49 U.S.C. § 11707 (West 1995), formerly, 49 U.S.C. § 20(11) (1976), and cross-moves for summary judgment limiting any recovery by plaintiffs to $ 57,670.47, which ATSF describes as the invoice amount of the goods plus freight charges and duties.
The Carmack Amendment
The Carmack Amendment does not govern this case for reasons explained lucidly in Capitol Converting Equipment Inc. v. LEP Transport, Inc., 750 F. Supp. 862, 863-64 (N.D. Ill 1990). aff'd, 965 F.2d 391 (7th Cir. 1992).
Before 1978, the Carmack Amendment governed transportation "from a point in one State or Territory or the District of Columbia to a point in another state, Territory, District of Columbia, or from any point in the United States to a point in an adjacent foreign country." 49 U.S.C. § 20(11) (1976). The Carmack Amendment did not cover goods shipped under a through bill of lading issued in a foreign country. Capitol Converting, 750 F. Supp. at 864 (citing, e.g., Reider v. Thompson, 339 U.S. 113, 117, 94 L. Ed. 698, 70 S. Ct. 499 (1950)). In 1978, the Carmack Amendment was amended, and the coverage of certain shipments involving transportation outside the United States was expanded.
Thereafter, several courts revisited the issue decided in Reider and adopted the following rule: Where a shipment involves transportation in a foreign county, the "domestic leg of the journey will be subject to the Carmack Amendment as long as the domestic leg is covered by a separate bill or bills of ladings." Swift Textiles v. Watkins Motor Lines Inc., 799 F.2d 697, 701 (11th Cir. 1986), cert. denied, 480 U.S. 935, 94 L. Ed. 2d 768, 107 S. Ct. 1577 (1987) cited in Capitol Converting, 750 F. Supp. at 862; accord, Lucky-Goldstar Int'l v. S/S. California Mercury, No. 89 Civ. 8591 (PKL), 1991 U.S. Dist. LEXIS 1018, *4, 1991 WL 12144 *2, 1991 AMC 1025 (S.D.N.Y. 1991); Fine Foliage of Florida, Inc. v. Bowman Transp., Inc., 698 F. Supp. 1566, 1571 (M.D. Fla. 1988), aff'd, 901 F.2d 1034 (11th Cir. 1990). The Amendment, however, does not apply where a through bill of lading covers the entire course of an international journey. Lucky Goldstar, at *2; Capitol Converting, 750 F. Supp. at 864.
The question whether a through bill of lading was issued abroad depends on the facts. Capitol Converting, 750 F. Supp. at 864. The circumstances relevant to the determination include (1) the final destination indicated in the bill of lading; (2) the conduct of the shipper and carriers; and (3) and whether the connecting carriers were compensated by the payment made to the initial carrier or by separate consideration from the shipper. Lucky-Goldstar at *2; Capitol Converting, 750 F. Supp. at 864.
The Yang Ming bill of lading was the only contract signed and satisfies all the criteria of a through bill of lading. It identified Hong Kong as the Port of Loading, Los Angeles as the Port of Discharge, and New York as the Place of Delivery. An asterisk next to the box titled "Place of Delivery" noted that the item was "applicable only when document used as a Combined Transport." Nearly identical language supplied the basis for another court to conclude that a bill on its face "appeared to 'contemplate the use of other carriers to effect inland transportation' ... and to refer, at least indirectly, to 'through' transportation." Capitol Converting, 750 F. Supp. at 864 (citing Tokio Marine & Fire Ins. Co. v. Hyundai Merchant Marine Co., 717 F. Supp. 1307, 1309 (N.D. Ill. 1989) and Austracan (U.S.A.) Inc. v. Neptune Orient Lines Ltd., 612 F. Supp. 578 (S.D.N.Y. 1985)). Here it is plain that neither the shipper, the consignee, nor the notify party was issued a separate contract for the rail carriage. Yang Ming made all the arrangements and compensated ATSF for the land-based carriage of the cargo. (Pl. Reply 23) Accordingly, this was a through bill of lading issued abroad, and the Carmack Amendment does not apply.
State Bailment Law
Plaintiffs assert that defendant ATSF is liable under New York law as a bailee, which was "engaged in fulfilling" Yang Ming's "obligation following the discharge of the cargo." Leather's Best, 451 F.2d at 813. In addition to Leather's Best, plaintiffs rely on Minemet Inc. v. M.V. Mormacdraco, 536 F. Supp. 769, 771 (S.D.N.Y.), aff'd without opinion, 714 F.2d 115 (2d Cir. 1982). See also Stein Hall & Co., Inc. V. S.S. Concordia Viking, 494 F.2d 287, 289 (2d Cir. 1974) (once the stevedore, as terminal operator, took possession of the cargo, it became a bailee for the mutual benefit of the carrier and consignees).
Yang Ming fruitlessly attempts to distinguish Leather's Best and Minemet as situations involving the entrustment of the goods by a shipping company for warehousing, rather than for inland carriage. The Court sees no reason why this factual distinction should matter for purposes of bailment analysis. Moreover, it is clear that state law permits owners to sue subcontracting carriers under bailment theory; the owner need not be a party to the contract between the original carrier and subcontracting carrier. Berger v. 34th St. Garage, 274 A.D. 414, 84 N.Y.S.2d 348 (1st Dept. 1948). This conclusion was implicit in Minemet, where the terminal operator was not a party to the bill of lading but nevertheless was held liable as bailee. 536 F. Supp. at 770. For all these reasons, the Court accepts plaintiffs' bailment theory as the law governing ATSF's liability and damages. Plaintiffs' evidence of nondelivery of the goods therefore establishes a prima facie case of liability which stands unrebutted. See id. at 771. In consequence, plaintiffs are entitled to summary judgment against ATSF on the issue of liability.
Assuming arguendo that the Carmack Amendment does not apply, ATSF nevertheless argues that plaintiffs' damages are limited on either of two theories. First, ATSF relies on a limiting clause in an intermodal circular which, ATSF argues, binds plaintiffs either directly or by virtue of its alleged incorporation into the Yang Ming bill of lading. Second, ATSF argues that its liability is limited to the same extent as Yang Ming's by Clause 26(1) of the bill of lading.
1. The Intermodal Circular
The intermodal circular, allegedly in effect at the relevant time, contains the following limitation in item 52(5): "In no event shall ATSF be liable for special or consequential damages." (Jones Aff. P 5 and attachment) The absence of any signature of a Braha representative, together with the evidence that Braha did not arrange for the transportation by ATSF and plaintiffs' uncontradicted insistence they were not even aware the circular existed, renders ineffectual ATSF's effort to claim that plaintiffs are bound directly to any terms in the circular. See also Co-Operative Shippers v. Atchison, Topeka & Santa Fe Ry. Co., 840 F.2d 447, 451 (7th Cir. 1988) (carriers may limit their liability only if the shipper has notice of the rate structure and is given a full and fair opportunity to obtain greater protection).
ATSF argues next that the circular was incorporated into the Yang Ming bill of lading by Clause 5(C), which provides in relevant part:
"RESPONSIBILITY FOR THROUGH TRANSPORTATION-- Where the place of receipt and/or place of delivery of the Goods is an inland point, the responsibility of the Carrier with respect to the Through Transportation of the Goods shall be as follows: