Court Opinion

ID: 146964
Source: CourtListenerOpinion
Date Created: 2010-05-22 00:03:34+00
Date Added: 2024-06-11T17:24:02.906210
License: Public Domain

FILED
                               NOT FOR PUBLICATION                                     MAY 21 2010

                                                                                  MOLLY C. DWYER, CLERK
                       UNITED STATES COURT OF APPEALS                               U .S. C O U R T OF APPE ALS

                                FOR THE NINTH CIRCUIT

 SINOTRANS CONTAINER LINES CO.,                         No. 09-55480
 LTD.,
                                                        D.C. No. CV-06-07848-SVW
                 Plaintiff-Appellee,

   v.                                                   MEMORANDUM *

 NORTH CHINA CARGO SERVICES,

                 Defendant-Appellant.

                     On Appeal from the United States District Court
                          for the Central District of California
                      Stephen V. Wilson, District Judge, Presiding

                           Argued and Submitted May 6, 2010
                                  Pasadena, California

Before: CLIFTON and BYBEE, Circuit Judges, and KORMAN, ** District Judge.

             *
              This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.

        **    The Honorable Edward R. Korman, United States District Judge, Eastern District
of New York, sitting by designation.
      Appellant, North China Cargo Services, Inc. (“North China”), appeals an order

of the United States District Court for the Central District of California, granting the

motion for summary judgment of appellee, Sinotrans Container Lines Co., Ltd.

(“Sinotrans”). North China, a California corporation, contracted with Sinotrans, an

ocean carrier organized under the laws of the People’s Republic of China, to have

Sinotrans transport sixty containers of waste paper by sea from Long Beach to

Qingdao, China in 2006. Once the shipments arrived in Qingdao, North China refused

to accept delivery of the containers and clear them through customs. Consequently,

they were taken into custody by Chinese port authorities for over two years.

      On December 11, 2006, Sinotrans filed its complaint against North China for

demurrage/detention charges, storage charges, and other damages and costs resulting

from North China’s failure to accept delivery of the cargo. On January 11, 2007,

North China filed a motion to dismiss on the following grounds: 1) failure to join an

indispensable party; 2) forum non conveniens; and 3) lack of subject matter

jurisdiction. On January 31, 2008, the district court denied the motion on all grounds.

Following limited discovery, Sinotrans filed a motion for summary judgment, which

the district court granted on February 3, 2009. The judgment was entered on February

27, 2009, and North China filed its notice of appeal on March 29, 2009.

                                           I

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          North China first argues that the district court lacked subject matter jurisdiction.

This argument is without merit. The federal district courts have original jurisdiction

over “[a]ny civil case of admiralty or maritime jurisdiction.” 28 U.S.C. § 1333(1).

“As a general rule, admiralty law applies to all maritime contracts.” Aqua-Marine

Constructors, Inc. v. Banks, 110 F.3d 663, 670 (9th Cir. 1997). Indeed, “a contract

is maritime if it relates to a ship in its use as such, or to commerce or to navigation on

navigable waters, or to transportation by sea, or to maritime employment.” Id. at 670-

71.

          The present dispute stems from North China’s breach of the bills of lading and

service contracts, the primary purpose of which was to transport goods from

California to China by sea. Accordingly, they are maritime in nature and thus

conferred admiralty jurisdiction upon the district court pursuant to 28 U.S.C. §

1333(1). The provisions relating to the pickup and detention of cargo in China, while

technically involving activity taking place on land, are incidental to the overall

objective of the agreement, which was to transport the cargo through maritime

activity. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 24 (2004) (holding that bills of

lading, which covered both ocean and inland transportation, were “maritime contracts

because their primary objective [was] to accomplish the transportation of goods by

sea.”).

                                               3
      Alternatively, the district court had diversity jurisdiction over this matter

pursuant to 28 U.S.C. § 1332(a)(2) because Sinotrans is a foreign citizen, North China

is a United States citizen, and the amount in controversy exceeds $75,000. North

China’s contentions to the contrary are erroneous and without support.

                                          II

      North China also argues that the district court erred in granting summary

judgment in favor of Sinotrans because there remain factual disputes regarding the

mitigation of damages. Sinotrans provided evidence that it took extensive measures

to attempt to mitigate its losses. First, according to sworn declarations, Sinotrans

contacted North China and offered “a big discount” in the detention charges if it

agreed to retrieve the deliveries in Qingdao, but North China refused. Next, Sinotrans

applied to Chinese customs to have the cargo destroyed or auctioned, but customs

officials would not grant approval.     Sinotrans then hired a “custom clearance

company” called Cititong International Freight & Forwarding Co., Ltd. to retrieve the

containers.   For unexplained reasons, these efforts were similarly unsuccessful.

Finally, Sinotrans hired attorneys in China to ask the Quindao maritime court to order

the sale of the cargo so that the containers could be recovered. Since that time,

customs has sold the contents of forty containers, but the proceeds were insufficient

to cover the unpaid duties and costs of conducting the sale.

                                          4
      By contrast, North China has offered no evidence of its own to dispute the

claim that Sinotrans took these measures.       It claims that its lack of supporting

evidence is the result of an inability to conduct appropriate discovery. Yet North

China never complied with Federal Rule of Civil Procedure 56(f), which provides that

if a party “shows by affidavit that, for specified reasons, it cannot present facts

essential to justify its opposition,” the court may deny a pending motion for summary

judgment and grant a continuance. Fed. R. Civ. P. 56(f); see also California ex rel.

Cal. Dep’t of Toxic Substances Control v. Campbell, 138 F.3d 772, 779 (9th Cir.

1998). “References in memoranda and declarations to a need for discovery do not

qualify as motions under Rule 56(f).” Brae Transp., Inc. v. Coopers & Lybrand, 790

F.2d 1439, 1443 (9th Cir. 1986). Accordingly, based on the evidence presented by the

parties, we conclude that there are no genuine issues of fact regarding damages that

would require a trial.

                                          III

      Finally, North China argues that the district court was not the proper forum for

this action and, consequently, the case should have been dismissed on the ground of

forum non conveniens. Such a dismissal requires the moving party to prove that the

balance of private and public interest factors relating to the competing fora favors

dismissal. See Creative Tech., Ltd. v. Aztech Sys. Pte., Ltd., 61 F.3d 696, 699 (9th Cir.

                                           5
1995). This determination “is committed to the sound discretion of the trial court. It

may be reversed only when there has been a clear abuse of discretion.” Piper Aircraft

Company v. Reyno, 454 U.S. 235, 257 (1981).

      The district court concluded that North China failed to demonstrate that there

was an adequate alternative forum and that the majority of public and private interest

factors weighed against dismissal on forum non conveniens grounds. We agree with

that assessment.

                                         IV

      For the foregoing reasons, we AFFIRM the decision of the district court.

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