*1 on the award, good-faith negotiations As for the arbitration to vacate For us level, supports the the record operational to show that Bank needs Manchester Jerge’s email to finding.17 court’s district “express contractual contained Agreement Tidball, Nolan’s to and letter Mandelbaum “plain limitation that created provisions” responded, demon- which Levinson18 to authority of arbitrator.” [the] on the Century negotiate tried to that 21st (internal strate Bohai, F.3d at 401 Apache Bank. The good with Manchester omitted). faith marks quotation and citations that the dis- has not demonstrated (1) bank that must establish The bank this clearly making erred in trict court arbitra- expressly conditioned Agreement finding. management senior on the failure of tion man- no such senior
negotiations and confirming the arbitration judgment occurred. agement negotiations is AFFIRMED. award require expressly not does The contract negotia- engage to management
senior § reading 11.1 suggests A plain
tions. only required Century was
that 21st at the negotiations engage in one round COMPANY, CNA INSURANCE a/s/o dis- agree with the level. We operational Plaintiff-Appel Corning, Inc., plainly does not court that 11.1 trict lee/Cross-Appellant, negotiation sen- unambiguously require v. management. ior CO., MARINE MERCHANT HYUNDAI Furthermore, if man even senior Railway LTD.; Norfolk Southern in a required engage were agement Burlington Company; Santa Northern Agree negotiations, round of second Defendants-Ap Railway Company, Fe condition abil expressly ment does pellants/Cross-Appellees. dispute on failed senior ity to arbitrate 12-6118, 12-6201. Nos. 11.2 Section negotiations. management resolve cannot parties Appeals, “[i]f states Court of States United negotia good faith claim[] Sixth Circuit. tions,” negotiations alluding July Argued: 11.1, Party §in “either place take should 26, 2014. Filed: March Decided matter be may that such submit demand Denied Rehearing En Banc binding to final arbitration.” ted 8,May 2014.* cannot show that Manchester Bank arbitra expressly conditioned Agreement negotiations. senior-management
tion Tidball, that, Century Servs., mailing 21st Man- Century LLC v. Fin. 17. See 21st A-10-CV-803-LY, Bank, negotiations with slip attempting to continue No. Fin. chester Nolan, ("The Second, 2013) (W.D.Tex. Levin- in his letter to Mar. op. at 11 bank. arguments payment legal on behalf refusal bank’s demands for son made several Century through correspondence negotiate again 21st continued insisted of the bank parties...."). repre- attorney[s] of both if Levinson money between to it. Even return MFG, Century have could 21st sented that because maintains 18. Manchester Bank indi- letter as properly Levinson’s understood bank, represented MFG and not the Levinson negotiations with cating further This on its behalf. negotiated he cannot have been futile. bank would First, light point. reasoning misses the * partic- Judge Boggs recused himself to return Mandelbaum's instruction Tidball, ruling. ipation it is deposit to obvious bank’s MFG % *4 Keenan, ARGUED: Paul D. Keenan P.C., Jenkintown, Cohen & Howard Penn- sylvania, for Appellants/Cross-Appellees. Radzik, Edward C. Marshall Dennehey Warner Goggin, York, Coleman & New NY, for Appellee/Cross-Appellant. ON Keenan, BRIEF: Paul D. Keenan Cohen P.C., Jenkintown, & Howard Pennsylvania, for Appellants/Cross-Appellees. Edward Radzik, C. Dennehey Marshall Warner Goggin, York, NY, Coleman & New Henry Alford, S. Grady Rebecca Jennings, Mid- Reutlinger, Louisville, KY, dleton Ap- for pellee/Cross-Appellant. BATCHELDER,
Before: Chief Judge; O’MALLEY, COOK and Circuit Judges.* BATCHELDER, C.J., delivered the opinion COOK, of the court J., in which concurred, O’MALLEY, J., concurred O’MALLEY, in part. 376-78), (pp. J. delivered a separate opinion dissenting from section III.B of majority’s opinion.
OPINION BATCHELDER, ALICE M. Chief Judge. core,
At its appears this simple to be a case: Corning Hyundai hired to transport overseas, Hyundai’s subcontractors accidentally destroyed the cargo during * The Circuit, Honorable Kathleen O'Malley, M. Circuit sitting for the Federal by designation. Judge for the United Appeals States Court of (esti- extremely rate has been low pay for it. transit, nobody wants to every mated at one or two sheets for few and a legal decisions significant some After crates). trial, Hyundai found court jury district to CNA and the subcontractors liable 2006, Corning Hyundai As of Mer- loss, request it refused CNA’s though years chant Marine had for several been ap- interest. Both sides prejudgment in which parties to a Service Contract and, this is not might expect, as one
peal Corning agreed ship as it would seem. Based nearly simple as carry Coming’s cargo from cer- agreed follows, we AFFIRM reasoning on the in the to cer- tain locations United States and RE- part, REVERSE part, rele- specifically, tain locations in Asia: reconsideration consistent with MAND for here, Tainan for Harrodsburg vant opinion. shipment glass of the aforementioned (and shipment empty the return
I. crates).2 exclusively with Corning dealt facility Harrodsburg, Hyundai as the sole carrier for Corning selecting shipment; Corning 4-foot sheets had no role Kentucky, makes 4-foot *5 flat-glass contracting any for use or with other carriers very thin fusion-drawn chain; a comput- Corning single televisions and made flat-screen LCD Hyundai. Corning packs these sheets The Service payment monitors.1 er crates, pertinent provi- each contained other custom-made wooden Contract into These approximately 500 sheets. sions: holding (three exactly 12 are sized so that
crates “[Hyundai] shall deemed an in- 4.A. be fit into a standard deep) and four across respect contractor with dependent container shipping 20-foot steel intermodal [Corning] nothing herein (less than leaving only negligible space shall be construed to be contained inches). “cubing out” This is called four relationship with that inconsistent ” shipping container eliminates or status.... securing. or packing for additional need [Hyundai] shall 9.A. “Indemnification — indemnify [Corning] hold Corning ships glass, in these contain- liability, and all harmless ers, Technologies in Corning Display (including at- expense reasonable (an Tainan, entirely separate com- Taiwan suit, fees), action, cause of torney’s buys glass all the that Corn- pany), which ...” judgment claim or buys more from ing produce can and also Agreement of Law—This Corning 13.A “Choice Consequently, other vendors. relevant, be, gov- insofar as shall many per day containers as can ships as several, Ship- the terms of the fill, doing so erned usually and has been 1984, and otherwise ping Act of years. Despite expected fragility of New by the laws of the State high and the volume of glass such thin and of the States virtually no York United Corning has had shipments, by rail and the America.” problems shipping with x that the contract includes 2. While the fact actually 1300 mm 1. Each sheet is mm, from Tainan to x of the crates approximately And each return 4'3" 4'5". thick, analysis that Harrodsburg could affect the inches is 0.635 mm or 0.025 sheet follows, thick, that it does not affect typical poster- we find than which is thinner inches, inch, (which we will not dis- outcome of this decision so or 0.03125 board is 1/32 thick). it further. cuss Incorporates Hyundai’s Regular against 15.C. claim] Subcontractor re- Lading provisions,
Form Bill of garding handling, storage[,] or car- conflict, they unless in which case Goods, riage of the every such Sub- the terms of the Service Contract contractor shall have the benefit of (The only control. relevant con- all provisions this Bill of Lading flict here is that this Service as if provisions such were expressly expressly Hyun- Contract deems for the Subcontractor’s benefit.” Coming’s dai independent as Responsibility 5. for Loss or Dam- contractor, Hyundai whereas the age— Regular Form Bill of Lading at- tempts Hyundai deem as (B)(2) “If [Corning] establishes that Coming’s agent). [Hyundai] liable for the ... dam- Goods, age to ... subject Regular Form Bill of Lad- ing3 provisions pertinent contains certain of this Bill of provisions Lading, n 21; including well: Article ... [then] with
2(B). respect to ... damage Clause caused dur- extending Paramount —
COGSA4 to cover all ing handling, storage, times “when or car- goods are in the custody [Hyun- riage by [Hyundai’s of the Goods dai].” Subcontractor, such be shall Subcontracting— to the extent to which such Subcon- (B) “[Hyundai] tractor would shall have been be entitled to liable to
subcontract on [Corning] terms the if it whole had made direct *6 any part or of the handling, stor- separate and contract with [Corn- age[,] or of the Goods and in ing] respect of such handling, any duties by [Hyundai] undertaken storage, carriage.” or in relation to the Goods.” 21. Limitation of Liability for Loss or (C) “[Corning] warrants that no claim Damage— against any shall be made [Hyun- of (A) (B) “Subject below, to subpart any
dai]’s Subcontractors or Sub- purpose Subcontractor, determining contractor’s of the ex- except [Hyundai]’s Carriers where tent of appropri- liability otherwise for ... ate, ... If such damage Goods, claims should [Corning] made, nevertheless be [Corning] agrees that the sound of the value ” shall indemnify [Hyundai].... is [Corning]’s Goods net invoice (D) Himalaya cost, plus prej- freight Clause—“Without and pre- insurance
udice to the foregoing, regard mium, [to if paid. [Hyundai] shall not 3. The record contains slightly two different ocean liability carrier to limit its even Hyundai's Regular versions of Form Bill of sets out default liability $500 a limitation of of Lading. using We by are the version used per package cargo while the ship is on the court, parties district as the expressed no ob- (“between tackles”). COGSA also allows jection to that choice in either the district the ocean carrier to extend this limitation or importantly, court here. More the differ- portions jour- to the overland of the change ences in the versions do not the sub- tackles”) ney ("beyond the properly with a agreement pertinent stance of the here. written Clause Paramount in the of lad- bill ing. feature of This COGSAmakes the Clause Act, Carriage by COGSAis the Sea Goods particularly important. Paramount key 46 U.S.C. 30701. The feature of COG- SA, here, pertains as it it allows the each of the six performed or coordinated or profit loss of liable for be (6) journey, of this as an intermodal legs any consequential loss.” single through via a bill of lad- shipment (B) ... damage as ... to “Insofar ing. part during was caused Goods custody carriage to which or with a motor Hyundai subcontracted Hague of the applicable version (DHL) pick up the containers applies: Rules facility Harrodsburg Coming’s
(1) [Hyundai] nor the Ves- “Neither railhead in Louisville. A drive them to the for ... be liable sel shall carry single a contain- single truck would minimum al- exceeding an amount er, the driver Corning provide ..., which per package limit lowable “straight” with a bill of per ... is U.S. COGSA [under] $500 Louisville, journey to as verification that (and ... the value package, unless departed in the container sealed nature) higher than this of the Goods The truck driver did good condition. writing declared in amount has been lading Corning, in its not issue [Corning] receipt before by Hyundai. right own or on behalf [Hyundai] and inserted on Goods with a rail carri- Hyundai subcontracted Lading, Bill of the face of this (Norfolk Co., Railway pursu- er Southern paid as re- freight extra has been Transportation ant to an “Intermodal quired. ...” incorporates Norfolk Agreement,” which the Goods have been “Where Rules, option including Southern’s into container ... packaged liability5 higher at a select Carmack-based [Corning], expressly it is on behalf of select6) did not price, of such con- agreed that the number containers from the truck at unload the considered to be tainers ... shall be railhead, Louisville load them onto ... for the packages the number flatcar, by train carry the containers limitation of application th[is] ... noteworthy that stan- Chicago. It is liability_” loading for such containers dard flatcar *7 undisputed that this Service Contract It is (3) per flat- for three containers provides governs the claims this case. on placed containers car: two 20-foot ends) (closed their “noses” the flatcar with Based on this Service Contract —which their doors in the middle so that touching 20- anticipated shipment multiple end, 40-foot containers, either and a every exposed are shipping foot-standard two 20-foot placed top facility in Har- container weekday, Corning from the sealed. All containers remain containers. Kentucky, Corning Display to rodsburg, any bill of Tainan, did not issue Hyundai Norfolk Southern Technologies in Taiwan— Carmack, (even higher price) liability coverage at a to § mack 49 U.S.C. 5. The scheme, particular shipper to road and rail carriers declines. See Bab shipper and the R.R., jurisdiction States under the of the United City v. Kan. S. cock & Wilcox Co. (STB), Transportation is cen- Cir.2009) Surface Board (3d (relying on 142 n. 6 F.3d appeal and is introduced in Sec- tral to this Here, 11706). 10502(e) § and 49 U.S.C. II.A, tion coverage infra. rail carriers offered Carmack both (at Hyundai higher price) and Hyundai to noteworthy because the Surface 6. This is Hyun nor neither rail carrier declined—but Transportation permitted rail car- Board has coverage option to offered a Carmack dai ever riers to avoid Carmack for container Corning. long Car- carriage, as the carrier offers so lading, right either in its own or on behalf dai would issue a bill of specific to Hyundai. at hand. This was an “ocean” bill.
Hyundai with subcontracted another rail (Burlington carrier Northern Santa Fe Hyundai subcontracted with a motor Co., “BNSF,” Railway pursuant to an “In- (not record, carrier named Agreement,” ternational Transportation unknown) terms to pick up the containers which incorporates BNSF’s Rules and also at Kaohsiung seaport carry them option offers select to Carmack liabili- by truck Corning Display Technologies ty at a higher price, Hyundai did not Tainan, Taiwan.7 Nothing in the record select) possession to take of the flatcar in suggests that this any motor carrier issued Chicago carry the containers train bill of lading, either in its right own or on Tacoma, to the railhead in Washington. behalf Hyundai. To summarize the six The containers were not removed from the legs of journey: flatcar; the entire flatcar was transferred (truck) 1. DHL motor carriage —Har- (a custody into BNSF’s “steel wheel” in- Louisville; rodsburg to terchange). noteworthy It that both 2. Norfolk carriage Southern rail Norfolk Southern and BNSF maintain de- (train) Chicago; —Louisville records, tailed computer, via of the han- 3. carriage BNSF rail (train) Chicago dling railcars, of the trains and including — Tacoma; movement on terminal, the line and at the coupling and decoupling, rough (train) 4. TMBR rail carriage —Tacoma handling. BNSF did issue seaport; WUT lading, right either in its own or on behalf Hyundai carriage (ship) sea —WUT Hyundai. Kaohsiung, Taiwan, seaport; (Taco- had a third (truck)— 6. Unknown motor Municipal ma Railway, “TMBR,” Beltline Kaohsiung to Tainan. apparently wholly-owned subsidiary of journey This would take weeks to com- Hyundai) possession take of the flatcar at plete, door-to-door from Harrodsburg to the railhead in Tacoma carry the con- Tainan. tainers train to the Washington United 21, 2006, February On Corning shipped (WUT) Terminal seaport. Because TMBR containers, several standard 20-foot as it operates over two hundred miles of rail in every had done weekday years, but and around the Tacoma railhead and sea- unlike those shipments, thousands of other port, it appears that this was necessary (identified two of these containers carriage and not merely a switching ser- *8 HMDU2262167) HMDU2347259 and were vice. TMBR did not any issue bill of damaged on way to Tainan. lading, either in its right own or on behalf Hyundai. usual, As was Corning prepared its own Hyundai, carrier, an straight ocean bill of unload for each container. the containers from the Each railcars at the truck signed driver Coming seaport WUT and load them onto ship straight bill upon accepting container, for sea carriage to the seaport in Kaohsi- thus acknowledging that he had received ung, Taiwan. It point is at this Hyun- that the container Corning in good condi- suggested 7. It is the record nologies that contracted this with motor carrier part did not trip, subcontract this directly. of the and way, Either it is not relevant to the that Corning Corning either Display or analysis Tech- herein. to Hyundai, sent an email Shooting” for Corning truck driver issued tion. Neither of the fact, Corning to inform situa- Corning, no carrier ever lading; a bill of any any cargo at lading for tion: issued a Correspond- shipment. during this
point afternoon, please note that be- Good declared a value Corning never ingly, via the rail into low 2 units arrived WUT shipment. cargo prior bulging, which is and the container were the con- transferred truck drivers may not cargo indicator that the in Louisville Norfolk Southern tainers to properly secured. been February day, that same on HDMU2347259 containers both placed Norfolk Southern HDMU2262167 flatcar, presumably on the same —because no evidence contains the record mid- touching in the contrary noses —with with Upon consultation HMMA/ top. on 40-foot container set dle Claims,[8] arranging survey we are report did not record or Southern Norfolk tomorrow, place Transload to take container at damage to either any approximately March 8th Wednesday transferred Norfolk Southern
point. speaking I be with 1:00 PM. will February Chicago on flatcar to BNSF directly after the initial view- surveyor report not record or 2006. BNSF did provide further ing, and be able will at that to either container any damage of the cause. Since com- evidence flatcar to transferred the point. BNSF Glass’, it is modity is shown as ‘Flat 4, 2006. on March TMBR in Tacoma may be some dam- possible there dam- report any or TMBR did record age. point. to either container age Craig Burgess Hyundai contracted be load- were intended to These containers Services, (Seattle, Inc. Cullen Maritime “Hyundai Hyundai vessel ed onto survey an on-site Washington), perform Taiwan. shipment overseas Duke” for Burgess confirmed damage. 5, 2006, Hyundai unloaded On March four of the crates containers and both onto the dock. from the flatcar containers visibly damaged speculat- were within thereafter, ob- employee a WUT Sometime aggressive due to that the ed visibly containers were served that the two carriage. “humping” during the (nose) each front damaged; end con- moving Humping is a means out- “bulging,” or container was buckled during transfer inter- necting rail cars opened were When the containers ward. the cars come to a sudden change in which some it was discovered that for inspection, loading that the Burgess opined also stop. visibly damaged crates were of the wooden within the con- of the crates packing broken. glass within had and some tainers, Harrodsburg, ap- by Corning any damage report There nowas satisfactory. The rec- been peared to have from this other car other container report written contain a ord does not pre- 40-foot (including train container Maritime. Burgess or Cullen two). sumably atop set these *9 10, 2006, Marc sent Cash, Cash 7, 2006, “As- On March Marc the On March Corning Wagner to John follow-up email Trouble Manager for Outbound sistant partment. refers to the "HMMA/Claims” America, Claims De- Marine of Inc. Merchant 348 report on the information obtained from return these containers to Harrods-
Burgess: burg, KY for further examination. to, Please note that I spoken have and John, pleasure speak
Good afternoon distribution, added to personnel this telecon, you today. per with As our Dept, our National Claims for fur- 3/9, Survey place Transload and took ther coordination and direction from this that in opinion and the results were point forward to ensure handling smooth surveyor bulging of the of the nose any concerns. The person contact aggres- of the containers was due to HMMA Claims is as follows: humping sive Flatcars the rail Mr. Todd Frare surveyor carriers. The found no issue your loading stowage with and of
cargo in the containers. I will cargo advise once is railbilled and depart scheduled to Tacoma for Har- Apparently, photos Cash sent of the rodsburg, KY. (both crates) damage containers and Hyundai unloaded the 24 crates from Wagner and, sometime thereafter damaged containers, loaded them into 14, 2006, March Wagner responded to containers, two different shipped them Cash via email: back to Harrodsburg, via the same route Marc: they Meanwhile, had arrived. I photos have shared the damaged Corning filed an insurance claim with its plant crates with our in Harrodsburg, insurer, CNA. When the arrived KY. The amount of product force the back Harrodsburg, CNA scheduled its subjected to in the humping incident survey own fully of the crates to assess the likely damaged glass. has There is damage. reason to suspect or all of the Mark Ohlson of Riverlands Marine Sur- shock, crates damage from the veyors Consultants, (Louisville, Inc. just the you four where found the exter- Kentucky), survey conducted a on March nal splintering of the wood. I would like 6, 2006, April 31 and prepared a writ- both containers origin returned to (Riverlands ten report April dated inspection Corning. at no cost to Report), for In CNA. the Riverlands Re- arrangements Please advise and ETA so port, Ohlson noted that Craig, Robert we can plan inspection. for the If dam- Surveyor Marine Hyundai, representing age is found we will be processing a present. was also Corning When opened claim. crates, containers and removed the that, point, Note at this (Hyun- both Cash (4) Ohlson found that all but four of the dai) Wagner (Corning) accepted had crates exhibited visible that a rail carrier’s humping of the flatcars crate itself or glass inside. they When (much later, caused the damage. But later opened two apparently undam- out), it turns Norfolk Southern and BNSF aged crates for inspection, both revealed disproved assumption by producing damaged glass. Ohlson attributed the logs to show that no humping rough damage to the “humping” likelihood of handling had during occurred during transport, but this was of these two replied containers. Cash certainly almost based not on evidence Wagner day: that same but on Burgess’s speculation during the John, Good afternoon please note the we initial survey on-site in Tacoma and Cash’s will make arrangements immediate adoption repetition of that assertion in *10 animosity between at- opined also covered. Corning. Ohlson his email stowing parties, and if became clear torneys, method of not the Coming’s that ship- for the been suitable immediately. “granted” had The court packing ship- the- Finally, Ohlson declared ping.9 case, motion and transferred Carriers’ that recommended total loss and ment a requested, the Eastern District as not to the crates disposed of and glass be Kentucky, to the Western District but for refur- their manufacturer returned to appears Louisville. this specifically While bishment. mistake, partiés pro- to have been a $664,679.88 on the District of Ken- Corning ceeded the Western paid
CNA Coming’s subrogated to tucky, any objection long claim and was and or error has recovery. September for On right to sue since been waived.
27, 2006, filed suit the Southern CNA summary judg- for The Carriers moved York, three defen- naming of New District (1) on three that CNA had ment bases: Southern, and Hyundai, Norfolk dants: claims, pled not Carmack so the absence Carriers”). (hereinafter CNA “the BNSF privity prevented CNA' from contractual Contract, breach of the Service claimed (2) carriers; suing the rail that the Service bailment, negligence. and liability for Subcontracting pro- Contract’s10 Clause Amendment, 49 cited the Carmack CNA carriers; suing hibited CNA opening paragraph § in the U.S.C. were entitled to and that the Carriers section) (jurisdiction complaint. of its $500-per-package enforcement of venue to moved to transfer The Carriers liability, arguing for a limitation of COGSA Kentucky, arguing Eastern District of $12,000 for the 24 crates.11 The limit of appropriate it would have been argu- rejected court the Carriers’ district be more conve- originally and would venue pled not ment that CNA had witnesses, parties nient for the so, claims, found that CNA had done carriage began at the Corn- given that the solely proceed held that the case in the Eastern facility Harrodsburg, ing Carmack, on the basis apparently Kentucky. opposed the District of CNA oc- damage undisputedly had moved, alternative, in the for transfer and posses- was in the curred while the District of a transfer to the Western court a rail carrier.12 The next was dis- sion of where the Washington, packed by "package” Corn- personnel is a "container” had loaded 9. Given that implies that there were ing, which at least in Tacoma for the crates into new containers damaged actually only "packages” two such shipment, ei- this assertion was based return Thus, reading, Hyundai strict here. under a Coming’s practices standard ther on $1,000 on would have been liable survey initial on-site from the statement shipment. Tacoma. here, argue that appeal the Carriers 12.On the Ser- specified, reference Unless "waived” its breach-of- “withdrew” or CNA to the Form vice Contract includes reference bailment, contract, negligence causes of specifically Lading, which was incor- Bill of court, chose instead district action in the therein, except provisions that porated proceed solely Carmack cause on its Contract itself. with the Service conflicted mischaracterizes This contention action. proceedings this issue and is district court attorney why unclear the Carriers’ 11. It is unsupportable untrue. ultimately ($12,000) per when the sought $500 crate (Form summary judgment, liability provision Bill motion for limitation of In their 1, 2008, 21(B)(2), near the July Carriers stated incorporated into the Lading filed Contract) argument CNA “ha[d] specifically end of their states that Service *11 Subcontracting Hyundai’s that the is in explained custody, apply Clause it does not rail carriers did not make the “immune these circumstances. Con- suit”; instead, merely “obligate[ed] sequently, the court denied the Carriers’ indemnify Hyundai re- Corning to attempts liability. to limit their by any sultant claims Subcontractor summary CNA had also judg- moved for against Hyundai arising out of these same ment, seeking to strike limi- the Carriers’ Finally, explained facts.” the court that tation-of-liability on defenses two theories: Paramount, because .the Clause as it is (1) that the Indemnification Clause in the Contract, written in the Service does not provided Service Contract for full remu- expressly $500-per-pack- extend COGSA’s neration for the loss of cargo; and age limit of to the subcontractor that the Carmack carriers, them; Amendment barred the rail it does not rail carriers from applies only attempted and because it limitation occurring while that cargo liability.13 inland rejected The court CNA’s (Memorandum asserted a Opinion, cause of action under the Carmack R. 102 at 3 March 16, 2009). p. Amendment.” R. 78 at 25. This was a The district court also included a contention, given passage: reasonable com- footnote CNA's plaint argue "While express preliminarily [the Carriers] contained three causes of ac- (breach contract, bailment, explicitly plead that CNA has failed to negli- tion and Amendment, claims [under] the Carmack gence) only referred to Carmack in the Complaint the court is satisfied section, that CNA's jurisdiction not as a cause action. clearly alleges comprehensive claims under (Complaint). response R. 38 In its memoran- opposed the Carmack Amendment as to in- dum, 1, 2008, August dated CNA answered dividual common law causes of action.” that it had raised three causes of action under (quotation R. 102 at 3 2n. marks and cita- Carmack: omitted). Thus, tions CNA did not withdraw [CNAj's acknowledged "It is claims for breach-of-contract, bailment, or waive its contract, negligence, breach of and bail- negligence causes of action in the district encompassed preempted by ment are court, sought preserve but rather these Amendment, such, the Carmack and as encompassed causes of action as within the against has [CNA] no state law claims [the Carmack claim. Even if it could be said that Carriers], comprehensive but rather one CNA withdrew or waived these causes of ac- claim under the Carmack Amendment.” tion, CNA did so understanding on the added). (emphasis R. 84 at 11 In their sur- preempted that Carmack them the case 15, 2008, reply, August dated the Carriers did proceed under Carmack. There is sim- not contend that CNA had withdrawn or conclude, ply no basis to as the Carriers waived the three common-law causes ac- do, would have us that if the district court tion but instead reiterated their belief that inapplicable had deemed Carmack pled argued, CNA had not Carmack and summary judgment stage and left CNA with alternative, summary judgment on the action, only the common law causes of common-law causes of action because Car- CNA would have nonetheless still withdrawn preempted
mack them. R. 88 at 12. In rul- action, i.e., or waived those causes of that it motion, ing on the the district court held that altogether. would have dismissed its case In- encompassed the claims: stead, as CNA throughout, has made clear alleges “CNA against causes of action [the pursued CNA would have these three com- contract, sounding Carriers] in breach of mon-law diversity ju- causes of action under bailment, negligence, n risdiction, encompassed as alleged complaint. in its See by the Carmack Generally, Amendment.... also fn.13 and fn. infra. part, and in the Carmack Amendment im- to poses liability injury for the actual loss or summary judgment CNA moved for property caused carriérs. It is un- July day the same the Carriers had disputed Cargo damaged that the (see while footnote), forgoing filed their motion the, possession of one or argued [Carri- both Rail governed “by that Carmack force of ers].” replied: law.” R. 79 at 16. The Carriers *12 plausible nor was that even a speculated, Indemnifi- that the theory, explaining first likely Hyundai to indem- that the containers had obligates given cause cation Clause claims, third-party Corning against positioned on the flatcar nose-to-nose. nify been liability bearing Hyundai’s on Also, “has no but railroads demonstrated that no Cargo.” The Corning for the loss of the to on that train had been other containers decide the Car- specifically not court did damaged. likely It that the con- appears granted the argument, mack but instead damaged being tainers were after removed finding that the Ser- based on its motion flatcar, from the but the case was neither limitations of did vice Contract’s way. nor defended that presented any of apply not to the Carriers. CNA, jury holding found for jury a trial under proceeded The ease to jointly severally liable for Carriers of action.14 CNA single Carmack cause (which $498,509.91 exactly 75% of the (i.e., facie case proved prima its Carmack $664,679.88claim, Notably, the penny). to condition, good was tendered provision there is no under Carmack condition, damaged and actual it arrived award, contributory negligence partial or a quantified), were so the burden damages jury and the court did not instruct the that to demonstrate one shifted to Carriers’ award, partial ap- it could issue a so this excepted five causes.15 The Carri- improper. been But CNA pears attempted prove that ers verdict to the district protest did not “improper” stowing Coming’s was due to it here. CNA did move for appeal court or as it had left three packing, inasmuch interest under New York pre-judgment container) (in space the 20-foot inches (9%) law, or, alternatively, federal but law the end wall. between the crates and court denied that motion. the district easily this contention. The CNA rebutted Meanwhile, the Carriers moved for damage actually mystery real was how the (1) law, judgment arguing as a matter of occurred—the railroads demonstrated “humping,” no as had been that Carmack did there had been aside, irritating respect provisions we find it and some- "With of the Car- As an explore applicable troubling Amendment to rail carri- that we had to mack ers, what depth solely Amend- it is notable that in such because the non-issue 'govern' ment does not claims of breach of misrepresented it to us in Carriers’ counsel contract, bailment!,] sure, negligence; rath- argument. To be his brief and at oral er, completely the Carmack Amendment complicated lengthy case with a this was preempts such causes of action.” procedural history and we will assume 23; ("If R. 85 at 25 R. 85 at see also duplici- merely mistaken and not counsel was applicable to the in- Carmack Amendment is Nevertheless, we en- tous in his contentions. matter, pled by then all of the claims stant courage thorough and cau- him to be more preempted.”). disagreed in are CNA [CNA] in the future. tious sur-reply, insisting that "these causes of con- 14. As a final comment on the Carriers’ are the Car- action found be authorized waived its tention that CNA withdrew or mack Amendment and do not constitute 'state " action, cause of we note breach-of-contract (relying at 12 law causes of action.’ R. 87 actually sought argue its breach- Transp. that CNA Prop. v. A.D. Ex- Travelers Cas. Co. Inc., 04-5830, theory at trial. The district court of-contract refused, press, No. 2007 WL (D.N.J. 2007) holding this was an Aug. (holding the *2 n. 3 "either/or” footnote, same)). from foregoing proposition in which CNA was barred As noted in the arguing by proceeding un- did or waive its breach-of- breach of contract CNA not withdraw contract, bailment, negligence causes of der Carmack. action in the district court. The Carriers con- II.A, infra, presents Car- 15. See Section that CNA did so is unfounded and tention burden-shifting framework. mack’s untrue. carrier; that the Transportation]
because it is not a-rail tion of the [Surface exempt- part Board had Board under this shall Transportation Surface issue transportation receipt property ed intermodal or bill of shipper selects it and transportation Carmack unless the receives for under this *13 it, Corning pays part. extra for did not (3) do; permit does not that Carmack That rail carrier and other carrier by Corning, shipper, against lawsuits property pro- that delivers the and is BNSF, they because Norfolk Southern or viding transportation or service sub- connecting are mere carriers under Car- ject jurisdiction to the of the [Surface al- mack. Because the court had district Transportation] part Board under this ready rejected argu- considered and these person are liable to the entitled to decisions, summary judgment in ments receipt recover under the or bill of intervening the Carriers relied on an Su- lading. preme Court decision to raise these issues liability imposed The under this sub- anew, namely Kisen Kawasaki Kaisha injury section is for the actual loss or Regal-Beloit Corp., Ltd. v. 561 U.S. property by— to the caused (2010). L.Ed.2d (1) carrier; receiving rail motions, The court denied the district ex- (2) carrier; delivering or plaining: (3) another rail carrier over whose court finds that [T]he Kisen [Kawasaki] line or property route the is trans- ... preclude liability not does ported in the United States or from under [ ] Carmack Amend- place in the United States to a ment in this case. The case [Kawasaki] place adjacent foreign country inapplicable herein. fur- The court transported when under a through ther finds the evidence supports the bill of lading. jury’s damages award of against all three defendants for the full value of the receipt Failure to issue a or bill of freight. lading liability does not affect the of a rail carrier. The appealed. cross-ap- Carriers CNA pealed, contesting pre- the court’s denial of delivering A rail carrier is deemed to judgment interest. performing be the rail carrier the line- transportation haul nearest the desti-
II. nation but does not include a rail car- preliminary overriding question providing only rier a switching service in this concerns appeal meaning at the destination. application of the Carmack Amendment. (b) The rail carrier issuing receipt is, That we must determine whether Car- (a) or bill of under subsection actually applies
mack here. of this section or delivering prop- erty for which the receipt or bill of
A. lading was issued is entitled recov- The Carmack Amendment to the Inter- er from the rail carrier over whose Act, state originally Commerce enacted in line or route injury the loss or oc- currently 1906 and codified at 49 U.S.C. curred the required paid amount to' be pertinent states in part: property, to the owners of the as evi- (a) A providing rail carrier transporta- by a receipt, judgment, denced subject jurisdic-
tion or service
transcript, and the amount of its ex-
claim,
reasonably incurred in defend-
In a Carmack
penses
the Su
preme Court has set out a burden-shifting
brought by
per-
action
ing a civil
framework, in which
shipper may
es
son.
prima
showing
tablish
facie case with a
(c)(1)
may
limit or
A rail carrier
be
of three basic elements:
exempt
liability imposed
(1) that
(“receiving”)
the initial
(a)
except
section
subsection
condition,
cargo
good
received the
A
provided
this subsection.
limita-
damaged,
was lost or
receipt,
tion of
...
in a
contract, or
lading,
rule
violation
(3) the amount of actual loss or dam-
this section is void.
*14
ages.
(certain
§
paragraph
49 U.S.C.
11706
Thereupon, the burden shifts to the defen-
added).
provisions
ap
breaks
These
also
dant-carrier to show both that it was not
carriers,
motor
see 49
ply to
U.S.C. negligent and that the damage was instead
14706(a)(1)
§
(virtually identical for motor
(1)
due to one of
excepted
five
causes:
carriers),
(2)
freight
God;
forwarders.16 See
war;
act of
an act of terrorism or
(3)
(4)
itself;
Royal
shipper
Alliance
v.
an act of the
an act
& Sun
Ins. Ocean World
(2d
public authority; or
Lines, Inc.,
138,
the inherent vice
612 F.3d
145
Cir.
goods.
or nature of the
Missouri Pac.
2010).
Stahl,
134,
R.R. v. Elmore &
377 U.S.
137-
Though
might
not be obvious
(1964).
38,
1142,
84
12
S.Ct.
L.Ed.2d 194
text,
original premise
from the
“Carmack’s
If the defendant-carrier meets this bur-
receiving
is that
lia
[initial]
carrier is
den,
not,
it wins.
If
shipper
then the
for damage
by
ble
caused
the other [subse
prevails based on
establishing
the—
chain,”
quent]
delivery
carriers
Ka
very
threshold—prima
low
facie case. Re-
wasaki,
out the carrier
at
nor must
B.
the plaintiff-shipper determine the circum
by
stances
which the loss or
actu
liability”
“Common carrier
at common
character,
ally
extraordinary
occurred.
law was “of an
ers,
warehouses,
stevedores[,]
"freight
16. There are no
forwarders” in this
which are
case,
have,
times,
although
parties
directly
transporting
cargo.
both
at
involved in
carrier,
improperly suggested
Simply
freight
that there are.
Unlike a
a
forwarder
does
put, "[f|reight
lading,
forwarders consolidate less
issue a bill of
and is therefore not
freight
shipper
anything
than
carload
into
a
[a]
[of]
carloads for
liable to
that occurs to
Milwaukee,
shipment.” Chicago,
goods being shipped.”
St. Paul &
Prima U.S. Inc. v.
465,
Inc.,
126,
(2d
Freight,
Panalpina,
Pac. R.R. Acme
v.
Fast
336 U.S.
223 F.3d
129
Cir.
467,
692,
(1949);
2000);
Kirby,
69 S.Ct.
355
shall
it
the liabili-
shipper
exempt
and no contract
contract is between
ty
imposed”).
thus
(receiving) carrier.
only the initial
tangible
Note that an actual or
bill
later,
Express
years
in Adams
Co.
Two
necessary
impose
lading
is not
liabili
505-06,
491,
33
Croninger, 226 U.S.
v.
ty
the initial carrier under
Carmack’s
(1913),
148,
pany to
(ac
contract
shipper’s
Because the
delivered,
or lines
or over whose line
constructive),
in or
tual or
as embodied
may pass.
property
such
symbolized by
initial carrier’s bill of
the
affirmatively
that no
Fourth. It
declares
agree
lading
shipper,
to the
is the sole
contract,
rule,
receipt,
regulation
or
car
governing
ment
the duration of the
exempt
common carri-
[initial]
shall
such
shipper
riage and is between
er, railroad,
company
or transportation
carrier,
subsequent car
making
initial
liability hereby imposed.
from the
carrier,
agents
of the initial
riers mere
bill(s)
lading
by
issued
overlapping
of
504,
marks
(quotation
Id. at
357
(1947),
bility Mexican, for Texas explaining: by its own separate bill of lading, connecting [U]nless carrier has re- (the overland, second of portion) a consideration ceived for the bill of Carmack, fell under though even the first lading in addition to that which flowed (overseas) part would not. The Court ex- under the bill issued *18 plained: carrier, initiating the Amend- Carmack makes
ment such second bill of lading through There no lading was bill of from void. It can enlarge neither the Buenos Aires to Boston.... The con- connecting the carrier contract nor tract for transportation ocean terminat- initiating that of the carrier. terminated, ed at Orleans. Having New new,
nothing of it sepa- remained for the rate, the lading [Because] so-called bill of distinct domestic contract of [is- carriage [i.e., sued Texas ‘supplement’ Mexican did not to R.R.] over- lap] new and .... independent parties dealing evidence un- If the various dertaking, judged when rigid the re- with this shipment separated the car- quirements by which lading riage bills of are into portions by distinct their con- Boston) (from have Aires to would Buenos judicially to
tracts,
for courts
it is not
they
outcome,
something
suggesting
into
that
portions
the
altered the
meld
the
is not where
The test
are not.
been consistent with
have
outcome could
the obli-
but where
originated,
shipment
Porter,
inconsistent with it.
or at least not
receiving carrier
carrier as
gation of the
is,
and ocean carrier
shipper
That
the
had
significant
it is not
Thus
originated.
contract,
through
from
single
entered
originated
in this
shipment
the
case
that
Boston, with the rail carri-
Buenos Aires to
foreign
the
country, since
foreign
in a
to
a mere subcontractor
er at New Orleans
at the
journey
the
terminated
portion of
carrier,
“obligation
then the
ocean
The obli-
of the United States.
border
carrier” vis-a-vis
receiving
carrier as
originated
receiving carrier
gation as
originated
have
with
shipper
would
issued its
respondent
[railroad]
when
Aires,
that
carrier in Buenos
ocean
lading
at New
through bill
original
subject to
not be
Carmack.
would
carriage
was
That contract
Orleans.
grounds
have no
shipper
Thus the
would
of the
provisions
squarely within
Carmack,
against
invoke
either
statute.
“receiving” carrier
ocean carrier as the
omitted).
(citations
117,
Nonetheless, the Reider Court’s reason- no additional consider- a er would receive through that the use of bill ing implied Sotomayor’s S.Ct. at 2455. theory was one of Justice 18. This Kawasaki, 130 in her dissent contentions
359
lading beyond
ation for the second bill of
(Kirby)
(ICC)
hired an intermediary
already
paid by the ocean carrier
arrange
carriage;
ICC hired an ocean
bill,
through
under the
Sud)
that second bill
(Hamburg
carrier
perform
would have been void under the Carmack
through carriage; and Hamburg Sud hired
Power,
analysis in
Light
Mexican
&
(Norfolk
331
Southern)
a rail carrier
to com-
734,
U.S. at
Regardless,
S.Ct. 1440.
plete the
portion.
overland
ICC issued a
rejected
the Court has since
this ocean- bill of lading directly to Kirby; Hamburg
carrier-as-shipper
argument
expressly. Sud
ICC,
issued a second bill to
without
Kawasaki,
(“A
See
Thus, though definitive, far from a com- any bill of its own. When the train de- posite of the Court’s Carmack case law as railed, Kirby sued Norfolk Southern for of Reider reasonably appeared to hold that breach of contract and negligence. Nor- (1) fully Carmack: preempted state law as folk Southern invoked the limitations of (2) to an interstate rail liability; carrier’s liability in the of lading. bills The Elev- single mandated a contract enth Circuit held that neither bill limited (i.e., receiving carrier’s bill of lading), Norfolk liability Southern’s to Kirby: any subsequent such that and overlapping Hamburg Sud bill Kirby, did not bind (3) void; contract would be either allowed the ICC bill did not reach Norfolk South- or a shipper’s disallowed against lawsuit ern. But Supreme disagreed Court carrier, “connecting” without expla- clear (contracts) interpreting the bills un- (4) nation; and likely and — apply to der reversed, federal maritime hold- contract, i.e., overseas law— “an un- ing that both bills limited Norfolk South- broken transaction of commerce with a liability 36, ern’s to Kirby. Id. at 125 S.Ct. nonadjacent foreign country.” Unfortu- nately, the ensuing Court’s cases concern- ing the Carmack Amendment confused as For our purposes, the most critical as- as, than,
much they more clarified. pect opinion is the Court’s complete
In
Southern R.R. v. Kirby, 543 omission
Carmack,
reference to
Norfolk
14,
385,
U.S.
(1)
S.Ct.
least one
oper-
limitation’
expressly
riod,
‘package
COGSA’s
Court’s
acting on the
invitation —
applicabili-
potential Carmack
rule. But COGSA also
brought the
as a default
ates
attention;21 and
Car-
ty to the Court’s
extending
by
its rule
option of
gives the
argument,
at oral
up again
came
mack
permits,
[ICC
As COGSA
contract.
passing
reference.22
merely
albeit
of
bill[s]
in
Hamburg
[their]
Sud
and]
if
little doubt that Carmack
be
There can
de-
to extend the
[COGSA]
chose
alter
the
significantly
it would
applied
period which
rule to the entire
fault
(e.g., prohibiting
outcome
analysis and
under
machinery
[their]
would be
the
liability
limiting its
from
Norfolk Southern
of
including
period
the
responsibility,
contract,
Ham-
voiding
overlapping
the
[They] would not
transport.
inland
the
its
applying
lading,
burg Sud
default rule
enjoy the efficiencies of the
Kir-
burden-shifting
to resolve
framework
[they] chose did
the
limitation
if
the
analysis). Consequently,
by’s merits
jour-
legs
all
of the
apply equally to
not
the
explanation
reasonable
most
[they]
responsi-
undertook
ney for which
determined,
it
sub
is that
Court’s omission
of
apparent purpose
bility. And
silentio,
apply.
not
that Carmack did
COGSA,
contract-
to facilitate efficient
Instead,
applied
COGSA
Court
sea,
carriage by
ing in contracts
liability. The
the rail carrier’s
assessing
defeated.
would be
that
acknowledged
COGSA
Court
(citations
and cer-
385
Id. at
S.Ct.
terms,”
“by
the rail carrier
omitted).
is,
That
marks
quotation
tain
contract,
byit
parties
extended
unless
ap-
have
that Carmack would
the extent
parties
that
had done
explained
case,
carriage
in this
plied to the
lading:
just that in the bills
in the bills of lad-
“extension” clauses
two
terms,
governs bills
By its
COGSA
(contractually
ing
Paramount
Clause
goods
lading for
—the
portions
the overland
extending COGSA to
are loaded on
goods
[to
time when the
Himalaya
carriage) and the
Clauses
they are
ship] to the time when
General,
Kirby
questionable
could have
It
whether
ac-
21. The United States Solicitor
were,
fact,
cepting the Court’s invitation to submit
if it
the con-
waived Carmack
brief,
potential appli-
amicus curiae
noted
trolling
assuming, arguendo,
law. But
that
and ad-
cability
Carmack,
the Carmack Amendment
Kirby
even
could and did waive
Car-
whether the
”[i]t
vised that
is unsettled
unlikely that the Court
though
applied, it is
it
transport
applies to land
Amendment
mack
controlling
expla-
law without
would omit the
international,
through bills
multimodal
likely
the Court found
It is more
nation.
case.”
lading,
as the bills in this
such
apply.
did not
that Carmack
States,
United
Brief of Amicus Curiae
Norfolk
Kirby,
v.
361 Clause, (contractually extending Himalaya COGSA to the the term “any” and the rail subcontractor)' trumped Car- necessity of rail carriage to complete the — (to mack, wholly inapplicable rendered it journey established the rail carrier’s inclu- omission), point replaced it with sion: COGSA. Thus, parties must anticipated way,
Put another
parties to a maritime
that a land carrier’s services would be
contract for intermodal through carriage
necessary for the
perform-
contract’s
(i.e.,
carriage containing
leg)
ocean
a rail
ance.
It is clear to us that a railroad
can contract for
coverage through-
COGSA
like Norfolk was an intended beneficiary
out,
entirely,
and exclude Carmack
with a
broadly
ICC bill’s
written Himala-
properly written Clause Paramount and
ya
Accordingly,
Clause.
Norfolk’s liabil-
Himalaya
premise
Clause. This
begets
ity limited
the terms of that clause.
questions,
three
which—not coincidental-
32,
Id. at
this same —an to applies broadly as “whether Carmack bill through a shipped under goods port of import overseas of an segment the inland the this time addressed lading of —but through lading.” under a shipment an im- involved This case issue. Carmack port the Id. And: via to Oklahoma from China port Beach, shipper The question a Long present California.23 cases at The instant (Ka- Kirby. ocean carrier in hired an addressed (Regal-Beloit) neither raised nor K-Line) Kisen, perform to through terms of a bill a.k.a. It is whether the wasaki a K-Line hired an ocean carriage, lading and abroad through of issued the R.R.) (Union of part to com- to the domestic apply Pacific can carrier carrier rail carrier, journey by K-Line issued a rail import’s portion. overland plete the in an- or limitations Regal-Beloit; despite prohibitions to lading bill That statute any bill other federal statute. not issue Pacific did Union con- Amendment lading known as Carmack K-Line bill lading. The (1) lading terms of bills of governs a Hi- provisions: pertinent tained five rail carriers. by domestic Clause, of li- issued extending limitations malaya 11706(a). (e.g., U.S.C. to K-Line’s subcontractors ability (2) Subcontracting Pacific); Union not to ex- The Court chose Id. at 2439. Clause, K-Line to subcontract authorizing unad- question was left plain why this Paramount, (3) discretion; a Clause at its ac- despite expressly Kirby, dressed the en- terms to cover extending COGSA’s the fact similarity knowledging por- including the overland journey, tire asserting that at patterns, id. Clause, (4) desig- tions; of Law a Choice in Kirby said of what the Court “[m]uch (5) law; Forum Japanese ],” nating at id. applies present ease[ Clause, Tokyo designating Moreover, Selection pick the Court did not 2442. off, District Court. left with the begin Kirby where up or of maritime contracts. preeminence Oklahoma, the train derailed When deconstructing the began by Pa- The Court K-Line and Union Regal-Beloit sued statute, saying: “Car- court, case text of the Carmack and the state cific California rail carriers into mack the realm of immediately federal dis- divides was removed (2) (1) carriers; receiving rail parts: three court dis- trict court. After the district carriers; connecting rail delivering Tokyo Forum Selec- missed based on “receiving 2442. A Id. at underlying rail carriers.” (premised on its tion Clause initial carrier to receive rail carrier” is the Paramount extend- holding that the Clause jour- shipper “at the the rail from the ed the COGSA bill origin” and the carrier Himalaya ney’s point of journey and the portion of the Pacific), lading pursuant that must issue a bill extended it to cover Union Clause “delivering rail reversed, requirements; a holding that Carmack’s the Ninth Circuit the last carrier to deliver trumped ... carrier” is “the Amendment carrier” is contract, “connecting and a cargo; fo- its] [COGSA-based at 2443. every carrier in between. Id. at On and clause.” Id. rum-selection that the term “re- emphasized certiorari, forum se- The Court “[t]he the Court said statutory is a term of ceiving rail carrier” ... rise to the dis- provision gives lection identical, aspects we are actually shippers, with cause all relevant were four 23. There ship- shipper one and one lading, will treat this as to four different locations four bills of States. But be- ment. in the Midwestern United art, above, carrier,” just “any as defined id. 2443. The analysis, colloquial ‘re- sense which we added some ex- bracketed property ceived’ another carrier.” planatory language, follows: Id. provisions [F]or Carmack’s journey begin must awith receiving Court then pivoted on the “re *23 carrier, rail which would have to issue a term, ceiving rail carrier” explaining that Carmack-compliant bill lading. of It fol- this categorizes particular term not a lows that Carmack does not if (for the carrier under Carmack purposes of property is received the shipper, [from identifying the liable carrier and the carri and the journey begins] at an responsible er overseas lading), for the bill of but location a through under bill that also determines covers whether even Carmack the into an transport inland applies shipment. to a location The Court held the case, States. In United such a applies only Carmack there shipments to is no ... rail [subject a carrier receiving which there is carrier to the re jurisdiction of the quired to issue a lading— STB] Carmack bill receives the property [directly meaning, road or rail carrier that is both the shipper to subject jurisdiction begin journey STB in the receiving form of] domes- cargo shipper from the tic rail journey’s transportation, at the and thus no carri- point of origin. Id. at er that 2443. No “receiv must issue a Carmack-compliant ing carrier” means no bill of lading. Carmack bill of The initial carrier in that lading, means which no instance applica Carmack receives the property at the bility (despite the shipment’s involvement carriers point [overseas] of originf, qualify that would as “connecting” subject or “de jurisdiction is not to the carriers). Id.; livering” rail see id. STB,] also at the United States for overseas “[bjecause 2449 (concluding that jour import transport, multimodal not for do- ney receiving included no rail carrier that transport.... mestic rail had to lading Carmack, issue bills of under present cases illustrate opera- apply”). Carmack does not This was a tion of principles. these Carmack did novel in that no approach previ court had not K require Line to issue bills lad- ously assessed Carmack’s applicability ing K Line because was not a ... rail quite way.24 [hence, subject not to the United
So
question
Carmack’s threshold
jurisdiction].
Line[,
States STB’s
K
whether
carrier,]
begins with an as-
ocean
obtained the
[from
“receiving
carrier”;
i.e.,
defined
rail
Regal-Beloit,
as the
journey’s
at the
point of
it,
put
Court
“ascertaining
shipment’s
origin]
China for
transport
overseas
point
origin
is critical to deciding wheth-
[by ship]
across an ocean
and then to
er the shipment
a receiving
includes
rail
inland
destinations
the United States
24. The
majority's point-
dissent contested the
applies
subject
then
other rail carrier
of-origin requirement
“receiving”
carriers
jurisdiction
in the
Board’s
chain
applies
insisted that Carmack
car-
transportation, no matter whether the ulti-
jurisdiction,
rier
essentially
under
STB’s
property
mate destination of the
is in the
any road or rail carrier in the United States:
elsewhere,
United
period
States or
for the
subject
Once
first domestic rail carrier
traveling
the carrier is
within the United
Transportation]
juris-
[Surface
Board’s
States.
property
receives
diction
States,
United
J.,
(Sotomayor,
dissenting;
Id. at
joined
attaches,
Carmack
regardless of
JJ.).
Ginsburg,
Stevens and
property originated.
where
at
[by
via
“conceptual approach/’ one
Kirby’s
property under
der
shipped this
K Line
ic].
journey
the entire
de-
consider
through bills of lad- would
COGSA-authorized
through
single
in the
bill as
scribed
chose to use
K Line
ing. That
journey
journey and decide whether
segment of
complete one
transport
carriage, there-
“substantial” sea
essentially
contained
these
journey
“maritime
making
bill a
put
not
K Line
does
maritime contracts
predominant
invoking
reach and thus does
contract”
within Carmack’s
of mari-
application
in the uniform
to issue Carmack
interest
require
Line]
[K
(or
conflicting interests
a Carmack-defined
time law over
[as
bills of
laws).
28-29,
Recip-
‘receiving carrier’].
Id.
385..
*24
only “in-
journey
if
contained
rocally,
Pacific, it
also not a
As for Union
through bill
carriage,
sea
substantial”
carrier under Carmack.
receiving rail
contract,
type
other
see
would be some
argu-
oral
conceded at
cargo
owners
(“If
a bill’s sea
id. at
Further, the Court declared “the that transport. container-based The Court interpretation of Carmack the Court now will not read Congress’ nonsubstantive adopts attains most consistency be- recodification of Carmack in 1978 to cre- tween Carmack and COGSA.” Id. at 2447. ate a such drastic change practice sea The Court’s discussion is confined to im- in this area. ports, but it is difficult if impossible to distinguish an export situation when Applying provisions Carmack’s in- to light viewed in these policy arguments. of import ternational export] shipping [or part Consider this discussion, transport would also pur- undermine the includes language bracketed to relative ex- pose COGSA, to facilitate efficient ports: contracting in contracts
Applying two different bill of lading sea. provide[s] Th[is] an apt case[] il- regimes to through the same shipment sophisticated lustration. The cargo would undermine COGSA and interna- [i.e., here Regal-Beloit] owner[ ] agreed that coming are to courts lower 385. And lading applied that bills maritime the Hi- same view. through segment inland
to the Line authorized K malaya Clause C. segment on inland for that subcontract [Regal-Beloit] whether that have considered whatsoever. The courts any terms K Line segment to select inland the decision to the applies made thus Carmack through come down on company export [its] single a an overseas as needs, initially con- rather than some question; transportation both sides the existence [itself]. rail services tracting for based applying Carmack (i.e., carrier receiving bills through provided of the jurisdiction event subject the foreseeable STB rules for venue is both during car- damaged shipper cargo from the receiving Indeed, obtained [Regal-Beloit] origin), but more point of riage. journey’s against protect argu- it based on recently rejecting insurance separate favoring COGSA any excess loss.... and rationale ments maritime contracts. parties decided allow
Congress has
signifi-
case of
only Sixth Circuit
In the
maritime com-
in international
engaged
issue,
Road Ser-
cance on this
American
contracts,
ato
their
to structure
merce
Corpo-
Rail
Company v. Consolidated
vice
extent,
has not
they see fit.
It
large
(6th Cir.2003),
ration,
we
F.3d
textually
regime,
Carmack’s
imposed
to a
“does not extend
held
carriage of
historically limited
shipment under
trans-
for domestic rail
goods received
shipment
segment
unless a domestic
essentially
are
maritime
onto what
port,
domestic bill
separate
is covered
*26
contracts.
opinion
concerned
lading.” Because
Kawasaki,
inserted;
Kirby and
predated
an import,
break
(paragraph
at 2447-49
Id.
that has since been
marks,
reasoning
cita-
and included
marks,
and
quotation
editorial
pres-
value for our
omitted)
rejected, it is of limited
“ex-
relative to
(language
tions
brackets).
though
generally
it is
even
Clearly,
purposes,
the
ent
added in
ports”
Kirby
Kawasaki.
with
and
turn on consistent
points does not
validity of these
or an
import
an
shipment
was
whether
Kawasaki,
the Southern District
Since
export.
conflicting opin
has
of
York
issued
New
applicability to
rail
Thus,
foregoing, the
ions on Carmack’s
light
export
through
under a
an overseas
leg
that Car-
of
appears to be
rule of Kawasaki
v.
Assurance Co.
American Home
ship
bill. In
not
to the overseas
apply
mack does
07-cv-10947,
Inc.,
2011
No.
Panalpina,
export
shipped
goods import or
ment of
—
—
(S.D.N.Y.
2011),
6,
Feb.
This WL 666388
through
lading.
single
forklifts,
export of
considered an
dicta
court
prior
the Court’s
consistent with
is
via a California
to Australia
R.R.
from Illinois
Missouri
outcomes.
and
See
Pacific
(contain
383;
single through bill
Porter,
port, under
at
273
v.
U.S.
Clause, a
Para
499;
Himalaya
Clause
ing a
Reider,
id.
at
S.Ct.
339 U.S.
mount,
coverage).
(Frankfurter, J.,
and COGSA
When
dis
120,
There are two why additional reasons Carmack not apply does in this instance. Here, it is undisputed that STI was
First, plaintiff [the] sued upon based not the carrier responsible for the entire the Bill Lading issued [the receiv- course of the shipment. [The shipper] ing thus, carrier] and bound its signed single Waybill paid [the terms. Bill Lading clearly states coordinating a single carrier] ‘all-in’ applies COGSA receiving [the through rate to handle shipment carrier] and subcontractors. goods from Kentucky through to its final Second, ... Congress Therefore, has not destination imposed Austria. STI regime did not carrier, Carmack’s onto what are as a essen- function ‘receiving’ tially maritime and the contracts. Where a bill Amendment does not of lading requires apply. substantial carriage of *27 sea,
goods by
purpose
its
tois
effectuate
This outcome is consistent with the
maritime commerce—and thus it is a
Supreme Court’s emphasis on efficiency
maritime contract. The
of Lading—
Bill
in international maritime trade.
undisputed
the
facts regarding the
(footnote
at *4
Id.
quotation
and certain
transport
that a substantial
—evidence
omitted)
marks
(citing Missouri K. & T. v.
part
the
depended
[of
contract]
car-
[on]
Ward,
388,
617,
Any
Kawasaki,
doubt would come from
ion all
way
through including the dis-
particularly if we invert
hold-
Kawasaki’s
—
Kirby
cussion of
and COGSA—the inverse
ing mechanistically
facts,
to fit it to our
fail
holding
is almost
clear
as
as the
to follow it all the way through,
per-
holding, albeit not
easily
haps
stated as a
language
add
is not actually
bright-line rule: when the journey
there.
presents
This
does
beguiling conclu-
begin with a
sion to which at
Carmack-defined receiving
one court appears
least
to
carrier,
may
Carmack
still
leapt,
apply
while
overlooking
logical
multimodal through bill
chasm beneath.
with a substantial
Panalpina,
See
2011 WL
sea component, for all the
666388 at *4.
reasons set out
in Kirby, such as the practical benefits of
Under the
“receiving-carrier
Kawasaki
through shipments
single
under a
approach,”
2442-45,
130 S.Ct. at
we deter-
lading, the nuisance or dilemma that a
mine whether
carriage begins
with a
disputed question
(i.e.,
of fact
the actual
and,
Carmack-defined “receiving carrier”31
location of the loss
damage)
could dic-
not,
disregard
then
Carmack and en-
if
tate the determination of the governing
force the
contract
its terms. See also
law concerning
venue,
liability or
the inef-
(“Because
at
id.
journey
included
ficiencies of encouraging
open
carriers to
receiving
no
rail carrier that had
issue
transfer,
at
containers
power
and the
Carmack,
bills of lading under
congressional
intent in drafting COGSA.
apply.”).
does not
But what of our present
Id.
2447-49.
facts—when the carriage
begin
does
with a
Carmack-defined receiving
Here,
carrier?
It is
the Service
governs
Contract
tempting simply
say
re-
carriage
Tainan,
Kawasaki
Harrodsburg
quires the result that
Carmack does
journey
begin
which does
with a Carmack-
when
begin
does
with a
carrier,
Carmack-
defined receiving road
but which
defined receiving carrier. But
implicates
Kawasaki
also
all of the Kirby-based con-
that,
does not hold
expressly or otherwise.
cerns articulated in Kawasaki. Because
carriage portion
"substantial”;
30. The sea
journey,
of this
Kirby leaves the definition of
Kaohsiung,
from Tacoma to
approximately
open
"substantial”
to future consideration.
6,225
Ocean,
miles
across
Pacific
which is
undoubtedly "substantial.” This is not in dis-
31. Recall that a
"receiving
Carmack-defined
pute, nor is it open
dispute.
to reasonable
carrier” is a road or rail carrier that is both
comparison
For
purposes,
por-
subject
jurisdiction
overland
United
States
*29
2,500
journey
tions of this
total approximately
Transportation
Surface
receiving
Board and
that,
Having
miles.
said
we do
read
not
the
shipper
journey's
from the
at the
Kirby
here,
holding,
as
nor do we hold
point
that
origin,
of
required
such that it
under
is
(alone
relative)
distances
or
are determinative
to
a
lading.
Carmack
issue
bill
Carmack
Kawasaki,
portion
journey
whether the sea
of the
is
371 III. out of their contract. Int’l Ore & Fertilizer Corp. Servs., Inc., v. SGS Control 38 F.3d complaint, In its CNA asserted three (2d 1279, Cir.1994) 1283 (citing East River action, purportedly causes of arising under Corp. S.S. v. Inc., Transam. Delaval 476 contract, bailment, breach of Carmack: 858, 872-73, U.S. 2295, 106 S.Ct. 90 negligence. In ruling on summary (1986) (federal L.Ed.2d 865 maritime), and motions, judgment the district court held Clark-Fitzpatrick, Inc. v. Long Island applied, that because Carmack it encom- R.R., 382, 70 653, N.Y.2d 521 N.Y.S.2d 516 passed and preempted separate these (1987) (New N.E.2d 190 York)); see causes of also action and the case pro- Fireman’s Fund Ins. Co. v. ceed Orient Over single as a Carmack cause of action.36 Ltd., seas Container 11, Line explained As 196 Misc.2d foregoing section, this 427, (N.Y.Civ.Ct.2003). N.Y.S.2d error; inwas apply by Carmack did not its plaintiffs The Instead, own cause of action against terms. such district court defendant lies breach disregarded should have of contract. Carmack and en- forced Service Contract on its terms.37 .the It is undisputed here that Meanwhile, because it applied had Car- Carriers’ duties arose out of the Service mack and preempted the individual causes Contract; (nor this case contains no duty action, of court district did not address any duty) breach of that was anticipat the Carriers’ motions for summary judg- ed and included in the Service Contract. ment on CNA’s action, tort-based causes Consequently, we conclude as a matter of bailment and negligence. The Carriers law CNA cannot maintain actions had argued that CNA could not maintain in bailment or negligence against the Car causes of in tort action because their riers; of action cause is limited to solely duties arose and, contract there- breach the Service Contract. There fore, inasmuch as the Service Contract fore, the district court’s denial of these tort case, controlled the viable claim causes of effectively dismissing action— for was breach contract. them —was ultimately correct and we can
Under either federal affirm part maritime this law or the judgment. See law,38 New York plaintiff v. cannot maintain Schlaud Snyder, F.3d 459 n. 6 (6th Cir.2013) tort cause of action based on a defen- (noting that may we affirm dant’s breach of duties that solely arose supported record). basis by the 12, 13, 36.See supra, footnotes for the particular 37. One term in bears mention and background particulars some sion, The provi this decision. clarification. Choice Lawof 13.A, II.A, See supra, also dictates that New Section York state law Carmack’s course, govern. and federal law burden-shifting trial, just Of we framework. CNA At II.D., established in supra, Section that the proved (i.e., prima its Carmack facie case Service Contract is pur a maritime contract condition, good tendered it ar- 27-29, Kirby, suant to 543 U.S. at condition, damaged rived in and actual dam- 385, and governs therefore maritime law ages quantified), were so the burden shifted to relegate here. But we discrepancy to a the Carriers to demonstrate one of the five footnote because "New York law ... also excepted attempted causes. The Carriers requires application of federal maritime law prove that the Coming’s was due to to maritime Corp. cases.” Sundance Cruises "improper” stowing packing. CNA re- Shipping, v. Am. Bureau 7 F.3d butted this jury contention and the found (2d 1993). Cir. CNA, $498,509.91 awarding damages. interest, court post-judgment awarded but de- specifies 38. The Service Contract either feder- pre-judgment nied interest. al or New York law in its choice of law provision. *31 372 in Himalaya Clause” that “broadly written of action is cause colorable
CNA’s sole
case)
carrier to invoke
that rail
Had
allowed
Contract.
the Service
for breach
liability claus-
limitation
applica-
contracts’
that
denied
court
the district
claims,
32,
385.
it
at
U.S.
Kirby,
the tort
543
dismissed
es.
bility and
breach of
with CNA’s
left
have been
would
here, “qualifying
But,
point
the
more to
defenses
the Carriers’
claim
contract
way cre-
beneficiary in no
as an intended
the
noteworthy that
It is
thereto.
part
the
obligations on
ates contractual
are
the Service Contract
parties
two
In re
beneficiary.”
the intended
M/V
Hyundai as
shipper and
as the
CNA39
(emphasis
Rickmers,
at 72
F.Supp.2d
622
are unnamed
carriers
The rail
carrier.
v. S.S.
Hall & Co.
(citing
Stein
original)
negotiated
neither
who
“subcontractors”
(2d
287,
F.2d
291
Viking, 494
Concordia
Due to
Contract.
the Service
signed
nor
Cir.1974) (“While
ship-
carrier and
circumstances,
analyze
differing
we
their
protec-
extend certain contractual
per can
against each
claims
of contract
the breach
damages,
tions,
limitation on
as the
such
differently.40
beneficiaries, they cannot
third-party
...
unconsenting
par-
third
an
to bind
contract
A.
journey contained
with CNA.
tractors”;
vice Contract
U.S.
ern and
anticipated
carriage, CNA
The rail
BNSF,
they
But,
that a
and,
are not
as
carriers, Norfolk South
are
S.Ct.
therefore,
explained
land carrier’s services
Hyundai “must have
substantial
Hyundai’s
parties
not in
because
to the Ser
Kirby,
“subcon
overland
privity
543
imposed
ty.”)). The “methods for
ited
are
showing, contractual
an intended
(internal citation
[1]
contracting parties.
acceptance
showing
an
on an intended
agency
beneficiary
that the third
omitted).
to be so bound
relationship with
obligations cannot be
beneficiary.” Id.
actually binding
Absent such a
a bill of
party
and [2]
exhib-
one
per
necessary for the contract’s
be
would
nor BNSF ex-
Southern
Norfolk
Neither
formance,”
making Norfolk South
thereby
be bound
any agreement to
hibited
“intended beneficiaries.”
and BNSF
ern
(or
Regular
Hyundai
Contract
Service
therein).
Lading incorporated
Bill
Form
third-party qualifies
the extent
“[T]o
contracted with
contrary, each
enforce To the
beneficiary, may
intended
as an
its own
independently,
Hyundai
favor.”
re
terms
In
contract
M/V
agreement.
transportation
standard
Litig.,
F.Supp.2d
Rickmers Genoa
Contract,
4.A,
§
ex-
Moreover, the Service
(S.D.N.Y.2009)
2nd
(citing Restatement
omitted).
(footnote
relationship
304)
agency
disclaims
pressly
of Contracts
to act as an
allow
Thus,
rail carrier’s status as
Kirby,
CNA, asserting
instead
agent
on behalf
beneficiary (along with
an intended
sentatives)
CNA,
the co-defense
answered
subrogee,
prosecuting
is
39. Because
they
Corning, we
refer to
and that
posed
were
will
conflict of interest
case as if it
no
shipper-side party to
representation.
or
joint
as the
CNA
merchant-
with the
were satisfied
Contract,
Corning
though
even
premise
the Service
proceed
Consequently, we
party to the contract.
the actual
waived
contention
that the Carriers have
are inconsistent
individual
that their
interests
Throughout
proceedings,
Carriers
any signifi-
diverge in
their defenses
than
joint representation.
had
More
the defense
way. The Carriers received
cant
once,
whether
court asked counsel
the district
they wanted.
representation was warranted.
separate
time,
(and
repre-
the Carriers’
Each
counsel
*32
“[Hyundai]
shall be deemed an inde- with that
or
relationship
status.” This
pendent
contractor
respect
with
to
only Hyundai
intent to bind
is also evident
sure, Kirby,
To be
[CNA].”41
deems B. reiterates that “nothing and herein con- shall tained be construed to be inconsistent Hyundai is a party Service course, merely II.B, 41. Of labeling Hyundai an "in- In Section supra, acknowledged we dependent necessarily contractor” not Missouri, does T., Supreme that the Court K. & See, e.g., Langfitt make so. v. Fed. Marine 244 U.S. at treated the Terminals, Inc., (11th 647 F.3d agent initial carrier subsequent as an for the Cir.2011) (discussing commonly the factors carriers to bind them the contract to with the employed distinguish agent an from an shipper, accordingly upheld shipper’s and independent contractor). Corning hired against lawsuit them. But that awas Car- Hyundai to conduct carriage, paid the entire mack case—and an outlier in the Carmack rate, Hyundai a flat and had no control over line of straight cases at that —while this is any aspect Hyundai’s Hyun- performance. breach of contract without Carmack consider- complete dai had over the control manner length ations. Given the arm's transactions selection, performance; and means of Hyundai, between the rail in- carriers terms, payment, right to terminate sub- cluding transportation agree- the rail carriers' contractors; materials; equipment based, relationships ments on which their are opportunity profit. Corning hired Hyundai there is no basis to hold that was Hyundai perform predetermined car- acting agent as an for rail carriers in riage paid the rate charged case. completion carriage. of that This agency relationship. issue, Hyun- provides This vision at with CNA.43 privity and is Contract in the goods are ac- when dai’s forward breach-of-contract straight is a Con- analyze custody the Service of a subcontractor: we tion in which law, to maritime tract, to federal pursuant ... caused respect [W]ith agreed-upon liabili- parties’ determine handling, storage, during the cir- present ty applied scheme as by [Hyundai’s Subcontrac- of the Goods *33 contracts example, the For cumstances. tor, liability be to the extent such shall “broadly writ- Kirby contained in at issue would to which such Subcontractor Himalaya Paramount ten” Clauses a if it had made liable to [CNA] been (as in those worded specifically Clauses [CNA] contract with separate direct and contracts) Carmack, extend- that excluded handling, storage, or respect in of such carriage, throughout ed COGSA carriage. provisions to the contracts’ even extended 5(B)(2). is, § That Lading Bill of Form despite subcontractor
the subcontractor’s
(in
Form
Regular
its
Hyundai proposed
privity. Corre-
of contractual
the absence
to,
parties agreed
Lading),
Bill of
and the
specific
must consider
spondingly, we
Hyundai’s
separate
govern
scheme to
in
Contract
written
the Service
clauses as
cargo under
liability
damage
for
appropriately.
them
subcontractor,
in
circumstances
Paramount,
carrier,
first the Clause
consider
damaged
We
or rail
such as a road
2(B),
§
Lading
which extends
Form Bill of
goods.45
tackles)
(beyond the
“when
inland
COGSA
provision, Hyundai is
pursuant
So
to this
[Hyundai].”
custody
are in the
goods
road or
[a
liable “to the extent to which
because the
court held that
The district
liable to [the
would have been
carrier]
custody of a rail carrier
cargo
in the
was
sepa-
a direct and
shipper] if it had made
damaged, the Clause
when
subcontractor
that
shipper]” for
[the
rate contract with
as, by
inasmuch
apply,
Paramount did not
journey.
Of
portion
carrier’s
terms,
occur-
applies
its
course, if
or rail carrier made a
a road
Hyundai’s custody.44
ring
car-
shipper
contract with the
for
separate
interpre-
court was correct
district
subject
riage,
it would be
to Carmack.
tation.
Reider,
See,
e.g.,
339 U.S.
Carmack, it would be unable
that
this is 499. Under
persuaded
are further
We
liability by
limit
contract.46
pro-
of the next
upon
correct
consideration
CNA,
subrogee,
prose-
argument,
the Carriers' counsel
Again,
45. At oral
43.
because
as
Corning,
merely
cuting
provision
if it were
we refer
speculated
this case as
that this
party
shipper-side
merchant- or
to CNAas the
sue
subcon-
means
which CNA could
Contract,
though Corning
even
to the Service
governing
directly,
the subcon-
tractors
thus
party
the contract.
is the actual
liability.
provi-
We do not read this
tractors'
Moreover, because,
4(C),
§
way.
sion
doing,
con-
the district court further
44.
In so
no claim shall be
warranted]
“[CNA]
interpretation
contract
cluded as a matter of
against any
[Hyundai's Subcontrac-
made
Contract's limitation-of-liabil-
Service
tors,”
5(B)(2) gov-
§
conclude that
we must
present
ity provisions
apply in the
did not
Hyundai's liability
erns
subcontrac-
is,
though the dis-
That
even
circumstances.
tors’ conduct.
overriding
applied Carmack as the
trict court
deny
had
the limita-
law and CNA
moved
Certainly,
may avoid Car-
a rail carrier
liability on the basis that Carmack
tion of
carriage if it of-
limitations,
liability for container
mack
prohibits
see 49 U.S.C.
such
shipper
coverage to the
and the
11706(c)(1),
fers Carmack
§
district court did not base
Wilcox,
&
shipper declines. See Babcock
this decision on Carmack.
11706(c)(1);
Adams Express,
U.S.C.
226 errors or defects which do not affect the
504, 33
U.S. at
S.Ct. 148. And the court
rights
substantial
parties.”);
see
ultimately
determine the
also
Lafler,
Rosencrantz v.
568 F.3d
pursuant
to Carmack’s burden-shifting
(6th Cir.2009)
588-92
(discussing harmless
R.R.,
framework. See Missouri Pac.
377 error). We affirm the district court’s
137-38,
U.S. at
of the Service that CNA’s claim for breach of by Hyundai contract IV. “damage during handling, caused stor- CNA contends that the district age, [Hyun- Goods *34 court erred by denying its motion for pre DHL, dai]’s Subcontractor” —be Norfolk judgment denial, In interest. its the dis Southern, BNSF, or be re- TMBR —must trict court’s stated rationale was that solved under Carmack. Because the dis- verdict was “[t]he rendered in this case on trict proceeded theory, court on the which the Carmack claim Amendment only [and] jury by verdict, the later confirmed its [t]he Carmack Amendment does not spe the occurred while the was cifically provide for recovery of pre in custody of either Norfolk Southern judgment explained interest....” As in BNSF, or the court ultimately was correct sections, foregoing the district court application of Carmack to determine by erred applying Carmack to this case as Hyundai’s liability and we can affirm this general principle; properly this case Schlaud, portion of the decision. See 717 on decided the Service Contract and the (we F.3d at may 459 n. 6 affirm on any applications pertinent provisions of the record). supported by basis Therefore, therein. the decision is not While the district court erred based on “the Carmack Amendment claim applying Carmack to this case as a general only,” aspect of the district court’s principle, that error ultimately harm rationale denying prejudgment interest less because the court would properly is insupportable. The Service Contract applied Carmack straight under a forward controls. breach-of-contract action. See Fed. We are unpersuaded by 61 also (instructing every R.Civ.P. court’s “[a]t stage additional proceeding, of the rationale “this is not a must case court disregard all errors which one party and defects that do not has had use of the any party’s affect party’s money.” By failing substantial other rights”); 28 to reim- (“On § U.S.C. hearing burse for the cost of the Corning damaged appeal (and case, or writ of certiorari in any glass the time of the accident court give judgment thereby forcing shall after an exami Corning to file a claim nation of CNA), the record regard without to with Hyundai did have the use of (relying F.3d at 141 n. 6 on liability 49 U.S.C. not avoid Carmack this basis. 10502(e) 11706). § § Hyundai Moreover, Because the district court determined aas here, in the stands shoes of the rail carrier interpretation matter of contract that the Ser- Hyundai compensated could have either been liability vice Contract’s limitations of did not liability by offering avoided Carmack circumstances, regardless to the present coverage Carmack to the shipper, Corn- agree por- of Carmack. We and affirm that ing/CNA. Hyundai But because did not offer tion of the court’s decision. district coverage option, Hyundai Carmack can- CNA’s) III.B. of (or one set forth section money during that sion—the
Coming’s which I cannot that, majority opinion pre the award of Having time. said —with discretion, agree. matter of is a judgment interest Maritime v. Westwind see Enters. Werner Hyundai’s contrac- I do not believe that (11th Cir.2009),
Int'l, F.3d (and, Corning hence to tual may affect the de factors and additional CNA) be resolved under Carmack” “must termination. Instead, majority holds. because as the Coming’s was authorized as this case for re- necessarily remand
We liability, limit the subcontractor’s agent to prejudg- question of the consideration I Corning, so and on behalf of and did light pertinent pro- ment interest to that Hyundai’s liability is limited believe applied Contract as visions of the Service major- I same extent. Because believe decision. We also direct the present 5(B)(2) ity Lading Form Bill of misreads to In re ClassicStar Mare court’s attention the extent of improperly construes 727 F.3d 494-97 Litigation, Lease Hyundai’s liability, respectfully I dissent (6th Cir.2013), our current amplifies majority’s Hyun- conclusion that from the interest. prejudgment view of to the full extent of dai is liable CNA V. liability specified in the *35 Amendment. foregoing, we AFFIRM Based on the Hyundai, against defendant judgment 5(B)(2) Lading Form Bill of states judgments and VACATE REVERSE that, respect to ... caused “with Southern and against defendants Norfolk handling, storage, carriage during the BNSF, REMAND this case to the by [Hyundaij’s of the Goods Subcontrac- may court so that it reconsider the district tor, liability shall be to the extent to such question prejudgment interest. have been which such Subcontractor would [Corning] liable to if it had made a direct O’MALLEY, KATHLEEN M. Circuit [Corning] in separate contract with Judge, dissenting part. respect handling, storage, of such or car- agree findings I with most of the provision, Based on this ma- riage.” majority thorough thoughtful opinion. jority Hyundai finds liable to CNA to the I that Specifically, agree Carmack liability imposed by the Carmack extent Amendment does not to the road or that, majority The finds if Amendment. leg export rail of an intermodal overseas direct- separately the rail carriers had through bill of lad- shipped single under ly Corning, contracted with those contracts ing. agree I that CNA cannot main- also subject to the been Carmack negligence tain actions in bailment or Amendment because the subcontractors carriers, against the and that its cause of Maj. Op. rail are domestic carriers. such, action is limited to claim for breach of majority 374-75. As concludes Finally, agree I the Service Contract. that these rail carriers would have been of contract liability that CNA’s breach action is limit unable to their contract rail only against Hyundai, available not the an express the absence of waiver Corn- And, I agree ing, Hyundai may carrier defendants. that also not limit contract, liable, by liability. majority Hyundai pass-through is for the sub- its Id. prop- It is the next conclu- this conclusion based on the contractor’s conduct. reaches Lading. incorporates Hyun- Bill of 1. The Service Contract dai's Form dai, may acting osition that “a rail carrier avoid Car- Coming’s agent as as outlined liability if it 5(A), mack for container in section proceeded to subcontract coverage shipper offers Carmack portions the rail shipment. Hyun- shipper and the declines.” Id. at 874-75 n. dai, fully within authority, its then refused (citation omitted). it Because finds that liability full Carmack from the subcontrac- “Hyundai in the stands shoes of the tors, and, accordingly, limited liability here,” majority concludes that of the subcontractors. Consequently, the Hyundai liability cannot avoid Carmack on analysis here, should end as we know the “Hyundai this basis because did not offer amount of Corning set for the [Corning] any coverage option.” Carmack subcontractors its agent, Hyundai. majority recognize, Id. What the fails to Although Hyundai ultimately accounta- however, is that the rail carriers did offer ble for that liability, it was also authorized coverage Corning, through to limit its terms. agent, Corning affirmatively and that While majority points out coverage. waived that While Hyundai is places defined at in the Service must fulfill the obligations carrier’s Contract independent contractor, as an Corning, actually in Coming’s stood nothing precluded Hyundai from purposes acting shoes for as defining scope both an liability. independent contractor and an agent, depending upon the activity ques- The Service “[p]ar- Contract states that tion. “[N]othing about the indepen- title agree [Hyundai] ties to allow to contract or invariably dent contractor precludes some- agency may necessary establish be one being agent appropriate provide transportation inland or door to Hudson, circumstances.” United v. States door services in international if commerce (6th Cir.2007) 491 F.3d (citing for in spelled called the rates out in Ap- *36 (Second) 2(3) Restatement Agency § of pendix Contract, RE:78-6, C.” Service (“An independent contractor ... may ¶ or 2(A) added). Page ID # (emphasis 496 at may agent.”)); not be an Eyerman v. Then, 4(B) section of Bill the Form of Cosmetics, Inc., Mary Kay 967 F.2d Lading provides Hyundai with the authori- (6th Cir.1992) (noting person that “a ty to “subcontract any terms the whole may be independent both an contractor any part handling, or of the storage[,] or Thus, agent”). and an Hyun- the fact that carriage of the Goods duties un- independent dai acted as an contractor by [Hyundai] dertaken in relation to the added). who could not the Further, bind carriers to a direct (emphasis Goods.” Form 5(A) contract Corning pursuant § Bill of with to its ex- Lading “[Hyun- states that — dai], press in authorization to do in making arrangements so both the transpor- for tation ... Service Contract and the Form Bill handling loading or of before or Lading discharge only Hyundai’s after acts not conflict with [Coming’s] —does agent ability agent to act as the responsibility Corning assumes no there- of for provisions, purposes for.” These together, limiting scope taken al- of the carri- Hyundai lowed agency liability. Hyundai to establish for ers’ pur- proper- can and did poses entering into agreements ly with limit the liability subcontractor’s on be- other carriers on Hyun- terms. And half of Corning.2 may Corning precisely While it seem odd that arrangement Corning would chose. give Hyundai authority Notably, to limit its own Coming’s this is consistent with carriers, liability by limiting waiving liability that of the that is overall in return for choices— for a deter- to remand need would disagree we specifically I regard, In this Corning liability amount of mination Form conclusion majority’s with the subcon- with contracted have would 5(B)(2) in Hyundai placed § Lading Bill of all a consideration upon based tractors Section rail carriers. the “shoes” point, evidence. relevant On “liability Hyundai’s 5(B)(2) states Hyundai Coming and between agreement Subcon- to which the be to the extent shall note, particular relevant. Of highly [Corning] liable to been tractor would liability under full request did not Corning con- separate direct made a if it had value, despite full declaring the COGSA of such [Corning] respect tract with receiving greater option having (emphases carriage.” handling, storage, payment of liability in return scope actually added). does not provision This Instead, Corning purchased fee. higher the subcontractor’s Hyundai place through insurance CNA to cover additional to the shoes, Hyundai liable only holds it coverage, opting this difference been would have the subcontractor extent Thus, it seems freight pay lower costs. circum- such Corning liable to taken the same Corning would have likely analy- such, hypothetical As stances. contract separate in a direct and approach 5(B)(2) should called for under sis option its vis-a-vis the subcontractors with offered Hyundai itself consider whether its attendant liability, with for Carmack coverage option; any Carmack Corning lia- cost, full Carmack by declining higher of- the subcontractor should look what bility. It agent. Corning fered to reasons, respectfully I foregoing For of this moreover, purpose that the appears, finding that majority’s from the dissent seg- to assist provision was under the Car- Hyundai is liable CNA among the subcontractors menting liability Amendment; Hyun- I limit mack parties could where in circumstances $10,000. liability to dai’s against a goods to the assess subcontractor; majority particular it. into
reads far too much reasons, Hyun- I believe that these
For to the contractually liable CNA dai is Plaintiff-Appellant, D’AMBROSIO, Joe extent, acting on extent, *37 v. lia- it held the carriers Corning, behalf al., Defendants- MARINO, et Carmen and no $10,000.00, to the tune ble: Appellees. Rules, 79-12 at RE: more. See BNSF 13-3118. No. 769; Rules, RE: # NS Page Item ID 8.6.2, I Page ID #591. at Item 78-14 Appeals, States Court United moreover, that, if note, even we were Circuit. Sixth act Com- Hyundai did not assume that 23, 2014. Argued: Jan. lia- limiting the carriers’ ing’s agent when 27, 2014. Filed: March Decided does, not, majority could as the bility, we 8,May En Banc Denied Rehearing Corning would not assume that if it had contract- waived Carmack I believe the rail carriers. directly
ed with instead, goods transported. damages choosing, charges shipping lower cover buy from CNA to insurance