Petition for Writ of Certiorari — American President Lines, Ltd. v. Gamma-10 Plastics, Inc.

Supreme Court brief1995

Ask Donna

What actually matters in this document.

Text

Supreme Court, U.S.

FILED

941188 JAN 4 19%

OFFICE Of THE Oak

IN THE

Supreme Court of the United States

OcTOBER TERM, 1994

AMERICAN PRESIDENT LINES, LTD.,

and AMERICAN PRESIDENT COMPANIES, LTD.,

Petitioners,

Vv.

GAMMA-10 PLASTICS, INC.,

Respondent.

Petition for Writ of Certiorari to the United

States Court of Appeals for the Eighth Circuit

PETITION FOR WRIT OF CERTIORARI

MICHAEL A. SNYDER

Counsel of Record

Ray, ROBINSON, CARLE, DAVIES

& SNYDER

850 West Jackson Boulevard

Suite 310

Chicago, Illinois 60607

(312) 421-3110

Attorney for Petitioners

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

QUESTION PRESENTED

In a dispute between a shipper and a carrier concerning

lost or damaged cargo, may the carrier rely on the provi-

sions of a federal statute explicitly incorporated into the

bill of lading and the tariff?

LIST OF PARTIES

All parties to the proceeding in the court of appeals

appear in the caption of the case.

American President Companies, Ltd. is the parent cor-

poration of American President Lines, Ltd., a wholly

owned subsidiary. American President Companies, Ltd.

has an interest in the following subsidiaries and affiliates:

— American Consolidation Services, Ltd.

— American President Trucking Company, Ltd.

— APL Information Services, Ltd.

— APL Land Transport Services, Inc.

— Eagle Marine Services, Ltd.

— Natomas Real Estate Company

The stock of American President Companies, Ltd. is

listed on the New York and Pacific Stock Exchanges.

ili

TABLE OF CONTENTS

PAGE

QUESTION PRESENTED ................... i

ee ii

TABLE OF AUTHORITIES ................. iv

a 1

EE 2

STATUTES INVOLVED ..................... 2

eek iwi basi aoe evcaeeceecs 3

REASONS FOR GRANTING THE PETITION 7

THE COURTS OF APPEALS ARE IN CON-

FLICT ON THE FORCE OF VALID TARIFF

EE inn 0h oa nbae vGWh'd caekie ates 8

THE COURTS OF APPEALS ARE IN CON-

FLICT ON THE FAIR OPPORTUNITY DOC-

RUE ue he vivwes bn oWheescenek ees 12

THE IMPORTANCE OF RESOLVING THE

eS oid elie chee osucpveses 20

eos a uc enaccsncdeesiesevavs 25

EE A-1

EE ee B-1

re C-1

sian 65 5 Hvk's ae nx b0e0sd000s D-1

aig d bss cuba dundee endaseees E-1

TABLE OF AUTHORITIES

CASES: PAGE

Acwoo International Steel Corp. v. Toko Kaivwn

Kaish, Ltd., 840 F.2d 1284 (6th Cir. 1988) .... 16

Aetna Insurance Co. v. M/V LASH Italia, 858

F.2d 190 (4th Cir. 1988) ........ccccccceees 16

Allstate Insurance Co. v. International Shipping

Corp., 703 F.2d 497 (11th Cir. 1988)....... 5, 6,9

Anticosti Shipping Co. v. St-Amand, 1959 S.C.R.

372, 19 D.L.R.2d 472, 1959 AMC 1526 (Can.) . 19

Binladen BSB Landscaping v. M.V. “Nedlloyd

Rotterdam,” 759 F.2d 1006 (2d Cir.), cert.

denied, 474 U.S. 902 (1985) .........---0 06. 15

Brown & Root, Inc. v. M/V Peisander, 648 F.2d

415 Gth Clr. WOGD) on wccccccccccsesss 10, 13, 15, 18

Carman Tool & Abrasives, Inc. v. Evergreen Lines,

871 F.2d 897 (9th Cir. 1989) .............. passim

Carnival Cruise Lines v. Shute, 499 U.S. 585 (1991) . 7

Caterpillar Overseas, S.A. v. Marine Transport,

Inc., 900 F.2d 714 (4th Cir. 1990) .......... 12, 16

Chan v. Korean Air Lines, 490 U.S. 122 (1989) .. 7

Cincinnati Milacron, Ltd. v. M/V American Legend,

804 F.2d 837 (4th Cir. 1986) (en banc) (per

CS nn ac tacccesasevesunebeyesnreenes 15

Cincinnati Milacron, Ltd. v. M/V American Legend,

784 F.2d 1161 (4th Cir.), superseded 804 F.2d

837 (4th Cir. 1986) (en banc) (per curiam) .. 16

Couthino, Caro & Co. v. M/V Sava, 849 F.2d 166

(Bitty Cir. THD occ vcccccccecccceteceveccess 15, 16

Crancer v. Lowden, 315 U.S. 631 (1942) ....... 8

> =e * > 6 ~

E.i.S. Industrie S.A. v. Polskie Towarzystwo

Okretowe, 608 F. Supp. 1133 (E.D.N.Y. 1985) 15, 16

Gebr. Bellmer Kg. v. Terminal Services Houston,

Inc., 711 F.2d 622 (5th Cir. 1983) (per curiam) .

6466000000 ON beck eee deemaseelca 10, 13, 15

General Electric Co. v. M/V Nedlloyd, 817 F.2d

1022 (2d Cir. 1987), cert. denied, 484 U.S. 1011

CE Wik 409.04 anand ssa sanedeweiewcs os 15

Henley Drilling Co. v. William H. McGee & Co.,

36 F.3d 143 (1st Cir. 1994).......... 13, 16, 18, 19

Institute of London Underwriters v. Sea-Land Ser-

vice, Inc., 881 F.2d 761 (9th Cir. 1989) ..... 13, 14

Insurance Co. of North America v. M/V Ocean

Lynx, 901 F.2d 934 (11th Cir. 1990), cert. de-

nied, 498 U.S. 1025 (1991) ................. 15

Insurance Co. of North America v. Puerto Rico

Marine Management, Inc., 768 F.2d 470 (ist

Cir. 1985), cert. denied, 474 U.S. 1102 (1986) .. 9, 21

Komatsu, Ltd. v. States S.S. Co., 674 F.2d 806 (9th

ele SE eee dite besiencss 62s eeee eu «+14

Lowden v. Simonds-Shields-Lonsdale Grain Co.,

ee I I a ae vas owercadebes 8

Maislin Industries, U.S., Inc. v. Primary Steel,

Inec., 497 U.S. 116 (1990) .................. )

Mori Seiki USA, Inc. v. M.V. Alligator Triumph,

990 F.2d 444 (9th Cir. 1993) ............... 12, 14

Mu, Inc. v. Puerto Rico Maritime Shipping Au-

thority, 1988 AMC 347 (4th Cir. 1987)...... 13, 16

Nemeth v. General S.S. Corp., 694 F.2d 609 (9th

Ry EE Wis les 5 PN Ses o's FAS 14

Pan American World Airways v. California Steve-

dore & Ballast Co., 559 F.2d 1173 (9th Cir.

BOTT) GOP CUTTRED) 2. ccccccsesevecnes 13, 14, 15, 21

Pearson v. Leif Hoegh & Co., 1992 AMC 1025 (4th

Cir. 1908) (per curfami) ....cccccccccccssess 16

Robert C. Herd & Co. v. Krawill Machinery Corp.,

SD UB. TOT COOP ibis ibe cc bee eee cece 22

Security Services, Inc. v. Kmart Corp., 114 S. Ct.

BOE CHEE 0 hes ccccdncenteeuveseseseesds. 8

Southwestern Sugar & Molasses Co. v. River Ter-

minals Corp., 360 U.S. 411 (1959)......... 9

Stolt Tank Containers, Inc. v. Evergreen Marine

Corp., 962 F.2d 276 (2d Cir. 1992)......... 21

Tessler Brothers (B.C.) v. Italpacific Line, 494 F.2d

oe et Me | Perper er tre 14, 15, 18

Toshiba International Corp. v. M/V “Sea-Land Ex-

press,”’ 841 F. Supp. 123 (S.D.N.Y. 1994)... 13

Trans World Airlines v. Franklin Mint Corp., 466

WB. GD GIR os ccccceccsccascestssneeess 24

Travelers Indemnity Co. v. Vessel Sam Houston,

26 F.3d 895 (9th Cir. 1994) ................ 14

Union Carbide Corp. v. M/V Michele, 764 F. Supp.

y 8 8k | Pere ee 15

Vimar Seguros Y Reaseguros, S.A. v. M/V Sky

Reefer, 63 U.S.L.W. 3420 (No. 94-623) (cert.

granted, Nov. 28, 1904) .........cccccceces 24

Wuerttembergische & Badische Versicherungs-

Aktiengesellschaft v. M/V Stuttgart Express,

711 F.2d 621 (5th Cir. 1983) (per curiam) ... 10

Z.K. Marine, Inc. v. M/V Archigetis, 808 F. Supp.

WSL CE.D. Fie. BGG 0 ve cceescwececccccces 13

vii

STATUTES AND TREATIES:

2 «kT re eA nen ene

ee I i dna s 6. uaébebs00kheewseecns

ee EEE es se ee ans

Harter Act, 46 U.S.C. app. §§ 190-196 .........

Carriage of Goods by Sea Act (“COGSA’’), 46

U.S.C. app. §$§ 1900-1315 .................. passim

COGSA § 3(6), 46 U.S.C. app. § 1303/6) ......... passim

COGSA § 4(5), 46 U.S.C. app. § 1304(5) ...... 5, 6, 10, 13

COGSA § 7, 46 U.S.C. app. § 1807 .............. 5

Shipping Act of 1984, § 8(aX1), 46 U.S.C. app.

EE Sod Caden ds cheuGbueeuGededese ccd 2

Shipping Act of 1984, § 8(aX1XE), 46 U.S.C. app.

RARE Sob ea aaa 4

Brussels Convention for the Unification of Certain

Rules of Law Relating to Bills of Lading, Aug.

25, 1924, 51 Stat. 233, T.S. No. 931, 120 L.N.

WE aie euuireeeedad des nedekvodses ccc. 19

wo oon hd

OTHER AUTHORITIES:

S. Rep. No. 742, 74th Cong., ist Sess. (1935) ...

H.R. Rep. No. 2218, 74th Cong., 2d Sess. (1936) .

7 Conc. Rec. 8064 (1986) ........... ccc cceee

79 Conc. REC. 13341 (1985) ...................

2A BENEDICT ON ADMIRALTY § 15 (7th ed. 1994) . 1

2A BENEDICT ON ADMIRALTY §§ 41-44 (7th ed.

NT bad bn sek ies ood tee Lean ween

2A BENEDICT ON ADMIRALTY § 166 (7th ed. 1994) . 16

S$ 8 & &

Vili

2A BENEDICT ON ADMIRALTY § 169 (7th ed. 1994). 12, 21

GRANT GILMORE & CHARLES L. BLACK, JR., THE

LAW OF ADMIRALTY (2d ed. 1975)........ 12, 19, 22

Laurence B. Alexander, Comment, Containeriza-

tion, the Per Package Limitation, and the Con-

cept of “Fair Opportunity,” 11 Mar. Law. 123

CE i.vvsconsusibesnensabbueds ans ksi

Thomas R. Denniston, Carter T. Gunn & Alfred

E. Yudes, Jr., Liabilities of Multimodal Oper-

ators and Parties Other Than Carriers and

Shippers, 64 Tut. L. Rev. 517 (1989) ......

Nicholas J. Healy & Jerome Scowcroft, Admiral-

ty and Shipping, 1984 ANN. SURVEY Am. L.

Gs b sscacyscectvadenceusbexseesummarr’s

Pichard W. Palmer & Frank P. DeGiulio, Terminal

Operations and Multimodal Carriage: History

and Prognosis, 64 TUL. L. REv. 281 (1989) ...

Mary T. Reilly, COGSA $500 Package Limitation:

Shipper’s Opportunity to Declare a Higher

Value, 138 J. Mar. L. & Com. 245 (1982)...

Jonathan Rodriguez-Atkatz, Apportionment of Risk

in Vessel and Marine Terminal Contracts, 64

(ee OR rer orrr

THOMAS J. SCHOENBAUM, ADMIRALTY AND MARI.

Te TA SOG Gee 6b sobs cede acces cdss

Michael F. Sturley, Tne Fair Opportunity Require-

ment Under COGSA Section 4(5): A Case Study

in the Misinterpretation of the Carriage of

Goods by Sea Act, 19 J. Mar. L. & Com. 1

CE 4.0 bean v54 hse nn twekeepeeeuns sexes 18, 19, 20

Michael F. Sturley, Observations on the Supreme

Court’s Certiorari Jurisdiction in Intercircuit

Conflict Cases, 67 TExAS L. REV. 1251 (1989) . 17

, 23

— — ~_

Daniel A. Tadros, COGSA Section 4(5)’s “Fair Op-

portunity” Requirement: U.S. Circuit Court

Conflict and Lack of International Uniformity;

Will the United States Supreme Court Ever Pro-

| vide Guidance?, 17 Tut. Mar. L.J. 17 (1992) .. 17, 19

15 CHARLES ALAN WRIGHT, ARTHUR R. MILLER &

EDWARD H. Cooper, FEDERAL PRACTICE AND

PROCEDURE § 3817 (2d ed. 1986)............ 21

JoAnne Zawitoski, Federal, State, and Interna-

tional Regulation of Marine Terminal Oper-

ators in the United States, 64 Tu. L. REv.

RE ERIE SI Ae 16

JoAnne Zawitoski, Limitation of Liability for Steve-

dores and Terminal Operators Under the Car-

rier’s Bill of Lading and COGSA, 16 J. MAR.

L. & Com. 337 (1985) ................0000. 17

Bi 2 a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

AMERICAN PRESIDENT LINES, LTD.,

and AMERICAN PRESIDENT COMPANIES, LTD.,

Petitioners,

GAMMA-10 PLASTICS, INC.,

Respondent.

Petition for Writ of Certiorari to the United

States Court of Appeals for the Eighth Circuit

Petitioners, American President Lines, Ltd., and Ameri-

can President Companies, Ltd., respectfully petition for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Eighth Circuit in this

case.

OPINIONS BELOW

The opinion of the court of appeals, reprinted as Appen-

dix A (“App. A”) at page A-1, is officially reported at 32

F.3d 1244 (8th Cir. 1994).

The district court’s Order and Memorandum Opinion

filed July 20, 1992, reprinted as App. B at B-1, is unre-

ported. The district court’s Judgment Order filed July 19,

1993, reprinted as App. C at C-1, is unreported. The

district court’s Order and Opinion filed December 17,

1993, reprinted as App. D at D-l, is reported at 839 F.

Supp. 1359 (D. Minn. 1993),

JURISDICTION

Petitioners seek review of the judgment of the Court of

Appeals for the Eighth Circuit, which was dated and

entered on August 10, 1994. A timely petition for rehear-

ing was filed on September 8, 1994, and denied on Octo-

ber 6, 1994. See App. E at E-1. This petition for certiorari

was filed within ninety days of that date, and this Court’s

jurisdiction is invoked under 28 U.S.C. § 1254(1).

STATUTES INVOLVED

Carriage of Goods by Sea Act § 3(6), 46 U.S.C. app.

§ 1303(6) (fourth paragraph):

In any event the carrier and the ship shall be dis-

charged from all liability in respect of loss or damage

unless suit is brought within one year after delivery of

the goods or the date when the goods should have

been delivered... .

Shipping Act of 1984, § 8(a)(1), 46 U.S.C. app.

§ 1707(a)(1):

. .. [EJach common carrier and conference shall file

with the [Federal Maritime] Commission, and keep

open to public inspection, tariffs showing all its rates,

charges, classifications, rules, and practices between

all points or ports on its own route and on any

through transportation route that has been estab-

lished. .. . Tariffs shall—

(E) include sample copies of any loyalty contract,

bill of lading, contract of affreightment, or other

document evidencing the transportation agreement.

STATEMENT

Petitioner American President Companies, Ltd., is the

parent company of petitioner American President Lines,

Ltd. (“APL”), a Delaware corporation doing business as a

multimodal carrier. The respondent is a Minnesota cor-

poration that sold plastic resin pellets. In the summer of

1988, the respondent contracted with APL for the trans-

portation of containers of plastic resin from Atlanta to

cities in China. Between July and October, 1988, the

respondent shipped twenty-two containers with APL in

four separate shipments. The present controversy involves

the losses that the respondent claims to have suffered as

a result of APL’s alleged mishandling of this cargo.

APL’s standard-form bill of lading, which evidences the

contract of carriage for each of these shipments, includes

a typical “clause paramount.”' This clause extends the

application of the Carriage of Goods by Sea Act

(“COGSA”), 46 U.S.C. app. §§ 1300-15, beyond the time

when it applies as a matter of law (i.e., while the goods

are on board the vessel) to include the period before load-

ing and after discharge. (During this period, the Harter

Act, 46 U.S.C. app. §§ 190-196, would otherwise apply.) In

particular, the clause paramount extends the fourth para-

' The “clause paramount” in APL’s standard-form bill of lading

provides:

CLAUSE PARAMOUNT. The receipt, custody, carriage and

delivery of the Goods are governed by the provisions of the

transportation agreement evidenced hereby and incorporated

by this reference, including . . . (iii) the provisions of the U.S.

Carriage of Goods by Sea Act, 1936, (“COGSA”).. . . Such Act

. Shall be extended to apply ... before the Goods are

loaded on and after they are discharged from the Vessel, and

throughout the entire time during which the Carrier is

responsible for the Goods under the transportation agree-

ment.

graph of section 3(6) of COGSA, 46 U.S.C. app. § 1303(6),

to the period before loading and after discharge. This

paragraph provides that a carrier, such as APL, “shall be

discharged from all liability in respect of loss or damage

unless suit is brought within one year after delivery of the

goods or the date when the goods should have been

delivered.”

To avoid any misunderstanding, clause 24 of the bill of

lading made the same point explicitly:

TIME FOR SUIT. The Carrier and the Vessel shall

be discharged from all liability in contract and in tort

in respect of loss, damage, delay, misdelivery or con-

version unless suit is brought within one year after

delivery of the Goods or the date when the Goods

should have been delivered.

The entire bill of lading, including these two provisions,

was also on file with the Federal Maritime Commission as

part of APL’s tariff, as required by section 8(a)(1)(E) of the

Shipping Act, 46 U.S.C. app. § 1707(a)(1)(E).

The first shipment under this arrangement arrived at

its destination in China on September 9, 1988, but the

respondent’s customers did not collect the cargo until

various times in late 1988 and early 1989. The second

shipment arrived in Hong Kong on September 24, 1988,

and was held there pending instructions from the respon-

dent; it was finally delivered in Shanghai in November

1988. On instructions from the respondent, APL held the

third and fourth shipments in Hong Kong and California,

respectively. But for the respondent’s instructions to hold

these two shipments, all of the cargo should have been

delivered in China long before July 1989.

te Rt ae Be ie AO oan od ie) ale

The respondent filed the present action in a Minnesota

state court on July 2, 1990, well over a year after the

cargo was or should have been delivered. APL removed

a F r

the case to federal court under 28 U.S.C. § 1441, the

district court having jurisdiction under 28 U.S.C. § 1332.

After removal, APL pled several affirmative defenses,

including that the action was time-barred under the one-

year time-for-suit provisions of COGSA section 3(6) and

clause 24 of the bills of lading.

The district court, granting respondent’s motion for

partial summary judgment, struck APL’s time-bar defense.

See App. B at B-1. It held that the case was governed by

the Harter Act, which does not contain a statutory time-

for-suit provision. Although section 7 of COGSA, 46 U.S.C.

app. § 1307, permits the extension of COGSA to the post-

discharge period, the court concluded that the clause para-

mount was ineffective to do so here because the bills of

lading had not been delivered to the respondent until

after the goods had been shipped. See App. B at B-6. The

court implicitly held that clause 24 (which is permissible

under the Harter Act) was ineffective for the same reason.

Finally, the court followed Allstate Insurance Co. v. Inter-

national Shipping Corp., 703 F.2d 497 (11th Cir. 1983), to

hold that APL could not rely on the tariff as a source of

constructive notice. See App. B at B-5.

A jury awarded the respondent $500,000 in damages for

delay of and damage to the cargo and awarded the petition-

ers $12,769.98 for unpaid freight on the first shipment. The

district court entered judgment on this verdict. See App. C

at C-1. In post-trial proceedings, the court awarded the

respondent pre-judgment interest of $308,417. See 839 F.

Supp. at 1364; App. D at D-11. Both parties appealed.

The court of appeals affirmed in part and reversed in

part. In ruling on APL’s time-bar defense, it employed the

so-called “fair opportunity” doctrine, which several courts

have applied to carriers’ attempts to limit their liability to

$500 per package under section 4(5) of COGSA, 46 U.S.C.

—_——

app. § 1304(5). See 32 F.3d at 1250-54; App. A at A-10 to

A-19. The court decided that APL had satisfied this doc-

trine with respect to the first shipment because APL was

able to prove that the respondent had received an original

bill of lading and negotiated it to a bank two days after

the containers had been loaded on the container train in

Atlanta. See 32 F.3d at 1253-54; App. A at A-17 to A-18.

As the respondent was thus bound by the clause para-

mount and the time-for-suit provision, the complaint

should have been dismissed with respect to the first ship-

ment. With respect to the other shipments, however, APL

had not proven when the respondent had received the bill

of lading, and therefore did not satisfy the fair opportun-

ity doctrine. See 32 F.3d at 1254; App. A at A-18 to A-19.

Accordingly, APL was unable to rely on the clause para-

mount or the time-for-suit provision. The court of appeals

also agreed with Allstate to conclude that APL could not

rely on the tariff to prove constructive notice of the appli-

cation of COGSA or the time-for-suit provision. See 32

F.3d at 1254; App. A at A-19. APL’s entitlement to the

benefit of the one-year time-for-suit provisions with

respect to these last three shipments is the focus of the

present petition.

REASONS FOR GRANTING THE PETITION

The true issue in this case is whether a business can

rely on reasonable provisions in its standard-form contract

when it enters into a commercial transaction. The court

below believed that a multi-million dollar company active

in international trade was too unsophisticated to read a

tariff, remember the provisions of a standard-form bill of

lading that it had accepted in a previous transaction, or

otherwise discover the contractual terms under which its

cargo (with an invoice value in the hundreds of thousands

of dollars) was being carried half-way around the world.

Unfortunately, some other courts of appeals have adopted

a similar approach. Accordingly, carriers are faced with a

variety of judicial inventions, such as the so-called “fair

opportunity” doctrine, that preclude their reliance on bill

of lading provisions, on tariff provisions, and even on fed-

eral statutes unless they can prove that the other party to

the contract received some particular form of notice.? Not

all courts of appeals have followed the same approach,

however, so the industry also faces a variety of conflicting

interpretations involving these doctrines and the govern-

ing federal statutes. These conflicts breed wasteful liti-

gation, make insurance more difficult and expensive to

ard-form passenger ticket with no more notice than that pro-

vided by “three pages of fine print.” Carnival Cruise Lines v.

Shute, 499 U.S. 585, 590 ( 1991); see also id. at 593. This Court

has also held that an air carrier does not lose the benefit of its

limitations if it fails to provide the notice specifically required by

the applicable international agreement. See Chan v. Korean Air

Lines, 490 U.S. 122 (1989). It is hard to believe that an interna-

tional commercial trader, such as the respondent, should be en-

titled to a higher degree of protection than cruise line and airline

passengers.

obtain, and interfere with the efficient structuring of

transactions.

There is no dispute that one year is a reasonable time

in which to require suit to be brought. Congress explicitly

adopted a one-year time-for-suit provision in COGSA

section 3(6), this provision undoubtedly governed these

transactions during the time that the goods were on board

vessels, and the Eighth Circuit applied the provision to

the first shipment. Nor is there any dispute that the con-

tract between the parties can extend COGSA’s application

to the post-discharge period—as it did for the first ship-

ment. The only dispute before the Court is whether APL

can rely on the bill of lading’s clause paramount that so

extends COGSA, or on a clause that explicitly provides a

one-year time-for-suit provision substantially identical to

COGSA section 3(6), for the last three shipments. On this

issue, the decision below is in conflict with decisions of

other courts of appeals on several levels, at least two of

which are worthy of this Court’s attention. First, the

Eighth Circuit, along with the Eleventh Circuit, is in con-

flict with decisions in the First and Fifth Circuits on the

effect of a valid tariff provision. Second, the Eighth Cir-

cuit is now part of an eight-circuit split on the application

of the fair opportunity doctrine.

THE COURTS OF APPEALS ARE IN CONFLICT

ON THE FORCE OF VALID TARIFF PROVISIONS

This Court has long recognized that “ ‘tariffs bind both

carriers and shippers with the force of law.’ ” Crancer v.

Lowden, 315 U.S. 631, 635 (1942) (quoting Lowden uv.

Simonds-Shields-Lonsdale Grain Co., 306 U.S. 516, 520

(1939)); cf. Security Services, Inc. v. Kmart Corp., 114 S.

Ct. 1702, 1706 (1994) (the shipper is bound to pay the

tariff rate notwithstanding ignorance or misquotation);

Os. adabedipiennn. Sateen

Maislin Industries, U.S., Inc. v. Primary Steel, Inc., 497

U.S. 116, 120-121 (1990) (same). Indeed, there is no

dispute that shippers such as the respondent are bound by

the rates that a carrier such as APL files in a tariff. The

courts below, however, held that the respondent was not

bound by the terms and conditions that APL filed as part

of its tariff—that the respondent could bring suit more

than “one year after delivery of the goods or the date

when the goods should have been delivered,” despite the

express prohibition in the filed tariff.

Distinguishing rates from terms and conditions has

never found any favor in the decisions of this Court. Cf.

Southwestern Sugar & Molasses Co. v. River Terminals

Corp., 360 U.S. 411, 417-421 (1959) (upholding an excul-

patory clause filed in the tariff). In making this distinc-

tion, the courts below instead followed Allstate Insurance

Co. v. International Shipping Corp., 703 F.2d 497, 500

(11th Cir. 1983), which also held that a carrier could not

rely on a one-year time-for-suit provision that had been

included in the carrier’s filed tariff. The Eleventh Circuit

implicitly held that a shipper is bound by only that

portion of the tariff that involves the carrier’s rates or

charges.

The Eighth and Eleventh Circuit approach is in conflict

with decisions of the First and Fifth Circuits. In Insurance

Co. of North America v. Puerto Rico Marine Management,

Inc., 768 F.2d 470 (1st Cir. 1985), cert. denied, 474 U.S.

1102 (1986), the court permitted a carrier to rely on a one-

year time-for-suit provision under circumstances that were

essentially the same as those in Allstate (and the present

case). In the process, the court specifically considered the

Eleventh Circuit’s reasoning and rejected it. See 768 F.2d

at 477-478. The First Circuit concluded that the Allstate

court had erred in failing to recognize that the carrier

before it (like APL) was required to file not only its rates

but also the terms and conditions of the contract of car-

riage. This conflict does not involve merely inconsistent

dicta or disagreements about general principle. The courts

of appeals, including the court below, are reaching results

that are directly contrary to those that other courts of

appeals have reached in the same situations.

The Eighth and Eleventh Circuits are also in conflict

with decisions of the Fifth Circuit. In several cases, the

Fifth Circuit has permitted a carrier to rely on the terms

and conditions of the contract of carriage (in particular, a

provision based on section 4(5) of COGSA that limits the

carrier’s liability to $500 per package) in part because of

the binding nature of the tariff. As the court explained in

Brown & Root, Inc. v. M/V Peisander, 648 F.2d 415, 421

(5th Cir. 1981), “a tariff validly filed is not a mere con-

tract but is the law promulgating the applicable stan-

dard.” See also Gebr. Bellmer Kg. v. Terminal Services

Houston, Inc., 711 F.2d 622 (5th Cir. 1983) (per curiam);

Wuerttembergische & Badische Versicherungs-Aktiengesell-

schaft v. M/V Stuttgart Express, 711 F.2d 621 (5th Cir.

1983) (per curiam).

The clear and direct conflict between the First Circuit

and the Eleventh Circuit may originally have been unwor-

thy of this Court’s attention. Quite simply, the Eleventh

Circuit erred in its interpretation of the prior caselaw.

The subsequent First Circuit decision clearly and convinc-

ingly exposes the error and demonstrates the proper

analysis. This Court’s decisions point in the same direc-

tion. Until last August, therefore, the Eleventh Circuit’s

error might justifiably have been ignored as an aberration

that was unlikely to cause serious problems. Now that the

Eighth Circuit has reviewed the conflict, however, and

agreed with the Eleventh Circuit’s erroneous conclusion

despite the First Circuit’s well-reasoned analysis, the

conflict can no longer be dismissed so quickly. It is now

clear that the Eleventh Circuit’s mistake will have wider

influence, and this Court should step in to correct the

problem before it becomes any worse.

The Eighth and Eleventh Circuits’ mistake goes far

beyond erroneous legal analysis; the decision below

imposes an intolerable burden on the shipping industry.

Under the precedent established in this case, a carrier can

no longer rely on the standard terms contained in its bill

of lading and filed as part of its tariff unless it can prove

the circumstances of the shipper’s acceptance of the bill of

lading. As a practical matter, a carrier will need to nego-

tiate every contract individually with each shipper before

it can be sure of the terms under which it operates.

Rather than placing the minimal burden on shippers of

checking the tariff (which is, after all, the entire point of

requiring carriers to file tariffs), the courts below have

placed a far heavier burden on carriers—and have done so

with no legal justification.

The inability to rely on standard-form contracts would

be a heavy burden for any large-scale business with a

high volume of relatively inexpensive transactions, but it

is particularly onerous when bills of lading are involved

because carriers frequently have little control over when

they issue a bill of lading. For example, shippers custom-

arily demand “on board” bills of lading (generally to

satisfy letter of credit requirements), so a carrier is

typically unable to issue the bill of lading until the goods

have been loaded on the vessel—which may be well after

the carrier took control of the goods. Similarly, shippers

frequently demand “freight prepaid” bills of lading (again

because letters of credit often require them), and the

carrier is unable to comply until the shipper has paid the

freight charges. Indeed, in the present case APL was

unable to issue bills of lading in the second and third

shipments until the respondent paid the freight charges.

But under the Eighth Circuit’s analysis, APL lost the

benefit of its standard-form contract because of the

respondent’s failure to make timely payment!

THE COURTS OF APPEALS ARE IN CONFLICT

ON THE FAIR OPPORTUNITY DOCTRINE

The significance of filing a tariff resurfaces in the con-

text of the so-called “fair opportunity” doctrine. This

doctrine imposes a judicially-created requirement that a

carrier must satisfy before it can rely on statutory rights

under COGSA or contractual rights granted by the bill of

lading.® If a carrier does not give a shipper sufficient

* COGSA applies as a matter of law only between the time the

goods are loaded on the vessel and the time they are discharged

from the vessel. See generally 2A BENEDICT ON ADMIRALTY §§ 41-

44 (7th ed. 1994). Most bills of lading, however, contain a clause

paramount extending COGSA’s application to periods that would

otherwise be governed by the Harter Act. See, e.g., GRANT

GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY 148

(2d ed. 1975). For cases (such as the present) in which COGSA

does not apply as a matter of law during the relevant period,

therefore, a carrier’s rights are either purely contractual (under

a bill of lading provision such as clause 24) or a combination of

statutory and contractual (under a clause paramount contractual-

ly extending the application of COGSA). Because “a high propor-

tion of cargo damage occurs” during loading and unloading, 2A

BENEDICT ON ADMIRALTY § 169, at 16-45 (7th ed. 1994), cargo

cases commonly arise in situations where the Harter Act would

generally apply. Accordingly, many “fair opportunity” cases fall

into this statutory/contractual pattern. See, e.g., Mori Seiki USA,

Inc. v. M.V. Alligator Triumph, 990 F.2d 444, 446 (9th Cir. 1993)

(cargo was damaged after unloading); Caterpillar Overseas, S.A.

v. Marine Transport Inc., 900 F.2d 714, 717 (4th Cir. 1990) (dur-

ing inland transportation before loading); Carman Tool & Abra-

(continued...)

notice to satisfy the fair opportunity requirement, most

U.S. courts hold that it may not rely on the statutory or

contractual right at issue. This has generally been the

right to limit liability to $500 per package, see COGSA

§ 4(5), 46 U.S.C. app. § 1304(5), but here the Eighth

Circuit extended the doctrine to govern the one-year time-

for-suit provision of section 3(6), 46 U.S.C. app. § 1303(6).

The doctrine itself is highly questionable, and when it

does apply there is a conflict among the circuits on

whether filing a tariff provides sufficient notice to satisfy

its requirements.

Courts of appeals in eight circuits have addressed the

fair opportunity doctrine, and at least five distinct ap-

proaches have emerged. Most recently, the First Circuit

addressed the issue in Henley Drilling Co. v. William H.

McGee & Co., 36 F.3d. 143 (1st Cir. 1994). Both parties in

Henley Drilling assumed that the doctrine applied, but the

court nevertheless “refrain[ed] from embracing the ‘fair

* (...continued)

sives v. Evergreen Lines, 871 F.2d 897, 899 (9th Cir. 1989) (after

unloading); Gebr. Bellmer Kg. v. Terminal Services Houston, Inc.,

711 F.2d 622, 624 (5th Cir. 1983) (per curiam) (after unloading);

Brown & Root, Inc. v. M/ V Peisander, 648 F.2d 415, 417 (5th Cir.

1981) (before loading); Toshiba International Corp. v. M/V “Sea-

Land Express,” 841 F. Supp. 123, 125 (S.D.N.Y. 1994) (during

inland transportation after unloading).

Other “fair opportunity” cases also fall into this statutory/

contractual pattern because they involve cargo in domestic trade

or cargo carried on deck—two other situations in which COGSA

does not apply as a matter of law. See, e.g., Institute of London

Underwriters v. Sea-Land Service, Inc., 881 F.2d 761, 763 (9th

Cir. 1989) (deck cargo); Mu, Inc. v. Puerto Rico Maritime Ship-

ping Authority, 1988 AMC 347 (4th Cir. 1987) (domestic trade);

Pan American World Airways v. California Stevedore & Ballast

Co., 559 F.2d 1173, 1175 n.3 (9th Cir. 1977) (per curiam)

(domestic trade); Z.K. Marine, Inc. v. M/V Archigetis, 808 F.

Supp. 1561, 1563 (S.D. Fla. 1992) (deck cargo).

opportunity’ doctrine ... in any form” because it found

the doctrine’s existence “to be a problematic question” that

need not be resolved in a situation where the carrier had

met whatever requirements might plausibly be imposed.

See 36 F.3d at 146 n.5. We take the view that there is no

legitimate basis for the doctrine, and the First Circuit was

correct to question its existence. Ideally, the Court should

take this opportunity to correct the errors that the lower

courts have made and bring U.S. law into line with the

rest of the world’s maritime nations. See infra at 19, 24

(discussing the international conflict on the issue). Alter-

natively, the Court could use this case as a vehicle to

resolve a long-standing and well-recognized intercircuit

conflict. But even if the Court prefers to focus on the tariff

issue without directly addressing the fair opportunity doc-

trine, a ruling on the tariff question would play a signifi-

cant role in minimizing this intercircuit conflict as well.

The lower courts that have accepted the doctrine are in

hopeless conflict on how to apply it. The Ninth Circuit

has, until now, applied the strictest version, requiring the

bill of lading to recite the substance of the COGSA provi-

sion on which the carrier seeks to rely. See Nemeth uv.

General S.S. Corp., 694 F.2d 609, 611-612 (9th Cir. 1982);

Komatsu, Ltd. v. States S.S. Co., 674 F.2d 806, 809-811

(9th Cir. 1982); Pan American World Airways v. California

Stevedore & Ballast Co., 559 F.2d 1173, 1175-77 (9th Cir.

1977) (per curiam); see also Travelers Indemnity Co. v.

Vessel Sam Houston, 26 F.3d 895, 898 (9th Cir. 1994)

(summarizing the law of the circuit); Mori Seiki USA, Inc.

v. M.V. Alligator Triumph, 990 F.2d 444, 448-449 (9th Cir.

1993) (same); Institute of London Underwriters v. Sea-

Land Service, Inc., 881 F.2d 761, 766 (9th Cir. 1989)

(same); Carman Tool & Abrasives v. Evergreen Lines, 871

F.2d 897, 899 & n.3 (9th Cir. 1989) (same); Tessler

Brothers (B.C.) v. Italpacific Line, 494 F.2d 438, 443 (9th

Cir. 1974) (establishing the law of the circuit).

_ The Fifth Circuit, explicitly rejecting this standard in a

case involving a bill of lading substantially identical to

the one before the Ninth Circuit in Pan American, holds

that the statutory language need not be in the bill of

lading so long as appropriate disclosure is provided by the

carrier’s tariff. See Brown & Root, supra, 648 F.2d at 419-

25; see also Couthino, Caro & Co. v. M /V Sava, 849 F.2d

166, 168-171 (5th Cir. 1988) (summarizing the law of the

circuit); Gebr. Bellmer Kg., supra, 711 F.2d at 624 (same);

Wuerttembergische, supra, 711 F.2d at 622 (same). The

Eleventh Circuit has accepted this analysis in the “fair

opportunity” context. See Insurance Co. of North America

v. M/V Ocean Lynx, 901 F.2d 934, 939-941 (11th Cir.

1990), cert. denied, 498 U.S. 1025 (1991).

In the Second Circuit, it appears that a clause para-

mount alone will satisfy the fair opportunity requirement.

See General Electric Co. v. M /V Nedlloyd, 817 F.2d 1022,

1029 (2d Cir. 1987), cert. denied, 484 U.S. 1011 (1988);

Binladen BSB Landscaping v. M.V. “Nedlloyd Rotterdam,”

759 F.2d 1006, 1017 n.12 (2d Cir.), cert. denied, 474 U.S.

902 (1985); see also Union Carbide Corp. v. M/V Michele,

764 F. Supp. 783, 786 (S.D.N.Y. 1990) (summarizing the

law of the circuit); E.M.S. Industrie S.A. v. Polskie Towar-

zystwo Okretowe, 608 F. Supp. 1133, 1134-35 (E.D.N.Y.

1985) (same).

The Fourth Circuit has been similarly willing to recog-

nize incorporation by reference, holding that a “short

form” bill of lading satisfies the doctrine’s requirements

when it incorporates COGSA and the long form bill of

lading by reference (and the long form bill of lading con-

tains the statutory language). See Cincinnati Milacron,

Ltd. v. M/V American Legend, 804 F.2d 837 (4th Cir.

1986) (en banc) (per curiam); see also Pearson v. Leif

Hoegh & Co., 1992 AMC 1025, 1029-32 (4th Cir. 1992)

(per curiam) (relying on bill of lading clauses and the

tariff); Caterpillar Overseas, S.A. v. Marine Transport Inc.,

900 F.2d 714, 719-720 (4th Cir. 1990) (relying on clauses

in the standard-form bill of lading that would have been

issued if the cargo had not been damaged before loading);

Aetna Insurance Co. v. M/V LASH Italia, 858 F.2d 190,

193-194 (4th Cir. 1988) (relying on bill of lading clauses

and the tariff); Mu, Inc. v. Puerto Rico Maritime Shipping

Authority, 1988 AMC 347, 349-350 (4th Cir. 1987) (same).

The Sixth Circuit seems to have adopted the same ap-

proach, albeit in circumstances that would have satisfied

a more demanding standard. See Acwoo International

Steel Corp. v. Toko Kaiun Kaish, Ltd., 840 F.2d 1284,

1288-89 (6th Cir. 1988).

Even before the decision below and before the First Cir-

cuit questioned the doctrine’s existence in Henley Drilling,

several lower courts‘ and numerous commentators’ had

* See, e.g., Carman Tool, supra, 871 F.2d at 899 n.3 (“the courts

are divided”); Couthino, Caro & Co., supra, 849 F.2d at 169

(“courts have different views”); Cincinnati Milacron, Ltd. v. M/V

American Legend, 784 F.2d 1161, 1164 (4th Cir.) (“circuits . . . are

in conflict”), superseded 804 F.2d 837 (4th Cir. 1986) (en banc)

(per curiam); E.M.S. Industrie, supra, 608 F. Supp. at 1135 (“fed-

eral circuits are in conflict”).

5 See, e.g., 2A BENEDICT ON ADMIRALTY § 166, at 16-24 to -30

(7th ed. 1994); THOMAS J. SCHOENBAUM, ADMIRALTY AND MARI-

TIME LAW § 9-36, at 375-376 (1987); Richard W. Palmer & Frank

P. DeGiulio, Terminal Operations and Multimodal Carriage: His-

tory and Prognosis, 64 TUL. L. REV. 281, 352 (1989) (“There is a

split among the circuits”); JoAnne Zawitoski, Federal, State, and

International Regulation of Marine Terminal Operators in the

United States, 64 TUL. L. REV. 439, 457-458 (1989) (discussing

the conflict); Jonathan Rodriguez-Atkatz, Apportionment of Risk

in Vessel and Marine Terminal Contracts, 64 TUL. L. REv. 497,

(continued...)

recognized the square conflict among the circuits on this

issue. Indeed, at least two commentators had explicitly

called on this Court to resolve the conflict. See Daniel A.

Tadros, COGSA Section 4(5)’s “Fair Opportunity” Require-

ment: U.S. Circuit Court Conflict and Lack of Internation-

al Uniformity; Will the United States Supreme Court Ever

Provide Guidance?, 17 TUL. MAR. L.J. 17, 34-36 (1992);

Michael F. Sturley, Observations on the Supreme Court’s

Certiorari Jurisdiction in Intercircuit Conflict Cases, 67

TEXAS L. REV. 1251, 1265-66, 1273 & nn.143-144 (1989).

By questioning the doctrine’s very existence, the First

Circuit has widened this long-standing conflict in one

direction. The decision below widens it in the other direc-

tion, for in this case APL satisfied the standards that

have been imposed in every other circuit. APL’s bill of

lading includes a clause paramount and clause 24 recites

the substance of section 3(6) of COGSA, thus satisfying

the Ninth Circuit standard. APL’s tariff provides adequate

notice, thus satisfying the fair opportunity standard of the

Fifth and Eleventh Circuits. The clause paramount meets

° (...continued)

510 (1989) (“courts . . . have applied varying standards”); Thomas

R. Denniston, Carter T. Gunn & Alfred E. Yudes, Jr., Liabilities

of Multimodal Operators and Parties Other Than Carriers and

Shippers, 64 TUL. L. REV. 517, 523 (1989) (“circuit courts differ

in their interpretation of what constitutes a fair opportunity”);

JoAnne Zawitoski, Limitation of Liability for Stevedores and Ter-

minal Operators Under the Carrier’s Bill of Lading and COGSA,

16 J. MAR. L. & CoM. 337, 355-360 (1985) (discussing the con-

flict); Nicholas J. Healy & Jerome Scowcroft, Admiralty and Ship-

ping, 1984 ANN. SURVEY Am. L. Supp. 1, 22-24 (same); Mary T.

Reilly, COGSA $500 Package Limitation: Shipper’s Opportunity

to Declare a Higher Value, 13 J. MAR. L. & Com. 245, 250-252

(1982) (same); Laurence B. Alexander, Comment, Containeriza-

tion, the Per Package Limitation, and the Concept of “Fair Oppor-

tunity,” 11 MAR. LAW. 123, 134-135 (1986) (same).

the standard of the Second, Fourth, and Sixth Circuits.

And any one of these facts satisfies the standard of the

First Circuit—if the First Circuit even recognizes the doc-

trine. But the Eighth Circuit now holds that a carrier

must go beyond all of this and prove when the shipper re-

ceived the bill of lading and what the shipper did with it.

Once again, there is a clear and direct conflict in which

the courts of appeals, including the court below, are reach-

ing results that are directly contrary to those that other

courts of appeals have reached in the same situations—

indeed, with respect to the same standard-form bill of

lading. The conflict is not inadvertent. The Fifth and

Ninth Circuits have explicitly acknowledged their refusal

to follow each other’s position. See, e.g., Brown & Root,

supra, 648 F.2d at 423-424 (declining to follow Pan Ameri-

can, supra); Carman Tool, supra, 871 F.2d at 899 n.3

(recognizing the disagreement with the Fifth Circuit). The

First Circuit carefully reviewed the field before taking its

unique position. See Henley Drilling, supra, 36 F.3d at

145. This is not a conflict on which further percolation

would be valuable. The lower courts have been addressing

the doctrine in the COGSA context for over twenty years,

see Tessler Brothers, supra, 494 F.2d at 443, and in the

process have fully discussed a wide range of possibilities.

The Ninth Circuit alone has addressed the doctrine in at

least eight published opinions, and the Fourth Circuit has

already taken the issue en banc (with at least four more

appellate decisions applying the en banc ruling!). Scholar-

ly commentary has also addressed the doctrine in great

detail. See, e.g., Michael F. Sturley, The Fair Opportunity

Requirement Under COGSA Section 4(5): A Case Study in

the Misinterpretation of the Carriage of Goods by Sea Act,

19 J. MAR. L. & CoM. 1 (1988). Finally, it is unrealistic to

expect the lower courts to resolve the conflict without this

Court’s intervention. The circuits are simply moving

—

further apart, as can be seen from the two most recent

decisions on the doctrine (t.e., the decision below and Hen-

ley Drilling, supra, in the First Circuit).

Bad as this intercircuit conflict is, the situation becomes

even worse when one recognizes that COGSA is the US.

enactment of an international treaty popularly known as

the “Hague Rules.” The treaty was intended, as its

official name suggests, to unify the law relating to bills of

lading, but there is a direct international conflict on the

“fair opportunity” doctrine. Although over ninety countries

have adopted the convention, no foreign court has adopted

this peculiarly American doctrine. See, e.g., Sturley, The

Fair Opportunity Requirement, supra, 19 J. MAR. L. &

CoM. at 22-24; Tadros, supra, 17 TUL. MAR. LJ. at 34.

Furthermore, the Supreme Court of Canada—our largest

trading partner—rejected the suggestion that a carrier

should be subject to anything resembling the U.S. doc-

trine. See Anticosti Shipping Co. v. St-Amand, 1959 S.C.R.

372, 374-377, 19 D.L.R.2d 472, 473-475, 1959 AMC 1526,

1527-29 (Can.).

We urge this Court to bring U.S. law into line with the

rest of the world’s maritime nations by rejecting the doc-

trine entirely. See generally Sturley, The Fair Opportunity

Requirement, supra. Alternatively, we ask the Court to

resolve the intercircuit conflict and hold that APL satis-

fied the doctrine’s requirements, either by filing a tariff

that fully disclosed the provisions on which it now seeks

° Brussels Convention for the Unification of Certain Rules of Law

Relating to Bills of Lading, Aug. 25, 1924, 51 Stat. 233, T.S. No.

931, 120 L.N.T.S. 155. See generally 2A BENEDICT ON ADMIRALTY

§ 15 (7th ed. 1994) ( summarizing the history of COGSA): GRANT

GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY 143-

144 (2d ed. 1975) (same).

to rely or by including the clause paramount and the

time-for-suit provision in its standard-form bill of lading.

THE IMPORTANCE OF

RESOLVING THE CONFLICTS

The importance of the issues raised here is not limited

to the maritime context. Standard-form contracts are a

normal part of business throughout the world, and the

validity of their terms is important to virtually every busi-

ness and consumer in the country. Filed tariffs play a role

in the carriage of goods and passengers by land, air, and

water, and thus they have an impact on everyone who

travels and on every business and consumer who pur-

chases goods that have been transported.

Even if we limit our focus to the carriage of goods by

sea, the issues here are worthy of the Court’s attention.

Each year, hundreds of billions of dollars worth of cargo

are carried to and from the United States by sea. See

Sturley, The Fair Opportunity Requirement, supra, 19 J.

Mar. L. & CoM. at 2 & n.4. With the recent approval of

GATT, such trade is likely to increase. Most of this busi-

ness is automatically subject to COGSA during the period

that the cargo is on board a vessel. But the governing

standards before loading and after discharge (when “a

high proportion of cargo damage occurs,” see note 3,

supra), as well as for certain situations in which COGSA

does not necessarily apply by its terms, are determined by

the provisions of the bill of lading and the tariff. Cases

such as the present, which establish the legal rules that

will govern the relationship between carriers and ship-

pers,’ go to the very heart of this multi-billion dollar in-

dustry.

Not only are the issues important, but conflicts in this

field are particularly intolerable because litigants can

easily exploit them through forum-shopping. A cargo

owner may bring an in rem action in admiralty in any

district in which a vessel is located, regardless of whether

the forum has any other connection with a case. See 15

CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H.

COOPER, FEDERAL PRACTICE AND PROCEDURE § 3817, at

170 (2d ed. 1986). Similarly, the cargo owner may bring

an in personam action, either in admiralty or at law,

wherever it can serve process on the defendant or attach

its property. See id., § 3817, at 170-171 & nn.8-9. In the

present case, for example, the respondent was able to

bring an action against APL in the District of Minnesota

because APL maintains an office there. The four ship-

ments, however, originated in Georgia and went overland

to the West Coast to begin their trans-Pacific journey. But

if the respondent had filed suit in a court in the Eleventh

In fact, the range of interests affected is much broader than

just carriers and shippers, for a number of other parties in a typi-

cal transaction derive their rights from the original parties to the

bill of lading. Under a “Himalaya clause” (which is included in

most bills of lading), stevedores, terminal operators, inland

carriers, and other third parties can obtain the benefit of the car-

rier’s limitations and exclusions. See 2A BENEDICT ON ADMIRALTY

§ 169 (7th ed. 1994). Thus if the carrier loses its statutory or bill

of lading rights, the stevedore suffers as well. See, e.g., Pan

American, supra, 559 F.2d at 1175. Similarly, the rights of third

parties such as consignees and subrogated insurers are deter-

mined by the shipper’s rights. See, e.g., Carman Tool, supra, 871

F.2d at 900-901 (consignee); Insurance Co. of North America v.

Puerto Rico Marine Management, supra, 768 F.2d at 473 (insur-

er). See generally Stolt Tank Containers, Inc. v. Evergreen Marine

Corp., 962 F.2d 276, 279 (2d Cir. 1992) (noting the importance of

third parties’ being able to rely on the terms of the bill of lading).

Circuit (where the goods were shipped), the Ninth Circuit

(where the ocean voyages began), Hong Kong (where goods

were transshipped), or China (the ultimate destination),

the result would likely have been very different.®

Furthermore, this is a subject where uniformity is parti-

cularly important. See, e.g., Robert C. Herd & Co. v.

Krawill Machinery Corp., 359 U.S. 297, 301 (1959); GRANT

GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMI-

RALTY 191-192 (2d ed. 1975). By its very nature, the car-

riage of goods by sea is a multi-jurisdiction enterprise.

Everyone involved in a commercial maritime transaction

must know how the law will allocate possible losses so

that they can decide who must insure (or make provision

for self-insurance), and how much the insurance should

cost. When the rules differ according to the forum, multi-

ple parties face a potential loss depending on where the

case is heard. As a result, each party must insure against

the loss and there is a needless “double insurance” ex-

pense.

Conflicting legal standards also force the parties to do

their best to comply with the standard in each jurisdiction

in which they are subject to suit. Even when this is possi-

ble, the expense must ultimately be passed on to the con-

sumers who purchase the transported goods. For a carrier

such as APL, these expenses could be staggering: APL has

approximately 65 offices in the United States (including

at least one office in each federal circuit) and 115 overseas

offices in 40 different foreign countries. Its ships regularly

call at 55 different ports and, through its multimodal

operations, it provides service to approximately 400 for-

® Although the courts below followed the Eleventh Circuit on the

tariff issue, the Eighth Circuit’s fair opportunity analysis is in

conflict with Eleventh Circuit doctrine.

eign cities. Complying with a different legal standard in

each jurisdiction would impose a significant burden on a

carrier’s ability to function efficiently, and consumers

would be the ultimate losers. This is particularly true

when the burden imposed is as unreasonable as that

announced by the Eighth Circuit in this case, which ser-

iously undermines a carrier’s ability to rely on a standard-

form contract.

Congress was particularly conscious of the need for uni-

form law in this field when it enacted COGSA. See gen-

erally Sturley, Observations, supra, 67 TEXAS L. REV. at

1271. During the floor debates, the principal reason given

for the statute was the need to implement the internation-

al treaty to achieve uniformity in the law governing ocean

bills of lading. See, e.g., 79 CONG. REC. 13341 (1935)

(statement of Sen. White) (“The [(COGSA] bill is designed

to bring about uniformity in ocean bills of lading.”), re-

printed in 1 THE LEGISLATIVE HISTORY OF THE CARRIAGE

OF GOODS BY SEA ACT AND THE TRAVAUX PREPARATOIRES

OF THE HAGUE RULES 589 (1990); id. at 8954 (statement

of Sen. Thomas) (“[The COGSA bill] is simply to bring

about uniform usage of bills of lading in the transship-

ment of goods and makes the usage uniform.”), reprinted

in 1 LEGISLATIVE HISTORY at 587. The committee reports

in both houses claim uniformity as the bill’s most impor-

tant purpose. See, e.g., S. REP. NO. 742, 74th Cong., 1st

Sess. 4 (1935), reprinted in 1 LEGISLATIVE HISTORY at 534

(bill “will accomplish real uniformity”); H.R. REP. No.

2218, 74th Cong., 2d Sess. 6 ( 1936), reprinted in 1 LEGIS-

LATIVE HISTORY at 526 (“most outstanding benefits are

simplification and uniformity of bills of lading”). Conflict-

ing interpretations on the applicability of COGSA under

a clause paramount and a tariff not only interfere with

the effective operation of a federal statute, they under-

mine the principal Congressional purpose in enacting the

statute. The Court’s recent decision to grant certiorari in

No. 94-623, Vimar Seguros Y Reaseguros, S.A. v. M/V Sky

Reefer® offers implicit recognition of this point.

The international conflict on the existence of the fair

opportunity doctrine presents an even stronger justifica-

tion for this Court’s review. The United States ratified the

Hague Rules primarily to provide a uniform international

law for bills of lading. When U.S. courts create judicial

doctrines in conflict with the interpretation given to the

treaty in every other contracting state, they undermine

the very purpose of the uniform law treaty. The problems

of intercircuit conflicts are magnified at the international

level. Even if it were possible to predict where litigation

would occur, the difficulty and expense of monitoring

treaty interpretations throughout the world is far greater

than for monitoring variations among the circuits. And

the threat of forum shopping becomes even more daunting

when practiced on an international scale. It is no surprise

that this Court has recognized the importance of seeking

international uniformity in the analogous context of the

carriage of goods by air. See, e.g., Trans World Airlines v.

Franklin Mint Corp., 466 U.S. 243, 256 (1984) (stressing

® The issue in Sky Reefer is whether a consignee is bound by a

foreign arbitration clause in a bill of lading subject to COGSA.

The Sky Reefer petition focuses on the effect of COGSA section

3(8), but the district court’s decision to enforce the arbitration

clause implicitly relied on the conclusion that a party who does

not receive the bill of lading until well after the goods have been

shipped is nevertheless bound by its terms; otherwise the con-

signee would not have been bound by the arbitration clause. If

this Court affirms the decision of the First Circuit, it may address

this point in a manner that could be of guidance to the Eighth

Circuit. Although we urge the Court to grant certiorari in the

present case now, the Court may also wish to consider holding

this petition until it has decided Sky Reefer.

the Warsaw Convention’s objective of international unifor-

mity). The need for the Court’s intervention is every bit as

compelling in this context.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,