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GE v. M.V. "NEDLLOYD ROUEN"

February 28, 1985

GENERAL ELECTRIC COMPANY, Plaintiff, against M.V. "NEDLLOYD ROUEN", her engines, boilers, etc., -and against- NEDLLOYD LIJNEN B.V. (NEDLLOYD LINES), Defendants


The opinion of the court was delivered by: DUFFY

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, D.J.:

Plaintiff General Electric Company ("G.E.") commenced this action pursuant to the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 1300, et seq., to recover for damage to part of its cargo intended for a power station being constructed by G.E. in Saudia Arabia. Defendant Nedlloyd Lijnen B.V. ("Nedlloyd Lines" or "Nedlloyd") moves pursuant to Fed. R. Civ. P. 56 for partial summary judgment limiting its liability to $500.00 per package or customary freight unit. See 46 U.S.C. § 1304(5).

 FACTS

 On February 16, 1983, Nedlloyd issued a bill of lading to G.E. for the carriage of twenty-six items of cargo, including a generator Auxiliary Compartment (Case 101) and a Control Cab (Piece 214), from Portsmouth, Virginia to Yenbu, Saudi Arabia. Case 101 and Piece 214 were allegedly damaged en route to Saudi Arabia when, on the evening of February 19, 1984, the M.V. Nedlloyd Rouen encountered heavy weather, and both items slid from the flatbed on which they were stowed in deck 2 of the vessel. See Affidavit of William Xanttopoulos, Exh. M (deck log); Exh. H (stowage plan).

 G.E. apparently had the two units repaired at a cost of approximately $59,933.28 and then sold the units to an affiliated company for $16,000.00. See id., Exh. I (Deposition of Richard J. Condon). Thereafter, G.E. replaced the two units at a cost of $686,325.00. See id., Exh. J (letter from Condon concerning insured value of machinery); Affidavit of John E. Cone, Jr., Exh. 8. In its action, G.E. seeks to recover the cost of replacing the units, the temporary repair costs less salvage, and other expenses such as survey costs.

 DISCUSSION

 COGSA applies by its own force to all bills of lading covering shipments of goods from the United States in foreign trade. 46 U.S.C. § 1300; S.M. Wolff Co. v. The Exiria, 200 F. Supp. 809, 811 (S.D.N.Y. 1961). Plaintiff's cargo was transported from Portsmouth, Virginia under a bill of lading that contained a "U.S.A. Clause" incorporating COGSA in the contract of carriage. See Xanttopoulos Affidavit, Exh. A (bill of lading). Thus, COGSA clearly applies to the instant contract.

 COGSA § 4(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.

 46 U.S.C. § 1304(5).

 I.

 Nedlloyd's bill of lading form contains a box (clause 6) on the front of the form labeled "Excess Valuation" and refers the reader to clause 7(1)b on the reverse side of the form. This box was left blank on the bills of lading covering this shipment. Thus, pursuant to section 4(5) of COGSA, absent G.E.'s declaration of the value of its cargo, Nedlloyd's liability is limited to either $500. per package or per customary freight unit. Had G.E. chosen to declare the value of its cargo, according to rule 12 of Nedlloyd's Tarriff filed with the Federal Maritime Commission ("FMC"), it would have had to pay an additional ten percent of the total declared valuation over freight.

 G.E. does not dispute the fact that it did not declare the value of the two units. Instead, G.E. advances three primary arguments which challenge Nedlloyd's bill of lading form and the ten percent surcharge policy as unconscionable. First, plaintiff argues that Nedlloyd should not be afforded the benefit of any limitation of liability since the bill of lading merely incorporated COGSA's limitation provision without explicitly setting forth the provision and that the other clauses on the back of the form created ambiguities that should be resolved against Nedlloyd. Second, plaintiff submits exhibits to show that the size of the print used on the back of the bill of lading form ...


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