FINDINGS OF FACT AND CONCLUSIONS OF LAW
The court has conducted a bench trial in this matter. What follows constitutes the court’s findings of fact and conclusions of law, in accordance with Federal Rule of Civil Procedure 52(a). To the extent that a finding of fact as stated may be considered a conclusion of law, it shall be considered as a conclusion of law. Similarly, to the extent that a conclusion of law as stated may be considered a finding of fact, it shall be considered as a finding of fact.
See Allergy Asthma Tech., Ltd. v. I Can Breathe, Inc.,
I. FINDINGS OF FACT
This case arose out of the loss of a cargo of power tools that were shipped from China to the United States. The court begins with a list of parties to the lawsuit and a brief' description of their roles. Plaintiff is Indemnity Insurance Company of North America (“Indemnity”). Indemnity insured the shipment and paid the consignee of the shipment, Lowe’s Company 1 , $236,032.71 for the loss. Defendant Hanjin Shipping Company was the ocean carrier, and issued a through bill of lading to transport the shipment from Shenzhen, China to Lowe’s facility in North Vernon, Indiana. Defendant Fritz Companies acted as the Customs Broker for the shipment. Defendants O’Hare Services and Channel Distribution contracted with the United States Customs Service to provide a “Centralized Examination Station 2 ,” where the Customs Service performed an intensive examination of the cargo.
*930 The events took place during the 'summer of 1999. Lowe’s purchased the power tools from Black & Decker, and hired Han-jin to transport the tools from China to the United States. On July 13 & 14, 1999, Hanjin issued a waybill and a bill of lading 3 to transport one 40' shipping container containing the tools. Per the waybill and bill of lading, Hanjin agreed to carry the container from Shenzhen, China to North Vernon, Indiana.
The plan was for the container to be carried via ocean vessel to Long Beach, California, then railed to Chicago, and delivered by motor carriage to the destination in North Vernon, Indiana. On August 4, 1999, the U.S. Customs Service informed Fritz Companies that the container and its contents would, be subject to an intensive Customs examination upon arrival in Chicago. A couple of days later, Fritz made advance arrangements with Hanjin and a local motor carrier to have the container delivered to O’Hare Services/Channel Distribution for the Customs examination.
The goods arrived in Chicago on August 10, 1999. Thereafter, the U.S. Customs Service issued a permit for the container to be transported to O’Hare Services for the examination. The container was taken to O’Hare Services, and the Customs examination took place on August 26, 1999. After Customs completed its examination, it notified both Fritz and Hanjin that the container and its contents were released and ready to be picked up. For several days thereafter, the container remained in a lot at O’Hare Services/Channel Distribution.
On September 3, 1999 a “Yard Check Report” at O’Hare Services/Channel Distribution showed that the container was in the lot at O’Hare Services. However, on September 10, 1999, it was discovered that the container was missing. The container was found a short time later, but the contents were gone.
Indemnity paid Lowe’s for the loss and then filed this suit. Indemnity alleged the following eight counts: (I) a claim under the Carriage of Goods by Sea Act (“COG-SA”) against Hanjin; (II) a claim under the Carmack Amendment against Fritz; (III) a common law bailment claim against O’Hare Services; (IV) a common law negligence claim against O’Hare Services; (V) a common law bailment claim against Channel Distribution; (VI) a common law negligence claim against Channel Distribution; (VII) a Carmack Amendment/federal common law claim against Hanjin; and (VIII) a Carmack Amendment claim against O’Hare Services.
Prior to trial, Indemnity voluntarily dismissed its claim against Fritz. At the close of Indemnity’s case, O’Hare Services and Channel Distribution made an oral motion for judgment as a matter of law. The court granted that motion from the bench for the reasons stated in open court. Thus, what remains are Indemnity’s claims against Hanjin under COGSA, the Car-mack Amendment, and federal common law.
Indemnity and Hanjin have each submitted proposed findings of fact and conclusions of law. Indemnity takes the position that COGSA does not apply because COG-SA by its terms does not govern losses that occur during inland transportation. Indemnity asserts that Hanjin is liable under the Carmack Amendment and federal common law. Hanjin takes the position that COGSA applies to the inland transit *931 of the cargo because of a “clause paramount” in the waybill and bill of lading. According to Hanjin, technical defenses under COGSA relieve it from liability.
II. CONCLUSIONS OF LAW
This case is simple on its facts, but presents legal questions that are quite complex. A preface is necessary on the state of the transportation industry and its governing laws. In recent years, the transportation industry has undergone a fundamental transformation due to the proliferation of shipping containers. Shipping containers are structural boxes that adapt easily to multiple modes of transportation, such as ocean vessel, rail, and motor carriage. Persons using containers enjoy the economy that comes from having cargo loaded into a container at its origin, and then remaining (hopefully) undisturbed in the container until arrival at destination. With the use pf a container, there is no need to re-stow cargo from ship to train to truck. Instead, the cargo is loaded once into the container at its origin and then unloaded once from the container at its destination, and the interim transportation is much more efficient than earlier transportation methods. The industry term for such transportation is “multi-modal” or “intermodal.”
See e.g. Tokio Marine and Fire Ins. Co., Ltd. v. Amato Motors, Inc.,
No. 90 C 4823,
To a certain extent, the law has not kept pace with the industry. Prior to the advent of containers, international cargo was handled more or less piecemeal by the ocean carrier and inland carriers. It was not unusual for a ■ shipper to enter into separate contracts with each, of the carriers, and the law developed to reflect that type of segmented transit. ■ For example, COGSA governs the'rights and liabilities of the parties while the goods are aboard a ship. 46 U.S.C.App. §. 1301(e). The Har-ter Act is another maritime statute that dovetails with COGSA and governs,
inter alia,
a certain portion of carriage after discharge from an ocean vessel.
See generally Mannesman Demag Corp. v. M/V CONCERT EXPRESS, 225
F.3d 587, 591-95 (5th Cir.2000). The Carmack Amendment governs surface transportation such as rail and motor carriage, as well as domestic water carriage. 49 U.S.C. § 13501 et seq.;
Capitol Converting Equip., Inc. v. LEP Transport, Inc.,
Increased use of containers has led to a corresponding increase in the use of “through bills of lading.” A through bill of lading is a contract of carriage that governs the entire transport of cargo from its origin to destination.
See Capitol Converting Equip., Inc.,
A. Jurisdiction:
Indemnity asserts that the court has jurisdiction under: (1) 28 U.S.C. § 1333, the court’s admiralty and maritime jurisdiction; (2) 28 U.S.C. § 1337, which governs certain claims arising under federal statutes regulating interstate commerce; and (3) 28 U.S.C. § 1367, the court’s supplemental jurisdiction. The parties do not attempt to invoke the court’s diversity jurisdiction, and there is nothing in the record to demonstrate that the parties are of diverse citizenship.
*932 1. Admiralty Jurisdiction:
As will be discussed in greater detail below, this is a contract case, with the contract being the through bill of lading. Federal admiralty jurisdiction encompasses contracts that “ ‘have reference to maritime service or maritime transactions.’ ”
Continental Cas. Co. v. Anderson Excavating & Wrecking,
Generally speaking, contracts of carriage that have elements of ocean and land carriage are “mixed contracts,” and do not fall under the court’s admiralty jurisdiction.
Hartford Fire,
First, the loss arose during inland carriage. Even if the contract were sever-able into sea and land based segments, the loss occurred during inland transit. Thus, the loss did not arise from the breach of a maritime obligation, and the first exception does not apply.
See Hartford Fire,
Second, the inland carriage was substantial.
See id.
at 555-56; 1 Sorkin,
Goods in Transit,
§ 3.15[4] (2002). When the inland carriage is substantial, that transportation is not incidental to the maritime portion of the contract, and the second exception will not apply.
See Hartford Fire,
2. Federal Question and Supplemental Jurisdiction:
The standards for invoking federal question jurisdiction, such as would apply under § 1337, are not onerous.
See Turner/Ozanne v. Hyman/Power,
The same analysis applies to supplemental jurisdiction under § 1367. See Wright, Miller & Cooper, supra, §§ 3564, 3567.1. 28 U.S.C. § 1367(a) permits the court to hear claims lacking an independent jurisdictional basis, so long as there is a claim within the court’s original jurisdiction. When § 1367(a) original jurisdiction is based on a federal question, the same rule of substantiality applies. See Wright, Miller & Cooper, supra, § 3567.1. The court has jurisdiction over the supplemental claims if the pleadings present a substantial federal claim. Id.
In this case, the allegations of the first amended complaint come within the court’s subject matter jurisdiction. The allegations fall under COGSA and the Car-mack Amendment, so the court could not have dismissed for lack of jurisdiction from the face of the pleadings. But, as will become evident in the following discussion, there is no factual basis for the federal claims against Hanjin.
B. Merits:
The parties dispute the law that is to be applied to Hanjin. Indemnity asserts that Hanjin is liable under either the Carmack Amendment or federal common law. Han-jin claims that its liability is governed by COGSA. After careful review, the court finds that the parties have missed the mark.
1. Carmack Amendment:
Indemnity argues that Hanjin is liable under the Carmack Amendment, but that contention is foreclosed by Seventh Circuit case law. The Seventh Circuit has explicitly ruled that the Carmack Amendment is inapplicable to a contract of carriage that originates outside of the United States when the cargo is carried under a foreign through bill of lading.
Capitol Converting Equip., Inc.,
In a thorough and persuasive discussion of the issues, the Supreme Court of Florida took the analysis one step further and held that an ocean carrier issuing a through bill of lading would not be liable under the Carmack Amendment even if a separate domestic bill of lading was issued for inland carriage.
King Ocean Central America,
Here, the transit documents demonstrate that Hanjin issued a foreign through bill of lading. The question of whether a bill of lading is a through bill of lading is largely a question of fact.
Capitol Converting Equip., Inc.,
2. Federal Common Law:
Indemnity presents an alternative argument that its claims against Hanjin are governed by federal common law. If that is correct, then the court would have jurisdiction under 28 U.S.C. § 1331.
See e.g. Frank v. Bear Stearns & Co.,
After
Erie R.R. v. Tompkins,
Relying on Supreme Court precedent, the Seventh Circuit permits federal common law claims. for relief in limited circumstances: (1) where Congress has granted federal courts the authority to develop substantive law; or (2) where a federal rule of decision is necessary to protect uniquely federal interests.
See Northrop Corp.,
A unique federal interest is present “ ‘where there is an overriding federal interest in the need for a uniform rule of decisions or where the controversy touches basic interests of federalism....’”
Northrop Corp.,
Standing alone, however, the existence of a unique federal interest is insufficient for finding a federal common law claim for relief.
See Northrop Corp.,
There is no uniquely federal interest in this case. The dispute is between private parties concerning their contract of carriage. The dispute does not concern the rights and liabilities of the United States, one of the individual States, or United States foreign affairs. Instead, the dispute, is purely private. Generally speaking, such private disputes do not come within the scope of federal common law.
See Turner/Ozanne,
Nevertheless, the court continues with the analysis because of the different outcomes reached by other courts in interstate commerce cases. The displacement of state law by federal law is an issue that is not easily answered. Undoubtedly, Congress has expressed its intent to have uniform federal laws governing the interstate transportation of goods, to the exclusion of inconsistent state law.
See Hughes v. United Van Lines,
Some cases easily find that federal common law will fill in “statutory gaps” in carriage of goods cases.
See e.g. Nippon Fire & Marine v. Skyway Freight Systems,
Other cases have not found federal common law claims, or have done so only after thorough review of the applicable federal statutory and regulatory schemes, together with careful limitations on judicial lawmaking.
See e.g. Sam L. Majors Jewelers,
*937
Still other cases have not ventured into federal common law. Instead the courts analyzed the issues in terms of express jurisdictional grants, such as diversity of citizenship, federal statutes, or admiralty.
See e.g. Hartford Fire,
As Indemnity implies, the Carmack Amendment is the closest federal statute to covering Indemnity’s loss, as it governs inland ground transit. The Carmack Amendment has two primary goals, the first of which is “ ‘to relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.’ ”
Pizzo v. Bekin Van Lines,
Neither goal of the Carmack Amendment requires the court to create a federal common law remedy against an ocean carrier for cargo damage occurring during inland carriage under a through bill of lading. First, a shipper’s remedies will not be diminished. The through bill of lading/contract creates the claim against the ocean carrier. The shipper will be able to proceed against the party it contracted with, and will not be forced to go through the laborious process of discovering the carrier that is actually at fault for the loss.
Compare e.g. Pizzo,,
Second, uniformity may be an issue whether the claim is decided under state or federal common law. The court recognizes that applying state law to interstate carriage cases may lead to some non-uniformity. But, creating a federal common law remedy will' not necessarily ensure uniformity. Writing for the Illinois Supreme Court, Justice Stephen Douglass eloquently wrote about the development of common law:
“The common law is a beautiful system; containing the wisdom and experience of ages. Like the people it ruled and projected, it was simple and crude in its infancy, and became enlarged, improved, and polished, as the nation advanced in civilization, virtue, and intelligence. Adapting itself to the condition and circumstances of the people, and relying upon them for its administration, it necessarily improved as the condition of the people was elevated.”
Penny v. Little,
The better course of action is to resist the invitation to create a federal common law remedy against an ocean carrier for cargo damage that occurs during substantial inland transit. An important factor is that the court must recognize the claim for relief in the absence of action from Congress. As the Sixth Circuit stated, that proposition calls for considerably more judicial restraint than when a court is faced with deciding an issue that is generally within statutory coverage but not directly addressed by Congress.
See Musson Theatrical, Inc.,
Congress has the constitutional authority to legislate an appropriate scheme to address the liability of an ocean carrier under foreign through bills of lading.
See e.g. Cleveland,
In the final analysis, the effect of state law on this case is more academic than practical. The law concerning the duties of originating carriers under through bills of lading is well established.
See King Ocean Central America,
3. COGSA:
COGSA by its terms is in effect only during the period of time that goods are aboard a ship, which is to say after loading and prior to discharge. 46 U.S.C.App. § 1301(e);
see Hartford Fire,
*939
Nevertheless, Hanjin asserts that COGSA governs the case because a clause paramount in the bill of lading incorporates the substantive provisions of COGSA as the parties’ choice of law. Hanjin makes a related argument that COGSA is the sole basis for jurisdiction over Hanjin. Hanjin’s jurisdictional, argument is incorrect for two reasons. First, the parties’ contractual choice of law, which is what the incorporation of COGSA is,
see Hartford,
Second, the rule of substantiality governs the court’s jurisdictional analysis. If the well pled complaint invokes the court’s jurisdiction, then jurisdiction remains even if the federal claim is meritless.
Turner/Ozanne,
Hanjin’s clause paramount/contractual extension of COGSA is not unusual in the transportation industry.
See e.g. Hartford Fire,
4. State Law:
The parties’ briefs do not contemplate the application of state' law. But, as explained above, there is no federal law that governs by its own terms. The case at its core is a breach of contract case, and its resolution depends on an application of state law contract principles.
See Capitol Converting, Equip., Inc.,
Ordinarily, a federal court applies the choice of law rules of its forum state.
See Gramercy Mills, Inc. v. Wolens,
Contracts are to be interpreted as a whole.
See e.g. LaSalle Nat’l Trust,
Hanjin relies on technical aspects of COGSA to argue that its delivery to Channel Distribution/O’Hare Services was effective delivery under COGSA. According to Hanjin, delivery occurred when the container arrived at the Channel Distribution/O’Hare Services facility for the Customs examination. Because the theft occurred after that time, Hanjin claims that it is not liable. The evidence does not support Hanjin’s position. There is no evidence that Lowe’s relieved Hanjin of the obligation to make final delivery to Lowe’s facility. Similarly, there is no evidence that Lowe’s agreed that the intermediate stop for the Customs examination extinguished Hanjin’s contractual liability to ensure that the cargo was delivered to North Vernon, Indiana. The court finds that Hanjin remained obligated under the terms of the waybill and bill of lading to deliver the cargo to North Vernon, Indiana after the Customs examination was completed.
*941
Whatever merit Hanjin’s argument may have under an
ex proprio vigore
application of COGSA, it is inapposite where COGSA applies only through the parties’ contractual agreement.
See King Ocean Central America, S.A.,
III. CONCLUSION
For the foregoing reasons, judgment is entered in favor of Plaintiff against Hanjin Shipping Company in the amount of $236,032.71.
IT IS SO ORDERED.
Notes
. The transit documents specify the consignee as LGS Sourcing, Inc., a subsidiary of Lowe's Company. For simplicity, the court refers to both LGS and Lowe’s as "Lowe's.”
. For further information concerning Customs Examination Stations, see generally 19 C.F.R. § 118.1 el seq. -
. Waybills and bills of lading are documents customarily used in the transportation industry for a variety of purposes, such as the memorializing the terms and conditions of the contract of carriage, and documents of title for the goods carried.
.
Texas Industries
also noted that admiralty cases may present a unique federal interest.
. Several of the cases cited herein address federal common law in the context of air cargo.
See Nippon Fire & Marine,