title of ths action in the United States Court of
Appeals for the Second Circuit was as follows:
lil
IN THE
UNITED STATES COURT OF APPEALS
For THE SEconpD Circuit
Gorpon H. Moonery, Limited,
Plaintiff-Appellee,
—against—
TerrLoTtH & Kennepy B.V., American Export Lines, Inc.,
SEABRIDGE INTERNATIONAL Suippine Lrtp., Maisuin
Transport oF DeLAwarE and Maistin Transport Lrtp.,
Defendants,
and
FarreELL Lines, INcorPoRATED,
As Successor by Merger to American Export Lines,
Defendant-A ppellant,
and
Matsuin Transport or DeLaware and
Maisurn Transport Ltp.,
Defendants-Appellees,
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK
lv
TABLE OF CONTENTS
PAGE
Questions Presented for Review 00.0.....0..ccccccccseseeeeeeeeeeee i
Wremee CO TG Eh POCOOIIS wisi Bol ctitecsicec eves il
IY TON a a alt on case la a et 1
SPUAPRIERDCROUARE FOCWECIINOINE nina occcevovecenctbidecisesnchsessachons 1
eM I a2 cet isccspcen cece rnasrotaumadelnae 2
SPIN UE” OU I ios i sede cul samedi iaorses teases 2
ARGUMENT
The Writ of Certiorari Should Be Allowed ............ 7
Point I—
The Court of Appeals Committed Error in Dis-
allowing Petitioner’s Claim of Limitation of Lia-
I Wiehe hnsehpiaccsakenatleia chile wich Shit shce chia Ab exsonbinchon 7
Point II—
The Court of Appeals Has Decided an Important
Question of Federal Law in a Way in Conflict
With the Lindenburg Case and in Conflict With
| ORME den Gis A RNASE IN cel MU oF 12
NE Baa DE SSR aE OS Le, EO TaD. Ry a by 14
APpPENDIX— PAGE
Report of Magistrate Martin D. Jacobs, of the
United States District Court for the Southern
RE EY TU tn la
Decision of Hon. Lloyd F. MacMahon, United
en ere ION a 16a
Memorandum of Judge MacMahon, Amending the
TCS Se ES MOREE UTE IN CINDS AT OER 20a
Opinion of United States Court of Appeals for the
Second Circuit, Reversing the Judgment of the
ERENCE ETON RO a 21a
Order of United States Court of Appeals Clarify-
I I cide a i 36a
Order of United States Court of Appeals Extend-
ing Time to File Petition for Rehearing ................ 38a
Order of United States Court of Appeals Denying
Uv: UOT 4la
Text of Carmack Amendment, 49 U.S.C., Section
20(11), Applicable During the Times in Question .. 43a
Text of 49 U.S.C., Section 10730, Effective October
BRANES Dy aM We RS OO CIRCE LED 47a
Inland Bill of Lading For the Shipment in
MINI tipi eucnicicdsisidiiianblnsenisNbcanin diaidasenin oc ee 48a
vi
TABLE QF AUTHORITIES
Cases: PAGE
American Railway Express Co. v. Lindenburg, 260
U.S. 584, 43 Sup. Ct. 206 (1922) 000... 7-8, 8-9, 10, 11,
12, 13, 14
Anderson v. Pacific Coast Steamship Co., 225 U.S. 187,
198-199, 32 Sup. Ct. 626, 630 (1911) 00. 13
Boeing Co. v. U.S.A.C. Transport Inc. 539 F.2d 1228
RUIN TE <s.. diana salatie daciannn: Sania cssaateimenadsoac ieee nice 9, 13
Statutes:
49 U.S.C., Section 20(11) (prior to 1978 amendment)... 2
49 U.S.C., Section 10730 (effective October 17, 1978)....2, 13
In THE
Supreme Court of the United States
OctoBEr TERM, 1980
Matsuin Transport oF DELAWARE and
Martsitin Transport Ltp.,
Petitioners,
—against—
F'arrELL Lines, INcorporatep, As Successor by
Merger to American Export Lines,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
Reports Below
The opinion in this action of the United States Court of
Appeals for the Second Circuit, dated February 22, 1980,
entitled “Gordon H. Mooney, Ltd. v. Farrell Lines, Ine.”
is set forth at 616 F.2d 619.
The opinion of the United States District Court for the
Southern District of New York is unreported.
Jurisdictional Statement
The judgment sought to be reviewed is dated February
22, 1980 and was entered on February 22, 1980.
By order dated March 18, 1980, the United States Court
of Appeals for the Second Circuit granted petitioner an
extension of time within which to file a petition for re-
2
hearing to and including April 10, 1980. Petitioner filed its
petition for rehearing prior to that day.
By order dated May 13, 1980, the United States Court of
Appeals for the Second Circuit denied the said petition for
rehearing.
This Court has jurisdiction to review the judgment in
question by Writ of Certiorari pursuant to the provisions
of 28 U.S.C., Section 1254.
Statutes Involved
This case involves the interpretation and construction of
the Carmack Amendment, 49 U.S.C., Section 20(11), 24
Stat. 386, as amended from time to time, which was in effect
at the times in question herein. The Carmack Amendment
was repealed by Public Law 95-473, Sections (b) and (c),
October 17, 1978, 92 Stat. 1389, the effect of which was to
enact 49 U.S.C., Section 10730 in its place.
Because of the length of the provisions of those statutes,
the pertinent text thereof will be set forth in the appendix
hereto. For the Court’s convenience, we have underlined
the pertinent provisions of the Carmack Amendment.
Statement of the Case
Jurisdiction was vested in the United States District
Court for the Southern District of New York under and
pursuant to 28 U.S.C., Section 1332, because of diversity
of citizenship of the parties and the amount in controversy.
The case arose out of damage to a shipment of frozen
Dover sole. Plaintiff below, Gordon H. Mooney, Ltd.
(“Mooney”), an Ontario corporation, had contracted with
defendant below, Terflofh and Kennedy B.V., a Dutch
company, to purchase 36,000 pounds of Dover sole for
3
$96,600.00 Canadian (A 482).* The goods were to be
shipped in 1400 cartons (A 482). Mooney thereupon con-
tracted with American Export Lines, Inc., later merged
into Farrell Lines, Incorporated, respondent herein, to
carry the cargo from Amsterdam to Toronto, pursuant to
the terms of respondent’s ocean bill of lading, which in-
cluded transshipment (A 553). The 1400 cartons of frozen
fish were placed in a sealed forty-foot reefer container in
good order and condition (A 553). Mooney paid for the
Dover sole and received all documents of title on or about
September 28, 1976 (A 553).
After a presumably uneventful ocean voyage, respon-
dent’s ship, in which the reefer, packed with the 1400 car-
tons of frozen fish, was stored, arrived in the Port of New
York in September of 1976 (A 501). Respondent arranged
with Maislin Transport of Delaware and Maislin Transport
Ltd. (hereinafter collectively “petitioner”’), an inland
motor common carrier, for petitioner to transship the
reefer, containing the 1400 cartons of frozen Dover sole, to
respondent’s agent, Seabridge International Shipping Ltd.
(hereinafter “Seabridge”), at a certain address in Mis-
sissagua, Ontario, Canada. The shipment is evidenced by
an inland bill of lading prepared by respondent (48a).**
This bill of lading, prepared by respondent on its own
form, states as follows:
“Where the rate is dependent on value, shippers are
required to state specifically in writing the agreed or
declared value of the property. The agreed or declared
value of the property is hereby specifically stated by
* Figures in parentheses preceded by “A” refers to pages in the
joint appendix in the Court of Appeals for the Second Circuit.
** Figures in parentheses followed by “a” refer to pages in the
appendix to this petition.
4
the shipper to be not exceeding
per er
The blank spaces in the quoted portion of the bill of
lading set forth above were not filled in.
Petitioner was, at all times, subject to the jurisdiction of
the Interstate Commerce Act and the Rules and Regula-
tions of the Interstate Commerce Commission (A 554). It
had filed its tariff under the Niagara Frontier Tariff, Tariff
787-B, which provided as follows (11a):
“ReLeaseD Vauuation. Charges named in this tariff
apply only when shipment is released to a value not
exceeding $500.00 per container and contents. When no
value is shown on the Shipping Order or Bill of Lading,
it will be understood that the shipper agrees to and
declares that the value of the shipment is released to
an amount not exceeding $500.00 per container and
contents.”
The freight rate paid by respondent to petitioner was
based upon the released value of $500.00, the cheapest rate
it could pay, although the actual value of the shipment was
far greater. That payment of the cheapest possible freight
rate reflected a continuing course of conduct between the
petitioner and the respondent (A 638, A 639). The respon-
dent had hired the petitioner to transship containerized
cargoes, on their inland voyages, on many occasions, both
before and after the instant shipment. In all cases, respon-
dent had prepared the bills of lading, the spaces for freight
rate and valuation had been left blank and the ocean car-
rier, respondent herein, had paid the minimum freight rate,
based on released value.
The petitioner transshipped the instant container, con-
taining the 1400 cartons of frozen fish, to Seabridge in
5
Canada. Unfortunately, the fish decomposed en route. The
appropriate public authorities in Ontario declared the fish
to be unfit for human consumption (A 632).
This lawsuit followed. Althougk many parties were
named as defendants, the case developed into a three-
cornered dispute between Mooney, as plaintiff, and peti-
tioner and respondent, as defendants, who cross-claimed
against each other. Petitioner interposed a defense of
limitation of liability (A 31).
The case was referred to Magistrate Jacobs of the United
States District Court for the Southern District of New
York. Magistrate Jacobs, after a full hearing on the
merits, held that Mooney was entitled to a full recovery,
that respondent was liable in full for its negligence, that
petitioner was not negligent and that respondent was not
entitled to indemnity against petitioner, nor was it entitled
to any apportionment of damages against petitioner
(18a-15a).
That decision rendered petitioner’s partial affirmative
defense of limitation of liability moot. Nevertheless, Magis-
trate Jacobs discussed that defense at some length (11a-
13a). As we read that discussion, Magistrate Jacobs would
have upheld the limitation if it had not been moot.
Magistrate Jacobs concluded that Mooney was entitled
to recover against respondent for the amount of the damage
which it had sustained, in the amount of $92,100.00 in
Canadian currency which, at that time, was the equivalent
of $94,760.00 in American currency and recommended that
plaintiff have judgment in that amount against respondent,
with interest from the date of the loss (14a-15a).
District Judge MacMahon confirmed the Magistrate’s
findings and adopted his conclusions (18a-19a). A judg-
ment was entered accordingly,
6
Respondent thereupon appealed to the United States
Court of Appeals for the Second Circuit. The Court of
Appeals, in reversing the judgment of the District Court,
held that both respondent and petitioner were guilty of
negligence in the handling of the shipment, in an equal
degree (36a-37a). The Court of Appeals went on to hold,
so far as petitioner’s claim of limitation of liability was
concerned, that since neither the freight rate nor the valua-
tion of the shipment was written on the instant bill of
lading, petitioner had not complied with the language of
the Carmack Amendment and that, accordingly, it was not
entitled to a limitation of liability (35a).
In this petition for a writ of certiorari, we do not seck
review of that portion of the decision of the Court of Ap-
peals which reversed the lower court and held petitioner
negligent, jointly with respondent. Although we strongly
disagree with that conclusion, we do not believe that the
importance of that holding is such as to justify granting
of a writ of certiorari.
In this petition, we seek a writ of certiorari, so as to re-
view only so much of the decision of the Court of Appeals
as denied petitioner’s defense of '‘mitation of liability, for
the reasons immediately following.
—
ARGUMENT
The Writ of Certiorari Should Be Granted
POINT I
The Court of Appeals Committed Error in Disallow-
ing Petitioner’s Claim of Limitation of Liability.
The Court of Appeals held that because neither the
freight rate nor the valuation of the shipment was written
on the bill of lading in question, petitioner may not limit its
liability under the Carmack Amendment. That holding
represents a clearly erroneous interpretation of that
statute.
Under the Carmack Amendment, all that is necessary to
bring -he limitation into play is a “value declared in writing
by the shipper or agreed upon in writing as to the re-
leased value of the property” (45a). The bill of lading
in the instant case, a contract between two parties, both of
whom are in the business of transporting goods for hire,
was pi ared on respondent’s form and signed by its agent.
It states that where the rate is dependent on value, which it
admittedly was, “shippers are required to state specifically
the agreed or declared value of the property” (48a). The
space in the printed form, in which the agreed or declared
value of the property was supposed to have been filled in,
was left blank by respondent,
That constitutes compliance with the statute. Sinee the
freight rate was admittedly dependent on value and since
the freight rate was, in fact, the released value rate, re-
spondent’s failure to insert any other value in its own bill
of lading constitutes an express agreement by respondent
to be bound by the released valve,
Ever since the opinion of this Court in American Rail-
way Laxpress Co, vy, Lindenburg, 260 U.S. 585, 43 Sup. Ct.
8
206 (1922), the rule has been that where a shipper accepts
a bill of lading or other shipping documents, he is bound
by its terms. In the Lindenburg case, the carrier delivered
its express receipt to the shipper, limiting its liability for
loss or damage to the shipper to the sum of $50.00 unless
the true value was declared. The true value was neither
stated by the shipper nor demanded by the carrier and the
freight rate was based on the released value.
The Supreme Court of Appeals of West Virginia, which
had held for the shipper, stated that since the receipt was
not signed by the shipper, he could not be bound by its
terms, purporting to limit liability.
This Court, in reversing the West Virginia Supreme
Court of Appeals, stated (260 U.S. at 591, 592, 43 Sup. Ct.
at 209) :
“The respondent, by receiving and acting upon the re-
receipt, although signed only by the petitioner, as-
sented to its terms and the same thereby became the
written agreement of the parties. In the absence of a
statutory requirement, signing by the respondent was
not essential. His signature, to be sure, would have
brought into existence additional evidence of the agree-
ment but it was not necessary to give it effect. Having
accepted the benefit of the lower rate dependent on
specific valuation, the respondent is estopped from
asserting a higher value. To allow him to do so would
be to violate the plainest principles of fair dealing.”
The applicable statute in the Lindenburg case was then
known as the Cummins Amendment. The controlling lan-
guage, however, was identical with the applicable language
of the Carmack Amendment.
If anything, this is a stronger case for the imposition of
the limitation of liability than Lindenburg, supra. In Lin-
9
denburg, a receipt prepared by the carrier was given to
the shipper, who presumably was not in the business of
carrying goods for hire. It was not signed by the shipper.
In the instant case, respondent was not truly a shipper
at all. Respondent prepared the bill of lading on its own
form, signed it, left the applicable spaces blank, accepted
petitioner’s lowest freight rate based upon released value
and now seeks to avoid the limitation of liability.
In addition to being in conflict with the controlling au-
thority of the Lindenburg case, the instant case is in con-
flict with an indistinguishable case from another circuit.
In Boeing Co. v. U.S.A.C. Transport, Inc., 539 F.2d 1228
(9th Cir. 1976), the shipper sustained actual damages of
over $400,000.00 when two of its jet engines were damaged
in transit on one of the carrier’s trucks. The lower court
had granted the cerrier’s motion for summary judgment
in the reduced amount of approximately $62,000.00 on the
theory that that was the released value ezreed upon be-
tween the parties.
In the Boeing case, the particular shipment was one of a
series made pursuant to an agreement between the shipper
and Pratt & Whitney, in which Pratt & Whitney agreed to
supply the engines in question to the shipper. The shipper
conducted discussions with the carrier pertaining to freight
rates, and at the shipper’s request the carrier had filed and
duly published tariffs with established rates for shipment
of those engines between Pratt & Whitney’s plant in Con-
necticut and the shipper’s plant in the State of Washington,
at a particular released value. Additionally, the shipper pro-
vided Pratt & Whitney with standard shipping instructions
requiring Pratt & Whitney to ship the engines via the
carrier at released value rates. In fact, it was at the ship-
per’s insistence that the released value rate, rather than
the actual value, was used.
10
In the shipment in question, the carrier’s driver signed
for the cargo at Pratt & Whitney’s plant in Connecticut on
a shipping document provided by Pratt & Whitney which,
as usual, bore no statement of released value. When the
shipment arrived at the carrier’s terminal in the State of
Washington, the carrier issued its own straight bill of lad-
ing which contained an appropriate written statement of
released value and which accompanied the shipment to the
point of the accident and then to its ultimate delivery to
the shipper. At that point, the shipper’s agent signed the
bill of lading, acknowledging delivery, noting the damaged
cargo but raising no objection to the statement of released
value contained in the bill of lading. An invoice was luter
prepared by the carrier, billing the freight at the released
value, which was paid by the shipper.
In affirming the District Court’s grant of summary judg-
ment to the carrier, the Court of Appeals stated that the
record demonstrated that the parties “were engaged in an
agreed-upon practice by which U.S.A.0. would transport
engines for Boeing solely at the released value rate; that
the carrier would issue its bill of lading embodying the
contract of carriage some time after it had accepted the
relevant shipment; and that the provisions of the bill issued
here, along with the rate ultimately charged and paid, were
lawful under the applicable statute and tariff” (539 F.2d
at 1230).
The Court of Appeals went on to diseuss the effect of
the Carmack Amendment and of the Lindenburg case,
supra, as follows (539 F.2d at 1231) :
“Nor can we accept Boeing’s contention that the car-
rier’s Bill of Lading contained no statement of released
value ‘agreed upon in writing’ as required by Section
20(11). Under the circumstances of this case, the evi-
11
dence of Boeing’s knowledge of, and assent to, the
written statement of released value—including that of
Boeing’s instructions to Pratt & Whitney, its past con-
duct, its subsequent acceptance of the bill without
objecting to that statement of value, and its payment
of freight at the ‘released value’ rate—amply supports
the District Court’s conclusion that the statutory re-
quirement is satisfied. Of course the signature of Boe-
ing’s agent would have constituted the most satisfac-
tory evidence of its agreement to the statement of
released value, but such evidence is not required.
American Railway Express Company v. Lindenburg,
206 U.S. 584, 590-592, 43 S. Ct. 206, 67 L.Ed. 414 (1923).
Moreover, we fully agree with the District Court’s
conclusion that ‘it would be inequitable for Boeing to
now he allowed to recover for the damage to the ship-
ment in question on a full value basis’, As the Court
observed in Lindenburg, supra, 206 U.S. at 592, 43
S. Ct. at 209:
‘Having accepted the benefit of the lower rate depen-
dent upon the specified valuation, the respondent is
estopped from asserting a higher value. To allow him
to do so would be to violate the plainest principles of
fair dealing’.”
In the instant case, the Court of Appeals held that “be-
cause neither the freight rate nor the valuation itself was
written on the bill of lading, Maislin may not limit its
liability under the statute” (35a). This is plain error.
Nothing in the Carmack Amendment requires the freight
rate to be set forth in the bill of lading.
So far as valuation is concerned, the Lindenburq and
Boeing cases demonstrate that a statement of the value of
the shipment was not necessary in order to bring the limita-
12
tion of liability into play, where the bill of lading, prepared
by respondent, required respondent to state the value in
writing, if it wished the value to be other than the released
value and where the freight rate which it paid petitioner
was admittedly based on released value.
Additionally, the Court of Appeals gave no weight what-
ever to the conceded course of dealings between the parties.
Thus, the underlying rationale of both the Lindenburg and
the Boeing cases, that fair dealing between the parties is
the ultimate criterion, was completely ignored by the Court
of Appeals. In sum, the Court of Appeals committed plain
error in this case by failing to uphold the limitation of
liability in the petitioner’s favor.
POINT II
The Court of Appeals Has Decided an Important
Question of Federal Law in a Way in Conflict With the
Lindenburg Case and in Conflict With the Boeing Case.
Rule 17 of the Rules of this Court, adopted April 14,
1980, and effective June 30, 1980, is entitled “Considerations
Governing Review on Certiorari.” It is stated in that Rule
that review on a writ of certiorari is a matter of judicial
discretion and will be granted only when there are special
‘and important reasons therefor. Among the criteria listed
in that Rule for the exercise of the Court’s discretion are
the rendering of a decision by a Federal Court of Appeals
in conflict with the decision of another Federal Court of
Appeals on the same matter and a decision by a Fec >ral
Court of Appeals on a federal question “in a way in conflict
with applicable decisions of this Court.”
Both these criteria are present in the instant case, The
decision by the Court of Appeals for the Second Circuit in
13
this case is in plain conflict with the Lindenburg decision,
supra, of this Court and the Boeing decision, supra, of the
Court of Appeals for the Ninth Circuit.
Moreover, this case did not decide some abstruse point
of law which will have no practical application except as
between the instant parties. The Carmack Amendment is
one of the single most important statutes regulating the
interstate transportation of goods. Although, as the Cuurt
of Appeals pointed out, it has recently been amended (49
U.S.C., Section 10730, Public Law 95-473, October 17, 1978),
no substantive change was intended.
Section 10730 states that a carrier’s liability may be
“limited to a value established by a written declaration of
the shipper, or by a written agreement, when that value
would be reasonable under the circumstances surrounding
the transportation.” (Emphasis supplied.)
The corresponding language in the Carmack Amendment
spoke of “rates dependent upon the value declared in writ-
ing by the shipper or agreed upon in writing as the released
value of the property.” (Emphasis supplied.)
In view of the similarity of language, it may safely be
assumed that when Congress recodified Title 49 of the
United States Code, it intended that the law governing
limitations of liability would remain the same.
See, for example, Anderson v. Pacific Coast Steamship
Co., 225 U.S. 187, 198-199, 32 Sup. Ct. 626, 630 (1911).
It is a matter of common knowledge that the type of
shipment which occurred in this case, a containerized ocean
voyage followed by transshipment of the same container
on an inland voyage, is becoming increasingly more prev-
alent. It is respectfully submitted that the instant decision
of the Court of Appeals will cause a great deal of mischief
14
in this field. Courses of conduct between carriers and ship-
pers and between carriers and other carriers, sanctioned
by many years of usage under the Lindenburg doctrine,
have been called int» question. Other Courts, both state
and federal, which have not as yet decided this issue, will
be faced with a dilemma when they are called upon to
decide that issue, in view of the present conflict in decisions.
We respectfully request this Court to grant the Writ of
Certiorari, so as to resolve this issue.
CONCLUSION
The Petition for a Writ of Certiorari Should Be
Granted.
Respectfully submitted,
JosePH S. RosentTHAL
Counsel for Petitioner
1140 Avenue of the Americas
New York, New York 10036
(212) 575-9100
Harvey P. RosEnsBereG
Epwarp CHERNEY
Of Counsel
APPENDIX
Report of Magistrate Martin D. Jacobs,
of the United States District Court for the
Southern District of New York
UNITED STATES DISTRICT COURT
SoutHern District or New York
77 Civ. 4175 (LFM)
Gorpon H. Moonry, Limrrep,
Plaintiff,
—against—
TerFLotH & Kennepy B.V., American Export Lings, Inc.,
Seasrivce INTERNATIONAL SxHrippine Limirep, Martsiin
Transport oF DerLtaAwaRE and Matsutin TRANSPORT
LIMITED,
Defendants.
I.
Preliminary Statement
Plaintiff, which imported Dover sole from Rotterdam
to Toronto, seeks damages against American Export Lines,
Inc. (AEL) and Maislin Transport of Delaware (Maislin)
because the fish (shipped in a container overseas to New
York and by truck to Toronto) arrived in Toronto decom-
posed and unmarketable. AEL was the ocean carrier to
New York and Maislin the inland truck carrier to Toronto.
The essence of the claim against AEL and Maislin is that
the shipment should have been refrigerated at 5° below zero
but after arrival in New York the temperature was changed
and the shipment decomposed at Toronto.
2a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
After hearing certain testimony Judge MacMahon by
order dated May 9, 1978 referred the action to me for trial
and findings of fact pursuant to stipulation among the
parties. The trial was held before me on October 25, 26, and
27, 1978. Many post-trial briefs were filed and oral argu-
ment was held on March 12, 1979.
Briefly stated the contentions of the parties are as fol-
lows: Plaintiff claims that AEL and Maislin are each re-
sponsible for the damage sustained without any limitation
of liability in their favor. AEL claims that 1) the damage
occurred after the container was turned over to Maislin and
Maislin alone is liable, and 2) while AEL does not rely on
any limitation of liability as against plaintiff, it seeks
indemnity from Maislin for any liability without any limi-
tation in Maislin’s favor. Maislin claims that 1) it is not
liable since in raising the temperature it acted reasonably
and in reliance upon the negligent instructions of ABL, a
sophisticated carrier, and 2) in any event it is entitled to
the benefit of a tariff limitation of $500.
II.
Evidence At Trial
A.
Shipment to Canada. Decomposition of Fish.
At the trial plaintiff called as witnesses Mr. Mooney,
plaintiff’s president and sole stockholder (4 et. seq.); Mr.
Lees, supervisor of Department of Fishing (57); Mr. Darl-
ington, employee of Seabridge (agent of AEL) whose duty
was to document imports (106); Mr. Hallek, maintenance
manager for AEL (193); Mr. Terrell, truck driver of
3a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
Maislin (238); and Mr, Pace, director of claims for Maislin
(265). AEL called Mr. Henkels, transportation consultant
(144) and Mr. Crawford, surveyor (362). Maislin called
Ms. Crapser, biller for Maislin (330), and Mr. Gallo, long
haul dispatcher of Maislin (339).
Plaintiff is in the business of merchandising frozen fish.
On July 15, 1976 it contracted for the purchase of 36,000
pounds of Dover sole (Pitff. Ex. 1). It received from the
seller an invoice dated August 25, 1976 (Pltff. Ex. 2). It
received from AEL a bill of lading (PItff. Ex. 3) which de-
scribes the goods as follows: “40 ft. reefercontainer s.t.c.
700 cartons iqf Doversoles, size 12/16 700 cartons iqf
Doversoles, size 16/20 Marks: N/M Hovsr/Hovusr Surp-
pers Loan Storacr anp Count Freicut Prepar Tempera-
ture minus 5 degrees Fahrenheit below zero. Packers seal
no: 0716 Shipped on board August 24th 1976.”
As appears from Pltff. Ex. 4, AEL on three occasions
transferred the 1,400 boxes of frozen Dover soles into dif-
ferent containers and thus had knowledge that it was pack-
ing 1,400 containers of frozen fish, AEL is not urging that
the container and its contents constituted a single package
subject to the loss or damage liability limitation of $500 per
package.
Paragraph 16 of the bill of lading provides for the $500
limitation and limits the carrier’s liability “unless the na-
ture of the goods and a valuation higher than $500 per
package or shipping unit shall have been declared in writ-
ing by the shipper”.
A significant clause of the bill of lading, upon which AEL
relies, is Paragraph 10 which states in pertinent part:
“... the liability of (American Export Lines) shall abso-
lutely cease when the goods are out of its exclusive pos-
4a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
session and shall not resume until the goods again come
into its exclusive possession; and the responsibility of this
Carrier during any such period shall be that of an agent of
the Shipper and/or Consignee, and (American Export
Lines) shall be without responsibility whatsoever”,
The shipment arrived in New York on September 10.
Plaintiff was notified on that day of its arrival. In order
to obtain the shipment it was necessary for plaintiff to
arrange with its bank to finance the purchase (16, 29).
Plaintiff negotiated with its bank in Canada from Septem-
ber 10 to September 27 and made arrangements for the
release of the bill of lading. In the meanwhile the con-
tainer was at the Maislin yard at Toronto (117). There is
no question that the shipment was properly refrigerated
below zero while on the vessel but that after it was turned
over to Maislin for delivery to Toronto the temperature
was increased.
When the shipment was finally opened at the Maislin
yard in Toronto it was found to be decomposed. As testi-
fied to in detail by the Canadian authorities, there were
three examinations, thirty samples were examined, and the
shipment was rejected as “refused entry due to decomposi-
tion” (Pltff. Ex. 6, 72). Plaintiff’s insurer denied coverage
(47), $4,500 was realized for the shipment in its actual
condition leaving a balance claimed by plaintiff in Canadian
currency of $92,100. I find that the shipment was not mar-
ketable when opened in Toronto.
B.
Basic Documents
At this point it will be helpful to diseuss the basic ship-
ping and other documents, which are a backdrop of the dis-
5a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
pute, including their contents, the purpose for which
prepared, the circumstances under which prepared and the
expert testimony as to whether the documents and conduct
of the parties was in accordance with usual business prac-
tice.
Inland Bill of Lading (Maislin Ex, E):
As appears on its face this “inland bill”, prepared by
AKL, is silent as to any temperature requirement.
Crawford was asked: “Q. Would you say on a reefer
container that some type of temperature or some instruc-
tions as to freezing or condition should have been on that
bill of lading. A. Yes. Q. Would you say that this was bad
practice for AEL to do that. A. It’s certainly an error.”
(402).
Henkels was asked: “Q. Isn’t it a fact that ordinarily all
shipping instructions are contained on the shipping order,
which is the only, — represents the undertaking that the
shipper imparts to the carrier and that the carrier agrees
to accept. A. Yes.” (172).
This document was turned over to Terrell, Maislin’s truck
driver. Terrell testified that he received Maislin’s Ex. E,
and Pitff. Ex. 8 (245).
Interchange Order Prepared by AEL and Delivered to
Trucker (Pliff. Ex. 8):
As testified to before Judge MacMahon, Hallek said that
this document was “an equipment interchange receipt”. It
states “required temperature 50°, temperature set at 50°,
temperature reads 50°”. He testified that the temperature
recorded on this receipt “is the temperature that our inter-
6a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
change people felt or believed the temperature required on
that container”. As appears from the face of this docu-
ment, Terrell acknowledged the receipt of this document
and testified that the “reefer mechanic did get up on the
container and he read the temperatures that are contained
in the TIR” (420). Crawford acknowledged that the tem-
perature notation on Pltff. Ex. 8, as well as that on Pitff.
Ex. 11, was an error explaining that “there were a number
of containers of photographic material at the terminal at
that time which had a 50° temperature requirement and the
driver had written the number 50° down and he just wrote
50° on this slip in error” (421).
Reefer Receipt (Pltff. Ex. 11):
This repeats the information in the TIR (PItff. Ex. 8) as
to the required temperature of 50°.
Pro or way Bill Prepared by Maislin (AEL Ex. A):
This document has a notation “maintain 40 deg. temp.”
which was explained by the testimony of Crapser and Gallo.
When the container arrived at its terminal in Carney,
Crapser, who had the responsibility of preparing the pro
or way bill, decided that the container needed some protec-
tive service and asked Gallo, line dispatcher, about some
sort of protective service (333). Gallo testified that he
checked the TIR (Pitff. Ex. 8) and the maintenance super-
visor Fahrenfeld told him that the reefer was running at |
40° and Gallo passed this information on to Crapser (344).
A notation “40°” appears on an inspection report (Pltff.
Ex. 15).
There was much discussion at the trial as to whether the
various witnesses understood that Dover sole was fresh
7a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
fish. Maislin relies on the testimony of Terrell, Crapser,
and Gallo that they did not know what Dover sole was, It
contends that this is not generally known. Maislin urges
that there was no indication on any of the documents that
the cargo was perishable; and indeed, if known to be fish,
it could have been dried fish which would not be frozen
(355).
C.
Testimony of Other Witnesses Including
Three Experts Called or Employed by AEL
Testimony of Darlington:
He testified that on September 27 a woman employee of
Maislin told him that the fish had gone rotten and he sought
to contact Chidiac, the operation manager of Maislin in
New York. Unable to reach him he talked to Giordano, the
assistant terminal manager, who said that “the girl in that
office had made up the bill wrong” (123). A memorandum
prepared by Darlington (PItff, Ex. 7) quotes Giordano as
saying that “the container was set at wrong temperature
and it was Maislin’s mistake”, In my view this statement
or memorandum has little significance. There is no question
that the inland bill of lading was “made up wrong” but the
ultimate question is who is responsible for “making it up
wrong” and whether the error is attributable to AEL.
Testimony of Pace:
His testimony dealt primarily with the records main-
tained by Maislin relating to the circumstances under which
the temperature was increased. He acknowledged that
there was a gap in the records from September 10 to Sep-
8a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
tember 20 (281). His investigation disclosed that the way
bill was prepared after inquiries made by Gallo, the dis-
patcher (275). His view is that when the container reached
Toronto it was shut off to reach 40°. AEL’s counsel and its
expert Crawford were given access to all documents (357).
In his view the documents prepared by and received from
AEL justified Maislin in maintaining the temperature at
50° or less.
Testimony of Terrell:
As already noted, he received from AEL emvloyees Mais-
lin’s Ex. E (inland bill) and TIR (Pltff. Ex. 8). He did not
discuss the requested temperature when the documents
were received (250). He received Pitff. Ex. 11 which noted
a required temperature of 50° from the reefer mechanic.
Testimony of Hallak:
He testified that the TIR (Pltff. Ex. 8) was prepared by
AEL and given to the driver of the equipment (224). When
questioned as to the various documents and the requested
temperature of 50° he significantly testified “I feel there
was an error made by both parties” (226). Asked by the
Magistrate “why shouldn’t the receiving carrier be entitled
to accept that (the notations on the documents) at its face
value?”’, he answered “I have no opinion” (228).
Testimony of Henkels:
He recognized that the TIR (Pltff. Ex. 8) was usually
prepared by the party giving up control and acknowledged
the receipt of the equipment (168). Admits that the TIR
was prepared on behalf of AEL (170). He said that people
9a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
ir. the trucking business were expected to know what Dover
sole is (153). He testified that the temperature was changed
on September 9 or September 10 (393). Mr. Henkels ex-
pressed the opinion that the later carrier should hold the
temperature without regard to the documents received
from the initial carrier (385). He stated that as far as
temperature and instructions are concerned “I place no
reliance whatsoever on a TIR” (386). Insisted that it was
not good practice to change the temperature (410).
IIT.
Discussion, Findings, and Conclusions
A.
Plaintiff’s Claim Against AEL
AEL’s position, relying upon Paragraph 10 of the bill of
lading (II A, supra), is that it is relieved of any liability
since the damage occurred to the shipment when it no
longer had exclusive possession of the cargo. However, it
overlooks the important provision in Paragraph 10 that
even when the goods are out of the exclusive possession of
AEL “the responsibility of this carrier during any such
period shall be that of an agent of the shipper” (emphasis
supplied). Under the facts here present AEL, acting as
agent, breached its obligation as agent to take reasonable
action to protect the cargo. Its conduct in giving inac-
curate instructions to Maislin as to the temperature was a
breach of such obligation. We have already reviewed (IT
B, supra) the many documents and circumstances which
show that they not only failed to include instructions in
10a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
the inland bill of lading prepared by it (Maislin’s Ex. E)
but negligently gave inaccurate and misleading instructions
in the TIR and other documents (PItff. Ex. 8). AEL’s ex-
perts admitted that this was a mistake and bad practice.
There can be no escape from the conclusion that AEL is
liable for creating the unfortunate situation that developed
by giving such inaccurate and negligent instructions.
AKL, acting as agent, was under a duty to act reasonably
to protect the cargo. It is a basic and elementary principle
that if an agent fails to perform its obligations it is respon-
sible for the damage caused. As was stated by the Supreme
Court, as early as 1879, in Case v. Citizen’s Bank of Louisi-
ana, 100 U.S. 446:
“Whenever an agent violates his duties or obliga-
tions to his principal, and loss ensues to the principal,
he is responsible therefor, Judge Story, and is bound
to make a full indemnity. Story, Ag., 6th ed., sec.
217 a.”
AEL’s reliance upon the “last carrier doctrine” is un-
availing. This doctrine, usually applied to a claim by a
shipper, recognizes that the last carrier is not responsible
if it can prove that “it was not negligent or that it comes
within one of the COGSA ‘excepted causes’ ” § 1304(2). One
of such causes is an act of the shipper. See Madow Co. v.
SS Liberty Exporter, 569 F.2d 1183, 1185 (2d Cir. 1978).
Here plaintiff in giving instructions to Maislin was acting
as agent for the shipper, as set forth in the plain language
of Paragraph 10 of the bill of lading.
lla
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
B.
Plaintiff’s Claim Against Maislin
1) The primary and serious negligent conduct of AEL,
acting as agent for plaintiff, is chargeable to and binding
upon the plaintiff shipper. While AEL contends that Mais-
lin should not have relied upon the temperature instruc-
tions from AEL, I believe this position is unreasonable and
untenable. Plaintiff must seek redress from AEL alone.
The fact that Maislin’s records were not entirely complete
as to the precise time when the temperature was increased
can not divert attention from the basic facts here present.
Maislin acted responsibly and with diligence when the em-
ployee prepared the pro or way bill (AEL Ex. A) after
undertaking to ascertain what protection should be afforded
to the container. While conceivably it might have made in-
quiries beyond what it actually did, I am not prepared to
find that it acted negligently or wrongfully.
2) Maislin contends that in any event its liability must
be limited to $500. This presents a troublesome question.
It relies on the following tariff provision under the Nia-
gara Frontier Tariff, Tariff 787-B, in particular 210, which
provides: “Retzasep VaLuation. Charges named in this
tariff apply only when shipment is released to a value not
exceeding $500.00 per container and contents. When no
value is shown on the Shipping Order or Bill of Lading, it
will be understood that the shipper agrees to and declares
that the value of the shipment is released to an amount not
exceeding $500.00 per container and contents.”
AKL and plaintiff contend that this tariff limitation is
not applicable and must yield to the statutory provision
in the Carmack Act (49 USC § 20(b)(11)) whieh states
12a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
that any limitation of liability shall not be valid unless
“declared in writing by the shipper or agreed upon in
writing as the release value of the property”. In support
of this contention reliance is placed on the decision of the
Court in Caten v. Salt City Movers & Storage Co., Inc.,
149 F.2d 428 (2d Cir. 1945) where in an action by the
shipper against a rail carrier it was held that “any attempt
to limit liability is prohibited except upon a declaration of
value by the shipper in writing or a release value agreed
to in writing”. Of interest also are the decisions of the New
York Court in Kaufman v. Pennsylvania Railroad, 64 NYS
2d 690 (Ist Dept. 1945) and Loeb v. Friedman’s Express,
Inc., 187 Mise. 89, aff’d without opinion, 296 NY 1029,
cert. denied, 331 US 851 (1947).
In Kaufman the action was to recover damages for the
actual value of a suitcase. The bill of lading provided
“subject to the classification and tariff in effect”. There
was a statement in writing on the bill of the amount of
the charge pre-paid by the shipper. Judgment was allowed
for the value of the shipment. In Loeb, an action against
a truck carrier, the charges were not entered in writing on
the bill of lading nor were they pre-paid by the shipper.
The Court distinguished Kaufman where the limitation was
upheld on the ground that there the shipper “was estopped
from asserting a higher value”. The Court held that “in
the guise of judicial construction the Court should not re-
write a statute”,
Tn all the cases relied upon by plaintiff and AEL deny-
ing limitation, the action was by shipper against carrier,
not carrier against carrier. Here Maislin, the second car-
rier, received a sealed container. As already noted, the
ocean bill of lading issued by AEL had the usual $500 lim-
13a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
itation and it would be unusual to provide for a different
provision with the later truck carrier. The tariff provision
involved here, unlike that in the limitation cases relied
upon, involved an “assumed $500 limitation”. As appears
from Maislin Ex. F, under the course of conduct between
AKL and Maislin there were forty-six bills of lading pre-
pared by AKL on its forms and in all of these the minimum
freight rate was paid.
While no direct authority can be found recognizing the
limitation, in the absence of a declaration of value in
writing on the bill of lading, it can be argued with con-
siderable force that under the course of conduct between
AEL and Maislin, especially considering that Maislin was
acting as agent for the shipper, AEL is estopped from ques-
tioning the limitation. However, in view of my conclusion
that apart from limitation Maislin can not be held respon-
sible, this need not be determined.
C.
Claim for Indemnity by AEL Against Maislin
In my view there is no sound basis for an indemnity
claim against Maislin. I have already found that AEL was
primarily responsible for the change of the temperature.
It was more than a “but for” or “concurrent” cause. Its
negligent and inaccurate instructions were the primary
cause of the damage, constituting gross negligence, and I -
find that Maislin did not act irresponsibly in changing the
temperature.
During oral argument I suggested the possibility that if
the Court were to hold some measure of liability on the
part of Maislin, consideration might be given to some ap-
portionment of responsibility between AEL and Maislin.
l4a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
In insisting that Maislin should be held solely responsible
and that there would be no basis for an apportionment of
responsibility, AEL cites certain authorities, Misurella v.
Isthmian Lines, 328 F.2d 40 (2d Cir. 1964) and Albanese
v. MV Nederi Amerik Stoom-Mats, 346 F.2d 481 (2d Cir.
1975), in which the shipowner, held responsible to a long-
shoreman, was allowed indemnity against the stevedore
even though there was evidence of the shipowner’s neg-
ligence. The Court held that there was a breach of implied
warranty by the stevedore in performing the services for
which it was employed. The rationale of these cases is that
“the shipowner’s own conduct will preclude it from obtain-
ing indemnity from the stevedore” only when “it prevents
or seriously handicaps the stevedore in his efforts to per-
form his duties”. These authorities, which of course did
not involve a claim by one carrier against another, are
far afield from the present situation.
It is my view that even if the Court were to determine
that Maislin is responsible and also can not avail itself
of the dollar limitation of liability, this might be an ap-
propriate case for the apportionment of liability between
AEL and Maislin. However, it is my strong determination
that Maislin should not be held responsible and AEL alone
should be held responsible.
IV.
Conclusions
Plaintiff’s sole remedy is against AEL and it is entitled
to recover the value of the shipment in Canadian dollars
at the time of the decomposition on September 28, 1976.
It was agreed at the time of oral argument that the value
15a
Report of Magistrate Martin D. Jacobs, of the United States
District Court for the Southern District of New York
in American dollars of $92,100 in Canadian currency at
such time was $94,760 and plaintiff should have judgment
for such amount against AEL with interest from Septem-
ber 28, 1976.
Plaintiff’s claim against Maislin should be dismissed and
also AKL’s claim against Maislin for indemnity.
V.
Miscellaneous
There are being filed with this report the transcript of
the trial, the exhibits, and the briefs submitted by the
parties.
Copies of this report have been mailed to counsel.
Any objection to or comments upon this report should
be filed directly with Judge MacMahon.
Dated: New York, New York
March 26, 1979
/s/ Martin D. Jacoss
Martin D. Jacobs
United States Magistrate
16a
Decision of Hon. Lloyd F. MacMahon,
United States District Judge
UNITED STATES DISTRICT COURT
SoutTHERN District or New York
77 Civ. 4175 (LFM)
Gorpon H. Mooney, Lim:tep,
Plaintiff,
—against—
TerFLotH & Kennepy, B.V. et al.,
Defendants.
MacManon, District Judge.
Farrell Lines Incorporated, successor by merger to de-
fendant American Export Lines, Inc. (“Export”), moves
pursuant to Rule 53, Fed.R.Civ.P., to modify the post-trial
report of Magistrate Jacobs to grant Export full indemnity
from defendants Maislin Transport of Delaware and Mais-
lin Transport Limited (“Maislin”), or, in the alternative,
to apportion liability between Export and Maislin as joint
tortfeasors.
Plaintiff, Gordon H. Mooney, Limited, brought this cargo
damage action against Export and Maislin,* who then as-
serted cross-claims against each other. We referred the
action to Magistrate Jacobs, who filed a post-trial report
holding Export solely liable. We note in considering Ex-
port’s motion to modify that report that we must accept
the findings below unless they are clearly erroneous. NLRB
* The action was discontinued as to defendant Terfloth & Ken-
nedy, B.V. by stipulation.
17a
Decision of Hon, Lloyd F. MacMahon,
United States District Judge
v. J. P. Stevens & Co., 563 F.2d 8, 14 (2d Cir. 1977), cert.
denied, 434 U.S. 1064 (1978).
It was stipulated that plaintiff contracted with Export
to carry a cargo of frozen Dover sole from Amsterdam,
the Netherlands, to Toronto, Canada; that plaintiff’s ship-
per packed the fish into a container at minus 05° Fahren-
heit; and that Maislin undertook to take the cargo from
the ship at New York and transport it overland to Toronto.
Furthermore, it is not disputed that the temperature inside
the container was subfreezing upon its arrival in New
York; that Maislin turned up the temperature setting to
40° Fahrenheit after taking custody of the cargo from
Export; and that the cargo was in decomposed condition
when opened in Toronto, resulting in a loss to plaintiff of
$92,100 in Canadian dollars.
The undisputed facts leave no doubt that plaintiff made
out its prima facie case against Maislin under the Inter-
state Commerce Act, 49 U.S.C. § 20(11) (1951), see Mis-
sourt Pac. R.R. v. Elmore & Stahl, 377 U.S. 134, 138 (1964),
and against Export under the Carriage of Goods by Sea
Act, 46 U.S.C. § 1303 (1975), see Demsey & Associates, Inc.
v. 8.8. Sea Star, 461 F.2d 1009, 1014 (2d Cir. 1972). The
principle question below was whether either could rebut
plaintiffs prima facie case by showing an absence of neg-
ligence or that the loss resulted from excepted causes.
On that question, Magistrate Jacobs found as follows:
When Export first took custody of the cargo in Amster-.
dam, it delivered to plaintiff a bill of lading which indicated
that the cargo had been stored at minus 05° Fahrenheit.
Upon turning the cargo over to Maislin in New York, Ex-
port prepared an “inland bill of lading” for Maislin which
was silent as to any temperature requirement, Upon turn-
18a
Decision of Hon, Lloyd F. MacMahon,
United States District Judge
ing over the cargo, Export also prepared a “Trailer Inter-
change Receipt,” which stated, “required temperature 50°,
temperature set at 50°, temperature reads 50°.” Maislin
then prepared a “way bill,” which stated, “Maintain 40 deg.
temp.”
Based on these findings, Magistrate Jacobs concluded
that Export had been negligent in that it had prepared an
inland bill of lading with no instructions regarding tem-
perature settings and in that its Trailer Interchange Re-
ceipt specified a temperature of 50°. He also concluded
that, in light of these documents, Maislin had not been
negligent in raising the temperature setting to 40°. Our
review of the testimony at the three-day trial and the sup-
porting exhibits convinces us that neither the initial find-
ings of fact nor the inferences drawn therefrom were clearly
erroneous.
Our holding renders Export’s contentions before us un-
tenable. First, Export contends that Magistrate Jacobs
erred in holding Maislin not liable, since the shipper had
made out its prima facie case under the Interstate Com-
merce Act, 49 U.S.C. § 20(11), and Maislin had presented
no evidence of its freedom from negligence. However, Mag-
istrate Jacobs’ finding that Maislin acted without negli-
gence rebuts plaintiffs prima facie case. Second, Export
contends that Maislin should have been held liable under
the last carrier doctrine. However, that doctrine does not
apply if the last carrier can show, as Maislin has, that it
acted without negligence. Madow Co. v. S.S. Liberty Ex-
porter, 569 F.2d 1188, 1185 (2d Cir. 1978). Likewise, the
findings below leave Export with no grounds for contending
that Maislin breached its warranty of workmanlike service
or that it failed in its duties as bailee.
19a
Decision of Hon, Lloyd F. MacMahon,
United States District Judge
Export also contends that paragraph 10 of its bill of
lading exempts it from liability from damage occurring
after the cargo left its exclusive possession. We believe
that Magistrate Jacobs correctly rejected that contention
on the ground that paragraph 10 also imposes on Export
the responsibility of an agent of the shipper after the cargo
has left its custody. Clearly, paragraph 10 offers Export
no protection if the damage resulted from Export’s breach
of its duty as the shipper’s agent. We uphold the finding
below that Export’s erroneous instructions to Maislin con-
stituted such a breach.
In sum, we adopt Magistrate Jacobs’ conclusion that
Export is solely liable for plaintiff’s loss of $92,100 in
Canadian dollars. Plaintiff is also entitled to interest on
that amount, at the rate of 6% from the date the cargo
arrived in Toronto. Iligan Int'l Corp. v. S.S. John Weyer-
haeuser, 372 F, Supp. 859, 869 (S.D.N.Y.), aff’d, 507 F.2d
68 (2d Cir, 1974), cert. denied, 421 U.S. 965 (1975). How-
ever, we reject plaintiff’s prayer for attorneys’ fees.
Since there was no evidence that Export’s shipper, de-
fendant Seabridge International Shipping Ltd., was re-
sponsible for the loss, we dismiss the action as to it.
Accordingly, we deny defendant American Export Lines,
Ine.’s motion, pursuant to Rule 53, Fed.R.Civ.P., to modify
the report of Magistrate Jacobs.
Settle judgment within twenty (20) days.
Dated: New York, N.Y.
June 12, 1979
/s/ Luoyp F., MacManon
Lioyp F. MacManon
United States District Judge
20a
Memorandum of Judge MacMahon,
Amending the Decision
UNITED STATES DISTRICT COURT
Souruern District or New York
77 Civ. 4175 (LFM)
Gorpon H. Moonry, Limrrep,
Plaintiff,
—against—
TerrLota & Kennepy B.V. et al.,
Defendants,
MacManon, District Judge.
We make two amendments to our memorandum decision,
filed on June 13, 1979, denying Farrel] Lines Incorporated’s
motion to modify the report of Magistrate Jacobs in this
action,
First, the next to last paragraph on page 6 should begin,
“Accordingly, we deny Farrell Lines Incorporated’s mo-
Gam ws”
Second, the number “78 Civ. 0913” should appear on the
first page immediately under the number “77 Civ. 4175.”
Case 78 Civ. 0913 is identical in all respects to 77 Civ. 4175,
and was consolidated with the latter case. Its number was
inadvertently omitted from Magistrate Jacobs’s report,
and hence from our memorandum decision.
So ordered.
Dated: New York, N.Y.
July 3, 1979
/3/ Lioyp F. MacManon
Luoyp F. MacManon
United States District Judge
Qla
Opinion of United States Court of Appeals for the
Second Circuit, Reversing the Judgment of
the District Court
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
>
No. 415—September Term, 1979
(Argued December 13, 1979
Decided February 22, 1980.)
Docket No. 79-7536
+
GORDON H, MOONEY, LTD.,
| Plaintiff-Appellee,
eal
FARRELL LINES, INC., as successor by merger to Ameri-
can Export Lines,
Defendant-Appellant,
and
MAISLIN TRANSPORT OF DELAWARE and MAISLIN TRANS.
PORT LTD.,
Defendants-Appellees.
ss
Before:
MULLIGAN, OAKES, and GURFEIN,*
Circuit Judges.
~~
Judge Gurfein participated in the oral argument in this case and
voted before his death on December 16, 1979 to dispose of the case
in the manner set forth in this opinion. He was unable to concur in
the opinion itself since it was drafted after his death,
22a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
Appeal from a judgment of the United States Dis-
trict Court for the Southern District of New York,
Lloyd F. MacMahon, Judge, holding appellant Farrell
Lines, Inc., solely liable for the spoilage of a shipment
of Dover sole from the Netherlands to Canada, Because
the facts demonstrate that a second defendant, appel-
lee Maislin Transport, was also negligent, we hold that
appellant and Maislin are jointly liable for the loss.
Reversed and remanded.
>
JOHN J. PALMERI, New York, New York, for
Appellee Mooney.
CHESTER D. Hooper, New York, N.Y.
(Haight, Gardner, Poor & Havens, New
York, N.Y., Keith L. Flicker, M. E. De-
Orchis, of counsel), for Appellant Far-
rell Lines, Inc.
HARVEY P. ROSENBERG, New York, N.Y.
(Friedlander, Gaines, Cohen, Rosenthal
& Rosenberg, New York, N.Y.), for Ap-
pellees Maislin Transport of Delaware
and Maislin Transport Ltd.
ined
OAKES, Circuit Judge:
This appeal, by the ocean carrier of a refrigerated
(“reefer”) container of frozen Dover sole, is from a
judgment of the United States District Court for the
Southern District of New York, Lloyd F. MacMahon,
Judge. The judgment held the ocean carrier solely lia-
ble to the Canadian buyer-consignee for the value of
23a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
the fish, which arrived in a decomposed state, even
though it was. the inland carrier that changed the
reefer temperature setting from -5° or -10°
Fahrenheit to 40° Fahrenheit. Following reference to
and a report by Magistrate Jacobs, the district court
held that the ocean carrier, American Export Lines,
Inc. (Export), was solely negligent; that Export’s negli-
gence in presenting the inland carrier, Maislin Trans-
port of Delaware and Maislin Transport Ltd.
(collectively Maislin), with an inland bill of lading (“in-
land bill”) that contained no temperature directions
and an “equipment interchange receipt” or “Trailer In-
terchange Receipt” (TIR) that referred to a 50° “re-
quired” temperature setting, rendered Maislin not
negligent; and that it was therefore unnecessary to
determine Export’s claim of a right to indemnity or
contribution or Maislin’s claim of a $50 limitation of
liability. Judgment was awarded to the plaintiff ship-
per solely against Export’s successor by merger, Farrell
Lines, Inc., for 92,100 Canadian dollars plus interest.
We reverse.
FACTS
A brief review of the evidence and the documents is
necessary. After receipt from Gordon H. Mooney, Ltd.,
the plaintiff below, of a purchase order for 1400 car-
tons of Dover sole, the Netherlands supplier packed the
cartons into a pre-cooled refrigerated reefer without
incident. When received at the Amsterdam dock, how-
ever, the refrigerated unit developed a malfunction and
the 1400 cartons had to be transferred to another
reefer by the carrier, Export. A second malfunction
developed and another transfer was made, but there is
no dispute in the case that following the second trans-
24a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
fer the 1400 cartons were still in their original, frozen
condition, and the trip from Holland to New York was
without incident. When the container was delivered to
Maislin for transportation from New York to Toronto
on September 8, 1976, Export prepared an inland bill
of lading which, while it referred to “Dover Sole,” con-
tained no instructions concerning temperature. In addi-
tion, Export’s “Equipment Condition Inspection
Report” said nothing in section 7 relating to “reefers,”
where there are three lines as to “req. temp. ___,”
“temp. set at a. and “temp. reads ___..” According
to the testimony of the truck driver for Maislin, Mr.
Terrell, he received these two documents and he also
observed an Export reefer mechanic' get up on the
container and read the temperature setting and then
fill out a handwritten slip of paper or “chit,” which he
gave to Terrell. The reefer mechanic’s chit, after noting
the date and number of the trailer, says “req. temp.
50°, temp. set at 50°, temp. reads 50°.” Terrell then
gave the chit to another Export employee who com-
pleted the equipment interchange receipt (TIR). There
was no separate temperature reading when the TIR
was filled out; rather, reference was made solely to the
“chit.” There is no dispute, however, that the tempera-
ture both was set at, and read, between —5° and —10°
at the time of delivery to Maislin, though Maislin could
not produce the “Partlow” thermograph chart that was
on the reefer at the time of delivery.’
l There was testimony that the reefer mechanic was an employee
not of Export itself but of an independent maintenance contractor
engaged by Export. Export, however, does not deny its responsibil-
ity for his acts on this account.
2 This assumes, of course, that such a chart—on a disc—was in-
serted. Export did have its chart up to the date of delivery. There
was testimony that in the ordinary course of business, a new one
25a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
How or why the Export reefer mechanic made the
error on the handwritten “chit” is only one of the
several mysteries in the record. It is possible that the
mechanic misread the thermograph, although that
seems unlikely. The Maislin driver remembered the
mechanic’s climbing up to look at the chart. According
to the surveyor who subsequently checked the matter
out, there was some talk in the Export yard that there
were several other containers containing photographic
equipment or film in the yard on September 8 and that
some of these carried with them a 50° required tem-
perature. The mechanic may have assumed that the
Dover sole reefer was one of those, but this explana-
tion would mean that he did not look at the Partlow
chart and conflicts with the Maislin driver’s memory of
the event. Or, conceivably, the mechanic may have
acted intentionally, for reasons that can only be sur-
mised.’ The mystery is unsolved.
The fact remains, however, that it was the Maislin
people who changed the temperature setting on the
containers in question to 40°, probably after the reefer
would have been inserted by the reefer mechanic. It is interesting
that on October 8, 1976, after the damage to the fish was discov-
ered, the surveyor removed a Partlow chart from the reefer which
was a 7-day rather than the 31-day recording type although the
thermograph operates on a 31-day cycle. The 7-day chart had no
notations as to temperature, date installed, container number, or the
like. Thus, if a Partlow chart had been installed at the time of
delivery to Maislin it had also been removed by Maislin.
It is also interesting that Maislin’s own records—kept on
“Thermo-King” charts and representing drivers’ notations of the
reefer temperatures supposedly taken every two hours—are missing
for the period Sept. 10-20 and intermittently thereafter.
3 Crawford, the surveyor, testified that various maintenance people
at the pier informed him of what he called this “photographic
material scenario,” but when he asked if the people involved would
talk to the Export lawyer he “was informed that if [he] mentioned
anything of this nature again, that they would take physical action
against [him].”
26a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
arrived at Fort Erie, Ontario. The Maislin witnesses
testified that when their clerical office sought to fill
out their “pro” or “way” bill at the terminal in South
Kearny, New Jersey, Mrs. Crapser, the clerk with the
responsibility for preparing the bill, decided that the
container needed some “protective service,” not, she
said, because she knew what Dover sole was, but be-
cause she saw the word “reefer” and wondered if it was
fish. She made inquiry of the Maislin line haul dis-
patcher, Mr. Gallo, and brought to his attention the
fact that the container was a reefer and that ic should
have “protective service.” According to his testimony,
although he had the TIR showing a 50° required set-
ting, he called the maintenance man, Lefty Fahrenfeld.
Lefty left the terminal to check the setting, presum-
ably made a physical check, and came back in a matter
of minutes and said that it was running at 40°. All
this supposedly occurred on September 8, the day the
shipment arrived at Maislin’s yard in South Kearny,
New Jersey. The 40° figure was inserted by Mrs. Crap-
ser on the pro or way bill as the temperature to be
maintained, and it was subsequently carried on the
Maislin record of “Thermo-King” temperature checks as
the required setting. There is also in evidence a memo
dated September 9 on a Crystal Glass Company memo
pad, evidentiy written at Fort Erie, Ontario by a
Maislin employee, reading:
Came from Buffalo at 10°F,
Temp. does not go up.
Should be a 40°F.
Shut off.
leave it shut off
Bill
27a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
And the Maislin Thermo-King temperature-check re-
cords contain two notations for September 9, when the
truck left Buffalo for Canada: “reset for [illegible]” and
“just arrived, shut off.“
The Thermo-King readings between September 11
and September 20, by which time the container was
sitting in Maislin’s Toronto terminal, were lost or not
available, see note 3 supra, but by September 20, the
temperature reading had crept up to 35°. Thereafter,
it stayed at 40° until about September 24. The Maislin
records show no temperature readings after the 25th
until 8:00 a.m. on the morning of the 27th, at which
time the reading was 0°, even though the same Maislin
record sheet called for a setting of 40°.‘ The tempera-
ture check record of September 29 shows the setting at
O° and the temperature reading at 20°. That was the
day Maislin sought to make delivery to the consignee,
but it was refused.’ The following day, delivery was
again attempted, but it was again refused and the
goods were returned to the Maislin terminal for survey
and potential salvage. The fish was subsequently found
to be largely decomposed and spoiled, although some of
4 There was evidence that a Maislin employee in New York, ap-
parently advised that the temperature setting was wrong, told the
Toronto office on September 28: “Show 5 degrees. This is fish and
where blood is coming from I don’t know. Suggest you get this
down before effecting delivery .
5 A skeptic might surmise that at the last minute, carrying out the
instructions from New York, see note 5 supra, the Maislin people
turned down the temperature of the reefer to stem the flow of fish
blood and make the fish appear properly frozen before delivery to
the consignee. This would tend to support the veracity of a record
made by Mr. Darlington, an Export customs agent, of a telephone
conversation he had with a Maislin employee in New York on Octo-
ber 8. He was informed in that call that the Maislin employee in the
New York office who had sent these instructions “was aware that
the container was set at wrong temp. and it was Maislin’s mistake.”
28a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
it was apparently salvaged at a very low price immate-
rial to the consideration of our case. There was expert
testimony from a transportation consultant, Cecil W.
Henkels, to the effect that a TIR generally goes to a
trucking line’s operating department, as opposed to the
rate clerk, but that an upward temperature change
would not be made without authorization from either
the original shipper or the carrier from which the ship-
ment was obtained.
DISCUSSION
The magistrate’s and district court’s findings that
Export was negligent, and therefore liable,® were
clearly supported by the evidence. Even though Export
submitted evidence of numerous other reefer inland
bills it had prepared which went to Maislin and con-
6 The question of what law governs Export’s conduct is a somewhat
difficult one. The district court thought that the applicable provi-
sion was in the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.
§ 1303(2) (“The carrier shall properly and carefully load, handle,
stow, carry, keep, care for, and discharge the goods carried.”). But
COGSA further states that “(t]he term ‘carriage of goods’ 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. § 1301(e). Thus
an issue arises here because Export’s negligence took place on land,
after discharge from the ship. If COGSA does not apply here, then
the applicable provision is the earlier Harter Act, 46 U.S.C. §§ 190-
196, which has the effect of preserving the common law duty of a
carrier to exercise due care in all handling of cargo, even when
there are contrary contractual provisions. The question of which act
applies ultimately matters little, however, because, “except for un-
important differences in phraseology, the two Acts come down to
much the same thing, as to liabilities which might be incurred
before loading or after unloading.” G. Gilmore & C. Black, The Law
of Admiralty § 3-25, at 148 (2d ed. 1975). For the same reason, we
find it unnecessary to discuss the validity of a provision in Export’s
bill of lading stating that COGSA governs “before the shipment is
loaded on or after it is discharged.” See id. (no provision in COGSA
explicitly authorizes “contracting out of Harter and in COGSA” for
period after unloading and before delivery).
29a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
tained no temperature directions, there was testimony
by the marine surveyor that it was “certainly an error”
not to have included such directions on the inland bill.
Export’s consultant, Mr. Henkels, confirmed that or-
dinarily all shipping instructions are contained on the
shipping order. Moreover, there was the handwritten
chit erroneously prepared by the Export reefer me-
chanic—for whatever reason—which did contain a 50°
reading as well as a 50° setting. The same figures
appear on the TIR, a more formal document prepared
and signed by Export, though also signed by Terrell,
the Maislin trucker. These errors at least contributed
to the unfortunate chain of events and render Export
liable. Export’s own manager of maintenance and re-
pair testified that he felt “there was an error made on
both parts,” the reefer mechanic’s and the truck
driver’s.
But Maislin too was at fault, in a variety of ways.
Its driver, Terrell, signed the TIR, noting that the
equipment was “received in good condition except as
noted.” The temperature setting at that time was, in-
disputably, —-5° and the temperature reading was at or
about -—10°.7 Yet the TIR, based on the mechanic’s
chit, showed the reading as well as the setting at 50°,
indicating that Terrell did not double-check the reefer
mechanic. Moreover, even though Mrs. Crapser in the
Maislin terminal at South Kearny may not have been
alert as to what “Dover Sole” is, she was at least aware
enough to suspect that “fish” was involved and that,
7 The district court found:
[I]t is not disputed that the temperature inside the container was
subfreezing upon its arrival in New York; that Maislin turned up
the temperature setting to 40° Fahrenheit after taking custody
of the cargo from Export; and that the cargo was in decomposed
condition when opened in Toronto. .. .
30a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
the container being a reefer, some “protective service”
was required. When Gallo accordingly sent “Lefty” out
to check the trailer at a time when, according to all the
expert testimony, the cargo was still at a very low
temperature and probably had not thawed at all (it
obviously would not have thawed at all if the tempera-
ture setting had not yet been changed), Lefty came
back to report that the reefer was running at 40°. This
was the figure adopted for use in the inland bill Mrs.
Crapser prepared, an erroneous figure under any fac-
tual construction. An inquiry as to what “Dover Sole”
is at this point, or a check with either Export, the
original shipper, or even the consignee, would have
revealed that the fish was or might be frozen, not
smoked, and hence would require a 0° setting or lower.
Instead, Lefty’s 40° figure—the source of which re-
mains undetermined*—was adopted without further
check.
Despite the figure inserted on the TIR or the setting
on the Maislin Thermo-King charts, the reefer ap-
parently continued to retain its —10° temperature. At
least this is what the Thermo-King charts show,
though a Maislin witness, its claims director, surmised
that this was an error by the truck driver(s) and that
he (they) had read the compression indicator rather
than the temperature chart. In any event, on arrival
September 9 at Fort Erie, Ontario, in the Maislin hold-
ing area, the reefer was “shut off” in according with
“Bill’s” directions on the Crystal Glass memo paper, in
S The Maislin claims man, Pace, said that Gallo, the dispatcher,
“concluded in his own observations that it would be safe to hold it
somewhat cooler than [the 50° required by the TIR], and he chose a
temperature of 40 degrees.” Gallo testified that, after talking to
Lefty, he told Mrs. Crapser that “{t]he reefer is running at 40
degrees and I will set it at 40 degrees.”
3la
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
order to get it up to the 40° temperature called for,
since “Temp. does not go up.” The fact that it had to be
“shut off’—the record does not disclose for how long
because the Maislin records are missing—to get it up to
a temperature of 40° is an indication that it was prob-
ably still set at a much lower temperature, or at least
running at one. This shutting off would not have oc-
curred had Maislin itself used proper procedures. True,
as the magistrate suggested, it was partly due to the
error in the TIR and hence to some extent “attributable
to” Export. But it was negligent to change the tem-
perature setting of the reefer without further inquiry.
It was also negligent to prepare the way bill with a
40° setting requirement, without further inquiry or
investigation, once it was learned that the cargo was
fish being transported in a refrigerated contained.
Even assuming that there was total reliance by the
trucker on the TIR for temperature requirements here
(which seems dubious because the 40° appearing on
Maislin’s way bill differs from the 50° figure on the
TIR), we think that such reliance was unjustified.
When a trailer is transferred from one carrier to
another, employees of each do, or should, inspect it,
and the receiving crucker’s signature on the TIR is as
much of a certification by him as to its condition as is
the signture of the transferring carrier’s employee. Cf.
Anello v. Murphy Motor Freight Lines, Inc., 525 F.2d
276, 278 n.2 (2d Cir. 1975) (as to condition of trailer
itself). Moreover, the actual setting of the container
temperature control is, if it differs substantially from
the TIR figures, notice to the receiving carrier—notice
that at least should provoke further inquiry.
A finding of negligence or lack of it, unlike a finding
of the underlying facts, is subject to review not based
32a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
on the “clearly erroneous” standard of Fed. R. Civ. P.
52(a). Master Shipping Agency, Inc. v. M.S. Farida,
571 F.2d 131, 133 (2d Cir. 1978); Director General of
India Supply Mission v. S.S. Maru, 459 F.2d 1370,
1373 n.3 (2d Cir. 1972), cert. denied, 409 U.S. 1115
(1973). On these facts, we have little difficulty in con-
cluding that Maislin was negligent.
As a result, Maislin must be held liable along with
Export. Under the Carmack Amendment,’ which gov-
erns interstate motor carriers, a prima facie case for
liability is made by proof of shipment in good condi-
tion, arrival in damaged condition, and the amount of
damages. Missouri Pacific Railroad v. Elmore & Stahl,
377 U.S. 134, 188 (1964). “Thereupon, the burden of
proof is upon the carrier to show both that it was free
from negligence and that the damage to the cargo was
due to one of the excepted causes relieving the carrier
of liability.” Jd. (emphasis added).’°
Because of its negligence, Maislin failed to rebut the
prima facie case against it. See Continental Can Com-
pany v. Hazor Express, Inc., 354 F.2d 222 (2d Cir.
1965). It is true that certain actions of the shipper
itself are one of the “excepted” causes that, if shown,
) 49 U.S.C. § 20(11), (12) (1976), revised without substantive
change and reenacted as 49 U.S.C.A. § 11707 (West Supp. 1979).
10 Under the Carriage of Goods by Sea Act (COGSA), 46 U.S.C.
§ 1304(2), liability falls upon the last ocean carrier, unless it can
prove that it was not negligent, or that the loss was within one of
the COGSA “excepted causes,” Madow Co. v. S.S. Liberty Exporter,
569 F.2d 1183, 1185 (2d Cir. 1978). However, under the Carmack
Amendment, 49 U.S.C. § 20(11) (1976), reenacted without substan-
tive change as 49 U.S.C.A. § 11707 (West Supp. 1979), the -turden
on an inland carrier is clearly to show both that it was free from
negligence and that the damage to the cargo resulted from one of
the excepted causes. Martin Imports v. Courier-Newsom Express,
Inc., 580 F.2d 240, 242 (7th Cir.), cert. denied, 439 U.S. 983 (1978).
This rule was misstated by the court below.
33a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
can protect a carrier from liability for damage to
goods. And the “shipper” for these purposes (Export,
which delivered the goods to Maislin) certainly contrib-
uted to the events through its negligence. But a show-
ing that Export as “shipper” is liable does not relieve
Maislin as carrier of liability for the damage, if that
damage would not have occurred except for Maislin’s
concurrent fault. Lehigh Valley R. Co. v. State of Rus-
sia, 21 F.2d 396, 405 (2d Cir.), cert. denied, 275 U.S.
571 (1927). That is to say, the excepted cause (here
negligence of the ocean carrier qua “shipper”) must be
the sole cause. Id.; cf. Levatino Co. v. American Presi- |
dent Lines, 337 F.2d 729, 730 (2d Cir. 1964) (ad-
miralty case under Harter Act) (“act of God” was not
sole cause of loss).
At the same time, because Export’s negligence con-
tributed to the loss, Expert cannot obtain indemnity
from Maislin. Cf. Weyerhaeuser Steamship Co. v. Na-
cirema Operating Co., 355 U.S. 563, 567 (1958) (shi-
powner “entitled to indemnity absent conduct on its
part sufficient to preclude recovery”). With respect to
the issue of possible contribution between these two
tortfeasors, we note that maritime law, applicable to
the conduct of Export, does permit contribution.
Cooper Stevedoring Co. v. Kopke, Inc., 417 U.S. 106
(1974). On the other hand, the liability of Maislin is
predicated on the Carmack Amendment, and that legis-
lation, as well as case law under it, is silent on the
issue of contribution. See 49 U.S.C. § 20(11), (12)
(1976), revised without substantive change and reen-
acted as 49 U.S.C.A. § 11707 (West Supp. 1979). Nev-
ertheless, because that amendment was merely an
enactment of already existing common law rights, to
which certain specific remedial rights were added, J &
34a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
H Flyer Inc. v. Pennsylvania Railroad Co., 316 F.2d
203 (2d Cir. 1963), we feel justified in turning to com-
mon law principles to fill in the gap in the statute
concerning contribution. Because there is a clear trend
in the law toward a rule allowing contribution among
joint tortfeasors, we hold that contribution is available
here—in this situation of joint liability shared by a
maritime shipper and an inland trucker.
To the extent that Maislin may be said to have
breached a warranty of workmanlike service, see Fair-
mont Shipping Corp. v. Chevron International Oil Co.,
511 F.2d 1252 (2d Cir.), cert. denied, 423 U.S. 838
(1975), Export’s own acts contributed to the breach, so
that the parties are joint tortfeasors, see Hurdich v.
Eastmount Shipping Corp., 503 F.2d 397 (2d Cir.
1974), as noted above.
Maislin argues, in a brief which otherwise simply
relied on the magistrate’s and district judge’s findings,
that Export, acting as agent for a shipper, voluntarily
chose a lower release value rate carrying a $500 limita-
tion of liability under the applicable tariff. The magis-
trate also thought that, due to the course of dealing
between the two, Maislin’s liability might be so limited,
even though the Carmack Amendment requires that
any such limitation of liability be “declared in writing
by the shipper or agreed upon in writing as the re-
leased value of the property.” 49 U.S.C. § 20(11)
(1976).'! The course of dealing referred to by the mag-
11 The 1978 revision of this portion of the Carmack Amendment,
intended to make no substantive change, is in 49 U.S.C.A. § 10730
(West Supp. 1979) (carrier may establish rates “under which the
liability of the carrier . . . is limited to a value established by
written declaration of the shipper, or by a written agreement, when
that value would be reasonable under the circumstances surrounding
the transportation”) (emphasis added).
35a
Opinion of United States Court of Appeals for the Second
Circuit, Reversing the Judgment of the District Court
istrate consisted of some 46 bills of lading prepared by
Export on its forms and paying the minimum rate, But
because neither the freight rate nor the valuation itself
was written on the bill of lading, Maislin may not limit
its liability under the statute. Mass v. Braswell Motor
Freight Lines, 577 F.2d 665, 667 (9th Cir, 1978); Tho-
mas Electronics, Inc. v. H.W. Taynton Co., 277 F.
Supp. 639 (M.D. Pa. 1967); Loeb v, Friedman's Ex-
press, Inc., 187 Misc. 89, 65 N.Y.S.2d 450 (Sup. Ct.
App. Term), affd mem., 271 A.D. 873, 66 N.Y.S.2d
634 (1946), affd per curiam, 296 N.Y. 1029, 73 N.E.2d
906, cert. denied, 331 U.S. 851 (1947).
Judgment reversed; cause remanded; costs of appel-
lant to be equally divided between appellant and appel-
lee Maislin.
86a
Order of United States Court of Appeals
Clarifying Its Opinion
UNITED STATES COURT OF APPEALS
Seconp Crrovir
79-7536
At a Stated Term of the United States Court of
Appeals, in and for the Second Circuit, held
at the United States Court House, in the
City of New York, on the day of March
21, one thousand nine hundred and eighty.
Present:
Hon. William Hughes Mulligan,
Hon, James L, Oakes,
Circuit Judges.
Gorpon H. Mooney, Lrp.,
Plaintiff-Appellee,
v.
Farrevi Lives, Inc.,
as successor by merger to American Export Lines,
Defendant-Appellant,
and
Malrsuin TRANSPORT OF DELAWARE and
Maistin Transport Lrtp.,
Defendants-A ppellees.
ORDER
In response to the request for clarification of our opinion
filed on February 22, 1980, in holding that appellant Farrell
37a
Order of United States Court of Appeals
Clarifying Its Opinion
Lines, Inc., and appellee Maislin were jointly liable for the
loss, it was the intention of the court that each party should
be liable for 50% of the damages,
/s/ Wituiam H, Muwuican
/s/ James L, Oakes
Circuit Judges.
38a
Order of United States Court of Appeals
Extending Time to File Petition for Rehearing
UNITED STATES COURT OF APPEALS
For tue Seconp Cracurr
79-7536
Gorpon H. Mooney, Liuirep,
Plaintiff-A ppellee,
—against—
TerFrLorH & Kennepy B.V., et al.,
Defendants,
FarrecL Lines, IncorPoraten, et al.,
Defendant-Appellant,
and
Maisun Transport or DeLaware, et al.,
Defendants-Appellees.
Notice or Morton ror Orper En iarcine Time
Tro Fixx Peririon ror REHEARING
Motion By: (Name and tel. no. of attorney in charge)
Sipney Gaines, Esq.
(212) 575-9100
Has opposing counsel consented? Yes [] No
Has service been effected? Yes [] No
Is oral argument desired? N/A [] Yes [J] No
(Substantive motions only)
39a
Order of United States Court of Appeals
Extending Time to File Petition for Rehearing
Requested return date: N/A
(See Second Circuit Rule 27(b))
Date of argument of appeal, if scheduled: N/A
Judge or agency whose order is being appealed:
Decision of Hon. Lloyd M. MaeMahon, U.S.D.J.,
U.S. Dist. Court (S.D.N.Y.) filed June 13, 1979
Opposinc CoUNSEL:
(Name and tel, no. of attorney in charge)
Joun Patent, Esq.—(212) 269-1010
Cuester D. Hoorrr, Hisq.—(212) 344-6800
Emercency Mortons, Morions ror Stays & InsUNOTIONS
Punpire APPEAL |
Has request for relief been made below?
(See F.R.A.P. Rule 8.) [] Yes [] No
Would expedited appeal eliminate need for this motion?
[1] Yes [J No
If no, explain why not:
Brief statement of the relief requested: Defendants-Ap-
pellees request a reasonable enlargement of time within
which to file a Petition for Rehearing pursuant to Rule 40,
F.R.A.P.
Previous requests for similar relief and disposition: NONE
Statement of the issue(s) presented by this motion:
Whether Defendants-Appellees are entitled to a reasonable
enlargement of time within which to file a Petition for Re-
hearing of the decision of this Court, dated and filed Feb-
40a
Order of United States Court of Appeals
Extending Time to File Petition for Rehearing
ruary 22, 1980, in light of circumstances set forth in the
accompanying affidavit of Martin J. Hertz, Esq.
Brief statement of the facts (with page references to the
moving papers): The presence of substantial questions of
law (pp. 2, 3; Aff’t. of Martin J. Hertz) and a voluminous
record (p. 5; Aff’t.) make it impossible to prepare Ap-
pellees’ Petition for Rehearing within the time prescribed
by Rule 40 F.R.A.P.
Summary of the argument (with page references to the
moving papers): See Statement of Facts, above.
March 6, 1980
/s8/ Swwney Gaines
Smwwney Gaines
Attorney for Defendants-Appellees
OrpER
Ir Is Heresy Orperep that the motion to extend the time
to file a petition for rehearing to and re April 10,
1980 be and it hereby is Granrep.
/8/ James L. Oakes
Hon. James L. Oakes, CJ
Cireuit Judge
March 18, 1980
4la
Order of United States Court of Appeals
Denying Petition for Rehearing
UNITED STATES COURT OF APPEALS
Seconp Circuit
79-7536
At a Stated Term of the United States Court of Appeals,
in and for the Second Circuit, held at the United States
Court House, in the City of New York, on the thirteenth
day of May, one thousand nine hundred and eighty.
Present :
Hon. Wiiuiam H. Mvutwican
Hon. James L. Oakes
Circuit Judges.
Gorpon H. Mooney, Limirep,
Plaintiff-A ppellee
TrerrLtotH & Kennepy B.V., American Export Lines,
Inc., et. al.,
Defendants
Farrett Lines Inc. as Successor by merger to American
Export Lines, Inc.,
Defendant-Appellant
Maisuin TrRANsPoRT oF DeLawareE and Maistin TRANSPORT
LimItep,
Defendants-A ppellees.
A petition for a rehearing having been filed herein by
counsel for the Defendants-Appellees
42a
Order of United States Court of Appeals
Denying Petition for Rehearing
Upon consideration thereof, it is
Ordered that said petition be and hereby is DENIED.
/s/ A. Dantet Fusaro
A. Danie, Fvusaro, Clerk
Due to his untimely death on December 16, 1979, Judge
Gurfein, a member of the panel, did not participate in the
consideration of this petition.
43a
Text of Carmack Amendment, 49 U.S.C.,
Section 20(11), Applicable During the
Times in Question
§ 20, par. (11). Liability of initial and delivering carrier
for loss; limitation of liability; notice and filing of claim.
Any common carrier, railroad, or transportation company
subject to the provisions of this chapter receiving property
for transportation from a point in one State or Territory
or the District of Columbia to a point in another State,
Territory, District of Columbia, or from any point in the
United States to a point in an adjacent foreign country
shall issue a receipt or bill of lading therefor, and shall be
liable to the lawful holder thereof for any loss, damage,
or injury to such property caused by it or by any common
carrier, railroad, or transportation company to which such
property may be delivered or over whose line or lines such
property may pass within the United States or within an
adjacent foreign country when transported on a through
bill of lading, and no contract, receipt, rule, regulation,
or other limitation of any character whatsoever shall ex-
empt such common carrier, railroad, or transportation
company from the liability imposed; and any such common
carrier, railroad, or transportation company so receiving
property for transportation from a point in one State,
Territory, or the District ef Columbia to a point in another
State or Territory, or from a point in a State or Territory
to a point in the District of Columbia, or from any point
in the United States to a point in an adjacent foreign coun-
try, or for transportation wholly within a Territory, or
any common carrier, railroad, or transportation company
delivering said property so received and transported shall
be liable to the lawful holder of said receipt or bill of lading
or to any party entitled to recover thereon, whether such
44a
Text of Carmack Amendment, 49 U.S.C.,
Section 20(11), Applicable During the
Times in Question
receipt or bill of lading has heen issued or not, for the full
actual loss, damage, or injury to such property caused by
it or by any such common carrier, railroad, or transporta-
tion company to which such property may be delivered or
over whose line or lines such property may pass within the
United States or within an adjacent foreign country when
transported on a through bill of lading, notwithstanding
any limitation of liability or limitation of the amount of
recovery or representation or agreement as to value in any
receipt or bill of lading, or in any contract, rule, regula-
tion, or in any tariff filed with the Interstate Commerce
Commission; and any such limitation, without respect to
the manner or form in which it is sought to be made is
declared to be unlawful and void: Provided, That if the
loss, damage, or injury occurs while the property is in the
custody of a carrier by water the liability of such carrier
shall be determined by the bill of lading of the carrier by
water and by and under the laws and regulations applicable
to transportation by water, and the liability of the initial
or delivering carrier shall be the same as that of such ear-
rier by water: Provided, however, That the provisions
hereof respecting liability for full actual loss, damage, or
injury, notwithstanding any limitation of liability or re-
covery or representation or agreement or release as to
value, and declaring any such limitation to be unlawful and
void, shall not apply, first, to baggage carried on passenger
trains or boats, or trains or boats carrying passengers;
second, to property, except ordinary livestock, received for
transportation concerning which the carrier sha!l have been
or shall be expressly authorized or required by order of
the Interstate Commerce Commission to establish and
45a
Text of Carmack Amendment, 49 U SC.,
Section 20(11), Applicable During the
Times in Question
maintain rates dependent upon the value declared in writ-
ing by the shipper or agreed upon in writing as the re-
leased value of the property, in which case such declara-
tion or agreement shall have no other effect than to limit
liability and recovery to an amount not exceeding the value
so declared or released, and shall not, so far as relates
to values, be held to be a violation of section 10 of this
title; and any tariff schedule which may be filed with the
commission pursuant to such order shall contain specific
reference thereto and may establish rates varying with
the value so declared and agreed upon; and the commis-
sion is empowered to make such order in cases where rates
dependent upon and varying with declared or agreed values
would, in its opinion, be just and reasonable under the
circumstances and conditions surrounding the transporta-
tion. The term “ordinary livestock” shall include all cattle,
swine, sheep, goats, horses, and mules, except such as are
chiefly valuable for breeding, racing, show purposes, or
other special uses: Provided further, That nothing in this
section shall deprive any holder of such receipt or bill of
lading of any remedy or right of action which he has under
the existing law: Provided further, That all actions brought
under and by virtue of this paragraph against the deliver-
ing carrier shall be brought, and may be maintained, if
in a district court of the United States, only in a district,
and if in a State court, only in a State through or into
which the defendant carrier operates a line of railroad:
Provided further, That it shall be unlawful for any such
receiving or delivering common carrier to provide by rule,
contract, regulations, or otherwise a shorter period for the
filing of claims than nine months, and for the institution of
46a
Text of Carmack Amendment, 49 U.S.C.,
Section 20(11), Applicable During the
Times in Question
suits than two years, such period for institution of suits
to be computed from the day when notice in writing is
given by the carrier to the claimant that the carrier has
disallowed the claim or any part or parts thereof specified
in the notice: And provided further, That for the purposes
of this paragraph and of paragraph (12) of this section
the delivering carrier shall be construed to be the carrier
performing the line-haul service nearest to the point of
destination and not a carrier performing merely a switch-
ing service at the point of destination: And provided fur-
ther, That the liability imposed by this paragraph shall
also apply in the case of property recousigned or diverted
in accordance with the applicable tariffs filed as in this
chapter provided. Feb. 4, 1887, c. 104, Pt. I, § 20, 24 Stat.
386; June 29, 1906, c.. 3591, § 7, 34 Stat. 593; Mar. 4, 1915,
ce. 176, § 1, 38 Stat. 1196; Aug. 9, 1916, ¢. 301, .39 Stat. 441;
Feb. 28, 1920, c. 91, §§ 436-438, 41 Stat. 494; July 3, 1926,
ce. 761, 44 Stat. 835; Mar. 4, 1927, c. 510, § 3, 44 Stat. 1448;
Apr. 238, 1930, ¢. 208, 46 Stat. 251; Aug. 9, 1935, ¢. 498,
§1, 49 Stat. 543; Sept. 18, 1940, ¢. 722, Title I, § 13(b),
54 Stat. 919. (Underlining supplied.)
47a
Text of 49 U.S.C., Section 10730,
Effective October 17, 1978
§ 10730. Rates and liability based on value
The Interstate Commerce Commission may require or
authorize a carrier providing transportation or service sub-
ject to its jurisdiction under subchapter J, II, or IV of
chapter 105 of this title, to establish rates for transporta-
tion of property under which the liability of the carrier for
that property is limited to a value established by written
declaration of the shipper, or by a written agreement, when
that value would be reasonable under the circumstances
surrounding the transportation. A rate may be made ap-
plicable under this section to livestock only if the livestock
is valuable chiefly for breeding, racing, show purposes, or
other special uses. A tariff filed with the Commission
under subchapter IV of this chapter shall refer specifically
to the action of the Commission under this section.
Pub.L. 95-473, Oct. 17, 1978, 92 Stat. 1389.
48a
Inland Bill of Lading For the Shipment in Question
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