Opinion ID: 151053
Heading Depth: 2
Heading Rank: 1

Heading: The Journey of the Printing Press

Text: In this case, a printing press was shipped on a three-leg journey from Germany to Indiana, and was damaged during the last leg of the journey when the truck carrying the press crashed into an overpass. The five most important entities in this story are: 1. White Horse Machinery Ltd. (White Horse), who is not a party to this case. White Horse was the exporter and shipper of the printing press. 2. Royal & Sun Alliance Insurance, PLC (Royal & Sun), who is the Plaintiff-Appellant. Royal & Sun insured White Horse's shipment and became subrogated to its rights. 3. Ocean World Lines, Inc. (OWL), who is the Defendant-Third-Party-Plaintiff-Appellee. OWL is the nonvessel-operating common carrier (NVOCC) [2] that issued a bill of lading to White Horse, promising delivery to the consignee via shipping and carriage that OWL would arrange. 4. Yang Ming Marine Transport Corp. (Yang Ming), who is one of the two Third-Party-Defendants-Appellees. Yang Ming, a vessel-operating common carrier (VOCC), is the owner of the vessel that took the printing press across the ocean in the first leg of the journey. Yang Ming issued a sea waybill to OWL. 5. Djuric Trucking, Inc. (Djuric), who is the other Third-Party-Defendant-Appellee. Djuric is the owner of the truck which carried the printing press during the third leg of the trip, and which crashed into an overpass, damaging the printing press. Djuric did not issue its own bill of lading.
On June 15, 2006, OWL issued a bill of lading [3] to White Horse. The bill of lading described the printing press, and provided that seven packages consisting of the printing press would be shipped from Bremerhaven, Germany, to Bourbon, Indiana. The transport was to be intermodal. [4] OWL, being a NVOCC, is a middleman that does not own and operate its own vessels. Instead, it enters into service contracts whereby it purchases large blocks of cargo space at a discount from vessel-operating common carriers (VOCCs). It then contracts with shippers to ship smaller amounts of cargo in that space. In this particular instance, OWL's bill of lading provided that the shipment would go to Norfolk, Virginia, on the M/V Yang Ming Milano, owned by the VOCC Yang Ming. Final delivery was to be made thereafter in Bourbon, Indiana. On June 16, 2006, the day after OWL's bill of lading was issued to White Horse, Yang Ming issued a sea waybill [5] to OWL. This bill of lading similarly indicated that Yang Ming would take the press from Bremerhaven, Germany to Bourbon, Indiana, by way of the port of Norfolk, Virginia. On July 5, 2006, Yang Ming arranged for Djuric to pick up the packages in Chicago, Illinois and deliver them to their final destination. The packages arrived in Chicago from Norfolk, having been carried there by the Norfolk Southern Railroad. On July 6, 2007, a Djuric truck picked up the printing press and subsequently crashed into a bridge overpass, damaging the cargo. Royal & Sun paid White Horse's claim, and sought to recover from OWL its outlay of £63,824.62, which, at the time the complaint was filed, converted to $125,851.38.
The printing press traveled under the OWL bill of lading and the Yang Ming sea waybill. The terms and circumstances of each are as follows.
The OWL bill of lading, issued on June 15, 2006, contained numerous boilerplate terms, as is typical for bills of lading. First, it included a Clause Paramount, which provided that the transportation would be subject to the $500 per-package liability limitation of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 30701 note. [6] Like most Clauses Paramount, this one extends COGSA beyond the tackle-to-tackle period. [7] Second, Clause 5(D)(3) of the bill of lading provided: If COGSA applies then the liability of the Carrier shall not exceed US$500 per package or customary freight unit unless the value of the Goods has been declared on the face hereof with the consent of the Carrier and extra freight has been paid in which case Clause 10 shall apply and the declared value (if higher) shall be substituted for the limit and any partial loss or damage shall be adjusted pro-rata on the basis of such declared value. J.A. 82, 88. White Horse, as is typical for most shippers, did not declare the value of the packages; instead, White Horse bought insurance from Royal & Sun. [8] Third, the OWL bill of lading included what is known as a Himalaya Clause. A Himalaya Clause extends contractual protections that would otherwise apply only to the entity issuing the bill of lading to the subcontractors of the issuing entity as well. [9]
The Yang Ming sea waybill, accepted by OWL, also contained several terms relevant to this litigation. First, the Yang Ming waybill also had its own Himalaya Clause and Clause Paramount, both rolled into clause 7(1) of the bill: [I]n the event that this Bill covers shipments to or from the United States, then COGSA shall be compulsorily applicable and shall (except as may be otherwise specifically provided elsewhere herein) also govern before the Goods are loading [sic] on and after they are discharged from the Vessel provided, however, that the Goods at said times are in the actual custody of the carrier or any Underlying Carrier or Sub-Contractor. J.A. 183. The waybill defined Underlying Carrier as any water, rail, motor, air or other carrier utilized by the Carrier for any parts of the transportation the shipment [sic] covered by this Bill. Id. A Sub-Contractor was defined to include owners and operators of Vessels (other than the Carrier), stevedores, slot chartered owners, terminal and groupage operators, Underlying Carrier, road and rail transport operators and any independent contractor employed by the Carrier in performance of the Carriage. Id. Second, the COGSA $500 per-package limitation was spelled out in clause 23(3): In the event this Bill covers the Goods moving to or from a port of final destination in the United States, the Carrier's limitation of liability in respect to the Goods shall in no event exceed U.S. dollars $500 per package.... Id. Clause 23(4) allowed a shipper to avoid the package limitation by declaring a higher value for the cargo and paying a correspondingly higher rate: The aforementioned limitations of liability set forth in this provision shall be applicable unless the nature and value of the Goods have been declared by the Merchant before shipment and agreed to by the Carrier, and are inserted in this Bill and the Applicable ad valorem freight rate, as set out in Carrier's Tariff, is paid. Id. OWL did not declare a higher value for the cargo or pay the higher rate.