Opinion ID: 381814
Heading Depth: 2
Heading Rank: 2

Heading: Stevenson's Care Of Flour After Loading Aboard The Nedon

Text: 217 COGSA sets out a framework for establishing the duties of a carrier with respect to its cargo. The central aspect of that framework is a ping pong game of burden-shifting, in which the burden of proof shifts back and forth between the parties in order to encourage them to produce whatever evidence is within their command. See W. Tetley, supra, at 47-55. The initial burden is on the party complaining against the carrier, here ADM, to show a prima facie case of both delivery of the goods to the carrier in good condition and outturn by the carrier in damaged condition. If that is shown, the burden shifts to the carrier to show that the damage was caused by one of the COGSA exceptions set out in 49 U.S.C.A. §§ 1304(2)(a)-(q). That shown, the burden shifts back and the carrier's negligence must be shown to have contributed to the damage. Finally, the carrier bears the final burden of separating the portion of the damage due to a COGSA-excepted cause from that resulting from its own negligence. See Schnell v. The Vallescura, 293 U.S. 296, 55 S.Ct. 194, 79 L.Ed. 373, 1934 A.M.C. 1573 (1934) (Harter Act decision); Nitran, Inc. v. M/V Cretan Life, 599 F.2d 1359, 1373 (5th Cir. 1979); W. Tetley, supra. 218 We have applied COGSA's framework in no less than four decisions involving insect damage to flour. In two, the shippers proved that the flour delivered to the carriers was free of infestation. 104 Thus, plaintiffs sustained their initial burden of proof and the process of burden-shifting ensued. In this case, however, it is now judicially determined that the flour was received by Stevenson in an infested condition. Accordingly, ADM never proved a prima facie case and the burden-shifting process never began. Exactly this type of situation was confronted in our other two flour infestation decisions. Of those two, United States v. Lykes Bros., S.S. Co., 511 F.2d 218, 1975 A.M.C. 2244 (5th Cir. 1975), is the controlling precedent. 105 219 Lykes involved a shipment of flour infested with flour beetles prior to receipt by the carrier, as here. The flour was, however, stowed in the same hold as some animal feed which might also have been infested. Just before departure, a strike broke out, which lasted for six weeks, and which kept the ship in port. Inspections of the flour by the carrier on a weekly basis did not reveal any problem until the fifth week. At that time, live infestation in the flour was found, but the carrier waited another week before sending that information to the shipper by means of the regular mail. Two weeks after sending the letter, having heard nothing from the shipper, the carrier nevertheless decided to fumigate the flour. The ship then departed. On arrival in Poland, however, the flour was found totally infested. We held, first, that: 220 the District Court correctly concluded Shipper failed to make out a prima facie case. However, we do not agree that ends the matter. It simply means Shipper cannot rely on the difference between the cargo's condition when delivered to Carrier and that at outturn to discharge its burden of proof. 221 COGSA § 3(2), 46 U.S.C.A. § 1303(2) obligates Carrier to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. There is nothing in the statute which relieves that obligation. COGSA § 4, 46 U.S.C.A. § 1304, enumerates various instances in which carriers are not liable to their shippers, but none of them excuses the carrier from the duty imposed by § 3. Shipper's failure to make out a prima facie case, however, imposes upon it the burden of proving any damage to the cargo resulted from a breach of that duty. Further, we affirm the District Court's holding that Shipper was entitled to no more in the way of cargo-care than the shipper of any other load of flour. Cf. Aunt Mid, Inc. v. Fjell-Oranje Lines, 7 Cir., 1972, 458 F.2d 712. 222 511 F.2d at 223-24, 1975 A.M.C. at 2251 (footnote omitted). We then remanded the case to the District Court with specific instructions for the determination of whether the carrier met his continuing obligation to care for the infested flour. 223 Since Stevenson discovered the infestation of the Nedon flour at the time of loading, the first two of our instructions on remand in Lykes are clearly not applicable. Two of the remaining Lykes instructions are at least facially applicable to the instant case, however:Third, the Court should determine in the light of a factual record what a reasonable, prudent carrier, discharging its § 3(2) duty, would have done once it knew of the infestation, and at the time it should have known of it. Fourth, Shipper is obligated to prove, by a preponderance of the evidence, what damage was actually caused beyond that which would have resulted from the defective condition existing in the flour at the time of its delivery to Carrier. The fourth inquiry should be made in the context of the rule stated by the District Court, and affirmed by us, that Carrier (assuming a strike-less voyage) was not obligated to provide onboard treatment beyond the normal stowage due a shipper with flour in actual best-possible condition who does not specify special treatment. 224 Neither should the District Court feel obligated to reconsider its ruling on Carrier's eligibility for the strike exception. Thus, the fourth inquiry should include a determination of whether or not any reasonably feasible treatment would have saved the cargo, given both the strike and the delivery-condition. 225 Id. at 225, 1975 A.M.C. at 2253. The fourth instruction in Lykes was concerned with the damage due to the presence of the potentially infested animal feed and strike-related damage, for which the carrier's liability was excepted under COGSA. In the instant case, no such exception applies and the District Judge properly found that nothing aboard the Nedon contributed to the infestation. Upon analysis, therefore, fourth instruction is also not applicable in the instant case. 226 Consequently, only the third Lykes instruction remains and it clearly applies in the instant case. In Lykes, the shipper had not been immediately informed of the discovery of infestation. We implied that the carrier's failure to immediately inform the shipper might not have been prudent, depending upon the other options available to the shipper: 227 Without meaning to limit the District Court's third inquiry on remand, by way of illustration we point out three alternatives Shipper faced had it been immediately advised of the infestation. It could have (i) ignored the situation, hoping to salvage enough of the cargo to make that the most economical alternative, (ii) fumigated the cargo, or (iii) unloaded the cargo and attempted to sell it immediately. 228 511 F.2d at 225, 1975 A.M.C. at 2253 (footnotes omitted). Again, our case is distinguishable because both ADM and Bolivia were immediately informed of the infestation. Still, the above alternatives are useful in gauging Stevenson's conduct where the shipper and supplier refused to take any responsibility for the cargo, as here. See id. at 225 n.15, 1975 A.M.C. at 2253 n.15; Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426, 1962 A.M.C. 2366 (2d Cir. 1962). 229 The District Judge found that Stevenson attempted to sell the cargo but was unsuccessful. 449 F.Supp. at 123. Stevenson was similarly unsuccessful in attempting to offload the cargo, in order to fumigate it ashore. The alternative of fumigation aboard ship was suggested by a surveyor but not followed by Stevenson. Instead, unable to obtain the cooperation of ADM or Bolivia, Stevenson filed this lawsuit approximately five weeks after loading and three weeks after Bolivia rejected the cargo. 230 Despite Stevenson's failure to fumigate the cargo aboard ship, we cannot fault the District Judge's conclusion that Stevenson was not negligent in caring for the Nedon cargo. 449 F.Supp. at 123. The District Judge considered our Lykes standard and evaluated Stevenson's conduct in light of the circumstances as they appeared at the time. Stevenson's failure to fumigate aboard ship was only one of several possible courses of action. Because of its experience with the unsuccessful onboard fumigation of the Arizona and Southwall, it may well have been the reasonable course of action by Stevenson to avoid the cost of fumigating where that action appeared likely to be futile. The flour aboard the Nedon was tightly stowed, making effective fumigation very difficult. Since Stevenson made various other attempts to prevent further damage to the cargo, the District Judge was not erroneous in concluding that Stevenson discharged its duty to care for the Nedon flour.