Court Opinion

ID: 34543
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:17:34+00
Date Added: 2024-06-11T16:57:56.824697
License: Public Domain

United States Court of Appeals
                                                                   Fifth Circuit
                                                                   F I L E D
                                                                    March 3, 2004
          IN THE UNITED STATES COURT OF APPEALS
                                                                Charles R. Fulbruge III
                   FOR THE FIFTH CIRCUIT                                Clerk

                         No. 03-20760
                       Summary Calendar

UNITED STATES OF AMERICA,

                                          Plaintiff-Appellee,

                            versus

OCEAN BULK SHIPS, INC.; ET AL.,

                                          Defendants,

OCEAN BULK SHIPS, INC.; TRANSBULK CARRIERS, INC.,
in personam,

                                          Defendants-Appellants.

                     ------------------

UNITED STATES OF AMERICA,

                                          Plaintiff-Appellee,

                            versus

OCEAN BULK SHIPS, INC.; ET AL.,

                                          Defendants,

OCEAN BULK SHIPS, INC., in personam; TRANS BULK
CARRIERS, INC., in personam,
                                                        Defendants-Appellants.

                   Appeal from the United States District Court for
                           the Southern District of Texas
                            (USDC Nos. H-01-CV-1639,
                         H-01-CV-2428 & H-01-CV-2486)
           _______________________________________________________

Before REAVLEY, JOLLY and DENNIS, Circuit Judges.

PER CURIAM:*

       The judgment is affirmed for the following reasons:

       1. We agree with the analysis of the district court. The appellant carriers do not

challenge liability but only the measure of damages. As to damages, the carriers do not

contest the measure of the quantity of goods that were missing or arrived in damaged

condition. They only challenge the method of valuation of the goods, a question of law

we review de novo.

       2. The Commodity Credit Corporation (CCC), an agency of the United States,

purchased the goods—foodstuffs intended for humanitarian relief—and paid for their

land and sea transportation. As a matter of law and common sense, the government was

entitled to reimbursement for the damaged and missing cargo in the amount that it paid

for the cargo plus the land and sea transportation costs it paid. Basing the damages on the

       *
        Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set forth in
5TH CIR. R. 47.5.4.

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costs to the government of the goods and their transportation, as reflected in the f.a.s.

value and ocean freight charges stated in the bills of lading issued by agents of appellants,

is a valid method of calculating damages in these circumstances. United States v. Ocean

Bulk Ships, Inc., 248 F.3d 331, 343 (5th Cir. 2001). The government offered evidence

that the values stated in the bills of lading reflected the actual costs incurred by the

government, and defendants offered no evidence to the contrary. “The United States’

declared value was prima facie evidence of the cargo’s value and, absent any rebuttal

evidence from the carrier, is adequate to set the value of the cargo for damage calculation

purposes.” Id.

       3. Defendants’ argument that the value of the goods cannot be considered in

calculating damages because the goods were taken out of commerce and therefore had no

market value ignores the costs incurred by the government in purchasing the goods, and

our recognition that a carrier “cannot use CCC’s humanitarian orientation to avoid

damages otherwise properly awarded.” United States v. Central Gulf Lines, Inc., 747
F.2d 315, 320 (5th Cir. 1984). Further, a regulation provides that, for purposes of claims

against ocean carriers, goods shipped under the Food for Peace Program may be valued at

the market price or the f.a.s. price used in the pending case. 22 C.F.R. §

211.9(c)(2)(ii)(B) (2003).

       4. Defendants argue that the United States cannot recover through assignments

from the private voluntary organizations (PVOs) because the PVOs suffered no financial

losses. This argument defies economic reality because the government suffered an

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economic loss in the form of the costs it incurred in purchasing and paying for the

transportation of the missing and damaged cargo in issue. The government’s purposes in

participating in the Food for Peace Program, whatever they might be, were not met when

the defendants failed to deliver the food to the intended beneficiaries. Further, a

regulation provides that the government may pursue claims against ocean carriers in these

circumstances “[w]hether or not title to commodities has transferred from CCC to the

cooperating sponsor . . . .” Id. § 211.9(c)(2)(i) (2003). In discussing this regulation we

have recognized that “the United States has standing to sue” for missing cargo under the

Food for Peace Program. Central Gulf Lines, 747 F.2d at 317. Thus, appellants’

argument that the PVOs “obtained sole legal title to the cargoes once they were loaded

aboard the various ships in the United States,” appellants’ brief at 16, strikes us as legally

irrelevant.

       5. The damages awarded are consistent with our precedents and federal

regulations, and do not violate COGSA’s requirement that the carrier shall not “be liable

for more that the amount of damage actually sustained.” 46 U.S.C. § 1304(5).

       AFFIRMED.

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