Opinion ID: 381814
Heading Depth: 2
Heading Rank: 4

Heading: Detention In Arica

Text: 21 As a landlocked country, Bolivia imports much of its ship-carried goods by way of Chile. A treaty between Bolivia and Chile permits free importation of goods to Bolivia by way of the Port of Arica in Chile. 449 F.Supp. at 89 n.5. 22 The Arizona and Southwall arrived at Arica on October 12, 1974. The vessels began to discharge their cargoes on October 14, 1974. Soon after unloading began, live insect infestation on both ships' cargoes was detected. Further examination revealed internal infestation was present in moderate amounts throughout almost all of the flour on both ships. A port official immediately advised Sub-Secretary Heran Landivar of the Bolivian Ministry of Industry, Commerce, and Tourism of the infestation. As the District Judge found, Landivar immediately instructed the port official to refuse the shipment of flour aboard the SOUTHWALL and ARIZONA . . . and then Landivar confirmed his order by telex . . . the following day. 449 F.Supp. at 105. Neither the telex nor the substance of Landivar's later testimony were revealed to Stevenson or ADM, however, until Landivar appeared at trial. Consequently, when Arica port officials refused to allow the Arizona and Southwall to discharge their cargoes, it was not readily apparent whether that refusal stemmed from Bolivia's dissatisfaction with the quality of the cargoes or from the port officials' fear that their port would be contaminated by the infested flour. 23 From October 14 to November 5, 1974, Stevenson arduously negotiated with Arica port officials, Landivar, and others to obtain permission to unload the two ships. During this period the infested cargoes were surveyed by experts, and it was indicated by some that with fumigation, shifting, and repackaging the flour could be made fit for human consumption. After unloading resumed on November 5, 1974, these procedures were in fact followed by a local salvage firm. Eventually, the Arizona and Southwall flour was shipped by rail to Bolivia and sold at a reduced price to consumers.E. Events In Mobile: Part II 24 Just following the discovery in Arica of infestation aboard the Arizona and Southwall, Stevenson presented the M/V Nedon at Mobile for loading the last shipment of flour. The remaining flour was of suspicious quality, however, because of its close ties to the troubled cargoes of the Arizona and Southwall : the flour was stored in the same two State Docks warehouses; many of the railcar lots of flour came from the same three independent mills that had been linked with the previous infestation problems; and the 17 and 1/2 railcar lots held back from the Arizona and Southwall were among the flour in this last shipment. Moreover, despite the intervening fumigation of the 17 and 1/2 railcar lots held back from the previous shipments, between October 12 and 17 an additional 13 car lots of flour were found to be infested. Unfortunately, when Superintendence arranged for the fumigation of those 13 car lots, one car lot was omitted. Subsequently, therefore, that car lot was loaded aboard the Nedon without being fumigated. Compounding these problems was the fact that at no time was the entire warehouse fumigated. Rather, the 17 and 1/2 and 12 car lot groups were simply pulled some several feet from the other cargo and fumigated. 449 F.Supp. at 106. 25 Seeking to avoid the problems of the Arizona and Southwall, Stevenson required Superintendence to clear in writing all cargo to be loaded on the Nedon. In addition, the Nedon's holds were cleaned, though not fumigated, and then inspected by the National Cargo Bureau. On October 15, 1974, loading of car lots cleared by Superintendence began. 26 On the following day, Stevenson took the added precaution of having its own tests run on the flour not yet loaded aboard the Nedon. Near the end of the October 16 loading day, the test results came back from the laboratory. The results indicated that there was no live (flour beetle) infestation, but remains (of beetles) were noted. 449 F.Supp. at 107. Later that evening, Stevenson received further information that several more of the samples contained dead infestation. Id. at 107. Also that evening, apparently because of its underwriters' insistence that a London surveyor examine the Nedon cargo, Stevenson decided to hold the Nedon in Mobile until further notice. Id. at 108. 12 The District Judge also found, however, that Stevenson was awaiting the full (laboratory) report which was to be released on October 17. Id. 13 27 Despite the discoveries and its decisions on the evening of October 16, the following morning Stevenson resumed loading the Nedon. By the end of the day, loading was complete, with some 81,193 bags of flour on board. No external live infestation had been observed by anyone during loading. 28 Consistent with the hold decision made on the evening of October 16, the fully-loaded Nedon did not, however, set sail for South America. Besides waiting for the London surveyor to reach Mobile, Stevenson was grappling with the necessity of clausing the Nedon bill of lading. Stevenson's underwriters were unhappy that the bills of lading for the Arizona and Southwall had not been claused 14 and threatened to refuse claims connected with the Nedon unless that ship's bill of lading was claused. Although it is not clear when the Nedon bill of lading was actually issued, the record shows that issuance occurred sometime after the October 17, 1974, date indicated on the bill of lading. See 449 F.Supp. at 109-10 (bill of lading issued only after it was determined that Nedon was infested and after Bolivia refused the Nedon cargo). As finally issued, the bill of lading was claused to indicate: Cargo infested by insects prior to loading. 29 On October 19, 1974, the London surveyor arrived. The surveyor examined the Nedon cargo and found live and dead infestation, especially in the No. 1 hold. The infestation was very largely due to flour beetles. The surveyor recommended that the cargo be fumigated before entering into tropical South American waters. He further advised that the bill of lading be claused with respect to such infestation and/or fumigation as requisite. The surveyor also inspected the State Docks warehouses which appeared comparatively clean. 449 F.Supp. at 109. 30 Because of the infestation problems in the last three shipments of flour, on October 24, 1974, Bolivia took steps to prevent further payments to ADM under the irrevocable letter of credit. On October 25, 1974, Bolivia told Stevenson not to permit the Nedon to leave for South America. In the course of a meeting on October 31, Bolivia notified ADM that it rejected the Nedon flour. ADM, however, replied, as it had all along, that it had no interest in the flour since risk of loss had passed to Bolivia at the time the flour was delivered to the warehouses. 31 Because of this aptly described hands off policy, 449 F.Supp. at 111, Stevenson was left with: a fully-loaded Nedon ; a shipper-consignee which refused to permit shipment or accept delivery of the cargo; and a supplier without interest in regaining its goods. Despite Stevenson's ensuing attempts, neither Bolivia nor ADM could be persuaded to take responsibility for the flour. Stevenson tried to sell the flour itself but was unsuccessful. Efforts to discharge the Nedon cargo were similarly unsuccessful because of legal and other restrictions. 449 F.Supp. at 123. Stevenson made no attempt to fumigate the flour aboard vessel, however. The record shows that Stevenson felt, in light of its experience with the Arizona and Southwall cargoes, that fumigation aboard ship was futile. The Nedon's cargo was tightly stowed and the holds were full, so that the fumigant gas would be unlikely to penetrate very far into the flour. Stevenson felt that fumigation could only be successful after the flour was taken ashore and spread out. 32 On November 11, Bolivia requested the United States Department of Agriculture (USDA) to inspect the Nedon cargo. The USDA inspected on November 12 and found pretty heavy infestation throughout the flour. Only the flour in the No. 1 hold was found so infested that it was unfit for human consumption, however; the infested flour in the Nos. 2, 3 and 4 holds was found fit for human consumption if fumigated. 33 Finally, Stevenson broke the impasse by filing this lawsuit against the cargo in rem on November 21, 1974. Surveyors examined the cleanliness of the Nedon itself, as well as the cargo, on December 2, 1974. On December 10, ADM entered a claim of ownership as to the cargo, and posted bond. The Nedon was finally unloaded in Mobile on December 14 and 15, 1974. The flour was then placed in a State Docks warehouse, and fumigated. 34 ADM subsequently attempted to sell the Nedon flour but found it difficult to do so. On February 7, 1975, the flour was finally sold at a substantial discount for use in the manufacture of ceiling boards. 35 After setting out findings much lengthier than our summary of the facts, the District Judge awarded Stevenson and Bolivia substantial damages. Stevenson was awarded $92,014.82 against Bolivia for the detention of its ships Arizona and Southwall in Arica; and $310,067.25 against ADM as claimant of the Nedon cargo, for prepaid freight, detention, and other charges incurred by that ship. Bolivia was awarded $325,960.51 for breach of contract damages against ADM for the Arizona and Southwall flour. In addition, the loss resulting from the salvage sale of the Nedon flour was left on ADM, and the cost of fumigating the Arizona and Southwall flour was left on Stevenson. 36 From that judgment, every party appeals. In sum, over a score of errors are asserted. ADM's complaints against Bolivia mostly involve issues concerning the flour quality and sales contracts' interpretation, especially with respect to the Arizona and Southwall flour. Bolivia appeals issues relating to the detention in Arica. ADM's complaints against Stevenson concern the care of all of the flour involved, as well as the award for freight and damages connected with the Nedon. Stevenson argues for an increase in the Nedon award, and for reimbursement from ADM of fumigating expenses. Our tasks delineated, we begin our labors.