Monica Textile Corp. v. S.S. Tana

952 F.2d 636, 1992 A.M.C. 609, 1991 U.S. App. LEXIS 29901, 1991 WL 274646
Court of Appeals for the Second Circuit·Decided December 23, 1991·No. No. 360, Docket 91-7635·Published·Cited by 32 cases

Opinion

McLAUGHLIN, Circuit Judge:

We are (once again) presented with “the latest skirmish in the age old war between shippers and carriers over their respective rights and liabilities.” Matsushita Elec. Corp. v. S.S. Aegis Spirit, 414 F.Supp. 894, 897 (W.D.Wash.1976). This case requires us to revisit the issue whether a massive shipping container is a “package” for purposes of the $500 per-package limitation on liability of the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C.App. § 1304(5).

Holding that the single shipping container was the relevant COGSA package, the district court entered a $500 judgment for the shipper. We now reverse and hold that each of the 76 bales of cloth stowed inside the container is a separate package for COGSA purposes.

BACKGROUND

Monica Textile Corporation (“Monica” or the “shipper”) engaged the defendants-carriers to transport a single 20-foot shipping container from Africa to Savannah, Georgia. The parties’ bill of lading disclosed that the container, which Monica had stuffed and sealed, held 76 bales of cotton cloth. The goods were damaged in transit and Monica brought suit in the District Court for the Southern District of New York (Sand, J.) to recover for the loss.

The carriers moved for partial summary judgment limiting their liability to $500 pursuant to COGSA’s liability limitation provision, 46 U.S.GApp. § 1304(5). The district court initially denied the motion, holding “that where the bill of lading prepared by the carrier’s agent discloses a specific number of identifiable units as the contents of the container, those units [the bales of cloth] constitute the package” for purposes of COGSA’s limitation on liability. Monica Textile Corp. v. S.S. Tana, 731 F.Supp. 124, 127 (S.D.N.Y.1990) [“Monica I”].

Shortly thereafter; this court decided Seguros “Illimani” S.A. v. M/V Popi P, 929 F.2d 89 (2d Cir.1991), which held that for COGSA purposes the number of packages specified in the “No. of Pkgs.” column of the bill of lading is generally controlling. Id. at 94. In the present case, though the “DESCRIPTION OF GOODS” column of the bill of lading stated that the contents of the container consisted of 76 bales of cotton cloth, the “No. of Pkgs.” column of the bill of lading had the number “1” typed in, and a line labeled “Total Number of Packages or Units in Words (Total Column 19 [No. of Pkgs. column]),” had the word “ONE” typed in. In light of these facts, Judge Sand permitted the carriers to renew their summary judgment motion to limit their liability to $500, and the district court reversed itself, holding that our intervening decision in Seguros compelled a finding that the single container, rather than the 76 bales stowed therein, was the relevant COGSA package. See Monica Textile Corp. v. S.S. Tana, 765 F.Supp. 1194, 1195-96 (S.D.N.Y.1991) [“Monica II”]. Because the carriers conceded liability, the district court entered judgment for Monica in the amount of $500.

Monica appeals the judgment of the district court, maintaining that the 76 individual bales of cloth, not the solitary shipping container, were the appropriate COGSA packages. We agree and therefore reverse the judgment of the district court.

DISCUSSION

The district court reversed itself in Monica II on the basis of Seguros, which it read

as establishing a bright-line rule for determining the number of COGSA packages from the bill of lading. The number of packages is the number appearing in the “No. of Pkgs.” column of the bill, unless other evidence of the parties’ intent plainly contradicts the applicability of that number, or unless the item re[638] ferred to by that number is incapable of qualifying as a COGSA package.

Monica II, 765 F.Supp. at 1195-96. The district court’s characterization of the Se-guros rule is accurate, as far as it goes. Seguros, however, involved 600 separate steel-strapped bundles, each containing 15 tin ingots. The issue therefore was whether there were 600 “packages” or 9,000 (600 X 15) “packages”. Most significantly, our Seguros decision did not purport to apply to containers, and the district court’s application of the Seguros rule to the container context was erroneous. An understanding of the “container” cases is necessary to appreciate our present holding that Segu-ros should not be extended to containers.

The Container Cases

Long before COGSA was enacted, industrialized nations recognized the need to reconcile the desire of carriers to limit their potential liability with their vastly superior bargaining power over shippers. See H.R.Rep. No. 2218, 74th Cong., 2d Sess. 6-9 (1936); Mitsui & Co. v. America Export Lines, Inc., 636 F.2d 807, 814-15 (2d Cir.1981); Comment, Containerization, the Per Package Limitation, and the Concept of “Fair Opportunity, ” 11 Mar.Law. 123, 124 (1986). The nations at the Brussels Convention of 1924 balanced these competing concerns with a per-package limitation on liability. See International Convention for the Unification of Certain Rules Relating to Bills of Lading, Aug. 25, 1924, 51 Stat. 233, 120 L.N.T.S. 155 (1931-32), reprinted in A. Knauth, The American Law of Ocean Bills of Lading 37-72 (4th ed. 1953); Note, Defining “Package” in the Carriage of Goods by Sea Act, 60 Tex. L.Rev. 961, 964-66 (1982). The principles established by the Brussels Convention became the template for COGSA. See Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 301, 79 S.Ct. 766, 769, 3 L.Ed.2d 820 (1959) (“[t]he legislative history of the Act shows that it was lifted almost bodily from the Hague Rules of 1921, as amended by the Brussels Convention of 1924”).

Unhappily, neither the statute nor its legislative history provides any clue as to the meaning of “package” in the Act. See Aluminios Pozuelo Ltd. v. S.S. Navigator, 407 F.2d 152, 154 (2d Cir.1968). Despite the difficulties this lack of guidance engendered,1 courts managed to muddle through this oft-litigated issue by generally deferring to the intent of the contracting parties when that intent was both clear and reasonable. This intent-approach later became strained by technological advances in the shipping industry. Indeed, “[f]ew, if any, in 1936 could have foreseen the change in the optimum size of shipping units.... ” Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, 375 F.2d 943, 945 (2d Cir.), cert. denied, 389 U.S. 831, 88 S.Ct. 97, 19 L.Ed.2d 89 (1967).

We first addressed COGSA’s application to shipping innovations in Standard Eléc-trica, which required us to determine which was the relevant COGSA package: each 60-pound carton or the pallets on which the cartons were bound together. Divining the parties’ intent, we held the pallet to be the relevant COGSA package. See id. at 946.

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Monica Textile Corp. v. S.S. Tana, 952 F.2d 636, 1992 A.M.C. 609, 1991 U.S. App. LEXIS 29901, 1991 WL 274646 (2d Cir. 1991).

952 F.2d 636 (Monica Textile Corp. v. S.S. Tana) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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