Opinion ID: 195619
Heading Depth: 3
Heading Rank: 3

Heading: COGSA Package/Customary Freight Unit

Text: 24 COGSA Sec. 4(5) limits liability to $500 per package ... or in case of goods not shipped in packages, per customary freight unit. 46 U.S.C.App. Sec. 1304(5). The district court concluded that the drill rig was shipped as a single package. Strictly speaking, of course, it was not a package. The parties agree that the actual cargo that was lost overboard was a truck mounted Cabot 900 Drilling rig, which was self propelled and had eighteen (18) wheels ... [and which] was not boxed or crated in any way. McGee's Mot. Opposing Def.'s Mot. for Summ. J. at 5-6 (emphasis added); compare Sea Barge's Resp. to Pl.'s Statement of Uncont. Mat. Facts at 4 (expressly admitting these facts). Moreover, we have held that a printing press shipped in open view, unboxed, [which] was not wrapped or crated ... was not a package as defined by COGSA. Hanover Ins. Co. v. Shulman Transp. Enters., Inc., 581 F.2d 268, 275 (1st Cir.1978); accord Tamini v. Salen Dry Cargo AB, 866 F.2d 741, 743 (5th Cir.1989) (free-standing portable drilling rig, for the most part fully exposed and not enclosed in a container, was not a COGSA package); Petition of Isbrandtsen Co., 201 F.2d 281, 286 (2d Cir.1953) (uncrated locomotive not COGSA package); 2A Benedict, supra, Sec. 167, at 16-35 (cargo that is shipped without any packaging whatsoever is generally treated as 'not shipped in packages' ) (citations omitted, citing numerous cases). How, then, since the shipper chose to describe the shipment as a single package can it now claim it constituted multiple units? 25 Thus, the drilling rig constituted but one unit, whether labeled a package or, more correctly, one customary freight unit (CFU). Within the meaning of COGSA, the CFU is generally the unit on which the freight charge is based for the shipment at issue. Binladen BSB Landscaping v. M.V. Nedlloyd Rotterdam, 759 F.2d 1006, 1016 (2d Cir.), cert. denied, 474 U.S. 902, 106 S.Ct. 229, 88 L.Ed.2d 229 (1985); Granite State, 825 F.Supp. at 1126. 10 To determine the unit upon which freight was charged we look to the parties' intent, as expressed in the Bill of Lading, applicable tariff, and perhaps elsewhere. 11 Croft & Scully Co. v. M/V Skulptor Vuchetich, 664 F.2d 1277, 1282 (5th Cir.1982); see FMC Corp. v. S.S. Marjorie Lykes, 851 F.2d 78, 80 (2d Cir.1988) (in determining the CFU, district court should examine the bill of lading, which expresses the contractual relationship in which the intent of the parties is the overarching standard) (citations omitted). 26 In support of its motion for summary judgment, Sea Barge argued that it charged a lump sum for transporting the drilling rig on the northbound voyage. 12 Sea Barge relied on the bill of lading, PREPA's acceptance of the bid/purchase order (purchase order), and a facsimile from Sea Barge to PREPA quoting the charge for the northbound voyage (quoted charge). The purchase order and the quoted charge clearly establish that the freight charge was based on a lump sum: 27 [PURCHASE ORDER] Charges will be as follows: 28 a) Ocean Transportation 29 --Drill rig & acc.: $86,400 lumpsum 30 b) Port charges & handling fees 31 --San Juan arrimo: $5.00/2,000 lbs 32 --Houston Wharfage: 1.50/2,000 lbs 33 --Houston truck loading: $7.50/2,000 lbs 34 [QUOTED CHARGE] 35 David, I have finalize [sic] shipping charges for this move and wish to give you our charges to move this rig to Houston, Texas. 36 . . . . .Charges ocean transportation: 37 Drill rig and accessories loose. $86,400.00 lumpsum 38 ... Port charges and handling fees: 39 San Juan Arrimo $5.00 per 2000 lbs 40 Houston Wharfage $1.50 per 2000 lbs 41 Houston truck loading $7.50 per 2000 lbs 42 The relevant portion of the bill of lading is substantially the same, though it does not use the term lump sum. 13 This evidence was sufficient to establish that Sea Barge was entitled to summary judgment on its claim that the northbound freight charge was based on a lump sum. See FMC Corp., 851 F.2d at 81 (bill of lading established that CFU was calculated on lump-sum basis). 43 NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE 44 McGee argues that listing wharfage and terminal usage charges by short ton (st) on the bill of lading established the short ton as the CFU. We think this argument cuts the other way. The portion of the bill of lading reproduced above, see supra note 13, sets out the charge per short ton only for wharfage and terminal usage, whereas the freight charge is stated in a lump sum. And this reading is buttressed by the quoted charge and the purchase order, which clearly evince the intent of the parties to calculate the freight charge on a lump-sum basis. 45 Sea Barge having carried the initial burden on its motion for summary judgment, the burden shifted to McGee to point to competent evidence indicating a trialworthy issue. See Local 48 v. United Bhd. of Carps. & Joiners, 920 F.2d 1047, 1050 (1st Cir.1990). In support of its claim that freight charges were based on the short ton, McGee proffered the Sea Barge invoice to PREPA relating to the northbound voyage, and a portion of the deposition testimony of William Lauderdale. The invoice is similar in all relevant respects to the portion of the bill of lading set out in the margin. See supra note 13. A flat $86,400 charge is made for Ocean freight, while wharfage and terminal charges are listed on a short-ton basis. Although, as McGee points out, other portions of the invoice and bill of lading reflect that the drilling rig weighed 1,726,000 pounds, there is nothing to link weight with the freight charge, and McGee made no proffer supporting such a link. 14 46 More importantly, the Lauderdale deposition tendered by McGee states that Lauderdale calculated the charges for the northbound voyage based on Sea Barge's expenses, including the costs of operating the vessel; agency, port, stevedoring and container costs; as well as a profit margin. Nowhere does Lauderdale intimate that the drilling-rig weight was a factor in calculating the freight charge or in the parties' discussions of the freight charge for the northbound voyage. Thus, we find no competent evidence that the freight charge was based on anything other than a lump sum, see S.S. Marjorie Lykes, 851 F.2d at 80-81 (finding that bill of lading and tariff established that parties intended to calculate freight on lump-sum basis), which means that the drilling rig itself was the CFU in this case. Binladen, 759 F.2d at 1016; see Union Carbide Corp. v. M/V Michele, 764 F.Supp. 783, 786 (S.D.N.Y.1990) (CFU was transportable tank, since freight charge was computed on lump-sum basis).