United States Court of Appeals,
Fifth Circuit.
No. 94-20314
Summary Calendar.
TUBACEX, INC., Plaintiff-Appellant,
v.
M/V RISAN, her engines, boilers, tackles, etc., in rem and
against Jugoslavenska Oceanska Plovidba, (Jugooceanija), and Forest
Lines, Inc., in personam, Defendants-Appellees.
Feb. 23, 1995.
Appeal from the United States District Court for the Southern
District of Texas.
Before JOHNSON, DUHÉ and BENAVIDES, Circuit Judges.
JOHNSON, Circuit Judge:
Shipper brought action under COGSA1 to establish carrier's
liability for damage to cargo. The district court granted summary
judgment in favor of carrier, however, finding that the carrier had
successfully made out a defense under 46 U.S.C. § 1304(2)(q) by
showing that the damage was caused by the actions of the shipper's
agents and without the fault or negligence of the carrier. Finding
no error, we AFFIRM.
I. FACTS AND PROCEDURAL HISTORY
In December of 1990, Tubacex, Inc., contracted with Forest
Lines, Inc. (hereinafter "FLI"), to ship a load of seamless rolled
steel tubes from Bilbao, Spain, to New Orleans, Louisiana, and
1
Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300, et seq.
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Houston, Texas. This cargo was loaded aboard an FLI lash barge2
and FLI issued to Tubacex bills of lading which were "clean."3
This barge was to be loaded aboard the next available FLI mother
vessel to call at Bilbao, Spain.
Tubacex believed that such a vessel would be available in
January of 1991. However, in January, FLI informed Tubacex that
the next mother vessel that would call at Bilbao would be in April
of 1991. Facing other deadlines for the cargo, Tubacex decided to
make other arrangements. Hence, Tubacex demanded that the cargo be
unloaded so that it could be shipped by other means.
On February 7, 1991, a stevedore chosen and hired by Tubacex
unloaded the cargo from the FLI barge. This unloading procedure
took place during inclement weather and the cargo was stored in the
open air, while wet, for several days until it was loaded aboard
the vessel M/V RISAN. The bills of lading issued by Jugoslavenska
Oceanska Plovidba (Jugooceanija) at that time noted some damage to
the cargo.4
Subsequently, Tubacex brought the instant action against FLI5
2
A lash barge is a type of barge that may be loaded on a
larger ship called a mother vessel. The mother vessel collects
the loaded barges and unloads them at various ports of
destination. The loaded barges may then be moved to waters that
the mother vessel cannot reach or unloaded at that port without
the need for special equipment.
3
This signifies that no damage to the cargo was noted at the
time of the issuance of the bills of lading.
4
The damage noted was that some of the pipes were bent and
that the pipes were partly wet and had some surface rust.
5
Tubacex also brought suit against the M/V RISAN, in rem,
and against Jugooceanija, in personam. Jugooceanija answered but
2
in redress of the damage caused to the cargo. FLI filed a motion
for summary judgment requesting that the district court find, in
pertinent part, that:
1. The damage was caused by Tubacex's agents and not by FLI. Thus,
FLI is exempt from liability under 46 U.S.C. § 1304(2)(i);
and
2. There is no evidence to show that FLI in any way caused the
damage. Therefore, FLI is exempt from liability under 46
U.S.C. § 1304(2)(q).
Initially, the district court denied this motion. However, FLI
filed a motion for reconsideration of its summary judgment which
the district court granted finding that FLI had successfully made
out a defense under 46 U.S.C. § 1304(2)(q). The district court
entered final judgment on March 25, 1994, and Tubacex has timely
appealed.
II. DISCUSSION
A. Standard of Review
In determining whether a district court properly granted
summary judgment, this Court must review the record under the same
standards that guided the district court. Walker v. Sears, Roebuck
& Co., 853 F.2d 355, 358 (5th Cir.1988). Under those standards, we
will only affirm a summary judgment if we conclude that "there is
no genuine issue of as to any material fact and that the moving
party is entitled to a judgment as a matter of law." Fed.R.Civ.P.
56(c).
The party that moves for summary judgment bears the initial
was eventually dismissed from the suit and jurisdiction was never
obtained over the M/V RISAN.
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burden of identifying those portions of the pleadings and discovery
on file, together with any affidavits, which it believes
demonstrates the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553,
91 L.Ed.2d 265 (1986). If the moving party fails to meet this
burden, the motion must be denied, regardless of the nonmovant's
response. If the movant does meet this burden, however, the
nonmovant must go beyond the pleadings and designate specific facts
showing that there is a genuine issue for trial. Id.; Anderson v.
Liberty Lobby, Inc. 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91
L.Ed.2d 202 (1986). If the nonmovant fails to meet this burden,
then summary judgment is appropriate.
B. COGSA Generally
Both parties agree that this dispute is governed by COGSA,
which regulates the rights and liabilities arising out of the
carrier's issuance of a bill of lading with respect to cargo damage
or loss. Quaker Oats Co. v. M/V Torvanger, 734 F.2d 238, 240 (5th
Cir.1984), cert. denied, 469 U.S. 1189, 105 S.Ct. 959, 83 L.Ed.2d
965 (1985). To enforce their respective rights under COGSA, "
"litigants must engage in the ping-pong game of burden-shifting
mandated' by sections 1303 and 1304 of the Act." Sun Co., Inc. v.
S.S. Overseas Arctic, 27 F.3d 1104, 1109 (5th Cir.1994) (quoting
Nitram, Inc. v. Cretan Life, 599 F.2d 1359, 1373 (5th Cir.1979)).
Initially, a shipper plaintiff establishes a prima facia case by
proving that the cargo for which the bill of lading was issued was
loaded in an undamaged condition, and discharged in a damaged
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condition. Socony Mobil Oil Company v. Texas Coastal and
International, Inc., 559 F.2d 1008, 1010 (5th Cir.1977); United
States v. Central Gulf Lines, 974 F.2d 621, 628 (5th Cir.1992),
cert. denied, --- U.S. ----, 113 S.Ct. 1274, 122 L.Ed.2d 669
(1993). For the purpose of determining the condition of the goods
at the time of receipt by the carrier, the bill of lading serves as
prima facia evidence that the goods were loaded in the condition
therein described. 46 U.S.C. § 1304(4); Blasser Bros., Inc. v.
Northern Pan-American Line, 628 F.2d 376, 381 (5th Cir.1980).
Once the shipper has presented a prima facia case, the burden
shifts to the carrier to prove that it either exercised due
diligence to prevent the damage or that the loss was caused by one
of the exceptions set out in section 1304(2) of COGSA. Sun
Company, 27 F.3d at 1109; Tenneco Resins Inc. v. Davy
International, AG, 881 F.2d 211, 213 (5th Cir.1989). If the
carrier rebuts the shipper's prima facia case with proof of an
excepted cause listed in section 1304(2)(a)-(p), the burden returns
to the shipper to establish that the carrier's negligence
contributed to the damage or loss. Quaker Oats, 734 F.2d at 238.
Then, if the shipper is able to establish that the carrier's
negligence was a contributory cause of the damage, the burden
switches back to the carrier to segregate the portion of the damage
due to the excepted cause from that portion resulting from the
carrier's own negligence. Nitram, 599 F.2d at 1373.
In addition to the excepted causes listed in section
1304(2)(a)-(p), a carrier may rebut a shipper's prima facia case by
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relying on the catchall exception in section 1304(2)(q). This
section provides that the carrier may exonerate itself from loss
from any cause other than those listed in section 1304(2)(a)-(p) by
proving that the loss or damage occurred "without the actual fault
and privity of the carrier...." 46 U.S.C. § 1304(2)(q). The
burden on the carrier under this section, however, is more than
merely a burden of going forward with evidence, but rather it is a
burden of persuasion with the attendant risk of non-persuasion.
Quaker Oats, 734 F.2d at 241. Hence, under this section, the
burden of proof does not switch back to the shipper, but rather
"judgment must hinge upon the adequacy of the carrier's proof that
he was free from any fault whatsoever contributing to the damage of
the goods entrusted to his carriage." Id.
C. Availability of Defenses Under Section 1304(2)(i) and (q)
In the case at bar, the district court determined that Tubacex
successfully made out a prima facia case by providing the clean
bills of lading issued by FLI and showing damage to the goods. In
response, FLI raised defenses under section 1304(2)(i) and (q)6
arguing that it did not cause the damage to the cargo, but rather
6
Section 1304(2) provides that neither the carrier nor the
ship shall be responsible for damage to the cargo arising or
resulting from—
(i) Act or omission of the shipper or owner of the
goods, his agent or representative; or
....
(q) Any other cause arising without the actual fault
and privity of the carrier and without the fault or
neglect of the agents or servants of the carrier ...
6
the damage was caused during the unloading by the actions of the
stevedore that was hired by, and under the control of, Tubacex.
Tubacex contends, however, that these section 1304(2) defenses
are unavailable to FLI because the damage to the goods herein arose
out of the unloading of the pipe. In making this argument, Tubacex
notes that section 1303(2) states that "[t]he carrier shall
properly and carefully load, handle, stow, carry, keep, care for,
and discharge the goods carried." Further, Tubacex contends that
these duties are nondelegable because the statute goes on to
provide that "[a]ny clause, covenant, or agreement in a contract of
carriage" which seeks to relieve the carrier for liability for the
duties provided in this section will not be valid. 46 U.S.C. §
1303(8) (emphasis added). Relying on these two sections, Tubacex
argues that the nondelegability of the carrier's loading and
unloading duties overrides any defense that might apply under
section 1304(2) when the damage is caused during the performance of
those tasks.
We disagree with Tubacex's melding of these provisions.
COGSA was designed to void overreaching clauses inserted by
carriers in bills of lading unreasonably limiting the carrier's
liability. Siderius, Inc. v. M/V Ida Prima, 613 F.Supp. 916, 920
(S.D.N.Y.1985); see also Encyclopaedia Britannica v. S.S. Hong
Kong Producer, 422 F.2d 7, 11-12 (2d Cir.1969), cert. denied, 397
U.S. 964, 90 S.Ct. 998, 25 L.Ed.2d 255 (1970); Calmaquip
Engineering West Hemisphere Corp. v. West Coast Carriers, Ltd., 650
F.2d 633, 639 (5th Cir.1981). Section 1303(8) embodies this
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purpose by invalidating "any clause, covenant or agreement in a
contract of carriage" which seeks to relieve the carrier of
liability for the duties assigned to the carrier under the statute.
However, in this case, there is no overreaching contract provision
in the bill of lading that the carrier is resorting to in order to
exonerate itself.
Instead, the carrier is relying on two defenses, section
1304(2)(i) and (q), specifically extended to carriers under the Act
itself. We see no conflict in the statute with applying these two
defenses even to the nondelegable duties of the carrier. Other
federal courts have done so without comment. See Aunt Mid, Inc. v.
Fjell-Oranje Lines, 458 F.2d 712 (7th Cir.), cert. denied, 409 U.S.
877, 93 S.Ct. 130, 34 L.Ed.2d 131 (1972) (upholding carrier's
section 1304(2)(i) defense in a case involving the proper stowage
of perishable cargo); Jefferson Chemical Co. v. M/T GRENA, 413
F.2d 864 (5th Cir.1969) (affirming trial court's finding that
shipper assumed risk by not requiring shipment of propylene glycol
in lined or stainless steel tanks); Puerto Rican-American Ins. Co.
v. Sea-Land Service, Inc., 653 F.Supp. 396 (D.P.R.1986) (upholding
carrier's section 1304(2)(i) defense where the shipper stowed the
cargo to a height exceeding the underlying boxes' capacity).
Most instructive, though, is the Second Circuit's opinion in
Associated Metals & Minerals Corp. v. M/V ARKTIS SKY, 978 F.2d 47
(2d Cir.1992). In that case, the cargo was damaged when it shifted
during the voyage. Even though this damage arose from the handling
and stowage of the cargo, a nondelegable duty of the carrier under
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section 1303(2), the carrier sought to exonerate itself on the
basis of a FIOS clause7 in the bill of lading. The district court
ruled in favor of the carrier, but the Second Circuit reversed
holding that contract terms shifting liability for the duties of
the carrier set out in section 1303(2) were barred by the
nondelegable provisions of section 1303(8). Id. at 51. Even so,
our sister circuit went on to explain that the carrier could escape
liability under the defense provided in section 1304(2)(i) "by
carrying its burden of proof that the damage did not occur because
of its own acts." Id. at 52.
Proving that the loss herein did not occur because of its own
acts is exactly what FLI has attempted to do. Like the M/V ARKTIS
SKY court, we find that while section 1303(8) would bar a provision
in the bill of lading shifting liability for the duties set out in
section 1303(2), it does not bar a defense under section 1304(2)(i)
or (q) that attempts to prove that the damage did not occur through
any act of the carrier or its agents.
D. Application of Section 1304(2)(q)
The district court found that FLI had met its burden under
section 1304(2)(q) to show that no act or omission of FLI had
caused the damage to the pipes, but rather the damage was caused by
the acts of Tubacex or its agents. To that end, FLI has presented
summary judgment evidence in the form of affidavits to establish
that the damage to the cargo was caused during the offloading.
These affidavits relate that the unloading took place during
7
"Free in and out, stowed" clause.
9
inclement weather and that, during the unloading, some of the
bundles of pipe unloosened causing bending or damage to the pipe.
Also, the pipe was stored in the open air, while wet, for several
days before it was loaded onto the vessel that would transport it.
Finally, FLI's affidavits established that the stevedore that
accomplished the unloading was hired by, and under the complete
control of, Tubacex.8 In response, Tubacex presented no evidence
that FLI caused the damage.
In determining whether it was appropriate to grant summary
judgment on these facts, it is again useful to consider M/V ARKTIS
SKY, 978 F.2d 47. In that case, the carrier attempted to meet its
burden under section 1304(2)(i) by showing the loading and stowing
was done by the shipper's agent. Id. at 51. However, the
appellate court noted that there was evidence that it was the
custom for the master and his chief mate to exercise total control
over all stowage operations and that the chief mate had personally
signed the lashing statement with the notation that the lashing and
stowing had been performed under his instructions and to his
8
In Agrico Chemical Co. v. S/S ATLANTIC FOREST, 459 F.Supp.
638 (E.D.La.1978), aff'd 620 F.2d 487 (5th Cir.1980), a carrier
attempted to make out a § 1304(2)(q) defense by arguing that the
towing company, which the carrier had hired, was an independent
contractor. Accordingly, the carrier argued that the towing
company's actions, which caused the damage, were not its own
actions or the actions of one of its agents. The trial court
rejected this argument, though, finding that the carrier could
not insulate itself from liability for its nondelegable duties
under § 1303(2) by use of independent contractors. Id. at 489.
That case is distinguishable from the case at bar, though. In
the instant case, Tubacex, the shipper, and not FLI, the carrier,
hired the independent contractor. FLI was not trying to delegate
away its nondelegable duties. Instead, Tubacex was reasserting
its control over the cargo.
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satisfaction. Id. That was sufficient, the court found, to raise
a genuine issue of material fact as to whether any action of the
carrier contributed to the loss thus defeating summary judgment.
Id. at 52.
In contrast to the M/V ARKTIS SKY, there is no evidence to
conflict with FLI's affidavits that the damage was caused by the
actions of the stevedores hired by Tubacex. Therefore, Tubacex has
failed to designate specific facts demonstrating the existence of
a genuine issue of material fact on this issue. Accordingly, the
district court was correct in granting summary judgment. Celotex,
477 U.S. at 323, 106 S.Ct. at 2553.
III.
CONCLUSION
For the reasons stated above, the judgment of the district
court is AFFIRMED.
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