The opinion of the court was delivered by: Kimba M. Wood, District Judge.
Defendant moves, and plaintiff crossmoves, for partial summary judgment
on the issue whether a clause in defendant's bill of lading limiting its
liability to $500 applies in this case. Plaintiff also crossmoves for
summary judgment regarding defendant's liability. For the reasons stated
below, the Court holds that the liability limitation applies. The Court
denies plaintiff's motion for summary judgment regarding defendant's
Defendant Lykes Bros. Steamship Co., Inc. ("Lykes"), a multi-modal
common carrier, by a bill of lading dated May 2, 1988, agreed to carry a
Combi Aisle Ranger forklift truck (the "cargo") from Felixstowe, England
by sea and then overland to a purchaser in Cincinnati, Ohio. Clause 3(a)
of the bill of lading provides that the provisions of the Carriage of
Goods by Sea
Act, 46 U.S.C.App. § 1300 et seq. ("COGSA") will apply throughout the
carriage of the cargo from Felixstowe to its final destination in
Cincinnati. Clauses 3(c) and 3(d)(ii) of the bill of lading provide that
COGSA will apply to the overland carriage of the cargo. COGSA allows a
carrier to limit its liability to $500 per "package," or, for goods not
shipped in packages, $500 per "customary freight unit." COGSA §
4(5), 46 U.S.C.A.App. § 1304(5) (West 1975 & Supp. 1990). These
limitation of liability provisions are set forth in Clause 4 of the bill
of lading. Defendant's Notice of Motion for Partial Summary Judgment at
Exh. ("Def. Exh.") A; Defendant's Statement of Material Facts Pursuant to
Southern District Rule 3(g) ("Def. 3(g) St.") at ¶¶ 9-11, 13.
Lykes carried the cargo, in an open top twenty foot freight container,
by ship to Norfolk, Virginia and then by rail to Cincinnati. Def. 3(g)
St. at ¶ 4. At the rail yard in Cincinnati, Lykes's subcontractor
ASAP Truck Lines ("ASAP") picked up the cargo for carriage by truck to
the purchaser's place of business. Def. 3(g) St. at ¶ 5. During this
trip, the cargo struck the underside of an overpass on Interstate Route
71 and was severely damaged. Def. 3(g) St. at ¶ 6. Plaintiff Norwich
Union Fire Insurance Society, Ltd. ("Norwich") brings this claim,
pursuant to the Court's admiralty jurisdiction, as the subrogee of the
purchaser and owner of the cargo. Norwich demands damages of $75,000.
Defendant argues that COGSA's limitation of liability provisions apply
to this case, and plaintiff is thus limited to damages of $500.
I. THE DOCTRINE OF DEVIATION
Plaintiff argues that because Lykes charged a higher freight rate for
the cargo because it was over standard height, and because the bill of
lading noted that the cargo was "overheight," Lykes thereby had assumed a
duty of specialized care. Plaintiff argues that defendant unreasonably
deviated from its duties to provide specialized care, thereby voiding the
limitation of liability clause.
The doctrine of deviation evolved from the pre-COGSA law of marine
insurance. When the carrier inexcusably deviated from its contract of
voyage, the shipper's insurance on its cargo was often voided. In order
to protect shippers in those circumstances, courts developed the rule
that an inexcusable geographic deviation prevented the carrier from
invoking a limitation of liability clause in the contract of carriage.
Later pre-COGSA decisions extended the doctrine of deviation to
unauthorized on-deck stowage (quasi-deviation). See Sedco, Inc. v. S.S.
Strathewe, 800 F.2d 27, 31 (2d Cir. 1986); B.M.A. Industries, Ltd. v.
Nigerian Star Line, 786 F.2d 90, 91 (2d Cir. 1986) (per curiam)
(discussing evolution of doctrine of deviation).
COGSA, enacted in 1936, did not define deviation; its only reference to
deviation is in § 4(4):
Any deviation in saving or attempting to save life or
property at sea, or any reasonable deviation shall not
be deemed to be an infringement or breach of this
chapter or of the contract of carriage, and the
carrier shall not be liable for any loss or damage
resulting therefrom: Provided, however, That if the
deviation is for the purpose of loading or unloading
cargo or passengers it shall, prima facie, be regarded
COGSA § 4(4), 46 U.S.C.A.App. § 1304(4) (West 1975 & Supp.
The Second Circuit has limited the doctrine of deviation to instances
of geographic deviation and unauthorized on-deck stowage of cargo
(quasi-deviation), and has stated that the doctrine should not be
extended beyond these categories. Sedco, 800 F.2d at 31-32; see B.M.A.
Industries, 786 F.2d at 91-92; Italia di Navigazione, S.p.A. v. M.V.
Hermes I, 724 F.2d 21, 22-23 (2d Cir. 1983); Iligan Integrated Steel
Mills, Inc. v. SS. John Weyerhaeuser, 507 F.2d 68, 71-73 (2d Cir. 1974),
cert. denied, 421 U.S. 965, 95 S.Ct. 1954, 44 L.Ed.2d 452 (1975). "[M]ere
negligence, lack of due diligence, or a failure to properly handle,
stow, care, or deliver cargo never has
constituted deviation" that would have ...