Rainbow Navigation, Inc. v. United States

742 F. Supp. 171, 1990 WL 98775
CourtDistrict Court, D. New Jersey
DecidedJuly 13, 1990
DocketCiv. A. 86-4343
StatusPublished
Cited by3 cases

This text of 742 F. Supp. 171 (Rainbow Navigation, Inc. v. United States) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rainbow Navigation, Inc. v. United States, 742 F. Supp. 171, 1990 WL 98775 (D.N.J. 1990).

Opinion

OPINION

HAROLD A. ACKERMAN, District Judge.

This admiralty suit concerns the carriage of United States government cargo between Norfolk, Virginia and Njardvik, Iceland in September — October 1984. The principal controversy relates to the interpretation of the Bill of Lading which controls this carriage. 1 Plaintiff, Rainbow Navigation, Inc. (“Rainbow”), seeks to recover compensation from defendant, the United States of America, for overhead, loss of freight revenues and expenses incurred by it while its vessel was strikebound in Njardvik, Iceland, for a period of over twenty-two days.

A bench trial was commenced on June 28, 1989. Due to scheduling difficulties, the trial was conducted for eight days over a ten month period. The trial proceeded on November 11, 1989, December 27, 1989, December 28, 1989, December 29, 1989, January 3, 1990, April 3, 1990, and concluded on April 4, 1990.

This court has jurisdiction pursuant to the Suits in Admiralty Act, 46 U.S.C. App. § 741—752.

I now make my findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a), based on testimony and certain documents which the parties offered into evidence at trial.

FINDINGS OF FACT

I will break down my findings of fact into three parts, describing: (1) the background of this case; (2) occurrences prior to sailing; and (3) the strike in Iceland.

I. The Background of this Case

The Military Sealift Command, (MSC), Department of the Navy is the single manager operating agency for sealift service within the Department of Defense (DOD). As part of that responsibility, MSC arranges ocean transport in the foreign and domestic offshore commerce of the United States for all DOD and DOD sponsored cargoes from commercial U.S. flag ocean carriers (Stipulated fact 1). By delegation, the Commander Military Traffic Management Command, Department of the Army (MTMC), has responsibility for, among other things, all functions related to the bookings of cargo for carriage by commercial ocean carriers. MTMC served as the contracting officer, the paying officer and the legal advisor (Tr. 673). All freight bills for the movement of cargo between the U.S. east coast and Iceland are paid by the MSC subordination area command, MSC, Atlantic (COMSCLANT). The Naval Supply Systems Command (NAVSUP) is responsible for the coordination of the resupply of U.S. Naval Stations worldwide. As part of this responsibility, NAVSUP provides transportation and funding, monitors the funds, and tracks any problems in the resupply transportation pipeline.

In 1984, plaintiff, Rainbow operated as an ocean common carrier in the U.S. east coast/Iceland trade, offering regularly scheduled service between Norfolk, Virginia, and Iceland. At all times pertinent to this matter, Rainbow operated one vessel, The Rainbow Hope, in this trade. This was Rainbow’s only vessel involved in ocean carrier transportation. In September of *175 1984, The Rainbow Hope was the only U.S. flag vessel in the U.S. east coast/Iceland trade. (Tr. 356, 391). At all times relevant, The Rainbow Hope was bareboat chartered 2 to Rainbow by the Maritime Administration, Department of Transportation. Under the charter, Rainbow agreed that monthly charter payments would be due and payable regardless of whether the vessel was employed (Stipulated fact 8). Virtually all cargo carried by Rainbow in this trade belonged to the U.S. government. On the voyage in question, approximately ninety-eight percent of the cargo carried belonged to the government. (Tr. 391).

In 1984, all cargo booked by MTMC with Rainbow and Icelandic shipping companies was booked on a common carriage basis under government bills of lading pursuant to their commercial tariffs on file with the Federal Maritime Commission. When military cargo is booked under a commercial tariff, MTMC prepares and uses government bills of lading, although it is customary that both a U.S. government bill of lading and a commercial bill of lading be issued (Tr. 419). The parties agree that the contract of carriage in this case was governed by a government bill of lading and a Rainbow bill of lading. (Stipulated facts No. 13, 18). In this case, the government and Rainbow bills of lading designate Njardvik, Iceland as the point of destination, and the terms and conditions of the freight carriage are governed by the government bill of lading and Rainbow Tariff No. I, 3 as duly filed with the Federal Maritime Commission, which incorporated the Rainbow Bill of Lading. Rainbow Tariff No. 1, as duly filed with the Federal Maritime Commission, which incorporated the Rainbow Bill of Lading.

The U.S. government bill of lading states in its terms and conditions that it is governed by the regulations of Title 41, sub-part 101-41.3, of the Code of Federal Regulations, (“CFR”). Except as provided in 41 CFR § 101, or as otherwise stated on the government bill of lading, the government bill of lading is also subject to the same rules and conditions as govern commercial shipments made on the usual form provided by the carrier. (Exhibit P-1). The government bill of lading imposed upon Rainbow, the carrier, the obligation to receive the cargo, carry it from Norfolk to Njardvik, and deliver the cargo in good order and condition to the consignee (Exhibit P-1). Under the government bill of lading and applicable regulations and statutes incorporated therein, freight is not earned until delivery of the cargo at the designated destination. 41 C.F.R. § 101-41.302-3. 4

In addition to the government bill of lading, however, Rainbow’s bill of lading applies to the parties’ contract of carriage. There are three clauses in the Rainbow bill of lading at issue in this case: clauses 5(a), 5(e) and 4(b). The liberties clause, found in the Rainbow bill of lading, clause 5(a), states:

*176 In any situation whether existing or anticipated before commencement of or during the voyage including strikes and work stoppages, which in the Carrier’s judgment may give rise to risk of damage delay or disadvantage to the vessel, her cargo or persons aboard, or make it imprudent to begin to continue the voyage or to enter or discharge at any port or to give rise to delay or difficulty in arriving or discharging or leaving any port or place or in making due disposition or delivery of the goods, the Carrier may decline to receive, keep or load the goods or may discharge the goods into any depot, craft or place or may proceed or return directly or indirectly to such other port or place as the Carrier may select and discharge the goods or any part thereof there, may retain the goods on board until the return trip or such time as the carrier thinks advisable or may forward or transship the goods by any means, but always at the risk and expense of the goods or may require the shipper or consignee to take delivery at port of shipment or elsewhere and if he fails to do so,

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Cite This Page — Counsel Stack

Bluebook (online)
742 F. Supp. 171, 1990 WL 98775, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rainbow-navigation-inc-v-united-states-njd-1990.