Court Opinion

ID: 2962874
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:03:03.669277+00
Date Added: 2024-06-11T15:01:19.350158
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                                                      ____________________          No. 93-1543                               HENLEY DRILLING COMPANY,                                 Plaintiff, Appellee,                                          v.                                   WILLIAM H. McGEE                                         AND                             CNA CASUALTY OF PUERTO RICO,                               Defendants, Appellants.                                                                                      ____________________          No. 93-1548                               HENLEY DRILLING COMPANY,                                 Plaintiff, Appellee,                                          v.                         MARINE TRANSPORTATION SERVICES, ETC.                                         AND                          LUIS A. AYALA COLON SUCRS., INC.,                               Defendants, Appellants.                                                                                      ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Raymond L. Acosta, U.S. District Judge]                                             ___________________                                                                                      ____________________                                        Before                              Torruella, Circuit Judge,                                         _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                               and Cyr, Circuit Judge.                                        _____________                                                                                      ____________________               Keith A. Graffam, with  whom Dario Rivera Carrasquillo, John               ________________             _________________________  ____          E. Mudd and Cordero, Miranda & Pinto were on brief for plaintiff.          _______     ________________________               Jose   F.  Sarraga   for  defendant   Marine  Transportation               __________________          Services.                Eugene F. Hestres,  with whom  Bird, Bird &  Hestres was  on               _________________              _____________________          brief for defendant Luis A. Ayala Colon Sucrs., Inc.                                                                                      ____________________                                  September 27, 1994                                                                                      ____________________                    CYR, Circuit Judge.  The central question in this  case                    CYR, Circuit Judge.                         _____________             whether the $500 per-package limit on ocean carriage liability          imposed  by the Carriage  of Goods by Sea  Act (COGSA), 46 U.S.C.            1304(5), is applicable to  an oil drilling rig     requires the          court to  consider  for the  first time  the COGSA-related  "fair          opportunity" doctrine.                                           I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    Puerto Rico Electric Power Authority (PREPA) contracted          with  Henley  Drilling  Company  (Henley)  to  conduct  petroleum          drilling  operations  in  Puerto  Rico.    Marine  Transportation          Services-Sea  Barge Group,  Inc. (Sea  Barge), an  ocean carrier,          agreed to  transport Henley's drilling equipment  from Houston to          Puerto Rico, and  return.  PREPA obtained  marine cargo insurance          on the Henley drilling rig through William H. McGee & Co. (McGee)          and CNA Casualty of  Puerto Rico (CNA).  Following  an uneventful          southbound voyage,  Sea Barge retained a  stevedoring contractor,          Luis A. Ayala Col n  Sucrs., Inc. (Ayacol), to stow  the drilling          rig aboard  the barge for the  return trip to Houston.   When the          barge arrived  in Houston,  however, Henley's huge  drilling rig,          valued at $629,000, was nowhere to be found.                     Henley sued Sea Barge, Ayacol, McGee, CNA and PREPA  in          the United States District Court for the District of Puerto Rico.          Under  the terms of their settlement  agreement, PREPA, McGee and          CNA  were subrogated to the  rights of Henley,  leaving Sea Barge                                          3          and Ayacol as the only defendants.  In March 1992,  Sea Barge and          Ayacol moved for partial  summary judgment, contending that their          liability,  if any,  could  not exceed  the $500  per-package/CFU          limit  imposed  by COGSA.1    Contemporaneously,  Ayacol and  Sea          Barge moved for summary  judgment on the further ground  that the          stowing of the drilling rig aboard the barge for  the return trip          to  Houston  was improperly  supervised  by  the marine  surveyor          retained  by PREPA,  thereby entitling  Ayacol  and Sea  Barge to          exoneration from liability.                     A magistrate judge recommended partial summary judgment          in  favor of Sea  Barge and Ayacol,  based on a  finding that the          drilling rig constituted a "package" within the meaning  of COGSA            4(5),  for which the maximum liability of the carrier is $500.2          The magistrate judge did  not rule on the summary  judgment claim          for exoneration.   McGee, CNA  and PREPA objected  to the  magis-          trate-judge's report and recommendation, which the district judge          subsequently  adopted over their objection.  McGee, CNA and PREPA          unsuccessfully  moved for reconsideration  by the district judge.          CNA  and McGee [collectively:  "McGee"] appealed.  Ayacol and Sea          Barge  cross-appealed,  challenging  the  district   court  order          adopting the magistrate-judge's report and recommendation insofar          as it failed to  grant Ayacol and Sea Barge exoneration  from all          liability and included no attorney fee award against McGee.                                         ____________________               1The  COGSA-imposed liability limit  applies to each package          or "customary freight unit" ("CFU").            __               2See note 1 supra.                ___        _____                                          4                                          II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________          A.   The McGee Appeal (No.  93-1543)          A.   The McGee Appeal (No.  93-1543)               _______________________________               1.   Summary Judgment Standard               1.   Summary Judgment Standard                    _________________________                    We  review  a  grant   of  summary  judgment  de  novo.                                                                  __  ____          Commercial Union Ins. Co. v. Walbrook Ins. Co., 7 F.3d 1047, 1050          _________________________    _________________          (1st  Cir. 1993).    Summary judgment  is  appropriate where  the          record,  viewed  in the  light  most favorable  to  the nonmoving          party,  reveals no genuine issue as to any material fact, and the          moving party is entitled to judgment  as a matter of law.  Velez-                                                                     ______          Gomez v. SMA Life Assur. Co., 8 F.3d 873, 874-75 (1st Cir. 1993).          _____    ___________________               2.   The COGSA Liability Limitation               2.   The COGSA Liability Limitation                    ______________________________                    Section 1304(5) of COGSA,  entitled "Rights and immuni-          ties of carrier and ship," provides in relevant part:                         Neither  the carrier nor  the ship shall                    in any event be or become liable for any loss                    or damage to or in connection with the trans-                    portation of  goods  in an  amount  exceeding                    $500  per package . .  . or in  case of goods                    not  shipped  in   packages,  per   customary                    freight  unit .  .  . unless  the nature  and                                          ______  ___ ______  ___                    value of such goods have been declared by the                    _____ __ ____ _____ ____ ____ ________ __ ___                    shipper before  shipment and inserted  in the                    _______ ______  ________ ___ ________  __ ___                    bill of lading . . . .                    ____ __ ______                         By agreement between  the carrier,  mas-                    ter, or agent of the carrier, and the shipper                    another maximum amount than that mentioned in                    this paragraph may be fixed . . . [but] in no                    event shall the  carrier be  liable for  more                    than the amount of damage actually sustained.          46 U.S.C. App.   1304(5) (emphasis added).                                            5                    The  courts  generally  have required  the  carrier  to          afford  the  shipper a  "fair  opportunity"  to avoid  the  COGSA          "package/CFU"  liability  limitation  through   adequate  advance          notice.   See, e.g., Carman  Tool & Abrasives,  Inc. v. Evergreen                    ___  ____  _______________________________    _________          Lines, 871 F.2d 897, 899  n.3 (9th Cir. 1989).  As this court has          _____          not adopted  the COGSA  "fair opportunity" doctrine,  see Granite                                                                ___ _______          State Ins. Co. v. M/V Caraibe, 825 F. Supp. 1113, 1118-24 (D.P.R.          ______________    ___________          1993)  (noting  absence  of  First  Circuit  precedent  on  "fair          opportunity" doctrine),  we first examine  the case law  in other          jurisdictions.                     All courts which have  addressed the matter require the          carrier  to  provide  the  shipper  some  notice  of   the  COGSA          "package/CFU" liability limitation, differing only as to the type          of notice.    See id.  (examining circuit  split as  to level  of                        ___ ___          notice  required); see  generally  Michael F.  Sturley, The  Fair                             ___  _________                       _________          Opportunity Requirement Under COGSA  Section 4(5):  A  Case Study          _________________________________________________________________          in  the Misinterpretation  of the  Carriage of  Goods by  Sea Act          _________________________________________________________________          (Part I),  19 J.  Mar. L.  & Com. 1,  13-17 (1988)  (hereinafter,          ________          "Sturley,  Part I");  Michael  F. Sturley,  The Fair  Opportunity           _______                                    _____________________          Requirement (Part II),  19 J. Mar.  L. & Com.  157 (1988)  (here-          _____________________          inafter,  "Sturley, Part II").   The Ninth Circuit  is thought to                     _______          have  the more demanding notice requirement, see 2A Ellen Flynn &                                                       ___          Gina A. Raduazzo, Benedict  on Admiralty    166, at pp. 16-28  to                            ______________________          16-29 (Michael  F. Sturley,  contrib. ed. 1993)  (hereinafter, 2A          Benedict)  (describing  "strict" Ninth  Circuit  standard, citing          ________          cases), mandating  that the  carrier provide the  shipper legible                                          6          written notice of the COGSA "package/CFU" liability limitation in          the bill  of lading, employing language  substantially similar to          COGSA   4(5).  See, e.g., Nemeth v. General  S.S. Corp., 694 F.2d                         ___  ____  ______    ___________________          609,  611 (9th Cir. 1982).   Other courts,  including the Second,          Fourth, Fifth and Eleventh Circuits, simply require that the bill          of  lading include  a "clause  paramount" incorporating  COGSA by          reference.  See, e.g., Insurance Co. of N. Am. v. M/V Ocean Lynx,                      ___  ____  _______________________    ______________          901 F.2d 934,  939 (11th Cir. 1990), cert. denied,  498 U.S. 1025                                               _____ ______          (1991);  General Elec. Co. v.  M/V Nedlloyd, 817  F.2d 1022, 1029                   _________________     ____________          (2d Cir. 1987),  cert. denied, 484  U.S. 1011 (1988);  Cincinnati                           _____ ______                          __________          Milacron, Ltd. v.  M/V American  Legend, 804 F.2d  837, 837  (4th          ______________     ____________________          Cir. 1986) (en banc) (per curiam), rev'g 784 F.2d 1161 (4th  Cir.                                             _____          1986); Brown &  Root, Inc.  v. M/V Peisander,  648 F.2d 415,  424                 ___________________     _____________          (5th  Cir. 1981).   The courts are in  agreement that the carrier          bears  the burden of proving that it has afforded the shipper the          requisite "fair  opportunity" notice.  See,  e.g., General Elec.,                                                 ___   ____  _____________          817  F.2d at 1029; Tessler Bros. (B.C.) Ltd. v. Italpacific Line,                             _________________________    ________________          494 F.2d 438, 443 (9th Cir. 1974).                      Our review leads us to conclude that the bill of lading          in  this case  afforded "fair  opportunity" notice  sufficient to          satisfy  whatever  essential  requirements are  imposed  by these          other courts.   Constructive notice was  afforded by the  "clause          paramount"3  legibly printed on the  reverse side of  the bill of                                        ____________________               3The bill of lading included a typical "clause paramount":               1.   CLAUSE PARAMOUNT:  This  bill of lading shall have               effect  subject to  the provisions  of the  Carriage of               Goods by Sea Act, approved April 16, 1936.                                           7          lading:  "This bill  of lading shall  have effect subject to  the          provisions of  the Carriage of  Goods by  Sea Act .  . . ."   See                                                                        ___          Cincinnati Milacron, 804 F.2d at 837 ("clause paramount" provides          ___________________          constructive notice).4   A  more particular notice  was contained          in the bill of lading "valuation clause":                     20.  VALUATION.   Carrier shall not be liable                    in any event for any  loss, damage, misdeliv-                    ery or delay with respect to  the goods in an                    amount exceeding $500.00  lawful money of the                    United States per package,  or in the case of                    goods  not shipped in packages, per customary                    freight unit, unless the  nature of the goods                    and  a valuation thereof  higher than $500.00                    is declared in writing by Shipper on delivery                    of the  goods to Carrier and  inserted in the                    Bill of  Lading  and extra  freight  is  paid                    thereon  as required by the applicable tariff                    to obtain  the benefit of  such higher valua-                    tion.          See Carman Tool, 871 F.2d at 899 n.4 (finding that bill of lading          ___ ___________          provision substantially similar to  that sub judice recited terms                                                   ___ ______                                        ____________________          See  also 46  U.S.C. App.     1312 ("any  bill  of lading  . .  .          ___  ____          containing an express statement  that it shall be subject  to the          provisions  of [COGSA] shall be  subjected hereto as  fully as if          subject hereto by the express provisions of [COGSA] . . . Provid-                                                                    _______          ed  further, that  every bill  of lading  . .  . shall  contain a          ___________          statement  that it shall have effect subject to the provisions of          [COGSA]") (emphasis  original); cf.  Komatsu Ltd. v.  States S.S.                                          ___  ____________     ___________          Co., 674 F.2d 806,  810 n.6 (9th Cir. 1982)  (rejecting statutory          ___          challenge to "fair opportunity" doctrine based on   1312, because          this  section "leaves  a carrier  free to  quote the  language of          section 4(5) in full").               4McGee  does  not  challenge  the legibility  of  the  COGSA          notice.   Cf. Nemeth, 694 F.2d at 611-12 (illegible recitation of                    ___ ______          COGSA   4(5) does not provide "fair opportunity" notice).                                            8          of COGSA    4(5) and thus afforded actual  notice); cf. supra pp.                                                              ___ _____          5-6 (quoting 46 U.S.C. App.   1304(5)).5                    McGee contends  that Sea Barge did  not demonstrate its          entitlement  to summary  judgment  on compliance  with the  "fair          opportunity" requirement  because  there was  competent  evidence          that Sea  Barge failed to  offer PREPA ad valorem  rates based on                                                 __ _______          the  true value of the cargo.  Specifically, McGee reiterates its          claim  below that Sea Barge failed to show that published tariffs          were available for a drilling rig on this voyage.6   McGee relies          primarily on the Fifth Circuit's language in Brown & Root:                                                       ____________                    [T]he circumstances of the case before  us do                    not overcome the prima  facie evidence of the                    opportunity for a choice of rates and  valua-                    tions . . . First, COGSA was expressly incor-                    porated  in  the bill  of  lading to  thereby                    bring into play   4(5).   Next, and more sig-                                                        ____ ____                    nificantly,  the  published tariff  which has                    __________   ___  _________ ______                                        ____________________               5In  light of  our conclusion  that the  bill of  lading met          whatever "fair  opportunity" notice  requirements are  imposed by          other circuits, we refrain  from embracing the "fair opportunity"          doctrine itself,  in any form.   We take this  course because the          parties have assumed, from the outset, that a COGSA-related "fair          opportunity" doctrine  would apply.   Thus, we leave  for another          day,  and a proper adversarial setting, what  we perceive to be a          problematic question.  See Michael F. Sturley, The Fair  Opportu-                                 ___                     __________________          nity Requirement Under COGSA Section  4(5):  A Case Study in  the          _________________________________________________________________          Misinterpretation of the Carriage  of Goods by Sea Act  (Part I),          ________________________________________________________________          19  J. Mar. L. & Com. 1  (1988); and Michael F. Sturley, The Fair                                           ___                     ________          Opportunity Requirement (Part  II), 19 J. Mar. L. & Com. 157, 176          __________________________________          (1988)  ("All of the available evidence suggests that the [COGSA]          package limitation should  not be subject  to a fair  opportunity          requirement.").                6McGee relies on a deposition by William Lauderdale, the Sea          Barge  agent  responsible for  negotiating  freight  charges with          PREPA,  which states that the rate for transporting the drill rig          was "outside" the tariff  Sea Barge filed with the  Federal Mari-          time Commission, because this  was "a single shipper on  a single          voyage, on  a contract voyage."   The record  does not contain  a          copy of the Sea Barge tariff.  Cf. infra note 7.                                         ___ _____                                          9                    the effect of law very carefully gave Shipper                                                     ____ _______                    a choice  of valuations  by a choice  of pre-                    _ ______  __ __________  __ _ ______  __ ____                    cisely definable freight rates.                    ______ _________ _______ _____          648 F.2d  at 424 (emphasis  added, citations  omitted); see  also                                                                  ___  ____          Wuerttembergische  v. M/V  Stuttgart Express,  711 F.2d  621, 622          _________________     ______________________          (5th  Cir. 1983) (per  curiam) (similar, applying  Brown & Root).                                                             ____________          The controlling  question before  us therefore becomes:   whether          actual and constructive notice, without more, affords the shipper          "fair opportunity," as a matter of law.                     Careful examination of the authorities has disclosed no          appellate  case which requires a  valid tariff     in addition to          actual  or  constructive notice     as  an  element of  the "fair          opportunity" doctrine.  The Fifth Circuit, whose cases constitute          the principal authority relied on by McGee, has reserved judgment          on this matter:                     The facts  of [Brown & Root, 648 F.2d at 424,                                   ____________                    and  Wuerttembergische, 711 F.2d  at 622] re-                         _________________                    veal that we  have not  held . .  . that  the                                       ___                    mere  incorporation of  COGSA into a  bill of                    lading  constitutes  prima facie  evidence of                    fair opportunity.  Because  that circumstance                                       _______  ____ ____________                    is not before us in  this case, we express no                    __ ___ ______ __ __  ____ _____ __ _______ __                    opinion on the issue.                      _______ __ ___ _____          Couthino, Caro & Co. v. M/V Sava, 849 F.2d 166, 170 n.6 (5th Cir.          ____________________    ________          1988) (emphasis added).  Other courts  of appeals either directly          hold that a tariff is not required if notice of the COGSA liabil-          ____          ity limitation has been given, see, e.g., Ocean Lynx, 901 F.2d at                                         ___  ____  __________          939 ("Brown & Root  thus adopted a system of  constructive notice                ____________          of an opportunity to  declare excess valuation.  Either  a clause          paramount in the bill of lading  or a valid tariff filed with the                                           __          Federal Maritime Commission  . .  . is sufficient  to afford  the                                          10          shipper  an opportunity  to  declare  excess value.")  (citations          omitted, emphasis  added),7 or  clearly imply  such a  rule, see,                                                  _____                ___          e.g., Aetna Ins.  Co. v. M/V Lash Italia, 858  F.2d 190, 193 (4th          ____  _______________    _______________          Cir. 1988) ("In  this case [language reciting the COGSA liability          limitation  in the] bill  of lading establishes  prima facie evi-                                                           _____ _____          dence of  fair opportunity by clearly outlining the limitation of          liability and  explaining the shipper's opportunity  to avoid the          limitation  by declaring a higher value."); Carman Tool, 871 F.2d                                                      ___________          at 901  ("so long as  the bill of  lading, on its  face, provides          adequate notice  of the  liability  limit and  an opportunity  to          declare a higher value, the  carrier has discharged its responsi-          bility")  (9th Cir.);  cf.  Komatsu, 674  F.2d at  811 (published                                 ___  _______          tariff,  without  actual notice  of  the  relevant provisions  of          COGSA, does not satisfy "fair opportunity" requirement).                     We thus  eschew McGee's implicit invitation  to augment          the "fair opportunity" doctrine.   As the Ninth  Circuit observed          in a similar context:                    We  decline to  expand  the fair  opportunity                    requirement  as suggested by  [shipper].  The                    requirement is  not found in  the language of                    COGSA;  it is  a  judicial encrustation,  de-                    signed to avoid  what courts felt  were harsh                    or unfair results.  The  requirement has been                    criticized  for introducing  uncertainty into                                        ____________________               7Though the published tariff  in Ocean Lynx "provide[d] that                                                __________          an ad valorem rate shall be applied to shipments of certain  com-             __ _______          modities [but did]  not provide  for the method  through which  a          shipper of  goods other  than the  listed  commodities can  avoid          COGSA section 4(5)'s  limitation on liability," 901  F.2d at 940,          the  court found  that incorporation  of COGSA  into the  bill of          lading  satisfied the  "fair opportunity"  requirement, id.   The                                                                  ___          argument rejected by the Eleventh Circuit is very similar to that          advanced by McGee.  See supra note 6.                                  ___ _____                                          11                    commercial transactions that  should be  gov-                    erned by certain and uniform rules.          Carman  Tool, 871 F.2d at 900 (citations omitted); see also Vimar          ____________                                       ___ ____ _____          Seguros y  Reaseguros, S.A. v. M/V Sky  Reefer, ___ F.3d ___, ___          ___________________________    _______________          (1st Cir.  1994) [No. 93-2179,  slip op. at  4 (1st Cir.  July 7,          1994)]  ("COGSA was . . . intended to reduce uncertainty concern-          ing the responsibilities  and liabilities of carriers,  responsi-          bilities and  rights of shippers, and  liabilities of insurers.")          (citations  omitted);   see  generally  Sturley,   Parts  I,   II                                  ___  _________  _______          (criticizing "fair opportunity" doctrine as  economically ineffi-          cient and  inconsistent with  COGSA's roots in  international and          domestic law).8   The bill of  lading indisputably provided  both                                        ____________________               8Further, nothing in the facts of this case counsels  exten-          sion of the  "fair opportunity"  doctrine.  McGee  has not  shown          that the  absence of  relevant published tariffs  prevented PREPA          from  avoiding  the  COGSA liability  limitation.    We will  not          presume that  PREPA, McGee's  insured, would have  declared addi-          _______          tional value  under a published tariff,  especially since PREPA's          contract with Henley  obligated it to provide marine cargo insur-                                _________ __          ance for the full replacement value of the drilling rig.  Compare                       ____ ___________ _____                       _______          Travelers Indemn. Co.  v. Vessel  Sam Houston, 26  F.3d 895,  900          _____________________     ___________________          (9th Cir.  1994) (because  shipper obtained insurance  through an          independent underwriter,  "there is every reason  to believe that          [the shipper] made  a deliberate choice to  forego the additional          cost that would have been incurred in raising [the COGSA] liabil-          ity limit").  Indeed, Sea Barge proffered uncontroverted evidence          that though it offered  insurance, PREPA declined, opting instead          to purchase insurance through McGee.               Professor Sturley  has suggested  that in the  typical case,          the ad valorem rates  for excess value  offered by a carrier  are              __ _______          higher than premiums for equivalent cargo-insurance coverage from          a third-party  underwriter.   See Sturley,  Part II,  at 194.   A                                        ___ _______          rational shipper confronted with  such a choice is not  likely to          pay ad valorem rates when third-party  insurance coverage is less              __ _______          expensive.   Moreover,  a  judicially-imposed tariff  requirement          would increase transaction  costs to the carrier, with  no corre-          sponding benefit to either party.                                          12          actual  and constructive  notice  of the  COGSA   4(5)  liability          limitation.9  As there  was no material fact in  genuine dispute,          the  district court  properly  granted summary  judgment for  Sea          Barge/Ayacol on the ground that the COGSA "package/CFU" liability          limitation applies.                         3.   COGSA Package/Customary Freight Unit               3.   COGSA Package/Customary Freight Unit                    ____________________________________                    COGSA   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.   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                                        ____________________               9McGee  also argues  that because  David Kiester,  the PREPA          agent who negotiated the bill of lading with Sea Barge, allegedly          was inexperienced in maritime matters, knowledge of the effect of          COGSA   4(5)  may not be imputed  to PREPA.  The  only case McGee          cites  for this proposition, see  Pan American World Airways, 559                                            __________________________          F.2d at  1177 (holding  that "clause  paramount" alone  cannot be                                                           _____          used  to  impute knowledge  of effect  of  COGSA to  shipper), is          inapposite.  Moreover, we conclude that Kiester's inexperience is          immaterial to our analysis.  Cf. Carman Tool, 871 F.2d at 901 n.9                                       ___ ___________          ("So long as the bill of lading has all the necessary information          [i.e., gives actual notice of COGSA   4(5)],  the shipper, or any                                                        ___ ________ __ ___          other  interested party, has the means  of learning everything it          _____  __________ _____          may  wish to know about the terms of the transaction.") (emphasis          added).                                           13          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 "pack-          age");  Petition of Isbrandtsen Co.,  201 F.2d 281,  286 (2d Cir.                  ___________________________          1953)  (uncrated locomotive  not COGSA  "package"); 2A  Benedict,                                                                  ________          supra,    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?                    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 (1985); Granite  State, 825 F.  Supp. at 1126.10   To  deter-                      ______________                                        ____________________               10Some early  cases  looked to  shipping-industry custom  in          determining  the CFU.  See,  e.g., Waterman S.S.  Corp. v. United                                 ___   ____  ____________________    ______          States Smelting, Ref.  & Mining  Co., 155 F.2d  687, 693-94  (5th          ____________________________________          Cir.), cert. denied,  329 U.S. 761 (1946).   But the clear modern                 _____ ______          trend is to  "recognize the  customary freight unit  as the  unit          specifically employed  by the  parties in  arriving  at the  rate          charged  for shipment," Granite State, 825 F. Supp. at 1126; see,                                  _____________                        ___          e.g., FMC Corp. v. S.S. Marjorie Lykes, 851 F.2d 78,  80 (2d Cir.          ____  _________    ___________________          1988); see also Jerome C. Scowcroft, Recent Developments Concern-                 ___ ____                      ____________________________          ing the  Package Limitation, 20 J. Mar. L. & Com. 403, 412 (1989)          ___________________________          (discussing modern cases);  2A Benedict, supra,   168, at pp. 16-                                         ________  _____                                          14          mine 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).                     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:                                        ____________________          46 to 16-47 (same).               11Since  the bill  of  lading is  the  contract of  carriage          between shipper  and carrier, Grant  Gilmore & Charles  L. Black,          Jr., The Law of  Admiralty 93 (2d ed. 1975),  familiar principles               _____________________          of contract  interpretation govern its construction,  see Croft &                                                                ___ _______          Scully  Co. v. M/V Skulptor  Vuchetich, 664 F.2d  1277, 1282 (5th          ___________    _______________________          Cir. 1982).               12It is undisputed that the  freight charges for the  south-                                                                     ______          bound voyage, totalling $164,583,  were calculated on a short-ton          _____          basis, as evidenced by the bill of lading.  It is not clear  from          the  record exactly why the parties opted for a lump-sum contract          rate  on the  northbound  voyage, but  the Lauderdale  deposition          suggests that Sea Barge's expenses would be lower for the trip to          Houston  because the  barge  to be  used  on the  return  leg was          already positioned in Puerto Rico.                                            15               [PURCHASE ORDER]               [PURCHASE ORDER]                    Charges will be as follows:                         a)   Ocean Transportation                              --Drill rig & acc.: $86,400 lumpsum                         b)   Port charges & handling fees                              --San Juan arrimo:  $5.00/2,000 lbs                              --Houston Wharfage: 1.50/2,000 lbs                              --Houston truck loading: $7.50/2,000 lbs               [QUOTED CHARGE]               [QUOTED CHARGE]                    David, I have finalize  [sic] shipping charges for this                    move and wish to give you our charges  to move this rig                    to Houston, Texas.                    . . .                    Charges ocean transportation:                         Drill rig and accessories loose.   $86,400.00                                                            lumpsum                    . . .                     Port charges and handling fees:                         San Juan Arrimo               $5.00 per 2000 lbs                         Houston Wharfage              $1.50 per 2000 lbs                         Houston truck loading         $7.50 per 2000 lbs          The relevant portion of  the bill of lading is  substantially the          same, though  it does not use  the term "lump sum."13   This evi-          dence  was sufficient to establish that Sea Barge was entitled to          summary judgment on  its claim that the northbound freight charge                                        ____________________               13                                                                               _________________________________________________                TARIFF ITEM NUMBER      CHARGES        TOTAL                    TARIFF ITEM NUMBER      CHARGES        TOTAL               _________________________________________________                CONTRACT                               86,400.00               _________________________________________________                                                                               _________________________________________________                TOTAL THRU FREIGHT                                             _________________________________________________                WHARFAGE 1.50 st                       1,322.25                _________________________________________________                TERMINAL USAGE(1)PR 5.00 st            4,407.50                _________________________________________________                TERMINAL USAGE(2)US 7.50 st            6,611.25                _________________________________________________               . . .                    TOTAL CHARGES       --------       98,741.00                                         --------                 ________________________________________________          (Italicized  characters  are typed  in  the  original; all  other          characters are pre-printed in the bill of lading.)                                          16          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).                    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.                    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                                          17          nothing to link weight with the freight charge, and McGee made no                                          _______          proffer supporting such a link.14                    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).               B.   The Cross Appeal (No. 93-1548)                                                     B.   The Cross Appeal (No. 93-1548)               ______________________________                                        ____________________               14Even  evidence that Sea Barge used the weight of the drill          rig to calculate  its own  costs may not  have been  dispositive.                                ___          See M/V Lash Italia, 858 F.2d at 193 ("[w]hile [carrier] may have          ___ _______________          considered the vehicles' dimensions in setting its freight rates,          the mere consideration of a particular measure does not render it          a  customary freight unit"); S.S. Marjorie Lykes, 851 F.2d at 80-                                       ___________________          81  (even though preliminary  negotiations indicated that carrier          was calculating freight based on price per ton, the fact that the          bill of lading and tariff unambiguously reflected a lump-sum rate          was controlling).                                          18                    The Ayacol  and Sea  Barge cross-appeal  challenges (1)          the district court finding  that the loading of the  drilling rig          was  not controlled by  PREPA to such  an extent  that Ayacol was          exonerated from  liability, and (2) the  order denying Ayacol/Sea          Barge  an  attorney fee  award against  McGee.15   We  deem these          claims waived due to  cross-appellants' failure to object to  the          magistrate-judge's report and  recommendation within the  ten-day          period  prescribed by 28 U.S.C.    636(b)(1)(C).   See Park Motor                                                             ___ __________          Mart,  Inc.  v. Ford  Motor  Co., 616  F.2d  603,  605 (1st  Cir.          ___________     ________________          1980)16 ("[A] party 'may'  file objections within ten days  or he          may not, as he chooses, but he 'shall' do so if he wishes further          [appellate]  consideration.").17  See also Fed.  R. Civ. P. 72(b)                                            ___ ____          (same); D.P.R. Loc. R. 510.2(A) (failure to object to magistrate-                                        ____________________               15Prior  to  briefing  and  oral argument,  McGee  moved  to          dismiss the  Ayacol/Sea Barge cross-appeal for  failure to comply          with  D.P.R. Loc. R.  510.2(A) (failure to  object to magistrate-          judge's report within ten days waives right to appellate review).          On  written submissions  by  the parties,  we  denied the  motion          without  prejudice,  specifically  preserving  McGee's  right  to          address this  issue in  its  appellate brief.   Ayacol/Sea  Barge          failed  to respond  to the  waiver argument presented  in McGee's          brief, either at  oral argument  or in their  principal brief  on          appeal, and filed no reply brief.  Thus, we rely  on the Ayacol/-          SeaBarge submissions in opposition to McGee's motion to dismiss.                16The  Supreme Court has made clear that the failure to make          timely  objection does not deprive the court of appeals of juris-          diction.  Thomas v. Arn, 474 U.S. 140, 146 n.4 (1985).                     ______    ___               17We reject  the contention that the  Ayacol/Sea Barge claim          sought to be raised  on cross-appeal was preserved by  an oblique          footnote reference  in  their joint  memorandum opposing  McGee's                                                          ________  _______          objection to the magistrate-judge's report.  Their joint memoran-          _________          dum  was not  filed within  the ten-day  period prescribed  by 28          U.S.C.   636(b)(1)(C).  See Park Motor Mart., 616 F.2d at 605.                                    ___ ________________                                          19          judge's report within  ten days waives  absolute right to  appeal          district court order).18                      Ayacol/Sea Barge urge that timely objection is required          only  when a party challenges  a finding actually  set out in the          magistrate-judge's report and recommendation.  Thus, they  assert          no exception to the report per se but challenge the "fail[ure] to                                     ___ __          make the additional findings requested [in the motion for summary          judgment]."   We reject  their contention, which  would allow  an          aggrieved party to assert on appeal an argument never surfaced in          the district court;  namely, in this  case, that the  magistrate-          judge's  report failed to respond  to the portions  of the motion          dealing with  exoneration of liability  and attorney  fees.   See                                                                        ___          United States  v. Nu ez,  19 F.3d  719, 722  n.8 (1st Cir.  1994)          _____________     _____          (arguments  not seasonably addressed  to trial  court may  not be                                                          surfaced for  first time on  appeal) (citing cases).19   Finally,                                        ____________________               18The  report  and recommendation  warned  that "failure  to          comply with [D.P.R. Loc. R. 510.2(A)] precludes further appellate          review."  See  United States  v. Valencia-Copete, 792  F.2d 4,  6                    ___  _____________     _______________          (1st  Cir. 1986)  (directing  inclusion of  notice  of waiver  in          magistrate-judge's reports).                19Ayacol/Sea  Barge  point  to Orthopedic  &  Sports  Injury                                              _____________________________          Clinic  v. Wang  Labs., Inc., 922  F.2d 220  (5th Cir.  1991), as          ______     _________________          support  for their theory.  In Wang, plaintiffs did not object to                                         ____          the  magistrate-judge's report  with  respect to  its failure  to          treat  plaintiffs'  res  ipsa  loquitur  defense against  partial                              ___  ____  ________          summary  judgment.   The Fifth  Circuit rejected  the defendant's          argument  that Thomas v. Arn barred the claim, stating:  "[plain-                         ______    ___          tiff] is still able  to request that  the issue be considered  on                               __ _______          appeal, even  if it did not question  the magistrate's findings."          Wang, 922 F.2d at  225 (emphasis added), citing Thomas,  477 U.S.          ____                                     ______ ______          at 148-49.  Although the court did not detail the reasons for its          decision,  the referenced portion of Thomas states:  "we need not                                               ______          decide  whether the  Act  mandates a  waiver of  appellate review          absent [timely  objection to the magistrate-judge's  report].  We          hold only that  it does not forbid  such a rule."  Id.   No other                                                             ___                                          20          the  proposed bypass of the Article III judge would undermine the          established role of the magistrate judge in the federal system:                    The purpose of the Federal Magistrates Act is                    to relieve courts of unnecessary work.  Since                    magistrates are not Article III judges, it is                    necessary to provide for a redetermination by                    the  court, if requested,  of matters falling                                __ _________                    within subsection (b)(1)(B).   To require  it                                                   __ _______  __                    if not requested  would defeat the  main pur-                    __ ___ _________  _____ ______ ___  ____ ____                    pose of the act.                    ____ __ ___ ___          Park Motor  Mart, 616 F.2d  at 605  (footnote omitted)  (emphasis          ________________          added);  see also id. at  605 n.1 ("Nor can it  be thought that a                   ___ ____ ___          party  could  skip  the  district court  and,  in  effect, appeal          directly to us.  We have no jurisdiction to review the determina-          tions of magistrates").20                    We  affirm   the  district   court  judgment   for  Sea                    We  affirm   the  district   court  judgment   for  Sea                    _______________________________________________________          Barge/Ayacol,  dismiss  the  Sea Barge/Ayacol  cross-appeal,  and          Barge/Ayacol,  dismiss  the  Sea Barge/Ayacol  cross-appeal,  and          _________________________________________________________________          remand for further proceedings consistent with this opinion.  All          remand for further proceedings consistent with this opinion.  All          ___________________________________________________________   ___          parties are to bear their own costs.          parties are to bear their own costs.          ___________________________________                                        ____________________          court has cited Wang on this point.  We think Wang is better seen                          ____                          ____          as support for the view that a court of appeals has discretion to                                                              __________          adopt  a rule allowing  a party  to raise  a claim  not preserved          before magistrate-judge.   Since  this case presents  no suitable          occasion  for such a rule, see Park  Motor Mart, 616 F.2d at 605,                                     ___ ________________          we find Wang to be inapposite.                           ____               20Additionally, we  note that these claims  likely would not          succeed  on the  merits.   Ayacol  cites no  case holding  that a          stevedore's duty of care may be delegated, in toto, to its marine                                                     __ ____          surveyor.  The  district court case  cited for this  proposition,          see  Royal Embassy of Saudi Arabia v. S.S. Ioannis Martinos, 1986          ___  _____________________________    _____________________          A.M.C. 769 (E.D.N.C. 1984), merely  found a right to contribution                                                               ____________          from the marine surveyor.   As concerns the request  for attorney          fees,  Sea Barge/Ayacol  established  no conduct  on the  part of          McGee which would warrant a fee award.                                           21