Opposition Brief — Bernard v. Ingersoll Milling Machine Co.

—_

5 upremeé Court, U.S.

Sup LED

No. 87-897“ (oes

JAN: @ st

i

IN THE 's F, SPANIOL, JR

Ts BOSEE “ CLERK

Supreme Court of the United

OCTOBER TERM, 1987

>

J.E. BERNARD & Co.,

Petitioner,

Vv.

THE INGERSOLL MILLING MACHINE COMPANY, M/V

BODENA, her engines, boilers, etc., EXCELLENT MARINE,

INC., TAIWAN INTERNATIONAL LINE LIMITED and FIRE-

MAN’S FUND INSURANCE CO.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF OF RESPQNDENT THE INGERSOLL

MILLING MACHINE COMPANY IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

JOHN DOAR

Counsel of Record

DOAR DEVORKIN & RIECK

233 Broadway, 10th Floor

New York, New York 10279

(212) 619-3730

Attorney for Respondent

The Ingersoll Milling Machine

Company

Of Counsel:

MICHAEL S. DEVORKIN

DOAR DEVORKIN & RIECK

233 Broadway, 10th Floor

New York, New York 10279

(212) 619-3730

|

\

ye y x

; |

N ~

Nah 7

Ul WA - ie

7 ; ca

; eo A

fe BER Say ;

7, bey,

| ‘ :

| \ 2

\ j

t \

| » j

&

} \ a K

i :

; | :

Yond ae

|

| /

| d

} ‘

*

/.

4 .

, \

x ee Y | ,

| & :

7 | ~ « .

en : \ . oe

\ 4

‘ % :

raat \ :

See

2 \ ;

: i

s x v4

c a

: \ yy % : i 5 BE

i, Rivednise ss

Fag ,

; - Us

not >

3

, 3 =

(x tf :

<

wv . a :

De HAV es 2 =

o . ot ; .

d Nv ¢ .

- ; om

is) ! / ,

7s |

:

ene ;

QUESTIONS PRESENTED

1. Whether the courts below were erroneous in finding that

petitioner Bernard provided freight forwarding services to the

shipper and the ocean carrier that were maritime in character

and essential to the ocean shipment of goods, and thus con-

cluding that the freight forwarding contract was within the

scope of admiralty jurisdiction?

2. Whether this Court should reach the issue of admiralty

jurisdiction where there is also diversity jurisdiction and pen-

dant party jurisdiction?

3. Whether the lower courts erred in concluding that as a

matter of law or of fact an “on deck shipper’s risk” bill of

lading is not clean.

il

RULE 28.1 STATEMENT

Respondent The Ingersoll Milling Machine Company is a

wholly owned subsidiary of Ingersoll International, Inc.

ili

TABLE OF CONTENTS

PAGE

Oar UPON MMII REED ccc csc ccnescaccasccas i

NE il

SURE MES CORES on ccc cesses ceesecs 2

REASONS FOR DENYING THE WRIT............. 4

I. The Second Circuit’s Decision is Based on an

Analysis of the Maritime, Non-preliminary Char-

acter of Bernard’s Work in Light of the Factual

Record. It Did Not Expand the Principles of

eck acced sec sessisecs 4

Ii. This Case Is Not An Appropriate One For The

Review Of The Principles Of Admiralty Jurisdic-

tion, Because There Also Was Diversity and Pen-

I UN coc c icc sc nevenceesess 7

re 7

B. Pendant Party Jurisdiction................. 9

lil. As A Matter Of Law And Of Fact, The Bill Of

I EN a ica sc scvsccececeess 11

I ee eee ee eee ee 14

TABLE OF AUTHORITIES

Cases: PAGE

Aldinger v. Howard, 427 U.S. 1 (1976)............... 10

Astor-Honor, Inc. v. Grosset & Dunlap, Inc., 441 F.2d

ee Oe GA PE ac adla ceca eeaeiedhaeads y

Boudreaux v. Puckett, 611 F.2d 1028 (Sth Cir. 1980) ... 1]

Calimaquip Eng. West Hemisphere Corp. v. West Coast

Carrier’s Ltd., 650 F.2d 633 (Sth Cir. 1981) ......... 12

DeBellas v. United States, 542 F. Supp. 999 (S.D.N.Y.

ERR ome sap Pe mre ain ites bent Asner ae ees 10

The Delaware, 81 U.S. (14 Wall) 579 (1874)........... 12

E.S. Binnings, Inc. v. M/V Saudi Riyadh, 815 F.2d 660

Se aan Te ko oun a we Coen ee bao kaek owokel 4, 6, 7

Hinkens Steamship Agency, Inc. v. Freighters, Inc., 498

eee Se PO eo bk d sk dud hoo Woo eene a eaes 7

Hipp v. United States, 313 F. Supp. 1152 (E.D.N.Y.

Poet she rate oe riites a SUS UE ON CEL RSL oe e) 9

The Idefjord, 114 F.2d 262 (2d Cir.), cert. denied, 311

Stas EE Ea oes b4- wa Loess alee ees Sey S's 12

Insurance Co. v. Dunham, 78 U.S. (11 Wall) 1 (1871).. 5

Kossick v. United Fruit Co., 365 U.S. 731 (1961)...... 5

Leather’s Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800

SE: SE va wihce eee addcnee nok eeeb anewenes 9, 10, 11

Lykins v. Pointer, 725 F.2d 645 (11th Cir. 1984)... ... 1]

Maltais v. United States, 439 F. Supp. 540 (N.D.N-Y.

| RN ry ee eres en ree nar eee En RIT FRE 9

PAGE

Minturn v. Maynard, 58 U.S. (17 How.) 477 (1855)... .4, 5, 7

Moor v. County of Alameda, 411 U.S. 693 (1973)..... 9

Morse Electro Products Corp. v. S.S. Great Pearce, 437

Fu I Se es POR Wis owes dasdedeawasans 10, 11

Ortiz v. United States, 595 F.2d 65 (1st Cir. 1979) ..... 1]

Owen Equipment and Erection Company v. Kroger, 437

Ra IG cas xd 6k x dea bees baa eT ss 10

Peralta Shipping Corp. v. Smith & Johnson (Shipping)

Corp., 739 F.2d 798 (2d Cir. 1984), cert. denied, 470

Ce ee SS cscs ca sbAes eee ewecseneraeesansy » a

Reid v. Fargo, 241 U.S. 544 (1916) .................. 6

St. Johns N.F. Shipping Corp. v. §.A. Companhia Geral

Commercial Do Rio De Janeiro, 263 U.S. 119 (1923) 12

The Thames, 10 F. 848 (S.D.N.Y. 1881) .............. 5

United Mine Workers of America v. Gibbs, 383 U.S. 715

(1966)....... Re Oy Ge TP NG PADD wee hy Fed 9

Rules And Statutes:

ae we Ns 6 ns caSencastssccdeevaeatenene 8

ee BE bok ad She hace ne bee Rees 10

rT ee ee er ery ery ee 10

PD rrr eee Par ee Saee e f ee Pr 6

MU Eo os <ssdo es eee 6

ees Perr rr err i Torre 6

Fed. R. Civ. P.

PO 0 ca kak aun ean d Sav oa ame eR ee eae 1]

CE os oun aba baa anes eee 11

ee. TH. Reee., TA DTG) ona vec ce rcstrcssccaveses 7

vi

PAGE

Miscellaneous:

Merchant Marine Officer’s Handbook, pp. 18-26 (4th

DE ssc an cites send ¢netsadeansseesl ena 12

U.S. Code Cong. & Ad. News, pp. 2699, 2702, 2704... 6

——-

IN THE

Supreme Court of the United States

E OCTOBER TERM, 1987

No. 87-897

>

J.E. BERNARD & CO.,

Petitioner,

Ve

THE INGERSOLL MILLING MACHINE COMPANY, M/V

BODENA, her engines, boilers, etc., EXCELLENT MARINE,

INC., TAIWAN INTERNATIONAL LINE LIMITED and FIRE-

MAN’S FUND INSURANCE CO.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

<>

BRIEF OF RESPONDENT THE INGERSOLL

MILLING MACHINE COMPANY IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

Respondent the Ingersoll Milling Machine Company respect-

fully requests that this Court deny the Petition for Writ of

Certiorari, seeking review of the Opinion of the United States

Court of Appeals for the Second Circuit in this case. That

opinion is reported at 829 F.2d 293 (2d Cir. 1986), and is

reprinted in Petitioner’s Appendix at la (“Pet. App. ___”).

The District Court opinion is reported at 619 F. Supp. 493

(S.D.N.Y. 1985), and is reprinted in Petitioner’s Appendix at

38a.

STATEMENT OF THE CASE

In August 1979, respondent The Ingersoll Milling Machine

Company (“Ingersoll”), Rockford, lilinois, booked cargo with

Taiwan International Line (“Taiwan”) through Taiwan’s Illi-

nois agent for shipment from New Orleans to Korea. The

cargo consisted of a $2.1 million special design metal working

milling machine.

The District Court found that Ingersoll and Taiwan entered

an oral contract of carriage for under deck stowage. (Pet. App.

49a). Although Ingersoll never gave permission for on deck

stowage, seventeen of the twenty boxes were stowed on deck

and were severely damaged by corrosion on arrival in Korea.

Ingersoll retained petitioner J.E. Bernard & Co. (“Bernard”)

to act as the freight forwarder for this shipment and instructed

it to perform certain tasks relating to the voyage. The District

Court found that Bernard was engaged to secure clean bills of

lading and to see that Taiwan followed instructions to issue

clean bills of lading. (Pet. App. 5Sla). Bernard was also

engaged to ensure that Ingersoll’s cargo would be properly

loaded so that proper bills would be issued. (Pet. App. 17a).

See JA 518-27, 560.’

Without Ingersoll’s knowledge, Taiwan’s agent in New Or-

leans marked the bills of lading “on deck shipper’s risk.” The

courts below found that such a bill of lading is not clean. (Pet.

App. 18a-19a, 50a-5la). After the ship sailed, Bernard received

the bill of lading but failed to examine its copies and failed to

advise Ingersoll that Taiwan had not followed instructions to

issue clean bills of lading. (Pet. App. 16a-17a, 20a-21a).

As the freight forwarder on Ingersoll’s shipment, Bernard

performed many tasks before and after the voyage began

which were essential to completion of the safe ocean voyage of

I “JA” refers to the Joint Appendix filed in the Court of Appeals. “E”

refers to the Exhibit volume thereof. “PX” refers to Plaintiff's Trial

Exhibits.

Ingersoll’s cargo. Its representative in the loading port ar-

ranged for necessary documentation to be prepared for accept-

ance of the cargo at the pier and coordinated the movement of

Ingersoll’s cargo to the pier. It also verified the loading of the

cargo on the ship. JA 518-27, 560-61.

Bernard was responsible for preparing, securing and review-

ing properly executed shipping documents, including the bill of

lading. JA 459, 464, 488-90, 492-93, 496, 498, 506, 560-65.

Bernard also paid the freight for Ingersoll, E 428, and billed

Ingersoll for preparation of the bill of lading and forwarding.

E 534. The Court of Appeals found that the procurement of

these documents relating to a shipment by sea was “an essential

and integral part of the shipping process.” (Pet. App. 16a).

Furthermore, Bernard performed some tasks for the carrier.

Thus, in order to receive its commission from Taiwan, Bernard

certified to Taiwan that it had performed “the solicitation and

securing of the cargo for the ship or the booking of, or

otherwise arranging for, space for such cargo,” and

“(1) The coordination of movement of the cargo to

shipside; (2) The preparation and processing of the ocean

bill of lading; (3) The preparation of dock receipts or

delivery orders; (4) The preparation and processing of

consular documents or export declarations; (5) the pay-

ment of the ocean freight charges on the cargo.” PX 124.

As a result of Bernard’s breach of its contract, the cargo

travelied on deck and was badly damaged. (Pet. App. 20a-

21a). Bernard did not provide the safe aoa which it had

promised to help secure.

In July 1980, Ingersoll filed suit against Bernard, Taiwan,

and Fireman’s Fund Insurance Co. (its own insurance carrier)

in the Northern District of lilinois, on the basis of admiralty

jurisdiction. The suit was later transferred to the Southern

District of New York and consolidated for trial with Ingersoll’s

suit against Taiwan and Excellent Marine Inc., the vessel’s

owner. Bernard and Taiwan cross-claimed against one another.

Although Bernard moved for summary judgment on the basis

of the bills of lading, it never moved to challenge the jurisdic-

tion of the Court or to request a jury trial. Rather, it ques-

tioned subject matter jurisdiction for the first time in its

post-trial brief.

The District Court rejected Bernard’s belated challenge to its

jurisdiction and its argument that Bernard’s work had been

performed only preliminary to or after the completion of the

voyage. It found Bernard’s actions in preparing and processing

the bill of lading and other vital documents and in paying the

ocean freight were maritime in character and necessary for the

shipment to Korea. (Pet. App. 54a).

The Second Circuit also rejected Bernard’s jurisdictional

challenge. It affirmed the District Court’s finding that

Bernard’s work was of a non-preliminary nature, and that the

tasks which Bernard agreed to perform were maritime in

nature and essential to the voyage. Accordingly, it held that

there was admiralty jurisdiction. (Pet. App. 16a-17a).

The lower courts also considered all of the relevant evidence

offered by both sides on the subject of clean bills of lading,

and rejected Bernard’s claim that as a matter of law a bill of

lading marked “on desk shipper’s risk” is a clean bill of lading.

The Second Circuit denied Bernard’s petition for rehearing

with a request for rehearing en banc.

REASONS FOR DENYING THE WRIT

I. The Second Circuit’s Decision is Based on an Analysis

of the Maritime, Non-preliminary Character of

Bernard’s Work in Light of the Factual Record. It Did

Not Expand the Principles of Admiralty Jurisdiction.

Petitioner contends that the Second Circuit’s decision below

conflicts with the rule of Minturn v. Maynard, 58 U.S. (17

How.) 477 (1855), that general agency contracts are not recog-

nizable in admiralty, with a decision of the Eleventh Circuit in

E.S. Binnings, Inc. v. M/V Saudi Riyadh, 815 F.2d 669 (11th

Cir. 1987), and with its own decision in Peralta Shipping Corp.

v. Smith & Johnson (Shipping) Corp., 739 F.2d 798 (2d Cir.

1984), cert. denied, 470 U.S. 1031 (1985).

To the contrary, the Second Circuit carefully considered and

followed Minturn in its factual analysis of Bernard’s activities.

The evidence showed, and the Court found, that Bernard’s

contract was not that of a general agent and that its duties were

not preliminary or incidental to the ocean carriage of Inger-

soll’s cargo. We believe that these findings that the Second

Circuit affirmed were correct.

Minturn involved a general agent’s demand against its prin-

cipal for a balance of accounts. The agent sought payment for

money for husbanding services provided to the shipowner in

paying for supplies, repairs and similar charges for the vessel.

The Second Circuit did not vary from or expand Minturn,

because Ingersoll’s contract with Bernard was plainly not a

general agency contract for husbanding services to a vessei, or

even a general agency contract of any type.’

To the contrary, Bernard contracted to and did provide

essential services to the shipper related to a specific ocean

voyage. It coordinated the movement of cargo to the ship, had

a representative in the loading port, provided key documents

for the voyage, verified that the cargo was loaded, reviewed the

documents after sailing and paid the freight.

Bernard argues that its services were “shoreside,” and inci-

dental or preliminary to the voyage. Bernard implies (Pet. 6),

as it argued below in reliance on The Thames, 10 F. 848

(S.D.N.Y. 1881), that “shoreside” work is not maritime. This

Court has long ago rejected the “locality test” for maritime

contracts. Jnsurance Co. v. Dunham, 78 U.S. (11 Wall) 1, 26

(1871). The boundaries of admiralty jurisdiction are concep-

tual. Kossick v. United Fruit Co., 365 U.S. 731, 735 (1961).

2 Bernard did not argue below and does not actually contend here that

it had a general agency contract with Ingersoll. This is for good reason,

since in order to avoid liability, Bernard has consistently argued that its

contractual tasks were de minimis, and that it was little more than a

messenger.

6 =

The Second Circuit properly focused on the character of the

work as determinative, and on this factual record properly

concluded that Bernard’s work was essential to the ocean

voyage of Ingersoll’s cargo and therefore maritime.’

Bernard paid the ocean freight. Bernard was charged with

procuring clean ocean bills of lading, doing whatever was

necessary after the vessel sailed to review them and advising

Ingersoll appropriately. Bernard was not a mere messenger. It

had an affirmative obligation to secure for Ingersoll clean bilis.

It undertook this obligation for Ingersoll, an inland shipper, in

order to insure that Ingersoll’s cargo was actually and properly

loaded on the vessel and that it would experience a safe ocean

voyage. In seeking payment for its services, Bernard certified

to Taiwan that it had coordinated the movement of the cargo

to the vessel and that it had prepared and processed the ocean

bill of lading. Because it was engaged to perform these tasks

and “was engaged to ensure that Ingersoll’s cargo would be

properly loaded on board the M/V Bodena so that proper bills

of lading would be issued,” (Pet. App. 17a), the courts below

properly concluded that Bernard and Ingersoll had a maritime

contract which supported admiralty jurisdiction.

Bernard wrongly asserts that there is a conflict with E.S.

Binnings, Inc. v. M/V Saudi Riyadh, supra. That case involved

a general agency contract for husbanding services. Bernard’s

services were not part of a continuing or general agency

relationship, were not similar to husbanding services, and did

not “end when the freight is placed at the pier.” /d., 815 F.2d at

664. Its services for Ingersoll’s cargo continued through and

after the loading on board and the issuance of the loading on

3 The District Court took note of cases in which this Court, see Reid

v. Fargo, 241 U.S. 544, 545-46 (1916), and other federal courts “have

traditionally exercised admiralty jurisdiction over shipper’s claims

against freight forwarders.” (Pet. App. 53a). Congress, in regulating

ocean freight forwarders, see 46 U.S.C. §§ 801, 841b(a); 46 C.F.R.

Part. 510, has specifically found their services “ ‘essential’ for success-

ful vessel operation.” See 1961 U.S. Code Cong. & Ad. News, 2699,

2702, 2704. The Second Circuit took note of these cases but decided

the case on the basis of the specific tasks performed by Bernard. (Pet.

App. 14a).

board and the issuance of the proper written ocean contract of

carriage and other shipping documents. These services were

critical to the manner of, and contract by which this specific

cargo would be shipped and its safe ocean journey would be

assured.

There is also no conflict with the other decisions cited by

Bernard. Peralta Shipping Corp. v. Smith & Johnson (Ship-

ping) Corp., supra, involved a routine husbanding contract.

See E.S. Binnings, Inc. v. M/V Saudi Riyadh, supra, 815 F.2d

at 664-65. In its decision below, the Second Circuit did not rely

on Hinkens Steamship Agency, Inc. v. Freighters, Inc., 498

F.2d 411 (9th Cir. 1974), to expand or distinguish Minturn. It

merely cited it for the proposition that the character of the

work is controlling.

Il. This Case Is Not An Appropriate One For The Review

Of The Principles of Admiralty Jurisdiction, Because

There Also Was Diversity and Pendant Party Jurisdic-

tion.

Bernard’s attempt to deny any federal jurisdiction is unavail-

ing, because there was diversity and pendant party jurisdiction.

Although the courts below did not reach these issues, the

existence of these alternative grounds for decision, makes this

an inappropriate case to reach the constitutional question of

the scope of admiralty jurisdiction.

A. Diversity Jurisdiction.

There was diversity jurisdiction, because in July 1980, at the

time the underlying action was filed, Ingersoll was an Illinois

business, and Bernard was a New York corporation. Official

records of the New York Secretary of State (included in

Respondent’s Appendix hereto, “Res. App. ___”), of which

this Court may take notice, Rule 201(f), Fed. R. Evid.;

Massachusetts v. Westcott, 431 U.S. 322, 323 n.2 (1977), show

that on December 7, 1925, Bernard was incorporated in New

York. (Res. App. la). On May 3, 1982, it changed its name to

Radix Group International, Inc., and on June 16, 1982, a new

J.E. Bernard & Co., Inc. was incorporated in New York. (Res.

App. 2a, 3a). In public filings with the SEC, its parent stated

that on October 1, 1981, it acquired Bernard and that on May

1, 1982, Bernard was reorganized into Radix.

In its Petition as originally filed with this Court, Bernard

asserted that there was no diversity because at the time the

action was filed both Ingersoll and Bernard were “incorpo-

rated under the laws of the state of Illinois.” (Pet. 8, n. 1). This

statement was not correct. Counsel for Ingersoll then advised

counsel for Bernard that on the basis of official state records

of New York and Illinois, it did not appear that Bernard had

ever been incorporated in Illinois. Bernard has since inserted a

correction of this misstatement so that its Petition now reads:

“At the time the underlying action was filed both

Ingersoll and Bernard had their principal places of busi-

ness in Illinois.” (Pet. 8, n. 1).

This new representation is also incorrect.

Official records of the Illinois Secretary of State show that

on February 1, 1977, in Bernard’s first application for author-

ity to transact business in Illinois, it stated under oath that it

was incorporated in New York and that its principal place of

business was in New York. (Res. App. 6a). Thus, at the time of

the filing of the action,’ Bernard was a New York corporation,

28 U.S.C. § 1332(c), and there clearly was diversity.

4 In May, 1982, Radix amended Bernard’s Illinois filing to note the

name change to Radix, but it still stated that New York was the

principal office designated in the charter, it listed New York as one of

its principal offices, and it stated the principal officers were located in

New York. (Res. App. Ila, 12a). On January 2, 1987, Bernard’s

authority to transact business in Illinois was revoked. (Res. App. 17a).

5 In 1980, when Ingersoll filed its complaint by its Illinois counsel, it

believed that Bernard was incorporated in and had its principal place

of business in Illinois and it so pleaded in the complaint. However,

diversity was not then an issue. If Bernard had made jurisdiction an

issue before post-trial briefs so that the District Court could have

reviewed the matter, there would have been discovery, and the fact that

Bernard is indisputably a New York corporation would have been

disclosed.

9

B. Pendant Party Jurisdiction

This case also meets the requirements laid down by this

Court for pendant party jurisdiction over a strictly state claim.

In United Mine Workers of America v. Gibbs, 383 U.S. 715,

725-26 (1966), this Court recognized the power of the federal

courts to adjudicate a state claim in a federal question case

when the relationship between the claims “permits the conclu-

sion that the entire action before the Court comprises but one

constitutional ‘case,’ ” on a “common nucleus of operative

fact.” The exercise of this pendant jurisdiction is within the

discretion of the court, giving due consideration to “judicial

economy, convenience, and fairness to litigants.” Jd., at 726.

Gibbs involved a single plaintiff and a single defendant, but

the lower court trend has been in favor of recognizing the

federal power to exercise pendant party jurisdiction over de-

fendants named only with respect to state claims, provided

that, as here, they arise from a common nucleus of operative

facts with the federal claims against-the other defendants. See

Moor v. County of Alameda, 411 U.S. 693, 714-15 (1973);

Astor-Honor, Inc. v. Grosset & Dunlap, Inc., 441 F.2d 627,

629-30 (2d Cir. 1971); Maltais v. United States, 439 F. Supp.

540, 547-48 (N.D.N.Y. 1977); Hipp v. United States, 313 F.

Supp. 1152, 1155 (E.D.N.Y. 1970).

In a case squarely on point, the Second Circuit has held that

in an admiralty suit against a carrier for breach of the contract

of carriage, the court may exercise pendant party jurisdiction

over tort claims against a non-diverse terminal operator. Leath-

er’s Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 809-11 (2d

Cir. 1971).

This Court has not resolved the question of the scope of

pendant party jurisdiction, but has applied a case by case

analysis based on the context in which its application is sought.

In Moor v. County of Alameda,-supra, 411 U.S. at 713-i5, the

Court assumed, arguendo, the existence of pendant party

jurisdiction, but upheid the lower court’s application of its

10

discretion not to exercise it. In A/dinger v. Howard, 427 U.S.

1, 16-18 (1976), the Court affirmed the denial of pendant party

jurisdiction in connection with 42 U.S.C. § 1983, but it did so

because of specific Congressional action excluding certain

parties from the scope of § 1983 cases. The Court took care to

state that a different case was presented where the grant of

federal jurisdiction is exclusive, because “the argument of

judicial economy and convenience can be coupled with the

additional argument that only in a federal Court may all of the

claims be tried together.” Jd., 427 U.S. at 18 (footnote omit-

ted). See also Owen Equipment and Erection Company vy.

Kroger, 437 U.S. 365 (1978) (no pendant jurisdiction when

federal jurisdiction is based only on diversity).

Subsequent to A/dinger, several courts have ruled that pen-

dant party jurisdiction should be exercised where (1) the state

and the federal claim arise from a common nucleus of opera-

tive facts; (2) Congress has not expressly or by implication

negated the existence of jurisdiction; and (3) considerations of

judicial economy, convenience, and fairness to litigants call for

the exercise of jurisdiction, taking account of the exclusivity of

federal jurisdiction and the ability to obtain full relief in one

Court. DeBellas v. United States, 542 F. Supp. 999, 1004

(S.D.N.Y. 1982) (Federal Tort Claims Act case); accord Morse

Electro Products Corp. v. S.S. Great Pearce, 437 F. Supp. 474,

479, 483-85 (D.N.J. 1977) (admiralty action citing the Second

Circuit decision in Leather’s Best, Inc. v. S.S. Mormaclynx,

supra).

Here, where Ingersoll’s claims against all other defendants

are subject to the exclusive admiralty jurisdiction granted to

the federal courts, 28 U.S.C. § 1333, and there is no contrary

legislative or policy reason for not also hearing the claim

against Bernard, Ingersoll’s claim against Bernard satisfies the

most stringent standards for exercising pendant jurisdiction.

Ingersoll’s claims against all defendants (and the third party

claims among the defendants) are all derived from a common

nucleus of operative facts. Efficiency, fairness, consistency of

result and completeness of relief all argue for one federal

1]

forum. Lykins v. Pointer, 725 F.2d 645, 647 (11th Cir. 1984);

Boudreaux v. Puckett, 611 F.2d 1028, 1031 (Sth Cir. 1980);

Ortiz v. United States, 595 F.2d 65 (1st Cir. 1979).

Prior to its post-trial brief, Bernard raised no objection to

the federal forum or to the transfer from Illinois. The conclu-

sion is inescapable that Bernard never did so because it recog-

nized that these claims arise in admiralty. With the case ready

for decision after a long trial, it made no sense and would have

been a great waste of judicial resources, for the District Court

not to exercise pendant jurisdiction over Bernard.

Bernard’s final contention that the exercise of pendant

jurisdiction over Ingersoll’s claim deprived it of a right to trial

by jury is equally without merit. As the Second Circuit has

held in the identical context, Bernard’s failure to demand a

trial by jury constituted a waiver of that right pursuant to Rule

38(d), Fed. R. Civ. P., and there is no obstacle to the exercise

of pendant jurisdiction. Leather’s Best, Inc. v. S.S. Morma-

clynx, supra, 451 F.2d at 810-11, n.12; see also Morse Electro

Products Corp. v. S.S. Great Pearce, supra, 437 F. Supp at

484. Furthermore, Bernard has nobody to blame but itself for

its alleged loss of a jury trial. Had it given the District Court an

early opportunity to address jurisdiction, it could have ap-

pealed to the Court’s discretion under Fed. R. Civ. P. 39(b).

Ill. As A Matter Of Law And Of Fact, The Bill Of Lading

Was Not Clean.

Bernard seeks a review of its liability for failure to secure

clean bills of lading on the grounds that the courts below

misinterpreted the meaning of “clean.” Bernard does not

explain why this is an important question of federal law for

this Court to decide. It plainly is not. Furthermore, the Second

Circuit’s decision is consistent with numerous decisions of this

Court and other circuits. The courts below did consider

Bernard’s evidence to support its contentions as to the meaning

of a clean bill of lading and found that the record as a whole

did not support Bernard’s position.

12

_ The Second Circuit agreed with the District Court and held

that the phrase a “clean bill of lading” is not limited to

describing the condition of the goods, but “refers also to the

place on a ship where cargo is to be stowed.” (Pet. App. 18a).

As the Second Circuit recognized (Pet. App. 19a), the cases

and the commentators have long been in accord that a clean

bill of lading imports stowage under desk. The Delaware, 81

U.S. (14 Wall) 579 (1874); see St. Johns N.F. Shipping Corp. v.

S.A. Companhia Geral Commercial Do Rio De Janeiro, 263

U.S. 119, 124 (1923); The Idefjord, 114 F.2d 262, 266 (2d Cir.),

cert. denied, 311 U.S. 707 (1940); Calmaquip Eng. West Hemi-

sphere Corp. v. West Coast Carrier’s Ltd., 650 F.2d 633, 639

(Sth Cir. 1981).

Bernard seeks to avoid the force-of-one hundred years of

case law and the views of most commentators by claiming that

the courts below refused to consider its evidence of the parties’

intent and the meaning of the term in the trade. This is untrue.

The District Court considered all of the evidence offered by

both sides. Bernard’s claims were refuted by the evidence. For

example, Ingersoll’s expert, an independent freight forwarder

with forty years of experience, testified that the phrases “on

deck” or “shipper’s risk” made the bill of lading not ~ecan

because each limits the responsibility of the steamship line to

the shipper. JA 1048-1 to 1049, 1061, 1069-6, 7; 1890. The

Merchant Marine Officer’s Handbook, pp. 18-26 (4th ed.

1965), in evidence (E 363), is to the same effect. For these

reasons, Bernard plainly did not establish a custom in the

industry to support its position.

The District Court properly held that Bernard’s attempt to

limit the meaning of clean was illogical:

“The very purpose of clean on board bills of lading is to

provide the shipper with documentation that the damage

to his goods, if any occurs, cannot be attributed to him.

in short, its purpose is to relieve the shipper of risk during

the voyage. The bills of lading in this case maintain

13

liability on Ingersoll throughout the voyage. Such bills

cannot be clean.”

(Pet. App. 50a). Whatever Bernard thought about the effect of

“on deck,” it had to know that the “shipper’s risk notation

rendered the bills of lading unclean.” (Pet. App. 51a).°

6 The INCO terms Bernard refers to were not part of Bernard’s

contract with Ingersoll. In any event, Bernard should have known

what constitutes a clean bill of lading (Pet. App. Sla), and the INCO

terms would not modify controlling precedents. (Pet. App. 18a, n.6).

For the reasons stated by the District Court, a common sense analysis

of the INCO definition shows it is consistent with those precedents.

Even Bernard, which thought this cargo was covered by a bank letter

of credit, JA 567, 575-76, knew that under Article 22a of INCO terms,

the banks would not accept Ingersoll’s bill of lading because it was

marked “on deck.”

14

CONCLUSION

For these reasons, the Petition for a Writ of Certiorari

should be denied.

Dated: New York, New York

December 31, 1987

JOHN DOAR

DOAR DEVORKIN & RIECK

233 Broadway, 10th Floor

New York, New York 10279

(212) 619-3730

Attorney for Respondent

The Ingersoll Milling Machine

Company

Of Counsel:

MICHAEL S. DEVORKIN

DOAR DEVORKIN & RIECK

233 Broadway, 10th Floor

New York, New York 10279

(212) 619-3730

APPENDIX

"BEST AVAILABLE COPY

2

>

la

STATE OF NEW YORK,

DEPARTMENT OF STATE, ss:

] HEREBY CERTIFY, that I have made diligent examination

of the index of corporation papers filed in this Department for

a certificate, order or record of a dissolution of RADIX GROUP

INTERNATIONAL, INC. the certificate of incorporation of

which corporation was filed December 7, 1925, under the name

of J. E. BERNARD & Co. INC., fixing the duration as per-

petual.

I further certify that I find the following amendments:

Certificate of Designation

Filed January 8, 1935

Certificate of Amendment of

Certificate of Incorporation

Filed January 29, 1945

Certificate of Amendment of

Certificate of Incorporation

Filed November 23, 1976

Certificate of Change

Filed November 18, 1980

Certificate of Merger of

FREEDMAN & SLATER, INC.

FREEDMAN & SLATER AIR CARGO CORP. and

NEWCO INTERNATIONAL TRANSPORTATION, INC.

with

J. E. BERNARD & Co. INC.

Filed April 28, 1982

Certificate of Merger of

WOLF & GERBER, INC.

with

J. E. BERNARD & CO. INC.

Filed April 28, 1982

2a

Certificate of Amendment of

J. E. BERNARD & Co. INC.

changing name to

RADIX GROUP INTERNATIONAL, INC.

Filed May 3, 1982

and that upon such examination, I find no such certificate,

order or record, and that so far as indicated by the records of

this Department, such corporation is a subsisting corporation.

WITNESS my hand and the official seal of the Department of

State at the City of Albany, this 13th day of December one

thousand nine hundred and eighty-five.

/s/ GAIL SHAFFER

Secretary of State

3a

STATE OF NEW YORK,

DEPARTMENT OF STATE, ss:

| HEREBY CERTIFY, that I have made diligent examination

of the index of corporation papers filed in this Department for

a certificate, order or record of a dissolution of J. E.

BERNARD & CO., INC., the certificate of incorporation of

which corporation was filed June 16, 1982, with perpetual

duration, and that upon such examination, | find no such

certificate, order or record, and that so far as indicated by the

records of this Department, such corporation is a subsisting

corporation.

WITNESS my hand and the official seal of the Department of

State at the City of Albany, this 13th day of December one

thousand nine hundred and eighty-five.

/s/ GAIL SHAFFER

Secretary of State

4a

File Number 5108-987-1

STATE OF ILLINOIS

OFFICE OF

THE SECRETARY OF STATE

TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:

I, JIM EDGAR, Secretary of State of the State of Illinois, do

hereby certify that the following and hereto attached is a true

copy of the Certificate of Authority and all Amendments

thereto, to date, including the latest Change of Registered

Agent or Registered Office of RADIX GROUP INTERNATIONAL,

INC.

IN TESTIMONY WHEREOF, | hereto set my hand and cause to

be affixed the Great Seal of the State of Illinois this 23rd day

of December A.D., 1987.

/s/ JIM EDGAR

Secretary of State

[SEAL]

Sa

Certificate Number 32387

STATE OF ILLINOIS

OFFICE OF

THE SECRETARY OF STATE

TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:

WHEREAS, J. E. BERNARD & CO. INC., incorporated under

the laws of the State of New York has filed in the Office of the

Secretary of State duly authenticated evidence of its incorpora-

tion and an application for Certificate of Authority to transact

business in this State, as provided by “THE BUSINESS CORPO-

RATION ACT” of Illinois, in force July 13, A.D., 1933.

Now THEREFORE, I, ALAN J. DIXON, Secretary of State of

the State of Illinois, by virtue of the powers and duties vested

in me by law, do hereby issue this Certificate of Authority and

attach thereto a copy of the application of the aforesaid

corporation.

IN TESTIMONY WHEREOF, I hereto set my hand and cause to

be affixed the Great Seal of the State of Illinois, done at the

City of Springfield this 10th day of February A.D. 1977 and of

the Independence of the United States the two hundred and

Ist.

/s/ ALAN J. DIXON

Secretary of State

[SEAL]

6a

Form BCA—106 or 114 Date Paid 2-10-77

(File in Duplicate) License Fee $ 50.00

Franchise Tax $ 141.67

Filing Fee $ 75.00

Penalty $ 26.94

Clerk 293.61

APPLICATION FOR CERTIFICATE OF AUTHORITY

OF FOREIGN CORPORATION

566 25

February 1, 1977

To ALAN J. DIXON, Secretary of State, Springfield, Illinois:

J. E. BERNARD & CO. INC., a corporation organized and

existing under and by virtue of the laws of the State of New

York hereby makes application for a certificate of authority to

transact business in the State of Illinois and submits the

following application pursuant to “The Business Corporation

Act,” of Illinois:

First—The above corporation was duly incorporated under

the laws of the State of New York on the 7th day of December,

A.D. 1925, for a perpetual term.

Second—The location of the prin © val office as designated in

the charter is New York, N.Y. The locations of its principal

places of business are: 90 West Street, New York, N.Y. 10006.

Third—The address of the proposed registered office of the

State of Illinois will be located at 39 S. La Salle Street in the

city of Chicago 60603, County of Cook, and the name of its

proposed registered agent in this State at such address is:

GEORGE HUGH BARNARD.

7a

Fourth—The corporation is transacting business and quali-

fied under the foreign corporation laws of the following states

and countries other than Illinois: New York

Fifth—The names of its officers and directors and their

addresses are as follows:

Name City and State Street and No.

President, Irwin Wortman-_. New York, N.Y. 90 West Street

Secretary, George Hugh Barnard Chicago, III. 39 S. La Salle St.

Director, Bruce A. Wilson Elk Grove Village, Ill. 2150 Landmeier Rd.

Director, Edward L. Jordan Elk Grove Village, Ill. 2150 Landmeier Rd.

Director, Morton John Barnard Chicago, IIl. 39 S. La Salle St.

Director, George Hugh Barnard Chicago, IIl. 39 S. La Salle St.

Sixth—The purpose or purposes for which it was organized

which it proposes to pursue in the transaction of business in

this State are:

Customs House Broker, Freight Forwarding, Transporta-

tion of Goods, Import and Export Trade (but not includ-

ing operation of railroads).

Seventh—The number of shares which it has authority to

issue, itemized by classes, par value of shares, shares without

par value, and series, if any, within a class, is:

Series Number Par value per share or statement

Class (if any) of Shares that shares are without par value

Common 1,000 Without par value

Eighth—The number of its issued shares, itemized by

classes, par value of shares, shares without par value, and

series, if any, within a class, is:

Series Number Par value per share or statement

Class (if any) of Shares that shares are without par value

Common 100 Without par value

(NOTE: “Issued” shares, as used above, include (1) “outstanding” shares,

and (2) all shares which have been issued and repurchased or

redeemed by the corporation, but not cancelled of record in the

home State.)

8a

Ninth—The amount of stated capital and the amount of

paid in surplus of the corporation as defined by “The Business

Corporation Act” of Illinois, is:

The corporation elects to pay its license fees and franchise

Tax on the basis of its total stated capital and paid-in-

surplus

Stated Capital. . .$100,000.00

(Note: If no Paid in

Surplus, insert “None”) Paid in Surplus .6 NONE

* * * * *

[Articles Tenth through Thirteenth omitted as they are blank

on appiication]

Fourteenth—INTERROGATORIES:

* * » * *

[Interrogatories (a) through (f) omitted as they are blank on

application]

(g) Is the corporation transacting business in this State at

this time? Yes

(h) If your answer is in the affirmative, state the exact

date on which it commenced to transact business in

Illinois: Feb. 1, 1977

IN WITNESS WHEREOF, the undersigned corporation has

caused this report to be executed in its name by its Vice

President attested by its ________- Secretary, this Ist day of

February, A.D. 1977.

J. E. BERNARD & CO., INC.

(Exact Corporate Title)

[SEAL] By /s/ EDWARD L. JORDAN

Vice President

Attest:

/s/ GEORGE HUGH BARNARD

Secretary

9a

STATE OF ILLINOIS,

COUNTY OF COOK, ss.

I, LUCILLE CAPRA, a Notary Public, do hereby certify that

on the Ist day of February, A.D. 1977, personally appeared

before me EDWARD L. JORDAN, who declares that he is Vice

President of the corporation, executing the foregoing docu-

ment, and being first duly sworn, acknowledged that he signed

the foregoing document in the capacity therein set forth and

declared that the statements therein contained are true.

IN WITNESS WHEREOF, I have hereunto set my hand and

seal the day and year before written.

/s/ LUCILLE CAPRA

Notary Public

[SEAL]

[Filed February 10, 1987]

10a

File Number 5108 987 1

STATE OF ILLINOIS

OFFICE OF

THE SECRETARY OF STATE

TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:

WHEREAS, APPLICATION FOR AMENDED CERTIFICATE OF

AUTHORITY TO TRANSACT BUSINESS IN THIS STATE, duly

signed and verified of RADIX GROUP INTERNATIONAL, INC.,

incorporated under the laws of the State of New York has been

filed in the office of the Secretary of State as provided by “The

Business Corporation Act” of Illinois in force July 13, A.D.,

1933.

Now THEREFORE, I, JIM EDGAR, Secretary of State of the

State of Illinois by virtue of the powers vested in me by law, do

hereby issue this certificate and attach thereto a copy of the

Application of the aforesaid corporation.

IN TESTIMONY WHEREOF, I hereto set my hand and cause to

be affixed the Great Seal of the State of Illinois, done at the

City of Springfield this 18th day of May A.D. 1982 and of the

Independence of the United States the two hundred and 6th.

/s/ JiM EDGAR

Secretary of State

[SEAL]

lla

5108-987-1

Form BCA—106 or 114 Date Paid 5-18-82

(File in Duplicate) License Fee s

Franchise Tax $

Filing Fee $

Penalty $ 25.00

Clerk BV

APPLICATION FOR AMENDED

, 19

To ALAN J. DIXON, Secretary of State, Springfield, Illinois:

RADIX GROUP INTERNATIONAL, INC. (formerly J.E.

Bernard & Co. Inc.), a corporation organized and existing

under and by virtue of the laws of the State of New York

hereby makes application for an amended certificate of author-

ity to transact business in the State of Illinois and submits the

following application pursuant to “The Business Corporation

Act,” of Illinois:

First—The above corporation was duly incorporated under

the laws of the State of New York on the seventh day of

December, A.D. 1925, for a Perpetual duration.

Second—The location of the principal office as designated in

the charter is New York, N.Y. The locations of its principal

places of business are: 152 William Street, New York, N.Y.;

1111 Nicholas Boulevard, Elk Grove, Illinois 60007.

Third—The address of the proposed registered office of the

State of Illinois will be located at 39 South LaSalle Street in the

city of Chicago (60606), County of Cook, and the name of its ~

proposed registered agent in this State at such address is:

George Hugh Barnard.

Fourth—The corporation is transacting business and quali-

fied under the foreign corporation laws of the following states

and countries other than Illinois:

Arizona, California, Florida

ait eenmaeentieneaeeaiil

12a

Fifth—The names of its officers and directors and their

addresses are as follows:

Date of

Name Office Address Taking Office

Pierre L. Schoenheimer Chairman 230 Park Avenue April 15, 1982

New York, N.Y.

John Radziwill President 156 William Street April 15, 1982

& Director New York, N.Y.

Don S. Friedkin Vice Pres., 230 Park Avenue April 15, 1982

Sec’y & New York, N.Y.

Director

Matthew Sheppard Vice Pres. 156 William Street April 15,

& Treas. New York, N.Y.

Patrick H. Canary Director 1111 Nicholas Blvd. April 15,

Elk Grove, Illinois

Joseph Weinberg Director 8728 Aviation Blvd. April 15,

Inglewood, Cal. 90301

Sixth—The purpose or purposes for which it was organized

which it proposes to pursue in the transaction of business in

this State are:

Customs House Broker, Freight Forwarding, Transporta-

- tion of Goods, and any other lawful purpose for which a

corporation may be organized in the State of Illinois.

Seventh—The number of shares which it has authority to

issue, itemized by classes, par value of shares, shares without

par value, and series, if any, within a class, is:

Par value per share or

Series Number statement that shares are

Class (if any) of Shares without par value

common N/A 1000 No par value

Eighth—The number of its issued shares, itemized by

classes, par value of shares, shares without par value, and

series, if any, within a class, is:

l3a

Par value per share or

Series Number statement that shares are

Class (if any) of Shares without par value

common N/A 100 No par value

(NOTE: “Issued” shares, as used above, include (1) “outstanding” shares,

and (2) all shares which have been issued and repurchased or

redeemed by the corporation, but not cancelled of record in the

home State.)

Ninth—The amount of stated capital and the amount of

paid in surplus of the corporation as defined by “The Business

Corporation Act” of Illinois, is:

Stated Capital. . .$100,000

(Note: If no Paid in

Surplus, insert “None”) Paid in Surplus. .$ none

* * ” * bal

[Articles Tenth through Fourteenth omitted as they are blank

on application)

IN WITNESS WHEREOF, the undersigned corporation has

caused this report to be executed in its name by its Vice

President attested by its __. Secretary, this Ist

day of May, A.D. 1982.

RADIX GROUP INTERNATIONAL, INC.

(Exact Corporate Title)

By /s/ M.P. SHEPPARD

Vice President

[SEAL]

Attest: /s/ [Illegible]

Secretary or Assistant Secretary

l4a

STATE OF NEW YORK,

COUNTY OF NEW YORK, ss.

1, PETER J. BERNBAUM, a Notary Public, do hereby certify

that on the Ist day of May, A.D. 1982, personally appeared

before me MATTHEW P. SHEPPARD, who declares that he is

Vice President of the corporation, executing the foregoing

document, and being first duly sworn, acknowledged that he

signed the foregoing document in the capacity therein set forth

and declared that the statements therein contained are true.

IN WITNESS WHEREOF, | have hereunto set my hand and

seal the day and year before written.

/s/ PETER J. BERNBAUM

Notary Public

PETER JAY BERNBAUM

Notary Public, State of New York

No. 30-4618346

Qualified in Nassau County

Certificate filed in New York County

Commission Expires March 30, 1983

[SEAL]

[FILED MAY 18, 1982]

15a

File #5108-987-1

BCA 5.10/5.20 (Rev. Jul. 1984) This Space For Use By

Submit in Duplicate Secretary of State

Remit payment in Check or Date

Money Order, payable to Filing Fee $5.00

“Secretary of State”.

DO NOT SEND CASH! Clerk

Secretary of State

State of Illinois

STATEMENT OF CHANGE OF REGISTERED AGENT

AND/OR REGISTERED OFFICE

Pursuant to the provisions of “The Business Corporation

Act of 1983”, the undersigned corporation hereby submits the

following statement.

1. The name of the corporation is RADIX GROUP INTERNA-

TIONAL, INC.

2. The State or Country of incorporation is New York

3. The name and address of its registered agent and its regis-

tered office as they appear on the records of the office of

the Secretary of State (Before Change) are:

Registered Agent No Change

First Name Middle Name Last Name

Registered Office 222 West Adams Street

Number Streei Suite No. (A PO. Box

alone is not acceptable)

Chicago 60606 Cook

City Zip Code County

l6a

4. The name and address of its registered agent and its regis-

tered office shall be (After All Changes Herein Reported):

Registered Agent The Prentice-Hall Corporation

System, Inc.

First Name Middle Name Last Name

Registered Office 33 North LaSalle Street

Number Street Suite No. (A PO. Box

alone is not acceptable)

Chicago 60602 Cook

City Zip Code County

5. The address of the registered office and the address of the

business office of the registered agent, as changed, will be

identical.

6. The above change was authorized by: (“X” one box only)

a. LJ By resolution duly adopted by the

board of directors. (Note 5)

b. & By action of the registered agent. (Note 6)

(If authorized by the board of directors, sign here. See Note 5)

* * * * *

The undersigned, under penalties of perjury, affirms that the

facts stated herein are true.

The Prentice-Hall Corporation System, Inc.

By: /s/ STEPHEN W. CRAIG

(Signature of Registered Agent

of Record)

Stephen W. Craig, Vice-President

Dated March 3, 1986

[FILED FEBRUARY 28, 1986 SECRETARY OF STATE}

17a

P File Number 5281-086-8

STATE OF ILLINOIS

OFFICE OF

THE SECRETARY OF STATE

TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:

1, JIM EDGAR, Secretary of State of the State of Illinois, do

hereby certify that J. E. BERNARD & Co., INC., incorporated

in the State of New York and licensed to transact business in

this State August 9, 1982, corporation was Revoked by the

Secretary of State on January 2, 1987, for failure to file an

annual report and failure to pay franchise taxes, for the year

1986, thereby terminating their existence in the State of IIli-

nois.

IN TESTIMONY WHEREOF, I hereto set my hand and cause to

be affixed the Great Seal of the State of Illinois this 23rd day

of December A.D., 1987.

/S/ JIM EDGAR

Secretary of State

[SEAL]