The opinion of the court was delivered by: Scheindlin, District Judge.
On December 29, 1999, Ingram Micro, Inc. ("Ingram Micro"), on
behalf of itself and as subrogee of Chubb Insurance Company of
Europe, S.A. ("Chubb"), filed suit against Airoute Cargo Express,
Inc. ("Airoute") to recover damages in the sum of $434,894*fn1
plus interest for alleged breach of contract. Specifically,
Ingram Micro alleged that Airoute breached its duties and
obligations as a common carrier and bailee of goods by failing to
deliver those goods. After the close of discovery, Ingram Micro
and Airoute agreed to try the case on stipulated facts. The
parties have submitted thirty-six stipulated facts and one trial
exhibit, the bill of lading between Ingram Micro and Airoute.
Both parties have also submitted post-trial memoranda briefing
their respective positions as to whether federal common law or
Canadian law applies to this action and whether Airoute's
liability is limited under the applicable law. For the reasons
stated below, the Court finds that federal common law applies to
this action and that, under federal common law, the limitation of
liability on Airoute's bill of lading is enforceable.
Ingram Micro is a Delaware corporation with its principal place
of business in Santa Ana, California. See Stipulated Facts and
Trial Exhibit ("St.Facts") ¶ 1. Chubb, a Belgian corporation, has
its principal place of business in London, England. See id. ¶
2. Airoute is a Canadian corporation with its principal place of
business in Dorval, Quebec. See id. ¶ 3.
In November 1997, Ingram Micro hired Airoute to transport an
order of 549 boxes of "Corel Draw 8" ("Corel") software and 2550
boxes of Corel upgrade software from Saturn Corporation's
warehouse in St. Laurent, Quebec, Canada to Ingram Micro's
warehouse in Harrisburg, Pennsylvania. See id. ¶ 4. Airoute
transmitted its terms for the contract of carriage from its
offices in Quebec to Ingram Micro's offices in California. See
id. ¶ 5. Ingram Micro then transmitted its acceptance of
Airoute's terms from California to Quebec. See id. ¶ 8. During
the negotiations, Airoute did not offer Ingram Micro an ad
valorem freight rate with no limitation of liability. See id.
¶ 6. Instead, Airoute quoted only one freight rate to Ingram
Micro, which contained a limitation of liability and was not
subject to negotiation. See id. ¶ 7.
On or about November 13, 1997, Airoute took possession of the
shipment in apparent good order and condition from the Saturn
Corporation warehouse in St. Laurent, Quebec. See id. ¶¶ 9, 16.
At this time, Airoute issued a bill of lading covering the
shipment from St. Laurent, Quebec to Harrisburg, Pennsylvania.
See Airoute's Bill of Lading for Ingram Micro Delivery
("Airoute's BOL"), Trial Exhibit, ¶ A. Ingram Micro did not
declare a value for the shipment on this bill of lading. See
id. If a value had been declared, Ingram Micro would have been
required to pay a higher freight rate for a higher recovery in
case of loss to the shipment. See id. Without a declared value,
the maximum default coverage for shipments, as stipulated by the
bill of lading, is the "lesser of $100.00 or $2.00 per pound."
After receiving the goods in St. Laurent, Airoute brought the
shipment to its facility in Dorval, Quebec and, on the same day,
tendered the shipment to its subcontractor, Paquin, Inc.
("Paquin"), also located in Quebec. See St. Facts ¶¶ 9, 17.
Airoute had hired Paquin, a Canadian transport company, to truck
the shipment from Quebec to Pennsylvania. See id. ¶ 17.
Before delivery to Pennsylvania, Airoute expected Paquin to
store the shipment inside Paquin's warehouse over the
weekend.*fn2 See id. ¶ 18. However, on the weekend of November
15-16, 1997, Paquin did not store Ingram Micro's shipment inside
its warehouse, but instead, kept the shipment in a trailor
outside its warehouse. See id. ¶¶ 22, 23. At some time during
this weekend, the shipment disappeared from Paquin's facility.
See id. ¶ 24. Other than a guard shack at the entrance to
Paquin's facility, there was no apparent security system in place
outside of Paquin's warehouse. See id. ¶ 25.
Thereafter, Canadian law enforcement personnel recovered 205
boxes of the 549 boxes of Corel software, and recovered 1033
boxes of the 2550 boxes of the Corel upgrade software. See id.
¶ 26. In 1998, Paquin, acting as Airoute's subcontractor,
delivered the recovered boxes in good order and condition to
Ingram Micro's warehouse in Harrisburg, Pennsylvania. See id. ¶
27. The remaining 344 boxes of Corel software and 1,517 boxes of
Corel upgrade software were never recovered and never delivered
to Ingram Micro in Harrisburg, Pennsylvania. See id. ¶ 28.
Ingram Micro's damages for the loss to
the shipment amount to $434,894.00.*fn3 See id. ¶ 31. The
shipment was insured by Chubb under an ocean marine cargo
insurance policy. See id. ¶ 32. Ingram Micro made a claim upon
the cargo policy, and Chubb paid Ingram Micro $384,894.00 for the
loss to the shipment. See id. ¶ 33. The entire shipment weighed
26,651.41 pounds. See id. ¶ 34. The non-delivered portion of
the shipment weighed 17,739.32 pounds. See id.
Ingram Micro claims that United States federal common law
governs its claim against Airoute. See Plaintiff's Post-Trial
Memorandum of Law ("Pl.Mem.") at 9. Airoute claims that Canadian
law should apply. See Airoute's Trial Memorandum of Law
("Def.Mem.") at 3. Before addressing the choice of law question,
the threshold question is whether federal common law may be
applied to this action at all. While Ingram Micro argues in favor
of applying federal common law rather than Canadian law, it does
not explain why federal common law should apply rather than the
laws of New York, California or Pennsylvania.*fn4
Within constitutional limits, federal preemption of state law
is found where Congress has explicitly expressed its intent to
preempt, or where the nature and object of the federal laws and
regulatory scheme show Congress' intent to occupy the entire
field. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96, 103
S.Ct. 2890, 77 L.Ed.2d 490 (1983); Campbell v. Hussey,
368 U.S. 297, 303, 82 S.Ct. 327, 7 L.Ed.2d 299 (1961). In cases involving
common carriers, where the Interstate Commerce Commission
("I.C.C.") has exercised its authority to regulate, state
statutes, regulations, and common law are preempted insofar as
they conflict with the federal regulation. See Chicago & N.W.
Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 318, 101
S.Ct. 1124, 67 L.Ed.2d 258 (1981).
The instant case involves a transport of goods from an adjacent
foreign country to the United States by ground, an area not
regulated by the I.C.C. Plaintiffs in other cases have tried to
bring such cases under the Carmack Amendment to the Interstate
Commerce Act, 49 U.S.C. § 11707. That Amendment governs cases
where: "the actual loss or injury to the property [is] caused by
(1) the receiving carrier, (2) the delivery carrier, or (3)
another carrier over whose line or route the property is
transported in the United States or from a place in the United
States to a place in an adjacent foreign country when
transported under a through bill of lading." 49 U.S.C. § 11706
(emphasis added). Here, the goods were transported from an
adjacent foreign country, namely Canada, into the United States.
Because the Carmack Amendment is limited to transport of goods by
states and from the United States into a foreign country, by its
terms, the Amendment does not apply to this action. See Whaling
v. Atlas Van Lines, Inc., 919 F. Supp. 168, 170 (E.D.Pa. 1996);
Kenny's Auto Parts, Inc. v. Baker, 478 F. Supp. 461, 464
(E.D.Pa. 1979) ("The cases interpreting the Carmack Amendment
have uniformly held that the Carmack Amendment has no application
to goods received for shipment at a point outside the United
Clearly, the Warsaw Convention, 49 U.S.C. § 40105, which
governs the international transport of goods by air, and the
Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5), which governs
the transport of goods by sea, also do not apply here as this was
a shipment by truck, not by air.
The weight of authority reveals that federal common law applies
to the interstate transport of goods by air. See, e.g., Williams
Dental Co. v. Air Express Int'l, 824 F. Supp. 435, 441 (S.D.N Y
1993), aff'd mem., 17 F.3d 392 (2d Cir. 1993); Welliver v.
Federal Express Corp., 737 F. Supp. 205, 207 (S.D.N.Y. 1990);
United States Gold Corp. v. Federal Express Corp., 719 F. Supp. 1217,
1224-25 (S.D.N.Y. 1989). The question remains as to ...