Document: 543 U.S. 14 NORFOLK SOUTHERN RAILWAY CO.v.JAMES N. KIRBY, PTY LTD., DBA KIRBY ENGINEERING, ET AL. No. 02-1028. Supreme Court of United States. Argued October 6, 2004. Decided November 9, Respondent James Kirby, Pty Ltd., an Australian manufacturer, hired International Cargo Control (ICC) to arrange for delivery machinery from Australia Huntsville, Ala., by "through" (i.e., end-to-end) transportation. The bill lading (essentially, a contract) that ICC issued Kirby (ICC bill) designated Savannah, Ga., as the discharge port and Huntsville ultimate destination, set ICC's liability limitation lower than cargo's true value, using default rule in Carriage Goods Sea Act (COGSA) ($500 per package) sea leg higher amount land leg. also contained what is known "Himalaya Clause," which extends limitations downstream parties, including, here, "any servant, agent or other person (including any independent contractor)." separately insured cargo its value with co-respondent, Allianz Insurance Ltd. When German shipping company (hereinafter Hamburg Süd) transport containers, Süd own (Hamburg bill), designating Savannah destination. That adopted COGSA's rule, extended it damages, Himalaya Clause "all agents . inland) carriers all contractors." petitioner Norfolk Southern Railway (Norfolk) Huntsville. train derailed, causing alleged $1.5 million damages. reimbursed loss then joined suing Georgia Federal District Court, asserting diversity jurisdiction alleging tort contract claims. responded that, among things, Kirby's potential recovery could not exceed two bills lading. granted partial summary judgment, limiting Norfolk's $500 container, certified decision interlocutory review. In reversing, Eleventh Circuit held claim protection under bill's because had been privity when was linguistic specificity required extend clause's benefits inland carrier. It bound acting received bill. Held: 1. law governs interpretation bills. Pp. 22-29. (a) maritime one, dispute inherently local, federal controls interpretation. Kossick v. Fruit Co., 365 U. S. 731, 735. Applying Kossick's two-step analysis, this dispute. 22-23. (b) at issue are contracts. This has recognized "[t]he boundaries admiralty over contracts — opposed torts crimes being conceptual rather spatial, have always difficult draw." S., To ascertain contract's nature, looks whether ship vessel involved dispute, place formation performance, but "the nature character contract." North Pacific Co. Hall Brothers Marine & Shipbuilding 249 119, 125. Here, their primary objective accomplish transportation goods States' eastern coast. Under spatial approach, fact call journey's final be does alter contracts' essentially nature. "`fundamental interest giving rise commerce."'" Exxon Corp. Central Gulf Lines, Inc., 500 603, 608 (emphasis added). approach vindicates focusing Court's inquiry on principal commerce. While may once seemed natural think only embodying commercial obligations between "tackles" port) objectives, shore now artificial draw line. Maritime commerce evolved along often inseparable some land-based obligations. international industry moved into new era, owners can across oceans destinations single transaction. popularity efficient choice, assimilate legs ocean lading, should render carriage nonmaritime Lower court cases appear depended solely geography fashioning identifying inconsistent precedent. 23-27. (c) case local. A so implicate local interests beckon state law. See Kossick, Though surely implicated case, those cannot accommodated without defeating interest; thus, governs. id., 739. touchstone here concern uniform meaning such one would undermine uniformity general same intermodal applies both land, Likewise, cover downstream, Confusion inefficiency will inevitably result if more body given meaning. protecting law, reinforces regime Congress established COGSA. 27-29. 2. entitled 30-36. broadly written limits liability. simple question turns correctly applied Robert C. Herd Krawill Machinery Corp., 359 297. Deriving principle narrow construction Herd, Appeals concluded language too vague clearly include Norfolk. Moreover, interpreted require carrier party seeking shelter Clause. Nothing requires rules. simply says must construed like contracts: terms consistent intent parties. Circuit's ruling parties' intent. plain indicates corresponds various modes performing contract. Since 366 miles port, parties anticipated carrier's services performance. Because clear railroad intended beneficiary clause, limited terms. 30-32. enjoys limitation. arising certain interpret bill, draws common Great Northern R. O'Connor, 232 508: intermediary goods, owner's against agreed. every sense, negotiate reliable enforceable engages. Respondents' contention traditional agency govern rejected. no moment indicia did exist ICC, treating single, purpose: subsequent limitations. Nor binding disastrous industry. First, tracks practices. Second, negotiated were while intermediaries not, likely want charge latter rates, resulting discrimination carriage. Finally, produces equitable result, since retains right sue carrier, exceeding they 515. 32-35. 300 F. 3d 1300, reversed remanded. O'CONNOR, J., delivered opinion unanimous Court. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR ELEVENTH CIRCUIT. Carter G. Phillips argued cause petitioner. With him briefs Stephen B. Kinnaird, Amanda L. Tyler, Hyman Hillenbrand, Richard K. Hines V, Taylor Tapley Daly. Deputy Solicitor General Hungar States amicus curiae urging reversal. brief former Olson, Assistant Attorney Keisler, Malcolm Stewart, Jeffrey A. Rosen, Paul M. Geier, Dale Andrews, Peter Smith, Ostrom, Amy Larson, Phillip Christopher Hughey, Ellen D. Hanson, Alice Saylor. David Frederick respondents. Michael Sturley, J. Scott Busby, Charles Sharp.* JUSTICE O'CONNOR 1 about wreck. shipment destined Alabama. intercontinental journey uneventful, reached unharmed. But carrying final, extensive damage. machinery's owner sued railroad. seeks upstream delivery. 2 * controversy arises contracts) records wishes them, states carriage, serves evidence T. Schoenbaum, Admiralty Law 58-60 (3d ed. 2001) Schoenbaum); (COGSA), 49 Stat. 1208, 46 App. § 1303. (Kirby), manufacturing company, sold 10 containers Motors plant located outside (ICC), freight forwarding (A arranges for, coordinates, facilitates transport, itself cargo.) formalize bill). designates Sydney, Australia, loading, Georgia, discharge, destination 3 negotiating opportunity declare full assume value. Cf. New York, H. Nothnagle, 346 128, 135 (1953) (a provide shipper fair value). Instead, industry, see Sea, 31 Mar. Com. 241, 244 (2000), accepted contractual below resulting, presumably, rates. sets Sydney For leg, invokes forth Act. COGSA "package limitation" provides: 4 "Neither nor shall event become liable damage connection package lawful money unless declared before inserted lading." 1304(5). 5 turn, amount.1 So expected take part execution benefit limitations, contains so-called Clause."2 6 "These conditions [for liability] apply whenever claims relating performance evidenced [bill lading] made contractor) whose used order perform Pet. Cert. 59a, cl. 10.1. 7 Meanwhile, co-respondent (formerly MMI Insurance, Ltd.). 8 Having actually cargo, Südamerikanische Dampfschifffahrts-Gesellschaft Eggert Amsinck Süd), containers. adopts Süd, package. clause extending beyond is, well sea. contractors whatsoever." 63, 5(b). 9 Acting through subsidiary, Company derailed en route, insurance loss. insurer answer, argued, amounts motion holding container. Upon joint review pursuant 28 1292(b). 11 divided panel reversed. first contract, exclude Norfolk, 1308-1309 (2002). majority suggested "a special degree carrier." Id., 1310. As "only Süd's bill." 1305. And, applying basic principles, Ibid. Based either grant judgment We certiorari decide 540 1099 (2004), reverse. II 12 courts decided assumption, shared Respondents object. They emphasize bottom, involving out rail accident somewhere think, however, borrowing Justice Harlan, situation presented genuinely salty flavor that." 742 (1961). 13 Our authority make decisional stems Constitution's courts. Art. III, 2, (providing judicial power Cases Jurisdiction"). 1333(1) (granting district original "[a]ny civil jurisdiction"); Fallon, Meltzer, Shapiro, Hart Wechsler's Courts System 733-738 (5th 2003). suit properly brought diversity, sustained virtue involved. Pope Talbot, Inc. Hawn, 406, 411 ("[S]ubstantial rights determined differently [a] labelled `law side' `admiralty court's docket"). Indeed, these circumstances, sustainable jurisdiction. Stewart Organization, Ricoh 487 22, (1988). mutually dependent, intertwined our cases. analysis we find do clean lines look putative case. Extension Act, 740 ("The injury caused navigable water, notwithstanding done consummated land"); Force Norris, Seamen 1:15 answer "depends upon contract," criterion "reference service transactions." 125 (1919) (citing Dunham, Wall. 1, 26 (1871)). 611 (1991) ("[T]he trend modern focus jurisdictional transaction maritime"). 15 coast Gilmore Black, (2d 1975) ("Ideally, [admiralty] [over ought] things principally connected transportation" deleted)). sure, land; rail. 16 example, shipowner's promise responsibility improper treatment his seaman might receive York hospital asked shipowner pay private physician, shipowner, preferring cheaper public hospital, offered costs complications arise there. characterized "fringe benefit" duty "`maintenance cure.'" 736-737. furtherance "peculiarly concer[n]," 738, folded matter site inadequate gave land. "fringe" portion promised 17 reiterated Exxon, supra, added) (quoting Sisson Ruby, 497 358, 367 (1990), turn quoting Foremost Ins. Richardson, 457 668, 674 (1982)). "clearly era age multimodalism, door-to-door based use available air, land." Schoenbaum 589 (4th 2004). technological change: packaged standardized move easily mode another. NLRB Longshoremen, 447 490, 494 (1980) ("`[C]ontainerization said constitute most important innovation steamship displaced schooner'"); Muller, Intermodal Freight Transportation 15-24 1995). 18 Contracts reflect technology, hence 595. Put simply, advantage separate American 19 Some taken deciding transportation, merely incidental long-distance travel incidental. See, e. g., Hartford Fire Orient Overseas Containers Lines (UK) 230 549, 555-556 (CA2 2000) ("Transport `incidental' segment involves great substantial distances," 850 four countries incidental); Sea-Land Serv., Danzig, 211 1373, 1378 (CA Fed. (holding called "substantial locations ports country Middle East" sea); Kuehne Nagel (AG Co.) Geosource, 874 2d 283, 290 (CA5 1989) calling up 1,000 "extensive operations viewed operations"). preliminary matter, seems us imprecise describe "incidental"; realistically, each essential accomplishing purpose. Huntsville; do. 20 Furthermore, extent decisions fashion depends geography, precedent requires. Conceptually, long sea, purpose effectuate thus Its defeated provides Geography, then, useful sense: If components insubstantial, 21 contracts, second hurdle Is local? "every term controlled federally defined rule." Wilburn Boat Fireman's Fund 348 310, 313 (1955) (applying marine regulatory industry). articulated specific stake, though implicated. interest, substantive govern. 739 (the process "is accommodation, entirely familiar many areas overlapping concern, somewhat analogous normal conflict laws where sovereignties assert divergent transaction"); 61 ("`Bills governed considering relevant choice rules'"). 22 explained Article III's "`must referred system coextensive with, operating uniformly in, whole country. certainly intention rules disposal regulation several States, consistency Constitution aimed subjects affecting intercourse foreign states.'" Dredging Miller, 510 443, 451 (1994) Lottawanna, 558, 575 (1875)). Yamaha Motor Calhoun, 516 199, 210 (1996) ("[I]n contexts, vindication policies demanded adherence decision" 742; 409; Garrett Moore-McCormack 317 239, 248-249 (1942))); Romero Terminal Operating 358 354, 373 (1959) ("[S]tate yield needs finds inroads harmonious system[,] [b]ut still leaves wide scope"). 23 Such clauses regularly executed around world. 595; Wood, Multimodal Transportation: An Perspective Carrier Liability Bill Lading Issues, Am. Comp. 403, 407 (Supp. 1998). 1307 (permitting limit "prior loading ship"). Part III-A, infra. [maritime] anywhere world," "should judged wherever made." 741. federal. 24 reinforce By terms, "from time loaded discharged ship." 1301(e). period, operates rule. gives option ("Nothing chapter prevent entering agreement, stipulation, condition, reservation, exemption custody care handling prior carried sea"). permits, chose entire period responsibility, including transport. enjoy efficiencies equally undertook responsibility. And apparent COGSA, facilitate contracting defeated. III 25 Turning merits, begin issue. agreed who participate transporting machinery. states: 10.1 27 sub-subcontractor. Circuits split answering question. Compare, Akiyama America V. Hanjin Marseilles, 162 571, 574 (CA9 1998) (privity Clause), Mikinberg Baltic 988 327, 332 1993) relationship required). 297 (1959). conclude not. "`the Carrier's liability, any, basis package.'" 302. stevedoring load onto ship, damaged goods. found legislative history meant automatically agents, stevedores, looked itself. reasoned liability'" "indicate stevedores agents. presumed way expressed added "strictly beneficiaries." 305. 29 Circuit, respondents, much decision. 3d, 1308. nothing attributes it. anything, stands proposition there Clauses. 30 Appeals' contractor)" contribute "Read naturally, word `any' expansive meaning, `one indiscriminately whatever kind.'" Gonzales, 520 (1997) Webster's Third Dictionary 97 (1976)). There reason contravene obvious Green Biddle, Wheat. 89-90 (1823) ("[W]here words treaty, construction, hostility excluded"). contracted Alabama, and, crow flies, discharge. Fitzpatrick Modlin, Direct-Line Distances 168 (1986). Thus, necessary Accordingly, clause. B difficult. task challenge centuries. Hadley Baxendale, Exch. 341, 156 Eng. Rep. 145 (1854). contractors. limitation, negotiated, prevents more. explained, does. n. supra. protected too, reach give relief petitioned. 32 drawn carriage: empowered sense. unsustainable. comes negligence damage, agreements 33 derive 508 (1914). Northern, transfer her Without express authority, arranged tariff rate railroad's less lost able rely agreement company. "had Transfer agree shipment"; know outstanding, conflicting obligation another party. 514. remedy, necessary, 34 object reading argue principles. Like respondents agent. Other similar one. e.g., Kukje Hwajae M/V Hyundai Liberty, 294 1171, 1175-1177 2002) (an acted carrier). 35 reliance misplaced here. undeniable agency, fiduciary effective control principal, ICC. Restatement (Second) Agency (1957). moment. derived classic binds negotiates carriers, infringe ensure reliability "entrusted shipped railway, contrary appearing, [the intermediary] shipment." hold intermediaries, entrusted "agents" ability downstream. 36 contend Various participants weighed amici sides close call. idle pretend characterized, discerned. balance, disagree three reasons. 37 believe shipping, dealing intermediary, owner. Even knowingly how came before, outstanding them. seek information contracting, assure themselves protection. gathering very costly even impossible, change hands times course 589; L., 404. 38 prompting distinguish shippers interfere statutory promoting nondiscrimination Delaware, W. 220 235, 251-256 (1911) (common "sit title prospective shipper"); Shipping 1709 (nondiscrimination rules). also, intimated, regime. 39 result. exceeds indeed, damages derailment. logical definitely knew bear gap IV 40 undertaken recognize legal backdrop future negotiated. course, structure Future remain free adapt greater predictability concerning compensate. 41 reversed, remanded further proceedings opinion. 42 ordered. Notes: Briefs ofamici reversal filed Air Transport Association America, Spotswood; Steamship Owners Mutual Protection Indemnity Association, et al. Bederman; Railroads Daniel Saphire; National Waterfront Employers Thomas Wilcox; Loss Prevention Security Attridge; World Council Lawrence John Butler. affirmance Institute Underwriters Joseph Grasso Hermann; Prevention, Stanley McDermott III; Industrial League Nicholas DiMichael Karyn Booth; Intermediaries Gluck; Francesco Berlingieri Jones; Martin Davies Susan Vance. Public Citizen, Brian Wolfman; Jan Ramberg E. Carey, Gooch, Jr., Lodwick. Forwarder equivalent 666.67 SDR unit kilogramme gross weight damaged, whichever higher, Consignor." 57a, 8.3. SDR, Special Drawing Right, account created Monetary calculated daily basket currencies. computed approximately $17,373 June 1997, $17,231 $9,763 argued. Exchange Rate Archives, http://www.imf.org/external/np/fin/rates/param_rms_mth.cfm (as visited Nov. 5, 2004, Clerk file). higher. record. III-B,infra, $5,000 machine, precise matter. Clauses name English calledHimalaya. Adler Dickson, [1955] Q. 158 (C. A.).

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