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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43085015_0494%3A07

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2010
- **Citation:** 559 U.S. 989

## Text

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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43085015_0494%3A07. Public record. Not legal advice.