Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, Defendant-Appellee,and Columbus Lines, Inc.

375 F.2d 943, 1967 U.S. App. LEXIS 6674
CourtCourt of Appeals for the Second Circuit
DecidedApril 19, 1967
Docket30855_1
StatusPublished
Cited by66 cases

This text of 375 F.2d 943 (Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, Defendant-Appellee,and Columbus Lines, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, Defendant-Appellee,and Columbus Lines, Inc., 375 F.2d 943, 1967 U.S. App. LEXIS 6674 (2d Cir. 1967).

Opinions

LUMBARD, Chief Judge:

Libellant Standard Eléctrica, S.A., appeals from a judgment entered by Judge McLean in the Southern District of New York, on August 25, 1966, denying libellant’s motion for summary judgment made pursuant to Rule 58 of the Admiralty Rules of the United States Supreme Court, and dismissing its complaint seeking $13,300 from the defendant-appellee, Hamburg Suda-merikanische Dampfschifffahrts-Gesell-sehaft, as additional damages for the loss of 1,680 television tuners shipped from New York to Rio de Janeiro.1 The entire shipment consisted of nine “pallets,” each containing six cardboard cartons of 40 tuners. Seven of the nine pallets were never delivered, and ap-pellee has conceded its liability; the only question is the amount of that liability.

The parties agree that the provisions of the Carriage of Goods by Sea Act of 1936 (hereinafter COGSA) are applicable, and limit recovery to “$500 per package.” Section 4(5), 46 U.S.C. § 1304(5).2 The sole issue on appeal, as below, is the meaning of the word “package” for purposes of that limitation. It is libellant’s contention that each cardboard carton qualifies as a package, and that the “palletized” form in which those cartons were received for shipment ought to be regarded as nothing more than a mechanical aid for delivery. Judge McLean held, however, that each pallet constituted a package within the meaning of § 4(5) of the Act. As the defendant had previously paid libellant $3,500, $500 for each of the seven missing pallets, together with interest, libellant’s motion was denied and the libel was dismissed. We agree with Judge McLean’s ruling and affirm the judgment below.

The parties stipulated that all of the pallets were made up by the shipper, I. T. T. Export Corporation, in the following manner:

As a base there was a wooden platform measuring 39" in length and 33" in width constructed of two floors about 4" apart nailed to three 2" x 4" stringers. On this platform were placed six corrugated fibreboard cartons, each containing 40 T.V. Tuners. The cartons were stacked in three tiers of two cartons each. Each tier completely covered the platform. The dimensions of each of the cartons were: 33% inches long, 19 inches wide and 12% inches high. Each carton weighed 60 pounds with 40 TV Tuners packed inside. Over the top tier of these cartons was fitted a wooden deck approximately % inch thick, the same width and length as the platform upon which the cartons were placed. The purpose of the top wooden deck was to prevent other cargo and the straps from cutting into the top two cartons. Four metal straps % inch wide were fitted over the top of the wooden deck, down the sides of the cartons and underneath [945]*945the platform where their overlapping ends were fastened tightly together with metal seals. Two of these straps ran lengthwise and two ran crosswise. When bound together with the metal straps the dimensions of each pallet were 39" in length, 33" in width and 42" in height. The gross weight of each pallet was 380 lbs.

When COGSA was enacted in 1936, it had as its central purpose the avoidance of adhesion contracts, providing protection for the shipper against the inequality in bargaining power. See Gilmore & Black, Admiralty 125-126 (1957); Caterpillar Overseas, S.A. v. S.S. Expeditor, 318 F.2d 720, 722 (2 Cir. 1963); Jones v. The Flying Clipper, 116 F.Supp. 386, 388-389 (S.D.N.Y. 1953). Section 4(5) provided that the carrier may not reduce its maximum liability below $500 per package or unit. See also 46 U.S.C. § 1303(8). At the same time, § 4(5) cast upon the shipper the burden of declaring the nature and value of the goods, and paying a higher tariff, if necessary, if he wished to impose-a higher liability upon the carrier. See Caterpillar Americas Co. v. S.S. Sea Roads, 231 F.Supp. 647 (S.D.Fla. 1964), aff'd, 364 F.2d 829 (5 Cir. 1966); also Morrisey v. S.S. A. & J. Faith, 252 F.Supp. 54 (N.D.Ohio 1965).

In determining the meaning of “package,” we are without the aid of meaningful legislative history. Only certain general observations may be made as to the reason why “package” was selected as an appropriate unit upon which the limitation of liability was placed in our 1936 Act, and in the English Act of 1924, which is similar. No doubt the drafters had in mind a unit that would be fairly uniform and predictable in size,3 and one that would provide a common sense standard so that the parties could easily ascertain at the time of contract when additional coverage was needed, place the risk of additional loss upon one or the other, and thus avoid the pains of litigation.

Few, if any, in 1936 could have foreseen the change in the optimum size of shipping units that has arisen as the result of technological advances in the transportation industry. As both parties recognize, it is now common for carriers to receive cargo from their shippers in a palletized form or “containerized” form. In some instances an entire trailer may be uncoupled from its tractor-truck on the pier and placed aboard the carrier.4 With the exception of Judge McLean’s opinion below, 262 F.Supp. 343 (S.D.N.Y.1966), and possibly United Purveyors, Inc. v. Motor Vessel New Yorker, 250 F.Supp. 102 (S.D.Fla. 1965), no court has yet considered how the limitation of liability is to be construed in light of this technological change.

Libellant’s principal contention is that a pallet is merely a mechanical device that is to be used in conjunction with a forklift and other machinery in order to facilitate loading. Certain benefits will accrue to the carrier through the use of pallets, namely, less damage to cargo and less labor cost over the long run, as the result of the decrease of individual [946]*946handling required for items of a lesser size. Libellant does not argue that these are functions not normally performed by packaging in general, but suggests only that we should disregard the pallet and look to the cardboard boxes for the purposes of the limitation. In support of this contention, libellant argues that COGSA is a remedial statute and should be interpreted broadly to protect the rights of shippers; that statutory provisions setting forth a limitation of liability should be strictly construed so as to decide all questionable cases in favor of its non-applicability and that $500 a package provides a much more stringent limitation than it did 30 years ago. Since the change in optimum size of a shipping unit could not reasonably have been foreseen, he argues, we should rule that the outer casing was merely a mechanical device and not a package.

Libellant’s contention overlooks a number of factors. First, it does not take into account the characterizations of the parties themselves. The dock receipt, the bill of lading, and libellant’s claim letter all indicated that the parties regarded each pallet as a package. On the dock receipt the “Marks and Numbers” were given as “1/9 and the “No. of Pkgs.” as “9 pallets.” The invoice from the shipper to the libellant described the goods as follows:

“Numbers on the packages: 1/9
Quantity: 9
* *

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Bluebook (online)
375 F.2d 943, 1967 U.S. App. LEXIS 6674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-electrica-sa-v-hamburg-sudamerikanische-ca2-1967.