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NORWICH PHARMACAL CO. v. S.S. BAYAMON

July 11, 1979

Norwich Pharmacal Company, Plaintiff,
v.
S.S. Bayamon, her engines, boilers, etc. and Puerto Rico Maritime Shipping Authority, Defendants.



The opinion of the court was delivered by: CONNER

OPINION AND ORDER

This is an action to recover for damages to a shipment of pharmaceuticals shipped from San Juan, Puerto Rico to New York aboard defendant's vessel, the S/S BAYOMON, pursuant to a bill of lading issued by defendant in August 1977 at San Juan.

The bill of lading, on its face, contains the following wording: "Drugs & Medicines Agreed declared value not to exceed 50 cents per pound-Item No. 17.120."

 On the reverse side of defendant's Short Form Bill of Lading, under the heading "Contract and Terms and Conditions" it is stated: "This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States of America, ("COGSA") Approved April 16, 1936."

 Defendant asserts as a defense to the complaint that

 
"Pursuant to the bill of lading and tariff provisions incorporated therein, the parties to the contract of carriage agreed to a valuation of $ .50 per lb. and plaintiff's damages are limited thereby."

 Presently before the Court are plaintiff's motion to strike this defense from the Answer on the ground that the valuation wording upon which the defense is based is void under COGSA; and defendant's cross-motion for an order limiting defendant's liability to 50 cents per lb. in accordance with its tariff and bill of lading provisions and denying plaintiff's motion to strike. There are no disputed issues of fact.

 Plaintiff relies on 46 U.S.C. § 1312, which provides:

 
"This chapter shall apply to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade. As used in this chapter the term "United States' includes its districts, territories, and possessions. The term "foreign trade' means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this chapter shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions, and any other port of the United States or its possessions: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this chapter, shall be subjected hereto as fully as if subject hereto by the express provisions of this chapter."

 Plaintiff argues that since the bill of lading in the instant case contained "an express statement that it shall be subject to the provisions" of COGSA, any agreement that places a value on cargo at less than that provided by COGSA is void under 46 U.S.C. § 1303(8), which provides:

 
"Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect."

 Section 1304(5) provides:

 
"Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $ 500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.
 
"By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the ...

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