* Circuit Judge of the United States Court of Appeals for the Eighth

Circuit, sitting by designation. REVISED, March 12, 1998

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 97-30143

_______________

SERVICIOS-EXPOARMA, C.A.,

and

ORIMPEX-ZONA IND. DEL ESTE,

Plaintiffs-Appellees,

VERSUS

INDUSTRIAL MARITIME CARRIERS, INC.,

Defendant-Appellant.

_________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

_________________________ February 25, 1998

Before MAGILL, * SMITH, and DeMOSS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

In this maritime case, we are called upon to decide two issues

under the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C. app.

§§ 1300-1315 (1994). We must first determine when “delivery”

occurs under 46 U.S.C. app. § 1303(6), commencing the one-year

period during which a shipper may bring an action for cargo damage

against a carrier. We must also decide which party SS the carrier orthe shipper SS bears the burden of proving the extent of damage to

each package for purposes of COGSA's $500 per-package limitation of

liability, 46 U.S.C. app. § 1304(5). The district court concluded

that “delivery” under § 1303(6) did not occur until the consignee

had a reasonable opportunity to inspect the shipped goods, and that

the carrier bore the burden of showing the extent of damage to each

package. We reverse.

I.

In 1992, Orimpex-Zona Ind. del Este (“Orimpex”), a Venezuelan

business, bought $1,360,001 worth of pre-fabricated steel building

materi als from Butler Manufacturing (“Butler”), of Kansas City.

The materials were designed to fit into 40-foot cargo containers,

and Butler recommend ed that the materials be shipped as such.

Orimpex opted to ship the cargo uncontainerized, however, and

Butler provided the materials in 1,140 packages, including

plastic-bagged rolls of insulation; cartons of fasteners, roofing

and wall materials; and bundles of structural steel.

Orimpex, through its Venezuelan customs broker, Servicios

Expoarma, C.A. (“Servicios”), arranged for shipping and insurance

for the building materials. Servicios contracted with Industrial

Maritime Carriers, Inc. (“IMC”), to ship the goods from New Orleans

to La Guaria, Venezuela, in two shipments.

The bill of lading specified that "[t]he Carrier or his Agent

shall not be liable for loss of or damage to the goods during the

period before loading and after discharge from the vessel howsoever3

such loss or damage arises." It also specified that the carrier

assumed responsibility for the goods "from ship's tackle at port of

loading to end of ship's tackle at port of discharge

. . . ." The

nature and value of the two shipments were not declared beyond the

$500 per package limit of liability contained in COGSA, 46 U.S.C.

app. § 1304(5).

The first shipm ent, aboard the M/V ANDREALON, departed New

Orleans on April 16, 1992. The second shipment, aboard the

M/V ARDAL, left New Orlea ns on May 2, 1992. The bills of lading

for both shipments showed Servicios as consignee and “notify” party

and were issued without exceptions, clean on board.

The ANDREALON arrived in La Guaria and commenced out-turn on

April 30, completing discharge on May 2. The goods were discharged

to an adjacent pier under the ship's tackle, and then moved about

30 meters to the warehouse of Mercaduana Almacenes (“Mercaduana”),

there to be stored pending customs clearance. The goods cleared

customs on May 12 and then were released to the consignee.

The ARDAL arrived and began discharging its cargo to

Mercaduana on May 14, completing discharge the same day. Servicios

obtained customs clearance for the second shipment on May 25.

It was apparent upon out-turn that some of the goods from both

shipments were damaged. Both parties conducted independent surveys

of the damage and disagreed as to its cause and extent. After

trial, the district court found that all the packages in the first

shipment and half of the packages in the second had been damaged to

some extent during transit.4

Orimpex trucked the building materials to the constru ction

site, then removed the materials from their packages. Orimpex paid

$324,342.64 to repair or replace components of the first shipment,

and $51,910.90 to repair or replace components of the second.

Orimpex recovered $15,664 from its cargo insurer for the damage

done to the rolls of insulation.

Pursuant to a contractual choice-of-forum clause, Orimpex and

Servicios sued IMC under COGSA in federal court. Following a bench

trial, the court found IMC liable for the damages to Orimpex's

building materials.

The court calculated damages by first excluding the rolls of

insulation, for which Orimpex had been compensated by its insurer.

The court then computed the actual damages sustained for each

shipment: $324,342.64 for the first shipment and $51,910.90 for the

second.

The court then computed the maximum liability under COGSA,

which establishes a maximum liability of $500 for each damaged

package, 46 U.S.C. app. § 130 4(5). In the first shipment, there

were 287 non-insulation packages, for a maximum liability of

$143,500 (287 × $500). In the second shipment, there were 249 noninsulation packages, for a maximum liability, for the half of the

packages that had been damaged, of $62,250 (249 × .5 x $500).

Given these maximums, the court set damages at $143,500 for the

first shipment and $51,900 for the second, plus prejudgment

interest.5 II.

COGSA provides a limitations period of one year from

“delivery” during which a shipper must bring suit against the

carrier:

In any event the carrier and the ship shall be discharged

from all liability in respect of loss or damage unless

suit is brought within one year after delivery of the

goods or the date when the goods should have been

delivered.

46 U.S.C. app. § 1303(6). This suit was filed more than a year

from the ANDREALON's discharge and transfer of the cargo to the

customs warehouse, but less than a year from when the consignee,

Orimpex, received the goods after they cleared customs. Thus, when

“delivery” occurred dictates whether the claims arising from the

damage to the cargo of the ANDREALON are time-barred.

IMC urges that “delivery” means “delivery from the carrier,”

while Servicios contends that “delivery” means “delive ry t o the

c onsignee.” Between these two points in time are the ten days

during which the cargo was in the possession of neither the carrier

nor the consignee. The statute does not define the term, and

either reading could be consistent with the plain text of the

subsection.

A.

No court of appeals has decided w hen “delivery” occurs for2 This issue was recognized but not decided in Mendes Junior Int'l Co. v.

M/V SOKAI MARU , 43 F.3d 153, 155 n.2 (5th Cir. 1995).

3 See also 2A M ICHAEL F. S TURLEY

, B ENEDICT ON A DMIRALTY § 163 (7th rev. ed. 1997)

(describing different approaches); M ichael F. Sturley, An Overview of the

Considerations Involved in Handling the Cargo Case

, 21 T UL

. M AR

. L.J. 263, 314-21

(1997) (same).

6 purposes of section 1303(6). 2 Several district courts have

addressed the question, howev er, and these cases can be arranged

into two general lines of authority. Some courts have concluded

that “delivery” occurs when cargo leaves a ship's slings,

irrespective of whether it is placed in the hands of the consignee

(or its agent). See, e.g., Cargill Ferrous Int'l v. M/V ELIKON

,

857 F. Supp. 45, 47 (N.D. Ill. 1994); C. Tennant Sons & Co. v.

Norddeutscher Lloyd

, 220 F. Supp. 448, 449 (E.D. La. 1993). Other

courts have held that delivery occurs only when the consignee has

a reasonable opportunity to inspect the goods for damage. See,

e.g., Atlantic Mut. Ins. Cos. v. M/V BALSA 38

, 695 F. Supp. 165

(S.D.N.Y. 1988); National Packaging Corp. v. Nippon Yusen Kaisha

,

354 F. Supp. 986, 987 (N.D. Cal. 1972). 3 Finding neither standard

entirely compelling, however, we adopt a different rule, one more

closely in keeping with the nature of COGSA and w ith the general

usage of the term “delivery” in maritime law.

B.

1.

Most limitation periods begin running when the cause of action

“accrues.” S ee, e.g.

, 45 U.S.C. § 56 (Jones Act). Thus, under the

Jones Act, which provides that actions are time-barred unless4 For example, the Louisiana limitations period for the avoidance of a sale

of a defective good (redhibition) runs four years from the day of delivery, or

one year from the day the defect was discovered, whichever occur s first. See

L A . C IV . C ODE A NN

. ART . 2534 (West 1992).

7 commenced “within three years from the day the cause of action

accrued ,” id

. (emphasis added), this circuit has applied the

discovery rule with respect to latent injuries: “A cause of action

under the Jones Act and general maritime law accrues when a

plaintiff has had a reasonable opportunity to discover his injury,

its cause, and the link between the two.” C risman v. Odeco, Inc.

,

932 F.2d 413, 415 (5th Cir. 1991). It is, of course, eminently

reasonable that a cause of action should not “accrue” until the

plaintiff has actual or c onstructive knowledge of its existence.

Cf. id. ; A lbertson v. T.J. Stevenson & Co.

, 749 F.2d 223, 228 -29

(5th Cir. 1984).

The COGSA limitations period, however, makes no reference to

when the cause “accrues.” Rather, it defines the running of the

limitations period solely by reference to an extrinsic event: when

the goods were delivered. S ee 46 U.S.C. app. § 1 303(6). This

distinction is neither insignificant nor unique. 4 So, in enacting

C OGSA, Congress deliberately tied the limitations period to an

extrinsic event and apparently paid no attention to when a cause

might accrue or when a plaintiff has notice that it has been

damaged.

Thus, the statute states that where the goods are lost at

sea SS and are never delivered SS the period begins running not when the

ship sinks, or when the consignee has notic e of the loss, but,8

instead, when the goods should have been delivered. S ee 46 U.S.C.

app. § 1303(6). Any other event SS including actual receipt by the

consignee SS is irrelevant to the mechanical application of when

delivery should have occurred.

Similarly, when a shipment is first delayed and then arrives

at port damaged, the limitations period commences not when the

damaged goods are actually delivered, but rather when they should

have been delivered. In Western Gear Corp. v. States Marine Lines

,

362 F.2d 328 (9th Cir. 19 66), the cargo washed overboard but was

recovered and repaired and re-shipped, arriving five months after

the original delivery date. The suit was time-barred, however,

when it was brought less than a year after the actual delivery date

but more than a year after the cargo should have been delivered.

Thus, the Western Gear court properly applied the limitations

period without regard to when the consignee had notice that the

goods were damaged, and even without regard to when the damaged

goods were received by the consignee. The period began running

when the cargo should have been delivered.

In this respect, the COGSA limitation period resembles a

statute of repose:

A statute of l imitations extinguishes the right to

prosec ute an accrued cause of action after a period of

time. It cuts off the remedy. It is remedial and

procedural. A statute of repose limits the time during

which a cause of action can arise and usually runs from an

a ct of a defendant. It abolishes the cause of action

after the passage of time even though the cause of action

may not have yet accrued.

Harding v. K.C. Wall Prods., Inc. , 831 P.2d 958, 967 (Kan. 1992).

It is apparent, then, that “delivery,” and the commencement of the9

one -year limitations period under § 1303(6), need not involve a

reasonable opportunity to inspect.10 2.

The text of and surrounding the one-y ear limitation clause

also demonstrates tha t the operative events are defined by

ref erence to the carrier's acts, not the ultimate consignee's.

Notice of loss or damage must be given to the carrier “at the port

of discharge before or at the time of removal of the goods into the

custody of the person entitled to delivery thereof under the

contract of carriage.” § 1303(6). And “[i]f the loss or damage is

not apparent, the notice must be given within t hree days of the

delivery.” I d

. Read together, these clauses equate “delivery”

with “removal into the custody of the person entitled to delivery

thereof.” Moreover, where the person entitled to delivery is a

railroad or a customs house, not the consignee, there is “delivery”

for purposes of the statute without regard to the actions of the

consignee.

If, in § 1303(6), Congress had meant to begin the limitations

period when the consignee received the goods, it could have

accomplished this quite easily by using words to that effect. But

instead of using the word “receipt,” Congress used the word

“delivery.” Both the common and the legal meanings of these words

make apparent that “delivery” is defined by acts of the carrier,

not by “receipt.”

Thus, commonly, to “recei ve” is “to t ake possession or

delivery of,” W EBSTER ' S T HIRD N EW I NT ' L D ICTIONARY 1894 (1986) (emphasis

added), but to “deliver” is to “ give

, transfer, yield possession or

control of, make or hand over,” id . at 597 (emphasis added). And5 Delivery need not include transfer of actual possession to the acquiror.

Thus, “delivery” includes mailing. B LACK ' S L AW D ICTIONARY 1268 (6th ed. 1990).

11 legally, to “receive” is to “ take into possession and control;

accept custody of; collect,” B L ACK ' S L AW D ICTIONARY 1268 (6th ed.

1990) (emphasis added), while “delivery” is “[t]he act by which the

res or substance thereof is p laced within the actual or

constructive possession or control of another,” i d

. at 428

(emphasis added). 5 Consequently, “delivery” entails acts by the

carrier, and what acts will constitu te proper delivery from the

carrier is determined by the carriage contract and general maritime

law.

C.

That “delivery” is thus defined to grant certainty to the

carrier is also supported by the policy underlying the limitations

period. The dual purposes of a limitations period are to force

parties to litigate claims while the evidence is still fresh, and

to grant the prospective defendant relative security and stability

by allowing it better to estimate its outstanding legal

obligations. S ee, e.g.

, 50 T EX

. J UR

. 3 D

, Limitation of Actions § 2,

at 266-68 (1986). Limitations periods

represent a pervasive legislative judgment that it is

unjust to fail to put the adversary on notice to defend

within a specified period of time and that the right to

be free from stale claims in time comes to prevail over

the right to prosecute them.

. . . [T]hey protect

defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired

by the loss of evidence, whether by death or

dis appearance of witnesses, fading memories,

disappearance of documents, or otherwise.6 The goal of certainty is, of course, sacrificed wherever the discovery

rule is applied. There, the interest in granting relief to injured plaintiffs

is adjudged to outweigh the defendant's interest in repose. But the discovery

rule is by no means universally applied. Texas courts, for example, apply the

discovery rule as “a very limited exception to statutes of limitation,” and only

“in those cases where the nature of the injury is inherently undiscoverable and

the evidence of injury is objectively verifiable.” C omputer Associates Int'l v.

Altai, Inc. , 918 S.W.2d 453 (Tex. 1994).

In cases of cargo loss or damage, there is, of course, nothing “inherently

undiscoverable” about the injury. Unlike personal injuries with long latency

periods, this damage was immediately apparent. Cf. Crishman , 932 F.2d at 415

(“If some injury is di scernible when the tortious act occurs, the time of the

event rule [rather than the discovery rule] respecting statute o f limitations

applies”).

12 United States v. Kubrick

, 444 U.S. 111, 117-18 (1979); see also

Wilson v. Zapata Off-Shore Co.

, 939 F.2d 260, 267 (5th Cir. 1991).

Thus, the underlying policies of certainty and repose work strongly

in favor of the notion that the defendant's conduct, and not some

amorphous standard of “accrual” or the uncertain and uncontrollable

“receipt by consignee and oppor tunity to inspect,” should define

when the statutory period begins to run. 6

The policy that favors quickly ridding defendants of

outstanding claims SS through litigation or forfeiture SS is especially

strong in the maritime context. The inverse-order rule of maritime

liens SS that the last lien to at tach takes priority over all

others SS favors those who act immediately on their claims. S ee G RANT

G ILMORE AND C HARLES L. B LACK

, J R

., T HE L AW OF A DMIRALTY § 9-62 (1975).

Similarly, the admiralty procedures SS with the attachment of

maritime liens and in rem actions SS show that the law recognizes the

transient nature of ocean shipping and requires plaintiffs to act

quickly upon their claims. This is because “the vessel must get

on.” The St. Jago de Cuba , 22 U.S. (9 Wheat.) 409, 416 (1824).7 See generally Michael F. Sturley, The History of COGSA and the Hague

Rules

, 22 J. M AR

. L. & C OM

. 1 (1991); 2 T HOMAS J. S CHOENBAUM

, A DMIRALTY AND M ARITIME L AW

§ 10-15 (2d ed. 1994).

8 See, e.g.

, A NTONIN S CALIA

, A M ATTER of I NTERPRETATION : F EDERAL C OURTS AND THE L AW

29-37 (1997). “My view that the objective indication of the words, rather than

the intent of the legislature, is what constitutes the law leads me, of course,

to the conclusion that legislative history should not be used as an authoritative

indication of the statute's meaning.” I d

. at 29-30. Further, the use of

legislative history “does not even make sense for those who accept legislative

intent as the criterion. It is much more likely to produce a false or contrived

result than a genuine one.” Id. at 31-32.

13 D.

Our interpretation of “delivery” for purposes of COGSA § 3(6)

is consistent with the historical background of the statute. COGSA

is our domestic en actment of the Hague Rules, a multinational

convention that established uniform rules to govern ocean bills of

lading. Those rules were approved by the Brussels Convention in

1922, some fourteen years before COG SA made them the law of the

United States. 7 As its purpose was to establish international

uniformity, COGSA could n ot substantively deviate from the Hague

Rules. There was no real dickering over the terms, no process of

drafting and revision. The history of Congress's enactment of the

COGSA therefore sheds fairly little light on its intent.

Subject to this and to a more general objection to the use of

legislative history in judicial interpretat ion of statutes, 8 we

hav e perused most of the relevant historical documents and

ultimately find them inconclusive on what was meant by “delivery”

in § 1303(6). The only academic commentator squarely to address

this issue simi larly concluded that “there is evidence in the

congressional hearings that seems to support both sides of the9 James R. Ward, The Floundering of “Delivery” Under Section 3(6) of COGSA:

A Proposal To Steady Its Meaning in Light of Its Legislative History

, 24 J. M ARITIME L. AND C OMM . 287, 324 (1993) (hereinafter “Ward, Floundering ”).

1 0 See Relating to the Carriage of Goods by Sea: Hearings before the House

Comm. on Merchant Marine & Fisheries on H.R. 3830

, 71st Cong. 2d Sess. 38 (1930),

reprinted in 3 M ICHAEL F. S TURLEY

, ED

., T HE L EGISLATIVE H ISTORY OF THE C ARRIAGE OF G OODS BY

S EA A CT AND THE T RAVAUX P REPARATOIRES OF THE H AGUE R ULES 365, 404 (1990)

.

1 1 See H ENRY N. L ONGLEY

, C OMMON C ARRIAGE OF C ARGO § 16.03, at 201 & nn.15-16

(1967). S ee also, e.g., United States Shipping Board v. Texas Star Flour Mills

, 12 F.2d 9, 11 (5th Cir. 1926) (holding clause precluding suit after six months

from delivery to carrier unenforceable where shipment SS and d amage S S took longer

than six months)

.

1 2 Still, the drafters recognized that the Hague R ules and COGSA were

contractual defaults, and thus that the time-for-suit provision was of the nature

of a contract term. See II I NTERNATIONAL L AW A SS ' N

, R EPORT OF THE T HIRTIETH C ONFERENCE :

P ROCEEDINGS OF THE M ARITIME L AW C OMMITTEE 113 (1922), reprinted in I S TURLEY , L EGISLATIVE

H ISTORY 219 (opining that “it is a contract by the shipper that he will not sue

14 debate.” 9 That is to say, nowhere in the bill's history does there

appear to have been an explicit consensus that “delivery” occurred

either when the carrier gave up control of the goods, or when the

consignee received them. Still, there is strong evidence to

support the position we articulate today.

1.

Of initial import is the background upon which § 3(6) was

written. At the time when COGSA and the Hague Rules were drafted,

bills of lading generally contained highly restrictive time-f orsuit provisions, often requiring a consignee to sue the carrier

within ninety days or forfeit it s cause of action. 1 0 Admiralty

courts had upheld these clauses on freedom-of-contract principles,

except in certain cases in which they would have eliminated the

cause of action en tirely. 1 1 Because COGSA replaced these clauses

with the uniform notice and time-for-suit provisions of § 1303(6), 12after twelve months”).

1 3 Many of the cases in which contract ual time-for-suit provisions were

litigated generally present no direct analog to the “delivery” standard of

§ 3(6). These clauses often related the time-for-suit period not to “delivery”,

but to the time goods were discharged or removed from the wharf. S ee, e.g., THE

PRESIDENT POLK v. THE PRESI DENT ADAMS , 43 F.2d 695 (2d Cir. 1930); I kuno v.

Morris & Co.

, 22 F.2d 140 (4th Cir. 1927); Green Star S.S. Co. v. Nanyang Bros.

Tobacco Co. , 3 F.2d 369 (9th Cir. 1925).

15 the courts' interpretation of those clauses could indicate how that

subsection ought to be interpreted. 13

This court's decision in A. Russo & Co. v. United States

,

40 F.2d 39 (5th Cir. 1930), presents a nearly preci se analog to

COGSA's use of delivery to trigger the limitations period. In

1927, A. Russo & Co. shipped 1,000 cases of c anned tomatoes from

Palermo, Italy, to Chicago. The through bill of lading specified

that an ocean carrier would take the cargo to New Orleans and

d eliver it to a railroad, which then would take the g oods to

Chicago. The bill of lading contained the following clause:

“ Claims for loss, damage, or injury to property must be ma de in

writing to the originating or delivering carrier or c arriers

issuing t his bill w ithin six months after delivery of the

property.” Id . at 41 (emphasis added).

Delivery from the ship to the railroad at New Orleans was

completed November 11, 1927; the goods were delivered to the

consignee in Chicago on November 21. The consignee made a claim

for damage to the agent of th e ship on May 17, 1928, and filed a

libel in admiralty on December 14, 1928. Id

.

The question was whether the consignee' s claim against the

ocean carrier was time-barred. The May 17 claim was made more than14 See generally , Ward, Floundering , at 305-25.

16 six months after the ocean carrier's delivery to the railroad, but

fewer than six months after the consignee received the goods in

Chicago. I d

. The court concluded that the claim against the

carrier was barred, as it was brought over six mont hs after the

carrier's delivery to the railroad. Id

.

It is thus apparent from Russo that “delivery” occurred when

the ocean carrier had fulfilled its obligations under the bill of

lading by placing the cargo into the hands of the railroad. That

the consignee received the goods ten days later, and that the

consignee could not determine the exact nature and amount of damage

t o the goods until such time, was immaterial. Delivery was not

defined by receipt by the consignee, but rather occurred when the

carrier had properly surrendered the goods in accordance with its

contractual duties.

To the extent that COGSA's limitation period is essentially a

contractual default, now incorporated by reference in all bills of

lading, this common law gloss still obtains. Furthermore, there is

support for this interpretation in the debates and statements made

contemporaneously with the passage of COGSA.

2.

During Congressional hearings on COGSA , the question of

“delivery” received some direct consideration. 14 The provision

directly at issue was another clause of § 1303(6) that requires

that, “[i]f the loss or damage is not apparent, the notice [to the1 5 Relating to the Carriage of Goods by Sea: Hearings Before the House

Committee on Merchant Marine & Fisheries

, 67th Cong., 4t h Sess. 74-78 (1923)

(statement of Mr. Davis), quoted in Ward, Floundering , at 317-20.

16 Id . (statement of Mr. Campbell).

17 Id . (question by Mr. Brand, answer by Mr. Haight).

17 carrier] must be given within three days of the deliv ery.”

46 U.S.C. app. § 1303(6). The effect of giving notice in this way

is to establish, prima facie

, that the d amage occurred during

shipment. The same ambiguity presents itself: Was this delivery

from the carrier or to the consignee?

The committee addressed the problem of the hypothetical inland

consignee: where goods are delivered by ocean carrier to New York,

then shipped by rail to Kansas City. One committee member pointed

out that in such a case, the consignee does not know of the damage

and cannot avail himself of the three-day-notice burden-shift ing

provision, unless the three days begins when the consignee receives

the goods. To effect this, he recognized, “it would be necessary

to say 'within three days after the receipt thereof by the ultimate

consignee.'” 15

The response, in essence, was that the langu age was

deliberate: For policy reasons, it makes sense that “[t]he man at

the port has to examine his goods within three days of the time the

ship lands the goods .” 16 And again: “Should not it be three days

after the receipt of the goods by the p erson entitled to them?”

The answer was unequivocal: “No, sir.” 1 7 So, consistently with the

principles of R usso

, the committee seemed to agree that under

COGSA, “delivery” was accomplished by relinqu ishing the goods to18 See Ward, Floundering , at 320-25.

19 Id. at 321.

2 0 C OMITÉ M ARITIME I NTERNATIONAL

, 1922 L ONDON C ONFERENCE 467 (1922), quoted in Ward,

Floundering , at 321 (emphasis added).

18 the land carrier, who is not necessarily the ultimate consignee.

The Congressional hearings also addressed the question of

customs-house delivery. Again, the issue was discussed in context

of § 3(6)'s three day notice-of-loss clause. There, however, the

issue became muddled, as the committee members and those testifying

seemed to confuse the issues of substantive l iability for damage

with the question of “delivery” that triggers the notice-of-claim

period. 18 As an academic said, it is “ultimately inconclusive.” 1 9

But the issue of what constitutes “delivery” was left unaddressed,

largely because the t erm carried an independent meaning at law:

S aid one drafter of the Hague Rules, “the shipowner must m ake a

real delivery, but what that delivery is to be it will be for the

law of the land, the law of the port of destination to say .” 2019 E.

Thus, the text of COGSA and its underlying policies and

history require that “delivery” be afforded its general legal

meaning: the point at which the carrier has fulfilled its

responsibilities to carry , discharge, and otherwise perform its

contractual duties with respect to the cargo. “Delivery” occurs

when the carrier places the cargo into the custody of whomever is

legally entitled to receive it from the carrier.

The final question, therefore, is when, as a matter of

contract and maritime law, delivery occurred. The case of T apco

Nigeria v. M/V WESTWIND , 702 F.2d 1252 (5th Cir. 1983), led to an

oft-cited articulation of the delivery standard under COGSA and the

Harter Act:

Although the Harter Act was partially super s eded by

passage of the Carriage of Goods by Sea Act, COGSA

defines the duty of care only from the time the goods are

loaded on to the sh ip until the time when the cargo is

released from the ship's tackle at port . 46 U.S.C.

§ 1301(e). Consequently, the Harter Act is still

applicable to any period between the discharge of the

cargo from the vessel and its proper delivery.

. . . The

Act itself does not define "proper delivery", but only

prevents the carrier from agreements which would relieve

it from liability for loss arisin g from negligence,

including improper loading or del ivery. 42 U.S.C.

§§ 190, 191. General maritime law requires that a

carrier "unload the cargo onto a dock, segregate it by

bill of lading and count, put it in a place of rest on

the pier so that it is accessible to the consignee, and

afford the consignee a reasonable opportunity to come and

get it."

702 F.2d at 1255 (citations omitted) (quoting F.J. Walker, Ltd. v.

M/V LEMONCORE

, 591 F.2d 1138, 1142 (5th Cir. 1977)). This general

duty of delivery, however, is subject to the “custom of the port2 1 See also Jud ith Anne Meyer, Note, I n Another Country: The Effect of

Mandatory Port Law upon Statutory Duties of Discharge and Delivery SS Tapco Nigeria

v. M/V Westwind, 9 M AR

. L AW . 123, 135-36 (1984) (“[T]he correct focus for

determ ining proper delivery is the person charged by the law and usage of the

port with the duty to receive cargo and distribu te it to the consignee. More

precise ly, proper delivery occurs at the point at which port law or usage

dictates that the duties of such person shall commence.”).

2 2 It makes no difference that in Imparca

, the bill of lading specified

this point of delivery. The Tapco Nigeria court noted:

In Imparca

, the bill of lading provided that the responsibility of

the carrier ended "when taken into the custody of customs or other

authorities" of a foreign port. The fact that there was no similar

provision here makes no difference. Because the Harter Act forbids

the inclusion of any term in a bill of lading which would lessen

or avoid the carrier's obligation to make a proper delivery, this

20 doctrine,” which is

the well-settled rule announced in T an-Hi v. United

States , 94 F. Supp. 432, 435 (N.D. Cal. 1950) that the

common law requirements of proper delivery are m odified

by the custom, regulations, or law of the port of

destination. As explained by that court, the duties to

discharge cargo to a fit wharf, to separate each segment,

and to protect the cargo until th e consignee has a

reasonable opportunity to remove it from the wharf, were

elements of a proper delivery "only where the custom,

regulation s, or law of the port did not otherwise

provide.

. . . The common-law did not permit less nor

require more in the way of delivery than the usage or the

law of the port dictated."

Id . at 1255-26. 21

This circuit has applied the custom of the port doctrine to

determine who is entitled to receive cargo from the carrier. Thus,

in Allstate Ins. Co. v. I mparca Lines , 646 F.2d 166 (5th Cir.

Unit B May 1981), we directly held that delivery to customs

authorities constitutes proper delivery where the custom or law of

the port requires such: “[A] carrier's delivery to persons charged

by the law and usage of the port with the duty to receive cargo and

distribute it to the consignee is a good delivery on the part of

the carrier.” I d. at 168-69 (quoting Tan Hi

, 94 F. Supp. at 435). 22provision could not effect liability before delivery had been

accomplished. Our decision in I mparca is implicit recognition that

proper delivery was achieved whe n the INP took custody of the

containers during the unloading process.

702 F.2d at 1257 n.2.

2 3 In fact, this delivery oc curred not at the warehouse but under the

ship’s slings, when Mercaduana took possession of the cargo.

21 Thus, while contract and maritime law generally will dictate into

whose custody an ocean carrier is required to deliver cargo, such

law will be overridden by the established law or custom of the port

of delivery.

In this case, it appears that the custom and laws of the port

of La Guaria require ocean carriers to deliver cargo to an

authorized customs warehouse pending clearance. 23 IMC accordingly

delivered the cargo of the ANDREALON to Mercaduana, completing such

delivery on May 2, 1992. Once IMC had properly placed its cargo in

the hands of the party authorized to receive it, IMC had

“delivered” the cargo, and the one-year time-for-suit period began

to run. Because Servicios and Orimpex filed suit more than a year

after this “delivery,” the claims for damage from that shipment are

barred under 46 U.S.C. app. § 1303(6).

Although this result seems, facially, somewhat harsh, it is

fair. Limitation periods exist solely for the benefit of

defendants and always will produce harsh results when they operate

to bar a claim that is otherwise valid.

Servicios and Orimpex had ample opportunity to file suit well

before the period expired. They knew of the damage almost

immediately upon discharge. The district court found, as a matter2 4 If we were presented with a different circumstance SS if, for example, the

goods had remained in the customs warehouse for over a year SS it might be possible

to engage in equitable tolling of the limitations period. Cf., e.g., Wilson v.

Zapata Off-Shore Co.

, 939 F.2d 260, 267-68 (5th Cir. 1991). We have no occasion,

in this case, to speculate as to when, in fact, such tolling w ould be

appropriate; we state only that we do not foreclose its possibility in other

contexts.

25 Parties can contract around this default limitation, but that did not

occur here. See 46 U.S.C. app. § 1304(5).

22 of fact, that the damage was visible when the cargo was off-loaded

from the ANDREALON. Servicios hired a surveyor who examined and

documented the damage as the cargo was unloaded and stored in the

Mer caduana customs warehouse. The record contains photographs

showing visible and obvious damage to the cargo as it sits on the

wharf under the ship's slings.

In sum, Servicios and Orimpex had a year to file suit but

neglected to do so. It is fair that the claims should be timebarred. 24

III.

COGSA provides that “[n]either the carrier nor the ship shall

in any event be or become liable for any loss or damage to

. . .

goods in an amount exceeding $500 per package . . . .” 46 U.S.C.

app. § 1304(5). 25 Servicios and Orimpex did not keep the contents

of the various packages separate after delivery but op ened them

all, and only after their contents were commingled did they assess

the aggregate damage. The district court thus heard no evidence of

the damage done to each package, or whether the damage to any

package met or exceeded the $500 limitation. Therefore, the court

aggregated the $500 limit for all of the damaged packages, and2 6 In that case, the buyer of the goods apparently considered it its duty

to hire a surveyor and ascertain the precise amount of damage to each package.

23 against this total limit applied the total damages sustained. This

was error.

A.

Because neither party attempted to show the damage sustained

to each package, we are presented with the no vel question of who

has the burden of doing so. The more typical case involves uniform

cargo that is uniformly damaged. See, e.g. Croft & Scully Co. v.

M/V SKULPTOR VUCHETICH

, 664 F.2d 1277 (5th Cir. 1982) (1,755 cases

of soda crushed). Or if the case involves non-uniform cargo or

damage, the court generally will be able to determine the quantum

of damage to each package. See, e.g., Universal Leaf Tobacco Co.

v. Companhia de Navegacao Maritima Netumar

, 993 F.2d 414, 416 (4th

Cir. 1993) (cases of various tobacco products in various states of

damage enumerated by court). 26

Here, on the other hand, we have very different packages

damaged, respectively, to a very different extent: from bundles of

steel that were bent in various degrees, to rolls of insulation

that were torn in various ways. But we have no attempt by the

consignee to quantify the per-package damages. Although Orimpex

hired a s urveyor immediately after the cargo had been discharged

from the ANDREALON, it apparently made no attempt to discern the

quantum of damage to each package. By the time IMC's surveyor

arrived, much or all of the cargo already had been removed from its2 7 S ee also Craddock Int'l v. W.K.P. Wilson & Son

, 116 F.3d 1095, 1105-06 (5th

Cir. 1997). And more specifically, a number of courts have explicitly or implicitly

treated § 1304(5) as an affirmative defense, the availability of which must be

established by the carrier. S ee, e.g., Rockwell Int'l Corp. v. M/V INCOTRANS

SPIRIT

, 998 F.2d 316 (5th Cir. 1993); Couthino, Caro & Co. v. M/V SAVA

, 849 F.2d 166

(5th Cir. 1988); C arman Tool & Abrasives, Inc. v. Evergreen Lines

, 871 F.2d 897 (9th

Cir. 1989); Binladen BSB Landscaping v. M/V NEDLLOYD ROTTERDAM

, 759 F.2d 1 006, 1009

(2d Cir. 1985).

24 original packaging and commingled.

B.

Servicios argues that a limitati on on liability is an

affirmative defense and that the carrier that seeks its protection

must show its applicability. Thus, Servicios contends that the

burden fell on IMC to show the damage sustained to each package.

1.

There is no question that IMC had the burden of establishing

the availability of the $500 limitation: “[T]he burden rests upon

the carrier of goods by sea to bring himself within any exception

relieving him from the liability which the law otherwise imposes on

him.” Schnell v. THE VALLESCURA

, 293 U.S. 296, 303 (1934). 27 But

this rule deals only with the availability of the limitation, not

with the quantum of damages recov erable. C f., e.g, Schnell

,

293 U.S. at 303-05.

Neither side disputes that the $500 limit is applicable.

IMC's burden of showing its availability is therefore discharged.

But the effect of the per-package limitation, onc e its

applicability is established, is that it becomes part of the

substantive law of damages that the plaintiff then has the burden2 8 Accord United States ex rel. Gray-bar Elec. Co. v. J.H. Copeland & Sons

Constr., Inc.

, 568 F.2d 1159, 1161-62 (5th Cir. 1978) (holding that the party

seeking damages must show the specific amount it is entitled to recover, not just

the total amount of damages).

25 of proving.

2.

It is a basic concept of damages that they must be proved by

the party seeking them. S ee, e.g., Prunty v. Arkansas Freightways,

I nc.

, 16 F.3d 649, 652 (5th Cir. 1994); Pizani v. M/V COTTON

BLOSSOM

, 669 F.2d 1084, 1088 (5th Cir. 1982). And where the

damages that are legally recoverable are less than the total amount

sustained, the injured party cannot simply show the total amount,

but must prove that portion to which it is legally entitled. In

Pizani

, we refused to allow the plaintiff to present a damage

figure where he had failed to segregate what was recoverable from

what was not. We stated:

[W]here a plaintiff has shown the gross amount of expense

or loss, but where defendant is not liable (by substantive

law) for all of the lo ss . . . courts are strict in

requiring plaintiff to prove affirmatively the amount that

should be subtracted, before he can recover anything on account of the loss or expense in question.

669 F.2d at 1089 (quoti ng 2 F. H ARPER & F. J AMES

, T HE L AW OF T ORTS

§ 25.3, at 1305 (1956)). 28

The substantive law of damages includes the $500 per-package

limitation. As always, it was the plaintiff's burden to show its

compensable damages. It is not enough, then, that Servicios proved

the gross amo unt of its damages, where it is not entitled to2 9 One example of a proper per-package da mage breakdown appears in

Universal Leaf Tobacco , 993 F.2d at 416.

30 W e do not, of course, suggest any bad faith here. Rather, we simply

note the alignment of legal incentives.

3 1 Suppose, for example, that there are 100 packages w orth $1,000 each;

20 are ruined in transit. Under an aggregate damage cap (100 packages × $500 =

$50,000), the buyer recovers the full $20,000, as it is less than the total cap

26 recover that entire amount. Servicios must show how much damage

accrued to each package, and it will be awarded the actual damages

to each package, subject to the $500 limit. 29

3.

As a matter of policy, it is appropriate to place the burden

of showing per-package damages on th e buyer. It will always be

difficult for the carrier to show the damages that accrued to each

cargo package. Only the buyer knows how much each package is worth

to it, and what will be the cost to repair or replace the damaged

goods. And because the buyer and not the carrier is entitled to

possession of the goods, it will always be more difficult for the

carrier to inspect the damage. Furthermore, there is every

incentive for the buyer to do as Servicios and Orimpex did here:

commingle the damaged goods so that the carrier could not have made

a per-package damage determination even if it had tried to do so. 30

There is no question that, if possible, a buyer would avoid

any per-package damage computation, thereby gaining the damage cap

amount from all the slightly-damaged, i nexpensive packages, and

using that to offset the damages to the heavily-damaged, more

valuable packages. 31 The buyer would always be at least as well orof $50,000. Under a strict per-package damage cap, it recovers only $10,000:

$500 each for the 20 ruined packages.

Or suppose 100 packages, 80 worth $100 and 20 worth $2,000. They are all

damaged and lose half their value. An aggregate damage cap gives the buyer

$24,00 ($4,000 (80 × $50) plus $20,000 (20 × $1,000)), while a strict per-package

damage cap yields only $14,000.

32 See, e.g., Pizani , 669 F.2d at 1089; Compania Anonima Venezolana de

Navagacion v. A.J. Perez Export Co. , 303 F.2d 692, 699 (5th Cir. 1962)

27better off under an aggregate damage cap than under a strict perpackage limit. This would thwart the basic COGSA scheme, which

deliberately limits damages not by the shipload but by the package.

C.

By its stric t application, this rule would require outright

dismissal of Servicios' claims, for where the plaintiff has failed,

at trial, to prove an essential element of its cause of action,

including both the fact and amount of his damages, that is fatal,

and it cannot prevail as a matter of law. S e e Prunty , 16 F.3d

at 652. The peculiar circumstances of this case, however, lead us

to remand in order to give Servi cios an opportunity to show its

per-package damages. There was not a total failure of proof.

Rather, Servicios mistakenly assumed that, as a matter of law, it

was required to prove only the total quantum of d amages. More

importantly, this belief was shared by the district court, and the

bench trial apparently was c onducted on this theory. Servicios

therefore never had a true opportunity to show the damages to which

it may be entitled. Cognizant of the equitable role of a court

sitting in ad miralty, 3 2 we remand for a proper determination of

damages.28 IV.

In sum, then, becau se IMC completed delivery of the

ANDREALON's ca rgo to the party entitled to receive it on May 2,

1992, the claims with respect to that cargo in the action commenced

on May 11, 1993, are barr ed by COGSA's time-for-suit provision,

46 U.S.C. app. § 1303(6). The district court erred by allowing

Servicios to recover an aggregate amount of damages without regard

to the actual damages to each package, where damages legally

recoverable were capped at $500 per package. We therefore REVERSE

and REMAND for a proper determination of damages as to those claims

that are not time-barred.