1 United States Court of Appeals,

Fifth Circuit.

No. 94-30258.

MINERAIS U.S. INC., EXALMET DIVISION, Plaintiff-Appellant,

v.

M/V MOSLAVINA, her engines, boilers, etc., et al., Defendants,

Turner Marine Bulk, Inc., Defendant-Appellee.

March 6, 1995.

Appeal from the United States District Court for the Eastern

District of Louisiana.

Before REAVLEY, DUHÉ and PARKER, Circuit Judges.

DUHÉ, Circuit Judge:

D efendant Turner Marine Bulk, a New Orleans stevedore,

negligently commingled two lots of ferrochrome that P l aintiff

Minerais U.S. Inc. was importing for resale in the United States.

Minerais had purchased 700 metric tons (MT) high grade ferrochrome

and 1000 MT low grade ferrochrome; 250 MT high grade ferrochrome

escaped damage, and the remaining 450 MT high grade and the 1000 MT

low grade ferrochrome were commingled. None of the combined

material fell within the higher grade, and Plaintiff was forced to

downgrade 450 MT high grade material to low grade for purposes of

resale. This appeal concerns only the issue of damages.

The district court awarded damages based on wholesale values

of the material (i.e., wholesale value of 450 MT high grade

ferrochrome minus wholesale value of 450 MT low grade ferrochrome),

finding that Plaintiff failed to establish the fair market value as

the appropriate measure of damages. Holding that Plaintiff2

adequately established fair market values, we reverse and remand

for application of the market-value rule using retail values as

specified herein.

I. The Market-Value Rule.

The market-value rule requires that damages be calculated

using market values at the time the cargo is discharged. Such a

damage award places the injured cargo owner in the same position it

was in before the damage. The market-value rule makes the cargo

claimant whole by awarding him the difference between the fair

market value of the undamaged cargo and the fair market value of

the cargo as damaged on the date of discharge at the port of

destination. C ook Indus., Inc. v. Barge UM-308, 622 F.2d 851, 854

(5th Cir.1980).

Nothing in Illinois Central Railroad v. Crail compels use of

the wholesale price rather than retail. S ee Illinois Cent. R.R. v.

Crail, 281 U.S. 57, 64-65, 50 S.Ct. 180, 181, 74 L.Ed. 699 (1930)

("[The market-value rule] may be discarded and other more accurate

means [to measure the loss] resorted to, if, for special reasons,

it is not exact or otherwise not applicable.") (awarding wholesale

value of lost shipment). I llinois Ce ntral was a

shortage-in-delivery case, not a damaged-goods case; where cargo

is downgraded but not completely destroyed, this Court has held the

market-value rule to be both a convenient and accurate means of

measuring damages. Cook Indus., 622 F.2d at 855-56. We hold the

rule provides an accurate measure of damages in this case as well.

A. Fair Market Value of Undamaged Cargo.3 In June 1990, when the shipment was discharged in New

Orleans, the average market price of hig h grade ferrochrome was

$1.15 per pound of contained chromium, according to Metals Week (a

weekly publication), which was found by the district court to be

the most reliable evidence of the market price. Published market

quotations of bulk commodities provide simple proof of market value

and damages so as to support application of the market-value rule.

See 2 Thomas J. Schoenbaum, Admiralty and Maritime Law § 10-36 (2d

ed. 1994); s ee also Amstar Corp. v. M/V ALEXANDROS T., 472 F.Supp.

1289, 1294 (D.Md.1979), a ff'd, 664 F.2d 904 (4th Cir.1981)

.

Further, Minerais' retail sales price in August 1990 corroborated

Metals Week by establishing $1.15 per pound of chromium as the

retail price. The market value of high grade ferrochrome at the

time of the arrival of the shipment was thus adequately established

at $1.15 per pound of chromium.

B. Fair Market Value of Cargo as Damaged.

The 450 MT damaged cargo after commingling was

indistinguishable from the 1000 MT low grade ferrochrome with which

it was mixed. M etals Week did not list a price for lo w grade

ferrochrome at the time of discharge of the shipment, because there

was no established market for it at the time. Minerais ordered the

low grade to test the market for it. Minerais sold the 1450 MT low

grade product in varying quantities over several months and the

price varied over those few months. The district court declined to

rely on a retail price in part because of the declining market and

in part because it was unclear which resale accounted for the 4504

MT downgraded material.

We hold that the sales price close in time to the discharge

d ate is nevertheless sufficient to establish the market value of

the downgraded product at the time of discharge. Some of the low

grade material sold at $. 99 per pound chromium in June and July

1990 as shown by two invoices (for sales of 160 MT and 400 MT).

These contemporaneous sales provide sufficient evidence from which

to apply the market-value rule. See Standard Oil Co. v. Southern

Pac. Co., 268 U.S. 146, 155, 45 S.Ct. 465, 466-67, 69 L.Ed. 890

(1925) (recognizing "contemporaneous sales of like property in the

way of ordinary business" as one manner of establishing market

value ); cf. Holden v. S.S. Kendall Fish, 395 F.2d 910, 913 (5th

Cir.1968) (requiring that damages be calculated at the time of

delivery, because the carrier "is not and should not be the

guarantor of the ups and downs of commodity prices").

We have no reason to factor in the varying prices of low grade

ferrochrome over the ensuing months. Regardless of the fact that

Plaintiff intended to introduce only a limited quantity of low

grade ferrochrome into the United States market, the sale of 560 MT

low grade product for $.99 per pound chromium near th e time of

delivery provides adequate proof of the fair market value of all of

the downgraded product (only 450 MT) at the time of discharge.

II. Conclusion.

Applying the general measure of the shipper's recovery, i.e.,

the difference in market values before and after damage to the

damaged cargo, will accurately compensate Plai ntiff. Plaintiff5

having provided sufficient evidence of fair market values of both

high and low grade ferrochrome at the time of delivery, we remand

f or calculation of damages under the market-value rule using the

June 1990 retail values.

REVERSED and REMANDED.