Opinion ID: 584154
Heading Depth: 1
Heading Rank: 4

Heading: restowage as a deviation abrogating liability limits

Text: 29 SPM argues that no liability limitation should apply as to any of the defendants because the restowage of its cargo by Yangming and Maher constituted a deviation from the carriage agreement that converted the carriers into quasi-insurers liable in full for any damage incurred as a result. The defendants counter that the harsh doctrine of deviation should be limited to carriers' geographical departures from course and to unauthorized on-deck stowage of cargo, and should not be extended to a customary practice such as restowage at an intermediate port. 30 The origins and development of the doctrine of deviation are well described elsewhere. See generally Michael F. Sturley, 2A Benedict on Admiralty § 121 at 12-1 to 12-6 (7th ed. 1992); Steven Friedell, The Deviating Ship, 32 Hastings L.J. 1535 (1981). As we recently noted: 31 At common law, deviation from a scheduled voyage stripped a carrier of many of its defenses and made the carrier the insurer of the goods that it was carrying. Courts viewed such deviations as a breach of contract and held carriers liable for the loss of goods resulting therefrom. 32 Berkshire Fashions, Inc. v. The M.V. Hakusan II, 954 F.2d 874, 883 (3d Cir.1992). 33 COGSA recognized the doctrine of deviation but circumscribed it: 34 Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this Act or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable. 35 46 U.S.C.App. § 1304(4). 36 By negative implication, COGSA recognizes that unreasonable deviations can violate the Act, and most courts have held that an unreasonable deviation also lifts a carrier's liability limitations, including the $500 per package limitation. See, for example, Ingersoll Milling Machine Co. v. M/V Bodena, 829 F.2d 293, 301 (2d Cir.1987); Nemeth v. General Steamship Corp., 694 F.2d 609, 612-13 (9th Cir.1982); Spartus Corp. v. S/S Yafo, 590 F.2d 1310, 1315-17 (5th Cir.1979). But see Atlantic Mutual Insurance Co. v. Poseidon Schiffahrt, G.m.b.H., 313 F.2d 872, 874-75 (7th Cir.1963) (statutory limitations apply, despite deviation). COGSA affirmatively provides, however, that reasonable deviations do not oust the contract of carriage (or COGSA limitations on liability), and the statute gives courts guidance on which deviations should be considered reasonable. 37 Unfortunately, COGSA does not define deviation itself, which is a predicate for reaching the distinct issues of reasonableness and the consequences of an unreasonable deviation. See 2A Sturley, Benedict on Admiralty § 122 at 12-6 to 12-7 (emphasizing that courts should not collapse the inquiries). 5 Lacking a statutory definition of deviation, courts have offered various definitions of their own. This court's pre-COGSA, yet still widely quoted, definition is among the classics: 38 To deviate, lexicographically, means to stray, to wander. As applied in admiralty law, the term deviation was originally and generally employed to express the wandering or straying of a vessel from the customary course of the voyage, but in the course of time it has come to mean any variation in the conduct of a ship in the carriage of goods whereby the risk incident to the shipment will be increased, such as carrying the cargo on the deck of the ship contrary to custom and without the consent of the shipper, delay in carrying the goods, failure to deliver the goods at the port named in the bill of lading and carrying them farther to another port, or briging them back to the port of original shipment and reshipping them. Such conduct has been held to be a departure from the course of agreed transit and to constitute a deviation whereby the goods have been subjected to greater risks, and, when lost or damaged in consequence thereof, clauses of exceptions in bills of lading limiting liability cease to apply. 39 G.W. Sheldon & Co. v. Hamburg Amerikanische Packetfahrt A.-G., 28 F.2d 249, 251 (3d Cir.1928). 40 Analysts distinguish between geographic deviations and other, quasi-deviations. In this case, there was no geographical deviation: the Ming Moon followed its advertised course of voyage. See General Electric Co. v. S.S. Nancy Lykes, 706 F.2d 80 (2d Cir.1983) (illustrating the principles of geographic deviation). SPM's only serious claim is that restowage of cargo at an intermediate port constitutes a quasi-deviation. 41 Quasi-deviation is a doctrine seemingly entrenched in the law, but not, apparently, expanding in scope. The usual example has been unauthorized on-deck stowage of cargo. See, for example, Constructores Tecnicos v. Sea-Land Service, Inc., 945 F.2d 841 (5th Cir.1991); English Electric Valve Co. v. M/V Hoegh Mallard, 814 F.2d 84 (2d Cir.1987). Plaintiffs have frequently pressed for expansion beyond that class of cases, but in recent years courts of appeals have generally declined to do so. See, for example, B.M.A. Industries v. Nigerian Star Line, 786 F.2d 90 (2d Cir.1986) (release of goods to person not holding necessary documents not a quasi-deviation); C.A. Articulos Nacionales de Goma Gomaven v. M/V Aragua, 756 F.2d 1156 (5th Cir.1985) (deviation not presumed when cargo loaded aboard ship but not delivered and carrier has no explanation); Iligan Integrated Steel Mills v. S.S. John Weyerhaeuser, 507 F.2d 68 (2d Cir.1974) (failure to provide seaworthy vessel not a deviation). 42 We agree with our sister circuits that the doctrine of quasi-deviation should not be viewed expansively in the post-COGSA era. Although COGSA did not abolish the doctrine of deviation, the statute's very existence and broad scope obviate the need for an expansive concept of deviation to protect shippers, and the statutory limitation on deviations suggests that courts should construe the doctrine narrowly. See also Grant Gilmore & Charles L. Black, Jr., The Law of Admiralty § 3-42 at 183 (Foundation Press, 2d ed. 1975) (It would seem unwise to extend analogically and by way of metaphor a doctrine of doubtful justice under modern conditions, of questionable status under Cogsa, and of highly penal effect.). At all events, in this case we need not decide that quasi-deviations can never encompass more than unauthorized on-deck stowage, as the Second Circuit may have, see Sedco, Inc. v. S.S. Strathewe, 800 F.2d 27, 31-32 (2d Cir.1986), because SPM's claim would be an unprecedented expansion of the doctrine. 43 We refuse to declare the intentional restowage of SPM's cargo at an intermediate port a quasi-deviation. 6 Conduct that is customary in the trade is not a deviation from the contractual voyage because such contracts ordinarily presume that the parties will follow the customs and usages of the maritime trade. See, for example, Caterpillar Overseas, S.A. v. Marine Transport, Inc., 900 F.2d 714, 721-22 (4th Cir.1990) (shift from one terminal to another not unusual, hence not a deviation); Encyclopaedia Britannica, Inc. v. S.S. Hong Kong Producer, 422 F.2d 7, 17-18 (2d Cir.1969) (bill of lading presumed to incorporate customs of shipping industry); Sturley, 2A Benedict on Admiralty § 122 at 12-12. Here the district court has found that intermediate port restowage is customary, and that finding is not clearly erroneous. 7 Therefore, the district court properly concluded that no quasi-deviation deprived the defendants of their contractual and statutory limits on liability. 44