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Global Oil Tools, Inc. v. Expeditors International of Washington, Inc.

United States District Court, E.D. Louisiana

April 2, 2018

GLOBAL OIL TOOLS, INC.
v.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. ET AL.

         SECTION “R” (1)

          ORDER AND REASONS

          SARAH S. VANCE UNITED STATES DISTRICT JUDGE

         Before the Court are defendant Hapag-Lloyd (America), LLC's and Ports America Louisiana, L.L.C.'s motions for summary judgment.[1] For the following reasons, the Court grants the motions. The Himalaya clause in the relevant bill of lading forecloses the liability of Hapag-Lloyd and Ports America to plaintiff. Ports America is further entitled summary judgment on two crossclaims against it because it was not negligent.

         I. BACKGROUND

         Plaintiff sells tools for oil and gas exploration.[2] In early 2016, plaintiff was in negotiations to sell a large number of tools, allegedly worth $2.4 million, as well as intellectual property, to an overseas buyer.[3] In anticipation of the sale, plaintiff packed these tools and intellectual property into two shipping containers, and contracted with defendant Expeditors International of Washington, Inc. (Expeditors) to arrange for the shipment of these containers to Romania.[4] Expeditors arranged for the containers to sail from New Orleans on March 12, 2016, aboard a ship operated by Hapag-Lloyd.[5] The containers arrived in New Orleans from Houma, Louisiana on March 8, [6] but plaintiff (through Expeditors) requested that Hapag-Lloyd delay the trans-Atlantic shipment for two weeks.[7]

         The containers were then scheduled to sail in late March aboard the M/V BAVARIA. On March 22, plaintiff instructed Expeditors to delay the shipment again.[8] Expeditors relayed this instruction to Hapag-Lloyd, but Hapag-Lloyd failed to relay it to defendant Ports America, the stevedoring company responsible for loading containers onto the M/V BAVARIA.[9] The ship, with plaintiff's containers on board, sailed on March 28.[10]

         After the ship sailed, plaintiff acquiesced in the discharge of its containers at Constanta, Romania.[11] The containers were transshipped in Cagliari, Italy, and arrived at Constanta on April 23, 2016.[12] A bill of lading, dated March 28, was approved by plaintiff on May 27.[13] The bill of lading identifies Romarftrans Group Srl. (RGS) as plaintiff's intermediate consignee.[14] RGS is Andrea Merzario, S.A.'s agent in Romania.[15] Acting through RGS, and pursuant to plaintiff's instructions, Andrea Merzario moved the containers to a bonded storage facility in June 2016.[16] The sale of plaintiff's tools and intellectual property was never consummated, and the containers remain in Constanta. Some tools were purportedly damaged during transit.[17]

         Plaintiff sued Expeditors and Zurich American Insurance Company, Expeditors' liability insurer, on November 15, 2016, for damages and declaratory relief.[18] Plaintiff added Hapag-Lloyd, Ports America, and Andrea Merzario as defendants on March 13, 2017.[19] Several defendants have filed crossclaims and counterclaims.[20] Hapag-Lloyd now moves for summary judgment on plaintiff's claims, [21] and Ports America moves for summary judgment on plaintiff's claims and Expeditors' and Andrea Merzario's crossclaims.[22] Plaintiff and Expeditors have filed oppositions, [23] but Andrea Merzario has not.

         II. LEGAL STANDARD

         Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 1075. A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by either countering with evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

         If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).

         III. DISCUSSION

         A. The Bill of Lading Bars Plaintiff's Claims Against Hapag-Lloyd and Ports America

         Hapag-Lloyd and Ports America seek summary judgment on plaintiff's claims against them based on the Himalaya clause in the bill of lading. A bill of lading is a contract between a shipper and a carrier for transportation of goods. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 18-19 (2004) (“A bill of lading records that a carrier has received goods from the party that wishes to ship them, states the terms of carriage, and serves as evidence of the contract for carriage.”). The contract “enunciates the responsibility of the carrier to deliver enumerated goods to a specified location.”[24] Interocean S.S. Corp. v. New Orleans Cold Storage & Warehouse Co., 865 F.2d 699, 703 (5th Cir. 1989). As contracts of adhesion, bills of lading are “strictly construed against the carrier.” Id. (quoting Allied Chem. v. Companhia de Navegacao, 775 F.2d 476, 482 (2d Cir. 1985)). But “contracts for carriage of goods by sea must be construed like any other contracts: by their terms and consistent with the intent of the parties.” Kirby, 543 U.S. at 397.

         Here, Expeditors issued the bill of lading for plaintiff's containers, although Expeditors did not actually own or operate the ship that transported the containers. In this transaction, Expeditors acted as a non-vessel operating common carrier-a type of intermediary between the shipper (plaintiff) and the vessel-operating common carrier (Hapag-Lloyd). See GIC Servs., L.L.C. v. Freightplus USA, Inc., 866 F.3d 649, 657 (5th Cir. 2017). With respect to plaintiff, Expeditors played the role of carrier; with respect to Hapag-Lloyd, however, Expeditors played the role of shipper. See 1 Admiralty and Maritime Law § 10-7.

         In its capacity as carrier, Expeditors owed a number of statutory duties to plaintiff under the Carriage of Goods by Sea Act (COGSA). Most importantly, COGSA requires the carrier to “properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.” 46 U.S.C. § 30701 note sec. 3(2). In other words, and subject to several exceptions, Expeditors was “liable to [plaintiff] if ‘anything happen[ed] to the cargo during the voyage.'” GIC Servs., 866 F.3d at 657 (quoting Prima U.S. Inc. v. Panalpina, Inc., 223 F.3d 126, 129 (2d Cir. 2000)). The bill of lading issued by Expeditors incorporates the provisions of COGSA.[25] See 46 U.S.C. § 30701 note sec. 13.

         The bill of lading also includes a Himalaya clause, which reads:

Merchant undertakes that no claim or allegation shall be made against any Person or Vessel whatsoever other than Carrier, including the Carrier's servants or agents, any independent contractors (at any time) and their servants or agents, Participating Carriers, and all others by whom the whole or any part of the Carriage, whether directly or indirectly, is procured, performed, or undertaken, which imposes or attempts to impose upon any such Person or Vessel any liability whatsoever in connection with the Good or the Carriage . . . .[26]

         In other words, plaintiff covenanted not to sue any party involved in the transportation of its shipping containers, except Expeditors. Thus, under the plain language of the bill of lading, plaintiff relinquished any right to sue Hapag-Lloyd or Ports America.

         Plaintiff offers several arguments to resist the application of the Himalaya clause. First, plaintiff argues that the Himalaya clause does not apply because the bill of lading was not issued until after the erroneous shipment.[27] Relatedly, plaintiff argues that the bill of lading fails for lack of consideration because it was executed after shipment.[28] But courts routinely enforce bills of lading issued after goods are damaged during carriage. See, e.g., Uncle Ben's Int'l Div. of Uncle Ben's, Inc. v. Hapag-Lloyd Aktiengesellschaft, 855 F.2d 215, 217 (5th Cir. 1988) (rejecting argument that because “the bills of lading were issued after the containerization, they cannot apply to the claims in question”); Luckenbach S.S. Co. v. Am. Mills Co., 24 F.2d 704, 705 (5th Cir. 1928).

         In Luckenbach, for example, a fire destroyed a number of cots during loading. The bill of lading, which was “in accordance with its standard form, ” exempted the carrier from liability for damages because of fire. Luckenbach, 24 F.2d at 705. The shipper argued that this exemption did not apply because the bill of lading was not issued until after the fire. But the Fifth Circuit enforced the bill of lading, holding that the bill “evidenced the contract the parties entered into at the time the goods were delivered and accepted.” Id. At that time, “an implied understanding arose from common business experience that the carrier would issue such bill of lading as it was its custom to issue to shippers in the usual course of its business.” Id. Here, as in Luckenbach, the standard bill of lading ...


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