CENTRAL NATIONAL-GOTTESMAN, INC., Plaintiff
v.
M.V. "GERTRUDE OLDENDORFF," her engines, boilers, etc., and EO Oldendorff, Defendants.
United States District Court, S.D. New York.
*676 Graham, Miller, Neandross, Mullin & Roonan, LLC, New York City (Jeffrey L. Neandross, of counsel), for plaintiff.
Hill, Betts & Nash LLP, New York City (Michael J. Ryan, of counsel), for defendants.
OPINION
ROBERT L. CARTER, District Judge.
Plaintiff Central National-Gottesman, Inc. ("Gottesman") brings this admiralty *677 action to recover for damage to a shipment of 1,735 rolls of fluting paper. Defendant EO Oldendorff ("Oldendorff") moves to dismiss the complaint for improper venue. For the reasons set forth below, the motion is denied.
BACKGROUND
On September 24, 1999, defendant Oldendorff issued a bill of lading, numbered LCLB-1, for the carriage and transportation of 1,735 rolls of fluting paper, allegedly tendered in good order and condition, aboard the vessel M.V. GERTRUDE OLDENDORFF from the port of Laem Chabang, Thailand to the port of Long Beach, California. The M.V. GERTRUDE OLDENDORFF is employed for hire in the common carriage of goods by water and, at all times pertinent to this litigation, was owned, operated, chartered, and controlled by defendant Oldendorff.[1] On October 22, 1999, the M.V. GERTRUDE OLDENDORFF arrived at the port of Long Beach, California and defendant Oldendorff discharged plaintiff's shipment of fluting paper. Upon inspection, it was discovered that the shipment had sustained serious physical and water damage. The damaged rolls were subsequently segregated and sold for salvage.
Plaintiff Gottesman as owner, shipper, consignee, and purchaser of the aforesaid shipment of 1,735 rolls of fluting paper instituted this action on its behalf and on behalf of all other interested parties to recover the sum of $600,000 for damage sustained to the shipment. On January 26, 2001, plaintiff Gottesman also commenced an action in the High Court of Justice, Queens Bench Division, London, UK, in which the registered owner of the vessel, New Resolution Shipping Corp., is named as a defendant.
DISCUSSION
When considering a motion to dismiss for improper venue pursuant to Rule 12(b)(3), F.R. Civ. P., the court has to accept facts alleged in the complaint as true and must construe all reasonable inferences in favor of the plaintiff. Dolson v. New York State Thruway Auth., No. 00 Civ. 6439,
Defendant Oldendorff argues that venue is improper in this district because of a forum selection clause in the bill of lading calling for the adjudication of all disputes in London. (Defs.' Mem. of Law at 4-5.) Clause 3 of the bill of lading provides:
Law and Jurisdiction.
*678 Any disputes under the Bill of Lading to be decided in London according to English Law.
(Ryan Aff. Exh. 1.) Oldendorff argues that, given its wording, the forum selection clause is mandatory, thereby barring plaintiff from bringing suit in this district. (Defs.' Mem. of Law at 4.)
Forum selection clauses, in the context of admiralty actions, are presumptively valid. Thyssen, Inc. v. M/V ALPHA JUPITER, No. 96 Civ. 8734,
It is clear that the forum selection clause at issue here is mandatory and exclusive. For a forum selection clause to be deemed mandatory, jurisdiction and venue must be specified with mandatory or exclusive language. Thyssen,
The language of the forum selection clause under consideration here, "[a]ny disputes under the Bill of Lading to be decided in London according to English Law," rather than simply stating that the court in London shall have jurisdiction over all disputes, actually makes explicit that such disputes are to be resolved in that forum and nowhere else. Faced with similar facts and language, numerous courts have reached parallel conclusions. See, e.g., Thyssen,
It is on these latter grounds that plaintiff Gottesman objects to the enforcement of the forum selection clause. Enforcement of the forum selection clause, according to Gottesman, would lessen defendant Oldendorff's liability under the Carriage of Goods by Sea Act ("COGSA" or the "Act"), 46 U.S.C.App. § 1300 et seq., thereby running afoul of the Act and violating public policy. (Pl.'s Mem. of Law at 12-15.) In particular, § 1303(8) of COGSA provides:
Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, . . . or lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect.
46 U.S.C.App. § 1303(8). Intrepeting § 1303(8) in Vimar Seguros y Reaseguros, S.A. v. M/V SKY REEFER,
The court is persuaded that the forum selection clause at issue here essentially operates as a prospective waiver of Gottesman's right to pursue statutory remedies under COGSA. If the case were decided in London instead of this district, there is a strong likelihood that English courts would give force to an exculpatory clause in the bill of lading, insulating parties other than the shipowner from liability, in violation of COGSA.[3] Clause 19 states:
*680 Identity of Carrier.
The Contract evidenced by this Bill of Lading is between the Merchant and the Owner of the vessel named herein (or substitute) and it is therefore agreed that said Shipowner only shall be liable for any damage or loss due to any breach or non-performance of any obligation arising out of the contract of carriage, whether or not relating to the vessel's seaworthiness. If, despite the foregoing, it is adjudged that any other is the Carrier and/or bailes [sic] of the goods shipped hereunder, all limitations of and exonerations from liability provided for by law or by this Bill of Lading shall be available to such other.
It is further understood and agreed that as the Line Company or Agents who has [sic] executed this Bill of Lading for and on behalf of the Master is not a principal in the transaction, said Line Company or Agents shall not be under any liability arising out of this contract of carriage, nor as Carrier nor bailee of the goods.
(Ryan Aff. Exh. 1.)
Recovery under COGSA is predicated on a plaintiff's ability to prove a breach of the contract of carriage against a "carrier" of the cargo. See 46 U.S.C.App. § 1302. In deciding which parties to a suit qualify as a carrier within the meaning of § 1302, courts in this district to consider the issue have construed the term expansively to include all owners and charterers participating in the carriage of goods. For example, in Joo Seng Hong Kong Co., Ltd. v. S.S. Unibulkfir,
[T]here is strong statutory support for treating, except in exceptional situations, all owners and charterers involved in the carriage of the goods at issue as COGSA carriers who are potentially liable to cargo interests under the bill of lading.... The [COGSA] statute seems to have been deliberately drawn so as not to limit the term to a party to the bill of lading or contract of carriage.
Joo Seng,
The fact that courts in this district have so construed the COGSA definition of "carrier" is crucial because it means that, unless the court in London were similarly prepared to adopt an expansive view of the term "carrier," plaintiff Gottesman would effectively be relinquishing rights that would be guaranteed to it in this forum under COGSA. This alone would violate COGSA and, as a result, would be sufficient grounds to allow the court to retain jurisdiction over the case.
Plaintiff Gottesman has provided an affidavit of Mark Andrew Lloyd, an English lawyer experienced in maritime law, who attests that a London court would not adopt a construction of "carrier" similar to the one in this district and would choose instead to give full effect to Clause 19 of the bill of lading limiting liability to the shipowner alone. (See Neandross Aff. Exh. 3.) In particular, Mr. Lloyd relies on the recent Starsin decision in London to predict that the London court "would hold that this Bill of Lading is one where the contractual carrier was the registered Shipowner and not the time charterer E.O. Oldendorff" and would, therefore, "dismiss any action in contract against E O Oldendorff as time charterers." (Neandross Aff. Exh. 3 at ¶ 43.) Defendant Oldendorff does not seem to quarrel with this conclusion as its principal commentary on the point is that Mr. Lloyd's statements are limited to an action in contract and, as such, do not address the prospects of a suit by Gottesman based on any other theory. (Defs.' Rep. Mem. of Law at 13.)
It is permissible for a court to consult the opinions of foreign attorneys familiar with the intricacies of maritime law in their respective countries and, in reliance thereon, construct an informed picture of how foreign courts may approach an issue. See, e.g., Nippon Fire & Marine Ins. Co. v. M/V SPRING WAVE,
Notwithstanding Mr. Lloyd's affidavit, defendant Oldendorff relies on Piper Aircraft Co. v. Reyno,
The central guarantee of § 3(8) is that the terms of a bill of lading may not relieve the carrier of the obligations or diminish the legal duties specified by the Act. The relevant question, therefore, is whether the [foreign] substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees.
SKY REEFER,
The court is compelled to decline enforcement of the forum selection clause at issue here for a further reason. An integral component of the Court's reasoning in SKY REEFER was that there existed a subsequent opportunity for the district court to review the foreign court's decision to ensure that it comported with the interest in enforcement of the laws in the United States and was not violative of public policy. SKY REEFER,
Finally, this outcome is not inconsistent with previous decisions in this district dismissing COGSA actions for improper venue. For example, in Hyundai Corp. U.S.A. Inc. v. M/V AN LONG JIANG, No. 97 Civ. 3855,
CONCLUSION
For the foregoing reasons, the court denies defendant Oldendorff's motion to dismiss the complaint for improper venue.
IT IS SO ORDERED.
NOTES
Notes
[1] While it is named in the complaint, the vessel M.V. GERTRUDE OLDENDORFF has not appeared in this district, nor has it been served with process or arrested. (Defs.' Mem. of Law at 2.) Plaintiff Gottesman avers that the vessel will be within this district, at the latest, "during the pendency of this action." (Cplt. ¶ 3.) In such a situation, courts have exercised their discretion to dismiss cases "where no other parties-defendant remained before the court." Itel Container Int'l Corp. v. Atlanttrafik Express Service, Ltd.,
[2] The fact that the forum selection clause at issue here calls for all disputes "to be decided" in London as opposed to stating that they "shall be decided" or "must be decided" does not alter the analysis in view of the fact that the clause still employs language of compulsion.
[3] England has adopted the Hague-Visby Rules, see Mobil Shipping and Transp. Co. v. Wonsild Liquid Carriers Ltd.,
