756 F. Supp. 2d 369
S.D.N.Y.2010Background
- Sixty USA contracted Franco Vago to transport 138 cartons of women’s apparel from Shanghai to New York; three bills of lading issued with Florence forum clause and Italian law.
- Goods were received in Shanghai and consolidated with Yang Ming as carrier; Oriental Logistics issued a downstream bill naming Franco Vago as consignee.
- Container arrived in Port Newark; Passport noted goods were crushed and wet; TJ Expeditors and others documented damage indicators and noted possible mis-stowage by Oriental Logistics.
- Sixty USA’s loss totaled around $91,473.59; recovery consisted of salvage proceeds and insurer payment, with Sixty USA subrogated to AIGE’s rights.
- Franco Vago answered asserting defenses including lack of jurisdiction, COGSA/Harter Act defenses, and lack of impleadment of certain parties; Yang Ming moved to dismiss based on its forum clause.
- Motions followed during mediation stay; Yang Ming’s motion to dismiss was granted; AIGE/Sixty USA’s summary judgment motion against Franco Vago was denied for material fact disputes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yang Ming’s forum clause requires dismissal of claims | Yang Ming’s clause mandates England forum for Yang Ming-related claims. | Enforcement is necessary for all claims arising under Yang Ming bill of lading and asserts exclusive English jurisdiction. | Yang Ming dismissed without prejudice; claims should proceed in England. |
| Whether Franco Vago waived the forum clause | Franco Vago failed to raise the clause earlier, constituting waiver. | Franco Vago preserved its rights by asserting lack of personal jurisdiction. | Franco Vago waived enforcement of the forum clause and consented to this forum. |
| Whether AIGE/Sixty USA are entitled to summary judgment against Franco Vago | Franco Vago assumed liability and per-COGSA limits do not bar full recovery. | Franco Vago’s terms limit liability and the CFCFS notation is not determinable on summary judgment. | Summary judgment denied; material facts remain unresolved, including contract scope and COGSA limits. |
| Whether Franco Vago can rely on Yang Ming’s forum clause to bar claims against it | Franco Vago should be barred by upstream clauses. | Franco Vago cannot piggy-back downstream carrier terms to bind Sixty USA. | Franco Vago cannot co-opt another contract’s forum clause; claims proceed in this forum under Franco Vago’s own contracts. |
| Whether Franco Vago’s status as NVOCC vs freight forwarder affects liability | Franco Vago may be liable as an NVOCC under COGSA beyond limited carrier liability. | Franco Vago is shielded by the terms describing no carrier liability and limited per-package limits. | Outstanding factual questions; discovery needed to determine NVOCC vs freight forwarder status and related liability. |
Key Cases Cited
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. Supreme Court, 1972) (forum selection clauses are prima facie valid and enforced unless unreasonable)
- New Moon Shipping Co. v. MAN B&W Diesel, 121 F.3d 24 (2d Cir. 1997) (strong showing required to overcome enforceability of forum clauses)
- Vimar Seguros v. Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528 (U.S. Supreme Court, 1995) (forum clauses in bills of lading in maritime context; COGSA §3(8) relevance)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (four-factor Bremen test for enforceability of forum selection clauses)
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (U.S. Supreme Court, 2004) (weight of authority on downstream/intermediary contract terms and liability)