Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-01189/USCOURTS-ca7-14-01189-0/pdf.json

Nature of Suit Code: 120
Nature of Suit: Marine Contract Actions
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

Nos. 14-1171 & 14-1189

KAWASAKI KISEN KAISHA, LTD., “K” LINE AMERICA, INC., and

UNION PACIFIC RAILROAD CO.,

Plaintiffs-Appellants,

v.

PLANO MOLDING CO.,

Defendant-Appellee.

____________________

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 07 C 5675 — Harry D. Leinenweber, Judge.

____________________

ARGUED JANUARY 6, 2015 — DECIDED MARCH 31, 2015

____________________

Before FLAUM, WILLIAMS, and TINDER, Circuit Judges.

FLAUM, Circuit Judge. On April 21, 2005, a Union Pacific 

freight train derailed in Oklahoma. The train was carrying 

two steel injection molds being delivered to Plano Molding 

Company in Illinois. The derailment occurred after the 

molds broke through the floor of their shipping container, 

causing that train car and many behind it to derail and resulting in approximately $4 million in total damage. The 

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2 Nos. 14-1171 & 14-1189

molds had been manufactured in China and shipped to the 

United States before being transferred to the Union Pacific 

train for the final leg of their journey.

At issue in this case is the reason that the molds broke 

through the floor. The appellants are three companies that 

were involved in the shipment of the molds and sustained 

losses from the accident: Kawasaki Kisen Kaisha, Ltd., “K” 

Line America, Inc. (collectively, “K-Line”), and Union Pacific 

Railroad Co. (“Union Pacific”). They sued Plano, claiming

that Plano was at fault because a company it hired packed 

the molds into the shipping container improperly, causing 

the floor of the container to break and ultimately causing the 

derailment. If true, Plano would be liable to appellants for 

breach of a warranty found in a document known as the 

“World Bill of Lading,” which provided contractual terms 

for the shipment of the molds. Plano, in defense, argued that 

the molds were properly packed and that they fell through 

the floor of the container because the container was defective.

In a bench trial, the district court found in favor of Plano, 

concluding that appellants had not proved that the molds 

were improperly packed. The court also held that the derailment was in fact caused by deficiencies in the container. 

On appeal, the plaintiffs contest these factual conclusions, as 

well as a number of other aspects of the district court’s opinion. For the reasons set forth below, we affirm.

I. Background

Plano is an Illinois corporation that designs, manufactures, and sells plastic storage boxes. In 2004, Plano identified a need to purchase two new steel injection molds, which 

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Nos. 14-1171 & 14-1189 3

it uses to manufacture its plastic boxes, and so it contacted 

CMT International, Inc. (“CMT”), a company that assists 

customers in the United States who wish to purchase products from Asia. CMT provided Plano with bids, and Plano 

selected Kunshan Yuanjin Plastic & Electronic Co., Ltd. 

(“Kunshan”), a Chinese company, to make the molds. Kunshan manufactured the molds and loaded them into wooden 

crates.

Plano hired World Commerce Services (“World”),1 a nonvessel operating common carrier,2 to arrange for the shipment of the molds from China to Plano’s factory in Illinois.

World then contracted with the THI Group LTD (“THI”) and 

K-Line for the physical shipment of the molds. THI, in turn, 

hired Shanghai Haixing Yuancang Container Transportation 

Co. (“Haixing”) to load the molds into an intermodal shipping container and hired Shanghai Ocean Tally Company as 

a “checker,” which ensured that the molds were properly 

loaded. That shipping container carried Plano’s molds (inside of their wooden crates) from the moment they were 

packed in China until the Union Pacific train derailed in Oklahoma. Both World and K-Line issued bills of lading covering the shipment of the molds. K-Line handled the ocean 

1 Plano contends that it was actually CMT that retained World’s services. 

For the purposes of this appeal, however, this dispute is irrelevant. 

2 As their name suggests, non-vessel operating common carriers do not 

own or operate ships or other means of freight transportation. Rather, 

they act primarily as coordinators of shipping logistics, and contract with 

carriers to actually move goods. They do, however, assume common carrier responsibility, 46 U.S.C. § 40102(6), (16), and often issue their own 

bills of lading. See, e.g., Sompo Japan Ins. Co. of Am. v. Norfolk S. Ry. Co., 

762 F.3d 165, 168–69 (2d Cir. 2014).

 

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4 Nos. 14-1171 & 14-1189

part of the voyage, but subcontracted the overland movement of the molds within the United States to Union Pacific. 

Once the shipping container carrying Plano’s molds arrived 

in the U.S., it was transferred from K-Line to Union Pacific, 

which began transporting the container by train from California to Illinois. During the voyage, the molds somehow 

broke through the floor of the shipping container, causing 

the train to derail in Oklahoma. The accident caused approximately $2 million in damage to the cargo of K-Line’s customers and $2 million in costs to Union Pacific.

Appellants sued in federal court, attempting to hold Plano liable for certain damages caused by the derailment and 

seeking indemnification for claims made against appellants

by third parties who suffered damages in the accident. The 

district court initially granted summary judgment in Plano’s 

favor on all of appellants’ claims, but this court reversed on 

one claim—a breach of contract claim based on a warranty in 

the bill of lading issued by World. Kawasaki Kisen Kaisha, Ltd. 

v. Plano Molding Co., 696 F.3d 647, 657–58 (7th Cir. 2012). We 

remanded to the district court to determine whether Plano 

was subject to the terms of the World Bill of Lading. After a 

one-day trial, the district court held that Plano was bound by

the World Bill of Lading and could be held liable to appellants if it violated the terms of that agreement. Kawasaki 

Kisen Kaisha, Ltd. v. Plano Molding Co., No. 07 C 5675, 2013 

WL 3791609, at *8 (N.D. Ill. July 19, 2013) (“Kawasaki I”). Plano does not appeal that ruling.

The district court then held a three-day trial to determine 

whether Plano breached Clause 10(2) of the World Bill of 

Lading, which states:

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Nos. 14-1171 & 14-1189 5

If Carrier receives the goods already packed into containers:

...

(2) Merchant warrants that the stowage and 

seals of the containers are safe and proper and 

suitable for handling and carriage and indemnifies Carrier for any injury, loss, or damage 

caused by the breach of this warranty

Plano, the parties agree, was a “Merchant” as defined in 

Clause 2(3) of the World Bill of Lading. The World Bill of 

Lading defined World as the “Carrier,” but Clause 3 provides that World’s contractors and subcontractors—

including all of the appellants—are entitled to all of the Carrier’s rights under the Bill of Lading.

The trial consisted largely of expert testimony. Appellants

sought to prove that Plano breached Clause 10(2) by improperly stowing and securing the molds in the shipping 

container. 3 There was no direct evidence of how the molds 

were packed into the container, and neither party presented 

witnesses who were involved in the loading of the container. 

That is in part because the container was packed in China, 

making it difficult to obtain this information.

3 As stated above, Plano itself did not actually pack its molds into the 

shipping containers; rather, Haixing did, and its work was checked by 

Shanghai Ocean Tally. However, assuming, as the district court did, that 

these companies were hired by Plano to pack the molds, Plano would be 

liable for those companies’ breach of Clause 10(2) just as if Plano itself 

had packed the container. Therefore, to avoid unnecessary complexity, 

we will conduct our analysis as if Plano itself packed the molds. 

 

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6 Nos. 14-1171 & 14-1189

The derailment itself also made it very difficult to determine after the fact how the container had been loaded. Much 

of what was inside of the container before the crash ended 

up outside of it, spread over the miles-long crash site. About 

60% of the floor of the container was missing after the accident, allowing much to fall out during the derailment. There 

was, however, some physical evidence about the stowage of 

the molds. Together, the two molds weighed 25,000 pounds, 

and each was packed into its own wooden crate. One mold 

was much larger than the other—it weighed 18,900 pounds, 

while other weighed 6,100 pounds. When packing shipping 

containers, packers use wooden pallets, wooden beams, and 

other types of dunnage (all types of inexpensive waste materials) to support and distribute the weight of cargo. After the 

derailment, all that was found in the shipping container was 

one 43-inch long wooden pallet, which presumably supported, at least in part, the weight of one of the crates. There 

were remnants of wooden pallets found at the accident site, 

as well as a wide variety of other debris that could have 

served as dunnage. Exhibit 281, a photograph taken at the 

derailment scene, appears to show two pallets that survived 

the accident, as well as several long wooden boards. It is not 

clear, however, which shipping container the pallets and 

wood came from, as the derailment caused multiple containers to break open and spill their contents.

Appellants’ theory of the case was that the molds were 

packed in a way that did not sufficiently distribute their 

weight in the container. They based this contention on the 

guidelines set forth in Circular 43-D, a publication of the Association of American Railroads, an industry trade group. 

Appellants argued that the guidelines in Circular 43-D, 

which was entered into evidence, should serve as the standCase: 14-1189 Document: 53 Filed: 03/31/2015 Pages: 21
Nos. 14-1171 & 14-1189 7

ard of care in this case. Appellants did not claim that the total weight of the molds violated the Circular 43-D guidelines, but rather that the weight was too concentrated. Regarding the concentration of weight in a shipping container, 

Circular 43-D states that “not more than 25,000 lbs. uniformly distributed in any 10 linear feet can be loaded.”

Appellants’ argument was presented largely through its 

expert witness, Dr. Robert Vecchio. Vecchio theorized that 

the pallet found in the shipping container following the accident was one of two identical 43-inch pallets that were 

originally used to support the molds, with each pallet supporting one crate. The larger of the two crates weighed 

18,900 pounds; spread out over 43 inches, that translates to 

over 5,000 pounds per linear foot, which is double the 

amount allowed for in Circular 43-D. Vecchio admitted, 

however, that a 43-inch pallet would have been sufficient to 

disburse the weight of the smaller crate. 

Vecchio also argued that the crates were not properly secured (“lashed”) within the shipping container, which allowed the crates to exert “dynamic amplification”—in other 

words, bouncing—on the floor of the container. His theory 

was that the combination of a failure to secure the crates and 

a failure to distribute the crates’ weight properly led to overstressing of the container floor, eventually causing the floor 

to break. To support his theory, Vecchio noted that no lashing material was found inside of the container or around the 

train following the derailment. Additionally, he referred to a 

number of “significant dents” in the wood floor of the container that were found after the derailment. According to 

Vecchio, these dents were caused by dynamic amplification 

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8 Nos. 14-1171 & 14-1189

of the crates, which only could have occurred if the crates 

were not properly lashed.

The parties’ experts referred to numerous investigative 

reports about the derailment at trial. The most important report, on which both appellants and Plano relied heavily and 

which was introduced into evidence, was produced by a 

company called Intertek Caleb Brett. Appellants focused on 

the Intertek report’s statement that the crates were placed in 

the center of the container, arguing that this implied that the 

weight of the crates was not properly distributed. On the 

other hand, the Intertek report stated that the crates were secured and lashed, contrary to Vecchio’s theory. Another important piece of evidence was a “Testification” produced by 

the Shanghai Ocean Shipping Tally Company, the company 

that supervised the loading of Plano’s molds into the shipping container. The Testification, like the Intertek report, 

stated that the cargo was loaded in the middle of the container. However, it also stated that the crates were “packed 

sound,” which could imply that the crates’ weight was 

properly distributed and that the cargo was properly lashed.

Finally, a post-derailment email from Joana Feng of the THI 

Group to World’s John Wember stated that “wooden brackets” had been used “to fix the case[s] in order not to move 

when transmitting.” On cross-examination, Vecchio stated 

that he had not previously seen the Testification or Feng’s 

email, and therefore did not take either into account when 

formulating his report.

The district court found that appellants had not provided 

sufficient evidence to prove that the weight of Plano’s crates 

was not distributed properly. Without any direct evidence as 

to how the container was packed, the court said that it was 

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Nos. 14-1171 & 14-1189 9

pure speculation for Vecchio to assume that the crates were 

supported by two 43-inch pallets. Although only one pallet 

was found in the container after the derailment, the district 

court noted that a second pallet—which even Vecchio assumed had been present—could have been large enough to 

support the larger crate. Moreover, the crates may have been 

supported by other pieces of dunnage. According to the district court, any of these scenarios was equally plausible given 

that more than enough wood to adequately support the 

crates was found at the site of the accident.

The district court also found that there was not enough 

evidence to support appellants’ claim that the crates had not 

been properly lashed. The court criticized Vecchio for disregarding the Intertek report’s finding that the crates had been

properly secured and lashed, when Vecchio otherwise relied 

heavily on the report and had said that it “provided the best 

available information” and that he “had no reason not to believe it.” The district court also stated that Vecchio’s conclusion was belied by the email from Feng to Wember stating 

that the crates had been fixed to prevent movement. The district court downplayed the fact that no lashing material had 

been found at the accident site, stating that it could have 

been lost or destroyed during the accident, or that investigators may have not even searched for it. The court also rejected Vecchio’s theory that the dents in the container’s floor 

were caused by dynamic amplification of the crates. The 

dents, the court noted, could have preexisted the loading of 

the crates into the container or could have been created 

when the crates were loaded or during the violent derailment. 

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10 Nos. 14-1171 & 14-1189

Both appellants and Plano also presented a great deal of 

evidence regarding the cause of the derailment, most of 

which focused on the condition of the shipping container.

Because we ultimately agree with the district court’s conclusion that appellants failed to prove that Plano breached 

Clause 10(2), and therefore do not reach the issue of causation, we provide only a brief summary of this evidence here.

In essence, Plano and its experts argued that the container 

was defective, mostly due to the condition of its welds. Plano’s position was that the molds fell through the floor of the 

shipping container not because they were packed improperly, but rather because the floor of the container was defective 

and gave way. Appellants, conversely, argued that the welds, 

and the container as a whole, were sound. The district court 

agreed with Plano, finding that the shipping container was 

defective and that “defective welds in the shipping container 

caused the molds to fall through the bottom of the container 

and cause the derailment.” Kawasaki Kisen Kaisha, Ltd. v. Plano Molding Co., No. 07 C 5675, slip op. at 23 (N.D. Ill. Mar. 6, 

2014) (“Kawasaki II”).

II. Discussion

Appellants’ central argument is that the district court 

clearly erred by finding that appellants failed to meet their 

burden of proving that Plano breached Clause 10(2), and 

that this breach caused the Union Pacific derailment. Before 

turning to this general issue, we address appellants’ arguments regarding more specific aspects of the district court’s 

opinion. We apply federal maritime law because jurisdiction 

exists under 28 U.S.C. § 1333. See Norfolk S. Ry. Co. v. Kirby, 

543 U.S. 14, 24–25 (2004) (finding bills of lading involving 

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Nos. 14-1171 & 14-1189 11

overseas shipment of goods to be maritime contracts even 

where the last leg of the journey was by rail).

First, appellants argue that the district court ignored the 

guidance of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 

579 (1993), when it assessed the testimony of their expert, 

Vecchio. Specifically, they claim that it was improper for the 

district court to find Vecchio’s theory less “credible” than the 

theories presented by Plano’s experts. Daubert, they argue, 

precludes a judge acting as a trier of fact from questioning 

an expert witness’s conclusions. Appellants misunderstand a 

court’s role in assessing expert testimony. It is true, as appellants point out, that the Daubert Court said a judge’s focus 

when assessing expert testimony “must be solely on principles and methodology, not on the conclusions that they generate.” Id. at 595. The Court, though, was referring to a

judge’s analysis, under Federal Rule of Evidence 702, of 

whether to admit expert testimony4 at all. Id. at 594–95. In 

making this determination, a judge acts as a “gatekeeper” to 

ensure that expert testimony is not admitted into evidence 

unless it is sufficiently reliable. Dhillon v. Crown Controls 

Corp., 269 F.3d 865, 869 (7th Cir. 2001). The district court here 

performed this gatekeeping analysis for each expert. In fact, 

the court did so both before the trial and in its final opinion, 

after both appellants and Plano once again asked the court to 

exclude the other side’s expert testimony under Daubert. Neither party contends that the judge performed these analyses 

incorrectly.

4 More precisely, Daubert dealt with the standard for admitting expert 

scientific testimony. Daubert, 509 U.S. at 582. The Daubert standard was 

later extended to apply to all expert testimony in Kumho Tire Co., Ltd. v. 

Carmichael, 526 U.S. 137, 141 (1999).

 

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12 Nos. 14-1171 & 14-1189

Once an expert’s testimony is admitted, it is treated no 

differently than lay testimony. See United States v. Christian, 

673 F.3d 702, 712 (7th Cir. 2012) (citing Federal Criminal Pattern Jury Instructions of the Seventh Circuit 3.07); United 

States v. Mansoori, 304 F.3d 635, 654 (7th Cir. 2002) (endorsing 

a jury instruction stating that “the fact that an expert has 

given an opinion does not mean that it is binding upon you 

or that you are obligated to accept the expert’s opinion as to 

the facts.”). When expert testimony has been admitted under 

Daubert, the “soundness of the factual underpinnings of the 

expert’s analysis and the correctness of the expert’s conclusions based on that analysis are factual matters to be determined by the trier of fact.” Stollings v. Ryobi Tech., Inc., 725 

F.3d 753, 765 (7th Cir. 2013) (quoting Smith v. Ford Motor Co., 

215 F.3d 713, 718 (7th Cir. 2000)). In a bench trial, once the 

court has fulfilled its gatekeeping function, it becomes a trier 

of fact that needs to assess the evidence itself—not just the 

methodology underlying that evidence. The judge, as trier of 

fact, was required to play his “essential role as the arbiter of 

the weight and credibility of expert testimony.” Id. In concluding that Plano’s experts were more credible than Vecchio, the judge properly scrutinized each expert’s assumptions, reasoning, and conclusions, as is the duty of the trier 

of fact.

Next, appellants argue that the district court was wrong 

to believe that they had made an argument regarding the 

proper securing and lashing of the molds within the shipping container. Appellants claim that they never made such 

an argument; rather, they only argued that the weight of the 

molds was not sufficiently dispersed. Appellants also claim 

that the district court was incorrect when it stated that “Dr. 

Vecchio’s theory of the accident hinges on the idea that the 

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Nos. 14-1171 & 14-1189 13

Molds were not lashed down properly in the Container.”

Kawasaki II, No. 07 C 5675, slip op. at 17. If appellants are 

correct, it is possible that the district court’s mistake caused it 

to wrongly discredit Vecchio’s testimony.

But appellants are wrong about their own argument. In 

their Post-Trial Closing Statement, appellants devoted more 

than a page to this argument, stating that “the postderailment investigation did not unearth any evidence” that 

the molds were secured and that the “‘dents’ Vecchio found 

in the plywood floor, however, show the steel molds were 

not properly secured against vertical movement.” To support their lashing argument, they then quoted from Vecchio’s 

testimony, demonstrating that Vecchio’s theory indeed assumed that the crates were not lashed. Appellants’ complaints about the district court, therefore, are not credible. 

Even more disturbing is appellants’ criticism of the district 

court for using the word “bouncing” to refer to Vecchio’s testimony about “dynamic amplification.” In their closing argument, appellants thrice referred to dynamic amplification 

as bouncing; in fact, they did not use the correct term, “dynamic amplification,” at all.5

5 Appellants also take issue with the district court’s statement that it was

“assum[ing], without finding, that Plano is subject to Clause 10.2.” Kawasaki II, No. 07 C 5675, slip op. at 28. Appellants argue that this was a settled issue, and therefore that no assumption was necessary. Though this 

assumption was in the appellants’ favor, and therefore did not impact 

the outcome below, we think it is worthwhile to provide some clarification on this matter. The appellants contend that, by questioning whether 

Plano was “subject to” Clause 10(2), the district court contradicted its 

July 19, 2013 ruling that Plano was bound to the World Bill of Lading. 

We appreciate the appellants’ point, as we think that the district court’s 

discussion here was imprecise. Clause 10(2) has a condition precedent; it 

 

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14 Nos. 14-1171 & 14-1189

We now turn to the heart of this appeal: whether the district court clearly erred by finding that appellants failed to 

prove that Plano breached Clause 10(2) of the World Bill of 

Lading. Appellants challenge both the district court’s allocation of the burden of proof and its determination that appellants did not meet their burden. We review de novo a district 

court’s allocation of the burden of proof. Chi. Prime Packers,

Inc. v. Northam Food Trading Co., 408 F.3d 894, 898 (7th Cir. 

2005). We review a district court’s findings of fact under the 

clearly erroneous standard. Fed. R. Civ. P. 52(a)(6); United 

States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (“A finding 

is ‘clearly erroneous’ when although there is evidence to 

support it, the reviewing court on the entire evidence is left 

with the definite and firm conviction that a mistake has been 

committed.”).

Normally, the party claiming breach of a warranty under 

a maritime contract—here, appellants—bears the burden of 

proof. See, e.g., Cent. Oil Co. v. M/V Lamma-Forest, 821 F.2d 48, 

49 (1st Cir. 1987). Appellants argue, however, that in this 

only applies if the “Carrier receives the goods already packed into containers.” At trial, the parties disputed whether this condition had been 

satisfied. The district court, though, did not decide the issue because it 

concluded that, even if Clause 10(2) was triggered, Plano had not 

breached the warranty found in that Clause. As we explain below, this 

conclusion was sound. At that point in the litigation, it was settled that 

Plano was subject to Clause 10(2) because it was bound as a party to the 

terms of the World Bill of Lading. Rather, the question was whether the 

Clause was applicable in this case— that is, whether Plano’s duty to safely 

and properly stow the molds was triggered. This is clearly what the district court meant to say. Regardless, neither the misstatement nor the 

district court’s decision not to definitively rule on the matter caused appellants any prejudice.

 

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Nos. 14-1171 & 14-1189 15

case the burden should fall on Plano to prove that the molds 

were packed properly because Plano has readier access to 

knowledge about the facts in question—how the shipping 

container was actually packed in China. Specifically, appellants point to Plano’s contractual relationships with World 

and THI, either of which could have inquired with its

agents—Haixing and Shanghai Ocean Tally—about how the 

containers were loaded. They also argue that Plano’s engineering vice-president has a home in China, and that he 

should have investigated how the container was actually

loaded.

Appellants’ argument is based on John Henry Wigmore’s 

rule that “the burden of proving a fact is said to be put on 

the party who presumably has peculiar means of knowledge 

enabling him to prove its falsity if it is false.” 9 Wigmore, Evidence § 2486, at 275 (3d ed. 1940). The Supreme Court has 

also endorsed this rule: “the ordinary rule, based on considerations of fairness, does not place the burden upon a litigant of establishing facts peculiarly within the knowledge of 

his adversary.” Campbell v. United States, 365 U.S. 85, 96 

(1961). Wigmore’s “rule” is not mandatory; rather, it is a 

“policy consideration” to be “applied in certain cases” as “a 

rule of fairness.” Erving Paper Mills v. Hudson-Sharp Machine 

Co., 332 F.2d 674, 678 (7th Cir. 1964); see also Wigmore, supra, 

at 275 (“The truth is that there is not and cannot be any one 

general solvent for all cases. It is merely a question of policy 

and fairness based on experience in the different situations.”).

Appellants point to two cases in which this maxim was 

employed. In Erving Paper Mills, a products liability case, we 

said that the manufacturer of a product should bear the burCase: 14-1189 Document: 53 Filed: 03/31/2015 Pages: 21
16 Nos. 14-1171 & 14-1189

den of proving that the product was suitable for sale to others in the ordinary course of its business. 332 F.2d at 678. 

And in Shanghai Automation Instrument Co., Ltd. v. Kuei, 194 F. 

Supp. 2d 995, 1004 (N.D. Cal. 2001), a district court in California held that the burden of proof should shift to the defendants where the plaintiff alleged that certain funds received by the defendants were improperly converted for 

personal use. The defendants, the court noted, had sole possession of information regarding how the funds were spent. 

We found a number of other cases in which this rule was 

employed. For example, in Shatterproof Glass Corp. v. LibbeyOwens-Ford Co., the Sixth Circuit shifted the burden of proof 

to the defendant, which had peculiar knowledge of the royalty rates it had paid to various patent holders. 482 F.2d 317, 

324 (6th Cir. 1973). And in PepsiCo, Inc. v. Redmond, a trade 

secrets case brought by Pepsi against a former employee 

who had joined a rival corporation, the district court granted 

Pepsi’s requested injunction barring Redmond from divulging trade secrets. 1996 WL 3965, at *1 (N.D. Ill. Jan. 2, 1996).

The court forgave Pepsi’s inability to prove what job duties 

Redmond would have at his new job, shifting the burden to 

Redmond on this issue because the details of his job duties 

were peculiarly within his and his new employer’s 

knowledge. Id. at *21. These cases are representative of the 

others that we examined.

For a number of reasons, we decline to apply this type of 

burden shifting in this case. First, the information at issue is 

not “peculiarly within the knowledge” of Plano. Campbell, 

365 U.S. at 96. In each of the above-cited cases where the 

burden of proof was shifted, the adversary itself had peculiar knowledge of the information at issue. Here, in contrast, 

not only does Plano lack “peculiar” (i.e., “exclusive”)

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Nos. 14-1171 & 14-1189 17

knowledge of the information at issue, it lacks any 

knowledge whatsoever—Plano simply has no information 

about how the shipping container was actually loaded. Appellants argue that Plano has a closer relationship with the 

foreign companies that possess this knowledge, and therefore that Plano has easier access to that information. Even if 

that is true, those companies are separate entities from Plano, and the mere fact that Plano may have a closer relationship with them does not bring this information peculiarly 

within Plano’s knowledge. Moreover, appellants have not 

demonstrated that Plano would actually be able to acquire 

the information at issue. The mere fact that Plano has, in the 

past, had contractual relationships with the foreign companies that possess the relevant information does not mean 

that Plano currently has unfettered access to that information. It is similarly irrelevant that a Plano vice-president 

has a personal home in the country where those companies 

are based. China is vast (over 9.5 million square kilometers) 

and has the largest population on earth; appellants fails to 

explain how Plano’s vice-president would have easy access 

to the information at issue. See Central Intelligence Agency, 

The World Factbook: China (2014), available at

https://www.cia.gov/library/publications/the-worldfactbook/geos/ch.html (last visited Mar. 3, 2015). In sum, 

fairness does not dictate that the burden of proof on this issue be shifted to a party with no actual knowledge of the 

relevant information and, it seems, no ready way to acquire 

it.

The district court, therefore, properly held appellants to 

the burden of proving by a preponderance of the evidence 

that Plano breached the warranty in Clause 10(2). That burden required appellants to prove it was more likely than not 

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18 Nos. 14-1171 & 14-1189

that Plano breached the warranty. See Bunge Corp. v. Carlisle, 

227 F.3d 934, 937 (7th Cir. 2000). The district court did not 

clearly err by finding that appellants failed to meet this burden. 6

Appellants presented no evidence of how the molds were 

actually packed into the shipping container. The fact that only 

one relatively small pallet was found in the container after 

the crash means little—most of the container’s contents likely fell out during the derailment. As the district court noted, 

large amounts of wood—and even some complete pallets—

were found near the derailment site, any of which could 

have come from the container in question. Appellants argue 

that it was “wild speculation” for the district court to suggest that the wood found at the crash site may have supported Plano’s molds. But appellants overlook the fact that they

had the burden of proving that the crates were improperly 

supported. Because they had no direct evidence of how the 

container was loaded, appellants had to resort to circumstantial evidence—the fact that only one small pallet was found 

in the container post-derailment. Appellants argued that an 

inference should be made from this discovery that the pallet 

in the container was the only one used to support the molds, 

or that there were at most two pallets of identical size. That

inference was weakened by the fact that there was ample 

wood found at the crash site that could have served as support for the molds. The district court did not find that these 

scraps had supported the molds. Rather, it found that the 

6 Appellants do not appeal the district court’s finding regarding how the 

molds were lashed and secured within the container; rather, they claim 

that they never made an argument about lashing in the first place. Therefore, we not need review that aspect of the district court’s opinion.

 

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Nos. 14-1171 & 14-1189 19

existence of the wood undermined appellants’ argument that 

the molds had been improperly supported. Moreover, Vecchio’s assumption that the molds were supported by two 

identical and insufficiently supportive pallets was based on 

pure speculation. The missing pallet (or pallets) could just as

easily have been much larger, or, conversely, nonexistent; 

there was simply no way to know based on what was found 

in the container post-derailment. Appellants repeatedly 

complain that Plano presented no evidence to suggest that 

the molds were properly packed. As the defendant, though, 

Plano did not have to prove anything.

Appellants have not produced enough evidence to prove 

that Plano breached the warranty found in Clause 10(2). 

Their final argument, however, is that they should not have 

to affirmatively prove breach, but rather that breach should 

be presumed based on the circumstances of this case. They 

argue, “[c]arriers receiving a sealed container cannot possibly [prove how the container was loaded]—it is a ridiculous 

burden to carry, hence the warranty. When ‘K’ Line proved 

there was no evidence anywhere of proper weight dispersing material for the larger crate, and without proper dispersal the stress was excessive, its prima facie case was made.” 

Reply Br. 17. Appellants are wrong about the purpose of the 

warranty—it exists to create a contractual duty, not to shift 

the burden of proof. Their general contention, though, is that 

the nature of an accident should provide a presumption of 

breach because, absent the presumption, carriers will rarely 

be able to provide direct evidence of breach, rendering the 

warranty a nullity. This argument is underdeveloped, and 

appellants provide no case law to support this approach, but 

we interpret it to be an attempt to import the doctrine of res 

ipsa loquitur into the realm of contract law.

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20 Nos. 14-1171 & 14-1189

Aside from whether the res ipsa loquitur doctrine can ever apply in a breach of contract case, it is clear that the doctrine should not apply in this case. We are sympathetic to 

appellants’ argument that it will often be exceedingly difficult for a carrier to affirmatively prove that a shipping container was improperly packed when a derailment—precisely 

the type of injury a warranty of proper stowage is intended 

to prevent—has led to the destruction of the most probative

evidence. This problem, however, was known to the parties 

when they agreed to be bound by the World Bill of Lading. 

With that problem in mind, appellants could have insisted 

upon a provision in the Bill of Lading stating that, in a case 

such as this, where a derailment is caused by a merchant’s 

goods breaking through the floor of a shipping container, 

there would be a presumption that the container was mispacked.7 As the Bill of Lading was actually written, however, 

there is no such presumption, and a carrier must affirmatively prove breach and causation. We decline to effectively rewrite the terms of the Bill of Lading by presuming breach.

7 Clause 10(5) of the World Bill states: “Merchant shall inspect containers 

before stuffing them and the use of the containers shall be prima facie evidence of their being sound and suitable for use.” Therefore, it is evident 

that the parties knew how to incorporate evidentiary presumptions into 

the Bill of Lading. The failure to do so explicitly in Clause 10(2) demonstrates that the parties did not wish to create such a presumption.

The presumption included in Clause 10(5), we note, does not impact 

our analysis of whether Plano breached its duty under Clause 10(2). As 

the district court correctly stated, “[t]he question of whether the stowage 

and seals were safe and proper is a different question than whether the 

container was sound and suitable.” Kawasaki II, No. 07 C 5675, slip op. at 

27–28.

 

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Nos. 14-1171 & 14-1189 21

Because we agree with the district court’s conclusion that 

appellants did not meet their burden of proving that Plano 

breached Clause 10(2), we do not need to review its findings 

that the shipping container was defective and that those defects caused the molds to fall through the container floor, ultimately causing the derailment. Plano had no obligation to 

explain why the accident occurred. Once the district court 

found that appellants had not met their burden of proving 

that Plano had breached Clause 10(2), the actual cause of the 

accident became legally irrelevant.8 Therefore, we agree with 

the district court that Plano is not liable to appellants for 

damages stemming from the derailment.

III. Conclusion

We AFFIRM the judgment of the district court.

8 The district court’s finding regarding the cause of the accident, we note, 

was not in itself sufficient to relieve Plano of liability. To prevail, appellants had to prove, in addition to breach, that Plano’s breach caused the 

derailment. The district court found that the defective state of the shipping container was a but-for cause of the accident. However, the fact that 

a container’s defective state was a but-for cause of a derailment does not 

mean that a merchant’s improper stowage of goods was not also a but-for 

cause. Under those circumstances, the merchant could conceivably be 

liable because its breach was a cause (though not the only cause) of damage.

 

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