United States Court of Appeals
For the First Circuit
No. 99-1794
TAG/ICIB SERVICES, INC., AS AGENT OF
CROWLEY AMERICAN TRANSPORT, INC.,
Plaintiff, Appellant,
v.
PAN AMERICAN GRAIN CO., INC.,
PAN AMERICAN GRAIN MFG., CO.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Selya, Circuit Judge,
Coffin and Campbell, Senior Circuit Judges.
Jorge F. Blasini with whom William A. Graffam, Jimenez,
Graffam & Lausell, Enrique Peral and Muñoz Boneta Gonzalez
Arbona Benitez & Peral were on brief for appellant.
Mario Pabón-Rosario with whom Antonio Moreda Toledo and
Moreda & Moreda were on brief for appellees.
June 19, 2000
CAMPBELL, Senior Circuit Judge. Plaintiff-appellant
TAG/ICB Services, Inc., as agent of Crowley American Transport,
Inc. (“TAG/ICB”), appeals from the district court’s dismissal of
its demurrage complaint on statute of limitations grounds. We
reverse, holding that TAG/ICB’s complaint is not time-barred,
and remand for further proceedings not inconsistent with this
opinion.
I.
The following facts are undisputed: TAG/ICB is a
common water carrier in domestic trade between ports in the
United States and Puerto Rico. On multiple occasions,
defendant-appellees Pan American Grain Company, Inc. and Pan
American Grain Manufacturing Company, Inc. (“Pan American”) used
TAG/ICB’s services and facilities for the transportation of
cargo between United States and Puerto Rican ports. The
transportation was subject to federally regulated tariffs.
The tariffs provided for a period of time during which
Pan-American was allowed to load or unload containers at places
of origin and destination free of charge (“free time”). After
the expiration of the free time, Pan-American was required to
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pay a demurrage charge for each additional day it retained a
container.1 On several occasions between July 1, 1994, and March
3, 1997, Pan-American retained containers beyond the free-time
period. TAG/ICB sent demurrage invoices to Pan-American
detailing the occasions when demurrage occurred, the number of
the bill of lading, the trailer number, the starting and ending
dates of the free time and demurrage, and the amount charged.
Pan-American did not pay on these invoices. As of March 14,
1997, there was an outstanding balance of $142,665.00 in
demurrage and $49,932.75 in administrative collection fees.
On May 11, 1998, TAG/ICB filed a complaint against Pan-
American for collection of the demurrage and fees, invoking the
district court's jurisdiction pursuant to 28 U.S.C. §§ 1331,
1333, and 1337 and Fed. R. Civ. P. 9(h). Attached to the
complaint were the invoices setting forth the outstanding
charges, which were dated July 7, 1994, through March 14, 1997.
TAG/ICB sought damages in the amount of $192,597.75.
On or about June 22, 1998, Pan-American filed a motion
to dismiss, asserting that the action was time-barred under the
Puerto Rico Code of Commerce, which provides a six-month
1"Demurrage" is remuneration of a shipowner for the
detention of its vessel beyond the number of days allowed by the
charter-party. See Black's Law Dictionary 432 (6th ed. 1990).
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limitation period. See 10 L.P.R.A. § 1909.2 TAG/ICB opposed the
motion, contending that the doctrine of laches and federal
maritime law instead determined the time to sue. It urged the
court to look to the Interstate Commerce Act, as the most
analogous statute, which contained a three-year statute of
limitations.
On March 30, 1999, the district court allowed Pan-
American’s motion to dismiss. See TAG/ICB Servs., Inc. v. Pan
Am. Grain Co., Inc., No. CIV.A. 98-1497, 1999 WL 305238 (D. P.
R., Mar. 31, 1999). Applying the six-month limitations period
contained in the Puerto Rico Code of Commerce, the court
concluded that TAG/ICB’s claim was time-barred in its entirety,
as the last invoice TAG/ICB issued for collection of demurrage
was dated over a year before it filed its complaint.
On April 21, TAG/ICB moved to vacate judgment. In
addition to reasserting that laches and maritime law applied,
TAG/ICB noted that Congressional changes to maritime law set
forth in the Interstate Commerce Commission Termination Act of
1995, 49 U.S.C. §§ 10101 et seq. (“ICCTA”), created an eighteen-
month statute of limitations that governs this action. The
2This section provides, in relevant part, that "actions
relating to the collection of transportation, freights, expenses
inherent thereto, and the contributions of ordinary averages
shall prescribe six months after the goods which gave rise
thereto were delivered." 10 L.P.R.A. § 1909.
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district court denied TAG/ICB’s motion. TAG/ICB appeals from
both the dismissal order and the denial of its motion to vacate.
II.
This court applies a de novo standard of review to a
district court's allowance of a motion to dismiss for failure to
state a claim. See New England Cleaning Servs., Inc. v.
American Arbitration Ass'n, 199 F.3d 542, 544 (1st Cir. 1999).
We accept as true the well-pleaded factual allegations of the
complaint, draw all reasonable inferences therefrom in the
plaintiff's favor, and determine whether the complaint, so read,
sets forth facts sufficient to justify recovery on any
cognizable theory. See LaChapelle v. Berkshire Life Ins. Co.,
142 F.3d 507, 508 (1st Cir. 1998). Here, the sole issue on
appeal is whether the district court applied the correct time
bar to TAG/ICB’s demurrage claim.
TAG/ICB asserted its claim under the federal courts’
admiralty jurisdiction, 28 U.S.C. § 1333.3 In an admiralty case,
3
In its complaint, TAG/ICB also referenced 28 U.S.C. §
1337(a), which grants federal jurisdiction over a "civil action
. . . arising under any Act of Congress regulating commerce."
Maritime carriers have a private federal cause of action under
§ 1337(a) jurisdiction to recover demurrage charges specified in
tariffs set forth in certain commerce-related statutes, see
Maritime Serv. Corp. v. Sweet Brokerage De Puerto Rico, Inc.,
537 F.2d 560, 562-63 (1st Cir. 1976). However, TAG/ICB did not,
either in the district court or in its appellate brief, argue
the applicability of § 1337(a). Hence, we confine our review to
TAG/ICB’s argument based on general maritime law and the
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maritime law and the equitable doctrine of laches govern the
time to sue. See Butler v. American Trawler Co., Inc., 887 F.2d
20 (1st Cir. 1989); Puerto Rican-American Ins. Co. v. Benjamin
Shipping Co. Ltd., 829 F.2d 281, 283 (1st Cir. 1987). When
applying the doctrine of laches, the court examines whether
plaintiff's delay in bringing suit was unreasonable and whether
defendant was prejudiced by the delay. See Puerto
Rican-American Ins. Co., 829 F.2d at 283.
In the maritime context, a laches analysis utilizes as
a benchmark the limitations period contained in the most
analogous statute. See id. That limitations period is not per
se dispositive, but rather courts rely upon it to establish
burdens of proof and presumptions of timeliness and
untimeliness. Hence, “if a plaintiff files a complaint within
the analogous statutory period, the burden of proving
unreasonable delay and prejudice falls on the defendant. If a
plaintiff files after the statutory period has expired, the
burden shifts and a presumption of laches is created.” See id.
(internal citations omitted). The analogous limitation period
can be located either in state or federal law. See, e.g., id.
doctrine of laches. In doing so, we do not mean to necessarily
rule out the possibility that a demurrage claim such as this
could be pursued under separate § 1337(a) jurisdiction, in which
event the same statutes of limitation found herein to be most
analogous for laches purposes might control directly.
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(applying Puerto Rico negligence statute of limitations to
maritime tort claim); Angela Compania Naviera, 592 F.2d at 61
(applying two-year statute of limitations contained in federal
Death on the High Seas Act to maritime wrongful death action);
Giddens v. Isbrandtsen Co., 355 F.2d 125, 127 (4th Cir. 1966)
(applying federal Jones Act statute of limitations to maritime
tort).
Here, we are satisfied that the most analogous statutes
are the federal statutes regulating the very tariffs under which
the alleged demurrages arose: the Shipping Act of 1916, 46
U.S.C. App. §§ 801 et seq. (“Shipping Act”), until its effective
repeal date of September 30, 1996, and thereafter the ICCTA.
Section 18 of the Shipping Act required common carriers by water
in interstate commerce to “establish, observe, and enforce just
and reasonable rates, fares, charges, classifications and
tariffs,” and to file tariffs showing all rates and charges with
the Federal Maritime Commission. See 46 U.S.C. App. § 817
(repealed 1995). The ICCTA contains similar requirements, but
specifies that the tariffs must now be filed with the Surface
Transportation Board. See 49 U.S.C. § 13702.
This court has held that maritime carriers have a
private federal cause of action to recover container demurrage
charges specified in tariffs under the Shipping Act (as well as
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under the Intercoastal Shipping Act of 1933, 46 U.S.C. App. §
843 (repealed 1995)). See Maritime Serv. Corp., 537 F.2d at
562-63. Hence, the Shipping Act pertained to TAG/ICB’s
demurrage actions until its repeal on September 30, 1996. See
46 U.S.C. § 817, repealed by Pub. L. No. 104-88, § 335(b)
(1995).
Although the Shipping Act does not itself contain a
statute of limitations, the three-year statute of limitations
set forth in a related statute, the Interstate Commerce Act
(ICA), 49 U.S.C. §§ 10701 et seq., has been held to pertain to
container demurrage actions such as this. See Puerto Rico
Marine Management, Inc. v. Molac Imports, Inc., 594 F. Supp.
648, 651 (D. P. R. 1984); Puerto Rico Marine Management v. El
Verde Poultry Farms, Inc., 590 F. Supp. 1174, 1176-77 (D. P. R.
1984).4 In Maritime Serv. Corp., we noted that the relevant
provisions of the Shipping Act were modeled on the ICA. See 537
F.2d at 562; see also United States Navigation Co. v. Cunard
S.S. Co., 284 U.S. 474, 481 (1932) (“Congress intended that the
4
The El Verde court applied the doctrine of laches and
concluded that the ICA was the most analogous statute. See 590
F. Supp. at 1176. In Molac, the plaintiff invoked jurisdiction
under 28 U.S.C. § 1337 (acts regulating commerce), not the
admiralty jurisdiction statute. See 594 F. Supp. at 649. The
district court did not, therefore, apply the doctrine of laches,
but held that policy considerations favored the direct
application of the ICA statute of limitations rather than the
Puerto Rico local law. See id.
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two acts, each in its own field, should have like
interpretation, application and effect.”). The two statutes
share the common purposes of eliminating discriminatory rates
and securing the uniformity of transportation charges. See
Maritime Serv. Corp., 537 F.2d at 563; Molac, 594 F. Supp. at
651.
Pan American contends the district was correct in
concluding that the Puerto Rico Code of Commerce is the most
analogous statute. 5 See id. While that statute is certainly
broad enough to apply to a demurrage action such as this, an
admiralty court must apply the federal maritime rules that
directly address the issues at hand, and only resort to state
law when no federal rule applies. See Greenly v. Mariner
Management Group, Inc., 192 F.3d 22, 25-26 (1st Cir. 1999); cf.
Del Costello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 161-162
5
We do not find the reasoning in Mortensen & Lange v. San
Juan Mercantile Corp., 119 D.P.R. 345 (1987), the case upon
which the district court primarily relied, to be persuasive in
this case. In Mortensen, the Puerto Rico Supreme Court held
that Article 947 provided the applicable limitations period to
a freight contract between two parties shipping lumber between
Puerto Rico and Honduras. The Court held that Article 947's
six-month caducity period was directly applicable to the action
at issue, as it was enacted by the Puerto Rico Legislature under
its power to legislate with regard to maritime matters, and the
suit was for collection of monies related to expenses inherently
related to the freight. Id. at 358. For aught that appears,
the Shipping Act, the ICA, and the ICCTA were not at issue
there.
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(1983) (state statutes of limitations should not be "borrowed"
if they are unsatisfactory vehicles for enforcement of federal
law); Occidental Life Ins. Co. v. Equal Employment Opportunity
Comm’n., 432 U.S. 355, 367 (1977) ("State legislatures do not
devise their limitations periods with national interests in
mind, and it is the duty of the federal courts to assure that
the importation of state law will not frustrate or interfere
with the implementation of national policies."). The policy
considerations noted supra favor the application of the federal
ICA to TAG/ICB’s federally based demurrage claim. To subject
demurrage actions to a variety of local limitations periods
would undermine the uniformity Congress intended, as well as the
policy against discriminatory rates, especially in fora having
short limitations periods. See Molac, 594 F. Supp. at 651.
Effective September 30, 1996, the ICCTA replaced the
relevant provisions of the Shipping Act. See 46 U.S.C. App. §
817, repealed by Pub. L. No. 104-88, § 335(b) (1995); see also
Pub. L. 103-429, § 10, 108 Stat. 4391 (1994).6 The ICCTA
6Section 10 of Pub. L. 103-429 provides, in relevant part:
(a) No substantive change.--This Act restates, without
substantive change, laws enacted before September 26, 1994, that
were replaced by this Act. This Act may not be construed as
making a substantive change in the laws replaced. . . .
(b) References.--A reference to a law replaced by this Act,
including a reference in a regulation, order, or other law, is
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thereupon replaced the Shipping Act and ICA as the most
analogous statute for purpose of laches. Unlike the Shipping
Act, the ICCTA contains a limitations period of its own. It
prescribes a statute of limitations of eighteen months for all
actions relating to transportation services:
(a) A carrier providing transportation or
service subject to jurisdiction under
chapter 135 must begin a civil action to
recover charges for transportation or
service provided by the carrier within 18
months after the claim accrues.
(g) A claim related to a shipment of
property accrues under this section on
delivery or tender of delivery by the
carrier.
49 U.S.C.A. § 14705. We hold, therefore, that the ICA’s three-
year statute of limitations, which was imported into the
Shipping Act, supplies the benchmark limitations period during
the time when the Shipping Act governed TAG/ICB’s demurrage
claims; and that thereafter, the eighteen-month statute of
limitations contained in the ICCTA is the presumptive benchmark
for the claims.
deemed to refer to the corresponding provision enacted by this
Act. . . .
(d) Actions and offenses under prior law.--An action taken or an
offense committed under a law replaced by this Act is deemed to
have been taken or committed under the corresponding provision
enacted by this Act.
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Pan-American suggests that the Puerto Rico Federal
Relations Act (“FRA”), 48 U.S.C. §§ 731 et seq., precludes
application of the ICCTA to this matter. Section 8 of the FRA
provides that "[a]ll laws of the United States for the
protection and improvement of the navigable waters of the United
States and the preservation of the interests of navigation and
commerce, except so far as the same may be locally inapplicable,
shall apply to" Puerto Rico and its waters. 48 U.S.C. § 749;
see also id. § 734 (providing, in relevant part, that “[t]he
statutory laws of the United States not locally inapplicable,
except as hereinbefore or hereinafter otherwise provided, shall
have the same force and effect in Puerto Rico as in the United
States”).
The ICCTA, like the Shipping Act, plainly protects the
interests of navigation and commerce. Cf. Maritime Serv. Corp.,
537 F.2d at 561 (Shipping Act and Intercoastal Shipping Act
“indisputably regulate commerce”). We see no basis for
determining that the ICCTA is “locally inapplicable” to Puerto
Rico such that it should not be applied to this action. See
United States v. Rivera Torres, 826 F.2d 151, 154 (1st Cir.
1987) (holding that Clean Water Act applied to Puerto Rico,
notwithstanding FRA). The Shipping Acts preceding the ICCTA
were consistently applied to demurrage and other actions
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involving waters in Puerto Rico. See, e.g., Puerto Rico Ports
Auth. v. Federal Maritime Comm’n, 642 F.2d 471, 476 (D.C. Cir.
1980); Capitol Transp., Inc. v. United States, 612 F.2d 1312,
1325 (1st Cir. 1979); Maritime Serv. Corp., 537 F.2d at 561.
Moreover, Pan American does not point to anything in the
legislative history of the ICCTA that would indicate that
Congress did not intend that statute to apply to Puerto Rico.
See Rivera Torres, 826 F.2d at 154.
Pan American bases its contrary argument solely on the
FRA’s provision that the ICA “and the several amendments made or
to be made thereto” do not apply to Puerto Rico. See 48 U.S.C.
§ 751. Because the ICCTA amends the ICA, it contends, the ICCTA
likewise does not apply to Puerto Rico. Section 751, however,
has been interpreted to refer only to intra-island Puerto Rico
transportation, “and neither gives Puerto Rico the right to
regulate interstate commerce nor precludes federal regulation of
interstate commerce involving Puerto Rico.” Trailer Marine
Transport Corp. v. Dolphin Forwarding, Inc., 758 F. Supp. 796,
797 (D. P. R. 1991); see also Trailer Marine Transport Corp. v.
Federal Maritime Comm’n, 602 F.2d 379, 385 n.26 (D.C. Cir. 1979)
(citing Benedicto v. West India & Panama Telegraph Co., 256 F.
417, 420 (1st Cir. 1919)). We are not persuaded, therefore,
that the ICCTA is locally inapplicable to Puerto Rico.
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Finally, Pan-American argues that TAG/ICB waived its
ICCTA argument by not making it in its opposition to the motion
to dismiss. In its opposition, TAG/ICB maintained that the
three-year limitations period contained in the Interstate
Commerce Act should apply to demurrage claims such as this. It
was not until its motion to vacate judgment that TAG/ICB
mentioned the ICCTA. Pan-American maintains that even at that
point, TAG/ICB did not make any developed argument concerning
the ICCTA. This contention is undermined by the fact that Pan-
American vigorously contested the application of the ICCTA in
its response to TAG/ICB’s motion to vacate judgment. We
believe, therefore, that TAG/ICB sufficiently preserved the
issue. Moreover, under Rule 12(b)(6), a court must determine
whether the complaint sets forth facts sufficient to justify
recovery on any cognizable theory. See LaChapelle, 142 F.3d at
508.
We thus conclude that the ICA and the ICCTA supply the
relevant benchmark statutes of limitation for TAG/ICB’s maritime
demurrage claim. To summarize, TAG/ICB’s maritime claim, to the
extent that it was governed by the Shipping Act -- i.e., from
July, 1994, to September 30, 1996 -- is presumptively subject to
the three-year statute of limitation contained in the ICA. The
ICCTA’s eighteen-month statute of limitations presumptively
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applies to TAG/ICB’s demurrage claim accruing after September
30, 1996, when the ICCTA replaced the Shipping Act. See 49
U.S.C. § 14705(a); In re Apex Exp. Corp., 190 F.3d 624, 642 (4th
Cir. 1999) (ICCTA statute of limitations operates only
prospectively).
Under the laches analysis, the above limitation periods
are not dispositive; rather, they presumptively establish the
claim’s timeliness or untimeliness subject to further germane
considerations. See Puerto Rican-American Ins. Co., 829 F.2d at
283. The district court did not address the other issues
relevant to the laches determination -- e.g., whether TAG/ICB’s
delay was unreasonable and whether Pan-American suffered
prejudice from the delay -- nor have the parties briefed these
issues to this court. In all events, the resolution of such
issues plainly calls for a better developed record (and, quite
possibly, for the taking of evidence). Accordingly, the laches
issues remain open for the district court to determine on
remand.
Reversed and remanded for further proceedings not
inconsistent with this opinion.
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