Opinion ID: 773252
Heading Depth: 2
Heading Rank: 1

Heading: Mill's Appeal

Text: 17 The thrust of Mill's appeal is directed toward avoiding liability, joint and several or otherwise, for the loss Project Hope suffered. It asserts two arguments in this effort. Despite its less-than-pellucid briefing on the issue, we understand Mill's first argument to be that the district court erroneously resorted to federal admiralty law principles in deciding to impose joint and several liability on Mill. See Project Hope, 96 F. Supp. 2d at 292 n.6. Mill's second argument is that after it was impleaded by Blue Ocean under Federal Rule of Civil Procedure 14(a), Project Hope failed to amend its original complaint to assert direct claims against Mill, and, thus cannot look to Mill for recovery.
18 As noted, Mill's argument seems to be that the district court, in imposing joint and several liability, erroneously resorted to the federal common law of admiralty, under which such awards are a standard remedy in cases involving multiple tortfeasors. See McDermott, Inc. v. AmClyde, 511 U.S. 202, 220-21 (1994) (noting that in admiralty [j]oint and several liability applies when there has been a judgment against multiple defendants); The Atlas, 93 U.S. 302, 317-19 (1876) (adopting joint and several liability rule in admiralty); Coats v. Penrod Drilling Corp., 61 F.3d 1113, 1124-30 (5th Cir. 1995) (en banc) (stating that joint and several liability is the maritime rule and noting that [b]y 1876, the common-law rule of joint and several liability was being adopted in admiralty); Pennsylvania R.R. v. The Beatrice, 275 F.2d 209, 212-13 (2d Cir. 1960); see also 1 Thomas J. Schoenbaum, Admiralty and Maritime Law § 5-5, at 167 (2d ed. 1994); Celeste Coco-Ewing, Coats v. Penrod Drilling Corporation: The Fifth Circuit Adheres to the Doctrine of Joint and Several Liability in the General Maritime Law, 70 Tul. L. Rev. 785, 788 (1995); Marie R. Yeates et al., Contribution and Indemnity in Maritime Litigation, 30 S. Tex. L. Rev. 215, 217 (1989); cf. Drake Towing Co. v. Meisner Marine Constr. Co., 765 F.2d 1060, 1068 (11th Cir. 1985). 19 Mill's premise is infirm, however. Our review of the district court's judgment against Mill--both the finding of liability and the imposition of joint and several recovery--reveals that it was not grounded in admiralty. 3 See Project Hope, 96 F. Supp. 2d at 291-98. Rather, Mill's liability and the joint and several award were determined exclusively under two federal statutory schemes: the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 1300 et seq., and the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. 4 We therefore turn to consider whether the joint and several award against Mill was proper under these statutes. The prima facie cases for both COGSA and the Carmack Amendment are identical for all relevant purposes here.
20 COGSA is not a proper basis for Mill's joint and several liablity. By its express terms, COGSA only covers the period from the time when the goods are loaded on to [the ship] to the time when they are discharged from the ship. 46 U.S.C. § 1301(e) (defining carriage of goods); see also id. § 1300 (COGSA covers contract[s] for the carriage of goods by sea to or from ports of the United States, in foreign trade . . . .). Mill's negligence in failing to ensure that the reefer was set at the proper temperature occurred exclusively on land, while the humulin was being transported from Project Hope's Winchester warehouse to the Norfolk Terminal. Therefore, Mill's negligence was plainly outside COGSA's reach. 5 21 The Carmack Amendment, however, does govern Mill's negligence. 6 In pertinent part, the Carmack Amendment provides: [A] carrier and any other carrier that deliver[] the property and [are] providing transportation or service subject to jurisdiction under [49 U.S.C. § 13501 are] liable to the person entitled to recover under the . . . bill of lading. The liability imposed . . . is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States . . . . 49 U.S.C. § 14706(a)(1). 22 The Carmack Amendment's reach is determined by reference to 49 U.S.C. § 13501, the provision of the Interstate Commerce Act that now establishes the regulatory jurisdiction of the U.S. Surface Transportation Board (formerly the Interstate Commerce Commission) with respect to the transportation by motor carrier of passengers and property. In relevant part, § 13501 extends the reach of the Carmack Amendment to motor carrier transportation of property: 23
24 (A) a State and a place in another State; [or] 25 (E) the United States and a place in a foreign country to the extent the transportation is in the United States; . . . . 26 Where multiple carriers are responsible for different legs of a generally continuous shipment, whether either § 13501(1)(A) or (E) is satisfied to trigger application of the Carmack Amendment is determined by reference to the intended final destination of the shipment as that intent existed when the shipment commenced. See Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 699 (11th Cir. 1986) (The nature of a shipment is not determined by a mechanical inspection of the bill of lading nor by when and to whom title passes but rather by the essential character of the commerce, reflected by the intention formed prior to shipment, pursuant to which property is carried to a selected destination by a continuous or unified movement. (internal citations and quotation marks omitted)); cf. Southern Pac. Transp. Co. v. ICC, 565 F.2d 615, 617 (9th Cir. 1977) (discussing the reach of Interstate Commerce Commission's jurisdiction). This intent fixes the character of the shipment for all the legs of the transport within the United States. See New York, New Haven & Hartford R.R. v. Nothnagle, 346 U.S. 128, 131 (1953) (citing Sprout v. South Bend, 277 U.S. 163, 168 (1928)); Greenwald v. Pan Am. World Airways, Inc., 547 F. Supp. 159, 161-62 (S.D.N.Y. 1982). 27 Thus, if the final intended destination at the time the shipment begins is another state, the Carmack Amendment applies throughout the shipment, even as to a carrier that is only responsible for an intrastate leg of the shipment. See, e.g., Merchants Fast Motor Lines, Inc. v. ICC, 528 F.2d 1042, 1044 (5th Cir. 1976) (discussing challenge to ICC ruling and stating [i]t is elemental that a carrier is engaged in interstate commerce when transporting goods either originating in transit from beyond Texas or ultimately bound for destinations beyond Texas, even though the route of the particular carrier is wholly within one state); Martinez v. Phillips Petroleum Co., 283 F. Supp. 514, 530-31 (D. Idaho 1968); cf. Texas v. United States, 866 F.2d 1546, 1559-60 (5th Cir. 1989) (Determining the existence of the requisite `fixed and persisting' intent to move goods in interstate commerce turns in significant part on the factual context of each case.); Burlington N. Inc. v. Weyerhaeuser Co., 719 F.2d 304, 310 (9th Cir. 1983) (noting intent manifested . . . at the time of shipment fixes interstate or intrastate character of shipment and finding intent was for intrastate shipment). Similarly, if the final intended destination at the time the shipment begins is a foreign nation, the Carmack Amendment applies throughout the entire portion of the shipment taking place within the United States, including intrastate legs of the shipment. See Swift Textiles, 799 F.2d at 698-700; cf. United States v. Erie R.R., 280 U.S. 98, 102 (1929) ([The character of a shipment] is not affected by the fact that the transaction is initiated or completed under a local bill of lading which is wholly intrastate . . . .); Texas & New Orleans R.R. v. Sabine Tram Co., 227 U.S. 111, 126 (1913); Long Beach Banana Dist., Inc. v. Atchison, Topeka & Santa Fe Ry., 407 F.2d 1173, 1180-81 (9th Cir. 1969). 28 Here, Project Hope's intention that the humulin travel in foreign commerce was fixed before Mill transported the humulin from Project Hope's Winchester warehouse to the Norfolk Terminal. As a result § 13501(1)(E) is satisfied, and the Carmack Amendment governs Mill's liability even though Mill's role in the humulin's shipment was restricted exclusively to Virginia. 29 Having concluded that the Carmack Amendment controls Mill's liability, we must consider whether the district court's imposition of the joint and several award was permissible under the Carmack Amendment. To answer this question, we look to the federal common law of damages, which informs the propriety of damage remedies under the Carmack Amendment. 7 See, e.g., Hector Martinez & Co. v. Southern Pac. Transp. Co., 606 F.2d 106, 108 (5th Cir. 1979) ([The Carmack Amendment] incorporates common law principles for damages.); J & H Flyer Inc. v. Pennsylvania R.R., 316 F.2d 203, 205 (2d Cir. 1963); see also Camar Corp. v. Preston Trucking Co., 221 F.3d 271, 277 (1st Cir. 2000); F.J. McCarty Co. v. Southern Pac. Co., 428 F.2d 690, 693 (9th Cir. 1970). 30 Doing so, we find that the district court's imposition of joint and several liability in this case was consistent with the federal common law of damages and, therefore, permissible under the Carmack Amendment. The district court imposed joint and several liability only after concluding that--as between Blue Ocean and Mill--the record d[id] not permit a fair allocation of comparative fault. Project Hope, 96 F. Supp. 2d at 298. Where a fair allocation of liability cannot be made among multiple tortfeasors, the federal common law permits imposition of joint and several liability. See, e.g., Restatement (Second) of Torts § 879 (1979) (If the tortious conduct of each of two or more persons is a legal cause of harm that cannot be apportioned, each is subject to liability for the entire harm, irrespective of whether their conduct is concurring or consecutive.); W. Page Keeton, Prosser and Keeton on Torts § 52, at 347-48 (5th ed. 1984) (Single Indivisible Result: Certain results, by their very nature, are obviously incapable of any reasonable or practical division and . . . [n]o ingenuity can suggest anything more than a purely arbitrary apportionment of such harm. Where two or more causes combine to produce [a single loss], each may be a substantial factor in bringing about the loss, and if so, each is charged with all of it.); cf. Gordon H. Mooney, Ltd. v. Farrell Lines, Inc., 616 F.2d 619, 625-26 (2d Cir. 1980) (holding that, under the Carmack Amendment, comparative fault is the appropriate method for assigning liability among joint tortfeasors where fault is assignable). 31 Because the district court found that liability could not be fairly apportioned--a factual conclusion that is not challenged by Mill in this appeal--and because the common law of damages allows resort to joint and several liability in such instances, we hold that the district court's joint and several award against Mill was proper under the Carmack Amendment.
32 Mill's second line of attack on the joint and several award centers on the fact that after Blue Ocean served its third-party complaint against Mill pursuant to Federal Rule of Civil Procedure 14(a), Project Hope did not amend its original complaint to directly assert a claim against Mill. Mill argues that, as a result, it cannot be held liable to Project Hope. We disagree. 33 Mill has waived this challenge because it failed--either out of error or strategy--to raise it properly before the district court. If Mill had voiced an objection to the district court before the bench trial, Project Hope easily could have amended its complaint to assert claims directly against Mill. See Fed. R. Civ. P. 15(a). Even if Mill had raised the objection in a post-trial motion--when it was absolutely clear that Mill was to be held directly accountable to Project Hope--the district court could have taken steps to ameliorate any injury to Mill by, among other options, permitting Mill to amend its complaint to conform to the evidence at trial. See Fed. R. Civ. P. 15(b). 34 In any event, we hold that a formal amendment of a plaintiff's complaint asserting causes of action against a party impleaded under Rule 14(a) is unnecessary if the third-party is effectively on notice that it will be held liable on the plaintiff's claims and the two proceed against one another in an adverse manner. See, e.g., Wasik v. Borg, 423 F.2d 44, 46 (2d Cir. 1970); Falls Indus., Inc. v. Consolidated Chem. Indus., Inc., 258 F.2d 277, 287 (5th Cir. 1958); cf. generally Fed. R. Civ. P. 1 ([The rules] shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.). The record is clear that throughout the district court proceedings Mill and Project Hope conducted themselves as though Project Hope was proceeding directly against Mill. For example, on its own initiative, Mill answered Project Hope's complaint and, in doing so, expressly denied that it breached any duty of care or contractual obligation owed to Project Hope. Likewise, Mill filed a pre-trial motion seeking dismissal of Project Hope's claims, which Project Hope contested. 35 For all of the foregoing reasons, the award of joint and several liability against Mill stands.