966 F. Supp. 2d 270
S.D.N.Y.2013Background
- Sompo and Nipponkoa insured cargos damaged in a 2006 Texas train derailment involving NSR, Norfolk Southern Corporation, and Kansas City Southern Railway Company.
- Cargos moved under multiple bills of lading and involved intermediaries Nippon Express and Yang Ming; Nippon Express issued sea bills and Nippon Express’s Nippon Express bill may be ambiguous.
- Yang Ming’s bill of lading contains a Himalaya Clause restricting suits to Yang Ming and extending liability limitations downstream.
- Enplas shipment rights were assigned to Nipponkoa via Enplas, Tokio Marine, TM Claim Service, and Yang Ming; Nipponkoa asserted rights to sue NSR for Enplas damages.
- I previously held the Carmack Amendment did not apply to through bills of lading originating overseas and dismissed related claims; the current posture resolves reassessed contract, tort, and bailment issues.
- Enplas damages were stipulated at $100,000, with Nipponkoa seeking and obtaining summary judgment for that amount plus interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yang Ming Himalaya Clause bars suits against NSR | Yang Ming clause does not permit COA against NSR. | Yang Ming Himalaya Clause extends liability limits to downstream carriers, barring suits. | Defendants protected; covenants not to sue preclude plaintiffs from suing NSR. |
| Whether Nipponkoa has valid assignment to sue NSR for Enplas | Assignment not clearly granting enforceable claims against NSR. | Assignment from Yang Ming authorizes Nipponkoa to sue NSR per ITA and Rules Circular. | Nipponkoa validly assigned rights and may sue; Nipponkoa entitled to judgment on Enplas claim. |
| Whether Carmack Amendment applies to these shipments | Carmack Amendment should apply to the through shipments and permit subrogation rights. | Carmack Amendment does not control; bills of lading govern liability. | Carmack Amendment does not apply; liability limited by Himalaya Clause protections. |
| Whether Nippon Express bill of lading ambiguity affects liability | Ambiguity resolved in plaintiffs' favor to allow suit against NSR. | Ambiguity resolved against plaintiffs; Yang Ming controls via Himalaya Clause. | Ambiguity is not controlling; Yang Ming bill precludes suits against NSR. |
Key Cases Cited
- Kirby v. NSR, 543 U.S. 14 (U.S. (2004)) (two bills of lading and Himalaya Clause extend liability limits to downstream carriers)
- Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138 (2d Cir.2010) (Himalaya clauses and downstream carrier liability limitations; circuit interpretation)
- Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89 (U.S. 2010) (Carmack Amendment implications; interpretation of through bills of lading)
- Royal & Sun Alliance Ins. v. Ocean World Lines, Inc., 572 F.Supp.2d 379 (S.D.N.Y.2008) (district court’s view on covenants not to sue and liability limitations)
- St. Paul Fire & Marine Ins. Co. v. City of New York, 907 F.2d 299 (2d Cir.1990) (presumption framework in negligence and rare events cases)
- Jesionowski v. Boston & M.R.R., 329 U.S. 452 (U.S. (1947)) (presumption of negligence in railway derailment context)
- O’Brien v. Argo Partners, 736 F. Supp.2d 528 (E.D.N.Y.2010) (assignment and rights standing principles in complex transport disputes)
- Sprint Commc’ns Co. v. APCC Servs., Inc., 554 U.S. 269 (U.S. (2008)) (arbitration and waiver principles; contractual interpretation guidance)
- Enron Corp. v. Springfield Assocs., L.L.C., 379 B.R. 425 (S.D.N.Y.2007) (assignee rights and equities in bankruptcy context)