Amicus Curiae Brief — Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp.

ae FILEO. — |

JUL 20 2009

Bn The

Supreme Court of the United States

KAWASAKI KISEN KAISHA LTD.

and K-LINE AMERICA, INC.,

Petitioners,

V.

REGAL-BELOIT CORPORATION, et al.,

Respondents.

+

UNION PACIFIC RAILROAD COMPANY,

Petitioner,

v.

REGAL-BELOIT CORPORATION, et al.,

Respondents.

.

On Petition For Writs Of Certiorari To The United

States Court Of Appeals For The Ninth Circuit

¢

BRIEF AMICI CURIAE OF THE INTERNATIONAL

GROUP OF PROTECTION AND INDEMNITY (P&I)

CLUBS, ET AL., INSUPPORT OF PETITIONS

FOR WRITS OF CERTIORARI

e

CHESTER D. HOOPER

Counsel of Record

HARMONY I. LOUBE

SAMUEL SPITAL

WARREN E. GLUCK

HOLLAND & KNIGHT LLP

195 Broadway

New York, NY 10007

(212) 513-3200

Attorneys for Amict Curiae,

The International Group of

Protection and Indemnity (P&I)

Clubs, et al.

July 20, 2009

{Additional Amici Listed On Inside Cover]

COCKLE LAW BRIEF PRINTING CO (800) 225.6064

OR CALL COLLECT (402) 342.2831

American Steamship Owners

Mutual Protection and

Indemnity Association, Inc

. ssuranceforeningen

Gard (Gjensidig)

Gard P&I (Bermuda) Ltd.

Assuranceforeningen Skuld

(Gjensidig)

Skuld Mutual Protection and

Indemnity Association

(Bermuda) Ltd.

The Britannia Steam Ship

Insurance Association Ltd.

The Japan Ship Owners’

Mutual Protection &

Indemnity Association

The London Steam-Ship

Owners’ Mutual Insurance

Association Ltd.

The North of England

Protecting and Indemnity

Association Ltd.

The Shipowvers’ Mutual

Protection And Indemnity

Association (Luxembourg)

The Standard Steamship

Owners’ Protection and

Indemnity Association

(Asia) Ltd.

The Standard Steamship

Owners’ Protection and

Indemnity Association

(Bermuda) Ltd.

The Standard Steamship

Owners’ Protection and

Indemnity Association

(Europe) Ltd.

The Standard Steamship

Owners’ Protection and

Indemnity Association

(London) Ltd.

The Steamship Mutual

Underwriting

Association Ltd.

The Steamship Mutual

Underwriting Association

(Bermuda) Ltd.

Sveriges Angfartygs

Assurans Foérening

(Swedish Club)

United Kingdom Mutual

Steam Ship Assurance

Association (Bermuda) Ltd.

United Kingdom Mutual

Steam Ship Assurance

Association (Europe) Ltd.

The West of England Ship

Owners’ Mutua! Insurance

Association (Luxembourg)

i

TABLE OF CONTENTS

Page

Re Ge BOF BI wvescvcvescsceccccecccscescoseses li

INTEREST OF THE AMICI CURIAE................. 1

il cilia nnsdnaeannadoseneeoenerewentien 3

SUMMARY OF ARGUMENT ..........................068. 8

TET iciictniarnincrenmnninnadaiitdiinninniniiinindanbanins 9

I. THE CARMACK AMENDMENT DOES

NOT GOVERN CARRIAGE BETWEEN A

NON-ADJACENT FOREIGN COUNTRY

AND A PLACE IN THE UNITED

I dinccdpiisisisacrusuapeersaiiendsanibebsesuimens )

Il. THE PRACTICAL RESULT OF THE

DECISION OF THE LOWER COURT IN

THIS MATTER IS OPPOSITE TO THE

RESULT ACHIEVED BY THIS COURT

IN NORFOLK SOUTHERN RY. CO. v.

JAMES N. KIRBY PTY LTD. ................4+:. 16

Ill. THE RESULT BELOW IS IN TENSION

WITH THE WELL-REASONED POSI-

TION OF THE UNITED STATES IN

RECENT TREATY NEGOTIATIONS

FOR THE ROTTERDAM RULES,

WHICH IS THAT ONLY ONE LAW

SHOULD GOVERN ALL ASPECTS OF

INTERNATIONAL, MULTIMODAL, DOOR-

TO-DOOR CARRIAGE OF GOODS .......... 18

IIE anbissctiscaneninsepentonmanancinleguanamscbectnidees 22

il

TABLE OF AUTHORITIES

Page

CASES

Adler v. Dickson, [1955] 1 Q.B. (C.A. 1954)............... 17

Anderson v. Pacific Coast S.S. Co., 225 U.S.

RENE ERIE RS ean ee ne ne ran enw ne LO Om EER 16

Atchison, Topeka and Santa Fe Railway Co. v.

U.S., 617 F.2d 485 (7th Cir. 1960) .........c.ccccccceccoeess 15

Fourco Glass Co. v. Transmirra Corp., 353 U.S.

ed 16

Galveston, Harrisburg & San Antonio Ry. Co. v.

Woodbury, 254 U.S. 357 (1920)..............ccccccsereccsvees ll

In re Roll Form Prods., Inc., 662 F.2d 150 (2d

Oo ic edeinledaccusiilibeniml 16

Kossick v. United Fruit Co., 365 U.S. 731

ARERR ROSES SAAR ae ren a ar Oe LT cle a OTR 17

Missouri P. R. Co. v. Elmore and Stahl, 377

a eisladmemeiainmimeinadentued 6

Mitsui Sumitomo Ins. Co. Ltd. v. Evergreen

Marine Corp., No. 07 CV 3784 (CM), 2008

WL 4369763 (S.D.N.Y. Sept. 22, 2008)................... 13

Norfolk Southern Ry. Co. v. James N. Kirby Pty

Bg Be A Be COD vncccccvscscseccescccceons 9, 16,17, 18

Rankin v. Allstate Ins. Co., 336 F.3d 8 (1st Cir.

ERIN SR See Dien ene Sm O SOE BOTCON EE 5

ill

TABLE OF AUTHORITIES — Continued

Rexroth Hydraudyne B.V. v. Ocean World Lines,

Inc., No. 06 CV 5549 (LAK), 2007 WL 541958

Ne MINE Shs BD cc ctinsecenccecscsonseontcessosencsveccs 13

Sompo Japan Ins. Co. of America v. Norfolk

Southern Ry. Co., 540 F. Supp. 2d 486, mo-

tion for reconsideration denied, 553 F. Supp.

ie BD inesvaveccsecescccvesevevesscscscesseveceses 13

Sompo Japan Ins. Co. of America v. Union

Pacific R.R. Co., 456 F.3d 54 (2d Cir. 2006)....... 5, 16

Sompo Japan Ins. Co. v. Union Pacific R.R.

Co., No. 03 CV 1604 (CM), 2007 WL 2230091

I I IED x cviccnstuccecesesassssatstsensssnescoseves 13

Sompo Japan Ins. Co. v. Yang Ming Marine

Transp. Corp., No. 07 CV 11276 (DC), 2008

WL 4330058 (S.D.N.Y. Sept. 24, 2008)................... 13

Trailer Marine Transport Corp. v. Federal

Maritime Comm., 602 F.2d 379 (D.C. Cir.

BR arc Sees EAL, Nd a SA A 15

U.S. v. Booky, 733 F.2d 1335 (9th Cir. 1984)............. 15

Vimar Seguros Y Reasequros, S.A. v. M.V. Sky

Bs He WP I Ce ocr ecncccccosvsccvesvececsoncosaccses 18

STATUTES

SO Oe Oe ee am RI aan 14

Be Fe te OF EE COD vcvceccccssescsecssccincecesencs 10, 13, 15

ee ee SE GI IIE: snscncececncccsdscccccdonsscsnens passim

iv

TABLE OF AUTHORITIES — Continued

Page

GD TEs BB civicasevecsssccsnsmecivenssinteiiiaiaendaamae 16

I sO BI ex ecscccenictiicttinniticiilisninnigialineieimenminiaia 4

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

229, Pub. L. No. 74-521, 49 Stat. 1207 (1936)

(re-printed in Note following 46 U.S.C.

SF SITE ccnicseciscinswidinendtvendéemeumpdinannahiausseiasantaaa passim

Pub. L. No. 95-473, 92 Stat. 1837 (1978)................... 14

OTHER AUTHORITIES

Appendix B to the Convention Concerning

International Carriage by Rail (COTIF) of

May 9, 1980, Uniform Rules Concerning the

Contract for International Carriage of Goods

by Rail (CIM), 2 International Transport

Treaties, V-213 (Wolters Kluwer, Supp. 1-10

DT, FED tists csticcsctiiescemmulasteaiaseamanaeaenae 20

Convention on the Contract for the Inter-

national Carriage of Goods By Road (CMR),

May 19, 1956, 399 U.N.T\S. 189....................cc000c0e0. 20

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

LAW OF ADMIRALTY (2d ed. 1975) ............c.cccccceececeeeees 2

H.R. Rep. No. 95-1395 (1978), reprinted in 1978

bs tak od OM =| EMRE 2 ke 14

Henry A. Tombari, T7rends in Oceanborne

Containerization and its Implications for the

U.S. Liner Industry, 10 J. Mar. L. & Com.

BOL, BERR COP ciscscececsscesesvonsvisissencteusteaeeleyeeae 6

TABLE OF AUTHORITIES ~ Continued

Marc LEVINSON, THE Box 1-4 (2006)....................

Mark Tilley, The Origin and Development of the

Mutual Shipowners Protection & Indemnity

Association, 17 J. MAR. L. & Com. 261 (1986)..

Michael F. Sturley, Maritime Cases About

Train Wrecks: Applying Maritime Law to the

Inland Damage of Ocean Cargo, 40 J. MAR.

ae

Michael F. Sturley, Reflections on the Recod-

ification of Title 46 BENEDICT’S MARITIME

eB Mk Tb)” |

THOMAS J. SCHOENBAUM, ADMIRALTY AND MARI-

TIME LAW § 19-12 (4th ed. 2004).................0......

U.S. DEP’T OF TRANSP., BUREAU OF TRANSP. STA-

TISTICS, AMERICA’S CONTAINER PORTS: FREIGHT

Huss THAT CONNECT OUR NATION TO GLOBAL

i ounececescseccveoees

U.N. Convention on Contracts for the Inter-

national Carriage of Goods Wholly or Partly

by Sea, Dec. 11, 2008 General Assembly

Resolution 63/122, Annex, U.N. Doc. A/RES/

63/122 (Rotterdam Rules)....................... 9, 18,

UNCITRAL, 12th Sess., Working Group III at

3, A/CN. 9/WG. II/WP 34 (Aug. 7, 2003)

available at http://daccessdds.un.org/doc/

UNDOC/LTD/V03/869/05/PDF/V0386905. pdf?

i dandhierinvicdadepbededienenssacnecsconsss 9,

nit 15

a

19, 20

19, 21

vi

TABLE OF AUTHORITIES — Continued

Page

Uniform Rules Concerning the Contract for

International Carriage of Goods by Rail

(CIM), 2 International Transport Treaties, V-

213 (Wolters Kluwer, Supp. 1-10 Jan. 1986).......... 20

1

INTEREST OF THE AMICI CURIAE'

American Steamship Owners Mutual Protection

and Indemnity Association, Inc.; Assuranceforeningen

Gard (Gjensidig); Gard P&I (Bermuda) Ltd;

Assuranceforeningen Sku!d (Gjensidig); Skuld

Mutual Protection and Indemnity Association

(Bermuda) Ltd.; The Britannia Steam Ship Insurance

Association Ltd.; The Japan Ship Owners’ Mutual

Protection & Indemnity Association; The London

Steam-Ship Owners’ Mutual Insurance Association

Ltd.; The North of England Protecting and Indemnity

Association Ltd.; The Shipowners’ Mutual Protection

and Indemnity Association (Luxembourg); The

Standard Steamship Owners’ Protection and

Indemnity Association (Asia) Ltd.; The Standard

Steamship Owners’ Protection and Indemnity

Association (Bermuda) Ltd.; The Standard Steamship

Owners’ Protection and Indemnity Association

(Europe) Ltd.; The Standard Steamship Owners’

Protection and Indemnity Association (London) Ltd.;

The Steamship Mutual Underwriting Association

Ltd.; The Steamship Mutual Underwriting Asso-

ciation (Bermuda) Ltd.; Sveriges Angfartygs

Assurans Foérening (Swedish Club); United Kingdom

' No counsel for any party authored this brief in whole or in

part, and no person other than the amici curiae represented in

this brief made any monetary contribution to its preparation or

submission. Written consents from the parties to the filing of

this bnef are on file with the Clerk of the Court. The partics

were notified ten days prior to the due date of this brief of the

intention to file.

2

Mutual Steam Ship Assurance Associ#tion (Bermuda)

Ltd.; United Kingdom Mutual Steam Ship Assurance

Association (Europe) Ltd.; and The West of England

Ship Owners’ Mutual Insurance Association (Luxem-

bourg) — together known as the International Group

of Protection and Indemnity (P&I) Clubs’ respectfully

submit this brief as amici curiae in support of

Petitioners.

Amici P&I Clubs comprise thirteen insurance

associations known as “protection and indemnity

clubs” (often abbreviated “P&I clubs”). P&I clubs are

“associations of shipowners banded together to spread

and absorb liabilities falling on their members.”

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

ADMIRALTY 76 (2d ed. 1975).’ The individual P&I

Clubs as amici curiae here form together a trade

association known as the International Group of P&I

Clubs.

The members of the Amici P&I Clubs are owners,

operators, and charterers of ships of practically all

maritime nations. The thirteen clubs represented

here insure nearly ninety percent (90%) of the world’s

ocean-going ship tonnage. The P&I Clubs themselves

* The amici curiae will be referred to hereinafter as “Amici

P&I Clubs.”

* For a discussion on the history and function of P&I clubs,

see THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 19-

12 (4th ed. 2004), and Mark Tilley, Zhe Origin and Development

of the Mutual Shipowners Protection & Indemnity Association,

17 J. Mar. L. & Com. 261 (1986).

3

are non-profit mutual organizations. Their member

shipowners insure one another on an indemnity basis

against a variety of third-party liabilities reluting to

the use and operation of ships.

+

INTRODUCTION

This case raises an issue that affects virtually all

the multimodal carriage of cargo in ocean containers

between non-adjacent foreign countries and the

United States. In 2008, U.S. ocean container ports

handled 28.2 million TEUs,* nearly all of which were

transported throughout the country by either rail or

truck carriers. U.S. Depr’r OF TRANSP., BUREAU OF

TRANSP. STATISTICS, AMERICA’S CONTAINER PORTS:

FREIGHT Huss THAT CONNECT OUR NATION TO GLOBAL

MARKETS 3, 16 (2009). Uniformity and predictability

of maritime law are essential not only to the Amici

P&I Clubs, but aiso to world commerce. Insurance

may be arranged for vessel interests more efficiently

if the law that governs the carriage of cargo is

uniform and predictable. The application of one law,

the Carriage of Goods by Sea Act (“COGSA”), ch. 229,

Pub. L. No. 74-521, 49 Stat. 1207 (1936) (re-printed in

Note following 46 U.S.C. § 30701); Petition for Writ of

Certiorari, Kawasaki Kisen Kaisha Ltd. and K-Line

* Because shipping containers are of various lengths, the

TEU (twenty foot equivalent) was developed as the standard

measure for counting containers. One 40 foot container equals 2

TEUs

4

America, Inc., petition for cert. filed June 18, 2009,

(hereinafter “K-Line Pet.” or “Pet.”) App. 48a-6la,

throughout the entire door-to-door multimodal

carriage of goods is extremely beneficial to all parties

involved in multimodal carriage and the efficient

operation of multimodal movements.

If, instead of COGSA, the Carmack Amendment

to the Interstate Commerce Act’ (“Carmack”) were to

apply to the U.S. inland part of multimodal carriage,

the inland carriers or the contracting carriers would,

according to the lower court opinion in this case, have

to give the shipper a fair opportunity to demand full

Carmack coverage, which is quite different than

COGSA. Full Carmack rights would have to be

offered as the primary regime to govern the inland

carriage. Pet. App. 33a-35a. The Carmack carrier

could only offer, as alternative terms, terms that are

uniform with the terms of the multimodal contract of

carriage evidenced by the ocean bill of lading.

Offering such a fair opportunity and the notice of

the alternative bill of lading terms required by

Carmack to the shipper would be very difficult if not

impossible in practice. In multimodal carriage, the

* The Carmack Amendment is codified at 49 USC.

§§ 10101 et seq. Part A governs rail transportation and begins at

49 USC. §10101. Part B governs Motor Carriers, Water

Carriers, Brokers, and Freight Forwarders and begins at 49

U.S.C. § 13101. This brief shall refer to this legislation as the

“Carmack Amendment” or as “Carmack.” See K-Line Pet. App.

62a-9la.

5

inland carrier does not contract directly with the

shipper. The shipper contracts with the contracting

carrier, which may be a non-vessel operating common

carrier (NVOCC) or a vessel operating common

carrier (VOCC) or some other kind of contracting

carrier. The contracting carrier might contract

directly or indirectly with the U.S. inland carrier. The

contracting carrier probably would not know which

inland carrier would perform the U.S. inland carriage

or the terms of that unknown carrier’s contract at the

time it contracted with the shipper. Without that

knowledge, the contracting carrier could not give the

shipper notice of the alternate terms a particular

inland carrier wished to use.

Moreover, if more than one law were to govern

various parts of each carriage, resolution of claims for

loss or damage would be needlessly and wastefully

complicated. Before the merits of a claim could be

addressed, the applicable law (Carmack or COGSA)

would have to be determined. The applicable law

could not be ascertained until the location of the loss

or damage and the location of its cause were

determined.°

* Moreover, if COGSA governed the ocean part of the

carriage and Carmack governed the land part, the receiver

would want te make a claim against both the ocean carrier and a

land carrier, whose liability may be higher than the ocean

carrier's. Carmack imposes a strict, insurer-type liability scheme

on the carrier while COGSA employs a fault-based liability

scheme. See Sornpo Japan Ins. Co. of America v. Union Pacific

R.R. Co., 456 F.3d 54, 58 (2d Cir. 2006); Rankin v. Allstate Ins.

(Continued on following page)

6

The location of the loss or damage or the location

of its cause may be difficult or impossible to prove.

Ocean containers used for multimodal transportation

are generally not opened during their carriage; as a

result, damage or loss is often not discovered until

the container reaches its final destination and is

opened by its receiver. If different legal regimes

required shippers to open and inspect containers as

they were transferred from one mode or party to

another, the transportation would be slowed and

cargo might be damaged or pilfered. The ocean

container has greatly reduced damage and loss

during transportation.’ This advantage should not be

lost by a need to open containers in transit.

Co., 336 F.3d 8, 9 (1st Cir. 2002); see also Missouri P. R. Co. v.

Elmore and Stahl, 377 U.S. 134, 137 (1964). If COGSA governed

the entire carriage, the receiver could prove its prima facie case

simply by proving delivery of a certain quantity of cargo to the

carrier in good order and condition and delivery by the carrier in

damaged condition, or that some cargo was missing when it was

delivered to its receiver. The claim would be governed only by

COGSA. There would be no reason for cargo interests to attempt

to improve their chances of recovery by suing the inland carrier

in addition to the contracting carrier.

" See generally MARC LEVINSON, THE Box 1-4 (2006)

(suggesting that the container shaped the world economy by

reducing the time and costs of shipping); Henry A. Tombari,

Trends in Oceanborne Contatnerization and its Implications for

the U.S. Liner Industry, 10 J. Mar. L. & Com. 311, 311-12 (1979).

(“Overall, the advantages of containerization over the breakbulk

system are to reduce (i) the time and effort needed to handle

cargo; (ii) possible theft and damagy; (iii) time required to move

from point of origin to final destination and (iv) a ship’s turn

around time in port.”)

7

All of the foregoing weighs heavily in favor of

applying a uniform law (COGSA) to the international,

multimodal carriage of goods between a non-adjacent

foreign country and a place in the United States. But

the disuniformity under current law is even worse

than having one legal regime covering the ocean leg,

and another the inland leg, of a multimodal ship-

ment. Because of an entrenched Circuit split, the law

within the inland portion of the shipment changes as

the container moves from circuit to circuit.

At the present time, the Fourth, Sixth, Seventh,

and Eleventh Circuits do not apply the Carmack

Amendment to the inland leg of a multimodal

shipment. K-Line Pet. 11, 13-15. Cargo moving

through those circuits would honor the contractual

extension of COGSA. By contrast, the Second and

Ninth Circuits do apply Carmack to the inland leg of

a multimodal shipment and thus do not honor a

contractual extension of COGSA (unless Carmack’s

strict requirements are satisfied). K-Line Pet. 11, 15-

16. The complications can be illustrated by hypo-

thetical cargo moving under a through bill of lading

that incorporated COGSA from Yokohama, Japan via

Tacoma, Washington and road and rail transportation

to Albany, New York. While being shipped from

Yokohama to Tacoma, the cargo would be governed by

COGSA. After the cargo arrives in Tacoma and begins

to move in the Ninth Circuit, it would be governed by

Carmack. As cargo moved through Illinois and

Indiana in the Seventh Circuit, it would be governed

by COGSA. It would be governed by COGSA as the

8

cargo traveled through Ohio in the Sixth Circuit, and

by Carmack when it reached New York in the Second

Circuit.

It is difficult to imagine a legal regime more

anathema to the uniformity and predictability that is

so important for insurance carriers and for inter-

national commerce. A decision by this Court is neces-

sary to unify the law governing international multi-

modal carriage in a!l the Circuits of this country.

¢

SUMMARY OF ARGUMENT

A review of Carmack and its various re-

codifications shows that Carmack simply does not

govern the carriage of cargo between a non-adjacent

foreign country and a place in the United States.

Carmack does govern carriage between an adjacent

foreign country, Mexico or Canada, and a place in the

United States. A significant amount of goods are

carried over land between the U.S. and Mexico or

Canada." Application of the Carmack Amendment to

that solely land carriage, either by train or truck,

provides a uniform law to that entire land carriage no

matter where during the inland carriage loss or

damage occurs. By contrast, applying Carmack to the

* Of the 25 million container entries into the U.S. in 2007,

over 14 million entered the nation by truck and rail from

Canada and Mexico. U.S. Dep’t oF TRANSP., BUREAU OF TRANSP.

STATISTICS at 21.

9

inland leg of a multimodal shipment from a non-

adjacent country creates disuniformity and un-

predictability; it is not what Congress intended.

This Court emphasized in several places in the

opinion of Norfolk Southern Ry. Co. v. James N. Kirby

Pty Ltd., 543 U.S. 14, 28 (2004) that uniformity of law

is crucial to multimodal transportation. In addition,

the United States through its Delegation to the

United Nations Commission on International Trade

Law (UNCITRAL) Working Group III on Transport

Law that drafted the Rotterdam Rules,’ emphasized

the need for one law to govern as far as possible each

multimodal carriage. The decision below is in tension

both with Kirby and the position of the United States.

«

ARGUMENT

I. THE CARMACK AMENDMENT DOES NOT

GOVERN CARRIAGE BETWEEN A NON-

ADJACENT FOREIGN COUNTRY AND A

PLACE IN THE UNITED STATES.

The plain text of the Carmack Amendment

before the 1978 recodification clearly applied only to

* U.N. Convention on Contracts for the International

Carriage of Goods Wholly or Partly by Sea, Dec. 11, 2008

General Assembly Resolution 63/122, Annex, U.N. Doc.

A/RES/63/122. After a signing ceremony in Rotterdam in

September 2009, this Convention will be known as the “Rotter-

dam Rules.”

10

carriage from a place in the United States to a place

in an adjacent foreign country, not to a place in a non-

adjacent foreign country."

Consistent with the plain text of the statute, this

Court made clear before the 1978 recodification that

the Carmack Amendment did not apply to carriage

(or a shipment) between a non-adjacent foreign

country and the United States. Justice Brandeis

emphasized in 1920 that the Interstate Commerce

Act governed carriage of cargo with adjacent foreign

countries:

The contention is that §1 of the Act [to

Regulate Commerce, February 4, 1887, c.

" Any common carrier, railroad, or transportation

company subject to the provisions of this chapter

receiving property for transportation from a point in

one State or Territory or the District of Columbia to

a point in another State, Territory, District of

Columbia, or from any point in the United States to

a point in an adjacent foreign country shall issue a

receipt or bill of lading therefor, and shall be liable to

the lawful holder thereof for any loss, damage, or

injury to such property caused by it or by any

common carrier, railroad, or transportation company

to which such property may be delivered or over

whose line or lines such property may pass within

the United States or within an adjacent foreign

country when transported on a through bill of lading,

and no contract, receipt, rule, regulation, or other

limitation of any character whatsoever shall exempt

such common carrier, railroad, or transportation

company from the liability hereby imposed .. .

49 U S.C. § 2011) (1976) (emphasis added). Pet. App. 98a.

ll

104, 24 Stat. 379] does not apply to the

transportation of passengers from a foreign

country to a point in the United States. To

this there are two answers. The first is that

the transportation here in question is not

that of a passenger but of property. The

second is that the act does apply to the

transportation of both passengers and

property from an adjacent foreign country,

such as Canada. Section 1 declares that the

act applies to “any common carrier

engaged in the transportation of passengers

or property ... from any place in the United

States to an adjacent foreign country.”

Galveston, Harrisburg & San Antonio Ry. Co. v.

Woodbury, 254 U.S. 357, 359 (1920) (emphasis in

original) (citation omitted). This Court also explained

this same application of the Carmack Amendment to

the Interstate Commerce Act, in dicta, in Reider v.

Thompson, 339 U.S. 113 (1950). In Reider, a shipment

of wool and skins was carried from Buenos Aires,

Argentina to New Orleans, Louisiana, by ship

pursuant to a bill of lading that described the

carriage from Buenos Aires to New Orleans. At New

Orleans, a separate bill of lading was issued by the

railroad to evidence carriage from New Orleans to

Boston. Jd. at 116. This Court held that the carriage

from New Orleans to Boston was governed by the

Carmack Amendment. /d. at 117.

It was argued that the Carmack Amendment did

not apply because the cargo originated in a non-

adjacent foreign country. This Court responded as

follows to that argument:

12

Does the fact that the shipment in this

case originated in a foreign country take it

without the Carmack Amendment? We think

not. There was no through bil! of lading from

Buenos Aires to Boston. The record does

not show the slightest privity between

respondent and the ocean carrier. The

contract for ocean transportation terminated

at New Orleans. Having terminated, nothing

of it remained for the new, separate, and

distinct domestic contract of carriage to

“supplement.” Even the parties to the ocean

bill of lading and the domestic bill of lading

were different. If the various parties dealing

with this shipment separated the carriage

into distinct portions by their contracts, it is

not for courts judicially to meld the portions

into something they are not. The test is not

where the shipment originated, but where

the obligation of the carrier as receiving

carrier originated.

Id. See also K-Line Pet. at 19 nn. 3-5 (citing

additional support).

Reider v. Thompson \eft us with the clear and

rational rule that the Carmack Amencment’s

jurisdiction was limited to carriage from one state or

territory of the United States to another (New

Orleans, Louisiana to Boston, Massachusetts), or

between an adjacent foreign country and a place in

the United States. Its scope simply did not extend to

cover carriage of cargo from a non-adjacent foreign

country to the United States. If the parties had

treated the carriage from Buenos Aires to Boston as

13

one move and evidenced that one move with one bill

of lading, issued perhaps by an ocean carrier that had

subcontracted the New Orleans to Boston leg to a rail-

road, no part of that one move would have been within

Carmack’s jurisdiction. The move would have been be-

tween Buenos Aires, a place in a non-adjacent foreign

country, and Boston, a place in the United States.

When Congress recodified Carmack in 1978, it

deleted 49 U.S.C. § 20(11), which had clearly limited

the liability imposed by Carmack to carriage with

adjacent countries.

The removal of the word “adjacent” from its

prominent place in 49 U.S.C. § 20(11) has been

misconstrued by some courts as affecting a sub-

stantive change in the law,’ even though the

introduction to the recodification act reads as follows:

" The following relatively recent cases have applied the

Carmack Amendment to multimodal carriage from or to non-

adjacent foreign countries: Mitsui Sumitomo Ins. Co. Ltd. v.

Evergreen Marine Corp., No. 07 CV 3784 (CM), 2008 WL

4369763 (S.D.N.Y. Sept. 22, 2008); Sompo Japan Ins. Co. v.

Union Pacific R.R. Co., No. 03 CV 1604 (CM), 2007 WL 2230091

(S.D.N.Y. Aug. 2, 2007); Sompo Japan Ins. Co. v. Yang Ming

Marine Transp. Corp., No. 07 CV 11276 (DC), 2008 WL 4330058

(S.D.N.Y. Sept. 24, 2008); Sompo Japan Ins. Co. of America v.

Norfolk Southern Ry. Co., 540 F.Supp. 2d 486, motion for

reconsideration denied, 553 F. Supp. 2d 348 (S.D.N.Y. 2008);

Rexroth Hydraudyne B.V. v. Ocean World Lines, Inc., No. 06 CV

5549 (LAK), 2007 WL 541958 (S.D.N.Y. Feb. 14, 2007).

Application of the introduction to the 1978 recodification, K-Line

Pet. App. 90a, would probably have eliminated the need to

litigate many of these cases or would at least have eliminated

the need to litigate whether Carmack applied.

14

An Act

To revise, codify, and enact without

substantive change the Interstate Commerce

Act and related laws as subtitle IV of title

49, United States Code, “Transportation”

Be it enacted by the Senate and House of

Representatives of the United States of

America in Congress assembled That certain

general and permanent laws of the United

States, related to transportation, are revised,

codified, and enacted as title 49, United

States Code, “Transportation” as follows:...

Pub. L. No. 95-473, 92 Stat. 1337 (1978) (first

emphasis added); Pet. App. 90a. See also H.R. Rep.

No. 95-1395, at 9 (1978), reprinted in 1978

U.S.C.C.A.N. 3009, 3018 (stating that the statute is

intended to remain substantively unchanged and

courts should not infer that a change of language is

intended to change substance). This introduction is

supported by Professor Michae) F. Sturley’s explana-

tion of the intent of recodification:

The purpose [of recodification] is to restate

existing law to conform to “the understood

policy, intent, and purpose of the Congress in

the original enactments, with such amend-

ments and corrections as will remove

ambiguities, contradictions, and _ other

imperfections both of substance and of form.”

2 U.S.C. § 285(b)(1).

Michael F. Sturley, Reflections on the Recodification of

Title 46, 2 BENEDICT’S MARITIME BULLETIN 209, 212

15

(2004). Even though it is clear that Congress did not

intend to change the substance of the Carmack

Amendment, some courts have reasoned that because

the word “adjacent” was not as prominent after the

recodification as it had been in 49 U.S.C. § 20(11),

Congress intended to and did greatly expand

Carmack’s application. It is obvious that if Congress

had wished to change the substance in this drastic

manner, it would not have said that it did not.”

” Professor Sturley has also argued that there is no reason

to distinguish adjacent foreign countries from non-adjacent

foreign countries even though the distinction creates a sub-

stantive change, because “it seems wiser to follow the clear text

of the statute rather than trace the prior language back over

three decades and through two recodifications.” Michael F.

Sturley, Maritime Cases About Train Wrecks: Applying Maritime

Law to the Inland Damage of Ocean Cargo, 40 J. Mar. L. & Com.

1, 34 (2009). On the contrary, it is widely accepted that when

interpreting a recodification it should be presumed that the law

is intended to remain substantively unchanged. See Atchison,

Topeka and Santa Fe Railway Co. v. U.S., 617 F.2d 485, 491 (7th

Cir. 1980) (“Congress has unequivocally forbidden any inter-

pretation that would substantively change the [Interstate

Commerce Act]”); U.S. v. Booky, 733 F.2d 1335, 1337 n. 3 (9th

Cir. 1984) (finding language present in original section of code,

but absent in recodified section, must be read into recodified

section when absence of language creates a substantive change);

Trailer Marine Transport Corp. v. Federal Maritime Comm., 602

F.2d 379, 383 n. 18 (D.C. Cir. 1979) (finding prohibition against

substantive change in recodification of Interstate Commerc» Act

requires courts to closely examine language of the Act prior to

recodification to determine intent of Congress).

Indeed, even when Congress is silent as to its intent in

revising and consolidating a statute, “it will not be inferred that

Congress, in revising and consolidating the laws, intended to

(Continued on following page)

16

Il. THE PRACTICAL RESULT OF THE

DECISION OF THE LOWER COURT IN

THIS MATTER IS OPPOSITE TO THE

RESULT ACHIEVED BY THIS COURT IN

NORFOLK SOUTHERN RY. CO. V. JAMES

N. KIRBY PTY LTD.

This Court explained the advantages of uniform

law governing multimodal carriage in Norfolk

Southern Ry. Co. v. James N. Kirby Pty Ltd., 543 U.S.

14 (2004).

Kirby presented multimodal carriage that was

slightly more complicated than the carriage in this

case. In Kirby, the shipper of cargo (Kirby) contracted

with a Non-Vessel Operating Common Carrier

(NVOCC) to carry cargo from Sydney, Australia to

Huntsville, Alabama. The NVOCC contracted with a

Vessel Operating Common Carrier (VOCC) also to

carry the cargo from Sydney to Huntsville, Alabama.

The VOCC contracted with a railroad (Norfolk

Southern) to carry the cargo over land from the US.

port of entry, Savannah, Georgia, to Huntsville,

Alabama. The contract for the entire shipment was

evidenced by the NVOCC through bill of lading

issued to Kirby, and by the VOCC through bill of

change their effect unless such intention is clearly expressed.”

Fourco Glass Co. v. Transmirra Corp., 353 U.S. 222, 227 (1957)

(quoting Anderson v. Pacific Coast S.S. Co., 225 U.S. 187, 199

(1911)); see also Sompo Japan Ins. Co. of America v. Union

Pacific R.R. Co., 456 F.3d 54, 64 (2d Cir. 2006) (quoting Fourco);

In re Roll Form Prods., Inc., 662 F.2d 150, 153 & n. 5 (2d Cir.

1981).

17

lading issued by the VOCC to the NVOCC. Kirby, 543

U.S. at 19.

This Court held that the bill of lading was a

maritime contract, and therefore, was governed by

federal law. The Court stated:

Confusion and inefficiency will inevitably

result if more than one body of law governs a

given contract’s meaning. As we said in

Kossick, when “a [maritime] contract... may

well have been made anywhere in the world,”

it “should be judged by one law wherever it

was made.” Here, that one law is federal.

Id. at 29 (citing Kossick v. United Fruit Co., 365 U.S.

731, 741 (1960)). This Court explained that the

defenses and limitations in the NVOCC bill of lading

protected all the parties that helped perform the

multimodal carriage, including the railroad. The

limitation contained in the VOCC bill of lading was

lower than the NVOCC’s bill of lading limitation and

there was no direct contract between Kirby and the

VOCC. This Court held that the NVOCC had acted as

Kirby’s limited agent to bind Kirby to the limitation

contained in the VOCC’s bill of lading. The lower

limit was extended to the railroad by the Himalaya

Clause™ in the VOCC’s bill of lading.

“ The term “Himalaya Clause” derives its name from the

S/S Himalaya, which was involved in Adler v. Dickson, {1955} 1

Q.B. (C.A. 1954), and is used to describe provisions that extend

maritime liability lumitations. See, e.g., Kirby, 543 U.S. at 20 n 2

(1960).

18

The case at bar is simpler and no limited agency

theory is necessary. The cargo shipper, Regal-Beloit

Corporation, et al. contracted with Kawasaki Kisen

Kaisha, Ltd. (K-Line) to carry cargo from China to

various inland destinations in the United States. K-

Line’s U.S. agent, K-Line America, contracted with

the Union Pacific Railroad Company (UPRR) for the

inland carriage. K-Line Pet. App. at 9.

Kirby’s reasoning applies a fortiori here: It

suggests that K-Line’s Himalaya Clause extended the

terms of K-Line’s contract, including a choice of forum

clause, to the railroad. K-Line would of course be

entitled to that choice of forum clause as well. See

Vimar Seguros Y Reasequros, S.A. v. M.V. Sky Reefer,

515 U.S. 528, 541 (1995) (holding that foreign

arbitration clauses in a bill of lading are valid under

COGSA).

Ill. THE RESULT BELOW IS IN TENSION

WITH THE WELL-REASONED POSITION

OF THE UNITED STATES IN RECENT

TREATY NEGOTIATIONS FOR THE

ROTTERDAM RULES, WHICH IS THAT

ONLY ONE LAW SHOULD GOVERN ALL

ASPECTS OF INTERNATIONAL, MULTI-

MODAL, DOOR-TO-DOOR CARRIAGE OF

GOODS.

The United States played an active role in

negotiating a Convention on Contracts for the

International Carriage of Goods Wholly or Partly by

Sea, which was recently completed by the United

19

Nations Commission on International Trade Law

(UNCITRAL) and approved on December 11, 2008 by

the United Nations General Assembly.”

The United States proposed to the treaty drafters

that the law governing the door-to-door carriage of

goods should be as uniform as possible." The United

States stated its position as follows:

I. Scope of application and performing

parties...

5. As part of the overall package, the

United States supports a door-to-door

regime on a uniform liability basis as

between the contracting parties, subject

to a limited network exception. This

means that the contracting carrier’s

liability to the cargo interests would

always be resolved under the Instru-

ment’s own substantive liability pro-

visions (including the Instrument’s own

limitation and exoneration provisions)

except when the network principle

applies to supersede these provisions.

’ U.N. Convention on Contracts for the International

Carriage of Goods Wholly or Partly by Sea, Dec. 11, 2008

General Assembly Resolution 63/122, Annex, U.N. Doc.

A/RES/63/122. After a signing ceremony in Rotterdam in

September 2009, this Convention will be known as the

“Rotterdam Rules.”

' UNCITRAL, 12th Sess., Working Group III at 3, A/CN.

9/WG. IL/WP 34 (Aug. 7, 2003) available at http://daccessdds.

un. org/doc/UN DOC/LTD/V03/869/05/PDF/V0386905. pdf 7?Open

Element.

20

To provide the maximum degree of

uniformity possible, we would keep the

network exception as narrow as possible.

The narrow network exception contained

in article 4.2.1 of the Draft Instrument

would be acceptable to the United

States.”

The network exception referred to a desire by Euro-

pean Nations to have their road and rail conventions”

govern damage or loss on European roads or rails.

While the U.N. Convention will govern a

multimodal carrier’s liability during U.S. inland

carriage, it will not apply directly to the railroad or

trucking company acting as subcontractor to the

carrier. The United States indicated that the carrier’s

Himalaya Clause should preserve uniformity by

applying the carrier’s defenses to the railroad or

motor carrier:

With regard to other performing parties, the

Instrument should not create new causes of

action or preempt existing causes of action.

For example, the liability of an inland carrier

(e.g., a trucker or a railroad) should be based

oo

‘* See Convention on the Contract for the International

Carriage of Goods By Road (CMR), May 19, 1956, 399 U.N.T.S.

189; Appendix B to the Convention Concerning International

Carriage by Rail (COTIF) of May §, 1980, and Uniform Rules

Concerning the Contract for International Carriage of Goods by

Rail (CIM), 2 International Transport Treaties, V-213 (Wolters

Kluwer, Supp. 1-10 Jan. 1986).

21

on existing law. In some countries, this

may be a regional unimodal convention... .

In others, it may be a mandatory or

nonmandatory domestic law governing

inland carriage, or the generally applicable

tort law. In some countries, cargo interests

may not have a cause of action against

inland performing parties. Preserving the

status quo in this regard would, of course,

preserve whatever rights an_ inland

performing party may have under applicable

national law to rely on a Himalaya clause

to claim the benefit of the contracting

carrier’s rights under the Instrument. The

Instrument should neither increase nor

decrease these existing rights.’

Inland United States carriers should be able to

rely on Himalaya Clauses in the bills of lading issued

by multimodal carriers. To interpret Carmack

contrary to the clear meaning and intent expressed

by Congress in the 1978 Recodification bill would

severely harm the uniformity sought by the United

‘cates in the future Rotterdam Rules, and would

increase the expense of U.S. foreign trade. It is

obviously far more efficient to govern multimodal

carriage with one law rather than many. When the

law changes with the geographical location of the

cargo or with the mode of transportation, liability is

neither uniform nor predictable. This is detrimental

not only to insurers, but to international trade.

" UNCITRAL, supra, note 16.

22

A decision of this Court is necessary to interpret

the Carmack Amendment correctly and thus preserve

uniformity in the law governing the multimodal

carriage of cargo.

°

CONCLUSION

The petition for writ of certiorari should be

granted.

Dated: New York, New York

July 20, 2009

Respectfully submitted,

CHESTER D. HOOPER

Counsel of Record

HOLLAND & KNIGHT LLP

195 Broadway

New York, NY 10007

(212) 513-3200

Attorneys for Amici Curiae,

The International Group

of Protection and Indemnity

(P&I) Clubs, et al.