Fishman/Tobin v. Tropical Shipping , 240 F.3d 956 ( 2001 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JAN 31 2001
________________________
THOMAS K. KAHN
CLERK
No. 99-4375
________________________
D. C. Docket No. 97-08747-CV-DLG
FISHMAN & TOBIN, INC., individually and for the use
and benefit of the Insurance Company of North America,
MACCLENNY PRODUCTS, INC., individually and for
the use and benefit of the Insurance Company of North
America, et al.,
Plaintiffs-Appellants,
versus
TROPICAL SHIPPING & CONSTRUCTION CO., LTD.,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(January 31, 2001)
Before BARKETT and WILSON, Circuit Judges, and DOWD*, District Judge.
WILSON, Circuit Judge:
*
Honorable David D. Dowd, Jr., U.S. District Judge for the Northern District of Ohio,
sitting by designation.
Fishman & Tobin (“Fishman”) and MacClenny Products (“MacClenny”), two
manufacturers that ship clothing from the Caribbean to the United States, appeal the
amount of judgment awarded to them when a carrier lost their cargo at sea. In
resolving their dispute, this Court for the fourth time enters the murky waters of the
Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1300 et seq. More specifically,
we endeavor to provide clarity to the reoccurring issue of what constitutes a “package”
under section 1304(5) of COGSA, since the term is not defined in the statute. After
thorough review of the record and the proceedings below, we now affirm the district
court’s ruling on the matter.
BACKGROUND
Fishman and MacClenny are two out of a number of American clothing
manufacturers who have their clothing assembled in Santiago, Dominican Republic
and shipped to the United States under the Caribbean Basin Initiative program.
Fishman imports children’s clothing. The company ships its product in a unit
referred to in the industry as a “big pack.” A “big pack,” which is akin to a pallet, has
4 x 4ft. dimensions, is slotted at the bottom so that it can be picked up by a forklift,
and is partially enclosed in corrugated cardboard with a base and cover made of
plastic. Inside these containers are bundles of boys’ pants and the like which are
wrapped in paper and sorted by style.
2
MacClenny is an importer of men’s suits and jackets. For the past ten years,
MacClenny sent all of its shipments with the same carrier, Tropical Shipping
(“Tropical”), until the incident culminating in this suit. On a weekly basis,
MacClenny routed four ocean containers of cloth, buttons, zippers, labels, hangers,
and plastic bags to Santiago to be assembled. Every week, between seven and twelve
containers of assembled men’s jackets were returned to Florida. The assembled suit
jackets were shipped in extra-tall containers to which structural beams are attached to
place these “garment-on-hanger packages.” Nylon ropes were hung from these beams
and knotted at certain intervals so that the hangers held during shipping. Each
garment-on-hanger container could hold between 4500 and 5500 hangers. Tropical
regularly sent its employees to MacClenny’s local partner, X-Cell Fashions, to have
these specially-designed containers cleaned, lining installed, and ropes checked so that
the newly pressed suits enclosed in plastic bags did not become wrinkled or soiled
during transport.
Both shippers regularly dealt with Tropical Shipping to transport their clothing.
A truck owned by Tropical would pick up the clothing at the shippers’ respective
warehouses along with a cargo manifest and drive it to port. Once the cargo arrived
at the port, it would be transferred to the ship’s containers and a bill of lading would
3
be prepared and sent back to the warehouses in accordance with industry custom.
Typically, the bills of lading arrived after the ships set sail.
During one such routine voyage, Tropical Shipping had a number of containers
fall overboard due to improper storage on the vessel. Tropical admits its liability and
asserts that section 1304(5) of COGSA limits its liability to $500.00 per package lost.
The parties disagree, however, on the application of the COGSA definition of
package to the units that were shipped.1
The parties brought their disagreement before the district court on competing
motions for summary judgment. After reviewing the facts before it, the district court
decided in favor of Tropical, concluding that the Fishman package was a big pack and
fair recovery was the amount of $19,500 or 39 “big pack” packages at $500 per
package. MacClenny would receive only $500 in compensation for the loss of only
one container. Both Fishman and MacClenny now appeal that ruling.
DISCUSSION
1
The Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5), provides in 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 transportation of goods in an amount
exceeding $500 per package lawful money of the United States, or in case of
goods not shipped in packages, per customary freight unit, or the equivalent of
that sum in other currency, unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of lading. This
declaration, if embodied in the bill of lading, shall be prima facie evidence, but
shall not be conclusive on the carrier.
4
The main point of contention between the two sides is how to apply the
COGSA definition of package to the units shipped. We previously adopted the
Second Circuit’s definition of “package”. See Hayes-Leger Assocs., Inc. v. M/V
Oriental Knight, 765 F.2d 1076, 1082 (11th Cir. 1985). A package is “a class of
cargo, irrespective of size, shape or weight, to which some packaging preparation for
transportation has been made which facilitates handling, but which does not
necessarily conceal or completely enclose the goods.” Aluminios Pozuelo, Ltd. v. S.S.
Navigator, 407 F.2d 152, 155 (2d Cir. 1968). There are four basic principles
identified in Hayes-Leger for applying COGSA’s section 1304(5) to containerized
shipments: (1) the contractual agreement between the parties as set forth in the bill of
lading; (2) the term “package” means the result of some preparation for transportation
“which facilitates handling but which does not necessarily conceal or completely
enclose the goods;” (3) a container cannot be a COGSA package absent “a clear
agreement between the parties to that effect, [and] at least so long as its contents and
the number of packages or units are disclosed;” and (4) “absent an agreement in the
bill of lading as to packaging of the cargo, goods placed in containers and described
as not separately packaged will be classified as goods not shipped in packages.”
5
Hayes-Leger, 765 F.2d at 1080 (citation omitted) (quotations omitted).2 We now
attempt to apply this less than transparent definition to each of the cases at hand.
Fishman & Tobin
A. The Fishman Dozen
Fishman suggests that the smaller bundles of its pants, referred to as
“dozens”, should be considered packages rather than the “big packs” used to store
those dozens before they go into the containers.3 See Mitsui & Co., Ltd. v.
American Export Lines, Inc., 636 F.2d 807, 818 (2d Cir. 1981) (“cartons, crates
and other units that were treated as COGSA packages when they were shipped
breakbulk should ordinarily continue to be so treated when they are shipped in
containers”); Matsushita Elec. Corp v. S.S. Aegis Spirit, 414 F. Supp. 894, 907
(W.D. Wash. 1976) (“if the individual crates or cartons prepared by the shipper
and containing his goods can rightly be considered ‘packages’ standing by
2
Hayes-Leger further summarized these four points into the following two rules:
(1) when a bill of lading discloses the number of COGSA packages in a
container, the liability limitation of section 4(5) applies to those packages; but
(2) when a bill of lading lists the number of containers as the number of
packages, and fails to disclose the number of COGSA packages within each
container, the liability limitation of section 4(5) applies to the containers
themselves.
765 F.2d at 1080.
3
Both sides agree that the term “big pack” is a customary unit of packaging in the
industry.
6
themselves, they do not suddenly loose that character upon being stowed in a
carrier’s container”).
Any grouping demonstrating some preparation may be considered a
package. Yet, it is clear that the number of packages should be fully and accurately
disclosed and easily discernable by the carrier, otherwise carriers will suffer
unforeseen liability. See Hayes-Leger, 765 F.2d at 1082; Binladen BSB
Landscaping v. M.V. “Nedlloyd Rotterdam”, 759 F.2d 1006, 1012-14 (2d Cir.
1985). As a result, “the touchstone of our analysis” is the contractual agreement
between the parties as set forth in the bill of lading. See Hayes-Leger, 765 F.2d at
1080 (“when a bill of lading discloses the number of COGSA packages in a
container, the liability limitation of section 4(5) applies to those packages”). The
bill of lading made out by Tropical states the following:
marks & numbers quantity description of goods gross weight
As Addr. 1 x 40' Stc. 39 Big Pack 24207
Containing 27,908
units boy’s pants
As Addr. 1 x 40' Stc. 17 Big Pack 10552
Containing 13,719
Units Boy’s Pants
7
The customs declaration form made out by Fishman includes all the same
information but also indicates the value of the items being shipped. Neither form
refers to the number of dozens of pants being shipped.
Fishman contends that the cargo manifest and reembarque4 are the relevant
documents to be examined as they were prepared by Fishman and were simply
miscopied from Fishman’s form to the bill of lading. See In re Belize Trading, Ltd.
v. Sun Ins. Co. of New York, 993 F.2d 790, 792 (11th Cir. 1993) (holding that when
the bill of lading and the shipping documents do not conform, the bill is construed
as having reflected the number of packages designated in the shipping invoices and
as such be in conformity with COGSA). In this case, the reembarque states,
although not clearly, that 2,325.08 dozens of pants are inside the relevant big
packs.
cantidad de bultos clases de bultos detalles de las mercancias
quantity/number of packages type of packages description of goods5
39 big pack containing: 2,325.08
childrens’ pants6
4
The reembarque is another piece of customs documentation.
5
This is a loose translation of the reembarque which is written in Spanish.
6
The invoice and other reembarque forms are slightly different in that they state “DZ”
after listing the number of pants being shipped. (“DZ”utilized as an abbreviation for dozen).
The cargo declaration contains a slightly different description of the goods. It states “1 x
40' STC. 39 big pack containing 27,908 units boy’s pants,” which is roughly the number of
dozens multiplied by 12.
8
As both Tropical’s interpretation of the bill of lading and the reembarque agree as
to the type and number of packages shipped, there is no need to look further.
Recovery will be based on the thirty-nine big packs indicated.
Even without such clarification, Fishman would be hard pressed to support
their claim that “dozens” are the relevant unit of measurement. By it’s own
admission, Fishman acknowledges that “dozens” as a unit of measurement and
packaging in this case could refer to any number of pants from one to twelve. The
designation really referred to the total number of pants in the container rather than
some common form of packaging that facilitates transportation. As a result, not
only is a Fishman “dozen” an inaccurate unit of measurement, it is one not clearly
denoted on the cargo manifest, customs declaration, or bill of lading. As such, the
Fishman dozen cannot be used as the measure of packaging referred to by COGSA.
Accordingly, we find nothing wrong with the district court’s conclusion that the
“big packs” as opposed to the “dozens” were the appropriate unit of measurement.
Based on this analysis, Fishman received a fair settlement from the district
court. The cargo manifest and the bill of lading each indicate 39 big packs and
state nothing about the smaller dozens. The recovery it received of $19,500, or
9
$500 per big pack, is also slightly more than the declared value of the product
(although significantly less than the insured value).7
B. Collateral Estoppel
Fishman also argues that it is entitled through the doctrine of collateral
estoppel to benefit from the district court’s favorable ruling in a related case where
the relevant “package” was defined as each “dozen” of pants. See Ins. Co. of N.
Am. v. Tropical Shipping & Constr. Co., Ltd., S.D. Fla. 1998, __ F.Supp.2d __,
(No. 97-1782-CIV-King June 2, 1998) (unpublished). Collateral estoppel
forecloses re-litigation of an issue of fact or law where an identical issue has been
fully litigated and decided in a prior suit. See Grosz v. City of Miami Beach, Fla.,
82 F.3d 1005, 1006 (11th Cir. 1996).
7
Furthermore, if Fishman wanted greater insurance coverage on its clothing, it could
have paid additional freight charges, thus opting out of COGSA coverage. See Fireman’s Fund
Ins. Co. v. Tropical Shipping & Constr. Co. Ltd., Case No. 96-8341-CIV-Ryskamp (S.D. Fla.
1997); New Hampshire Ins. Co. v. Seaboard Marine, Ltd., 1992 A.M.C. 279 (S.D. Fla. 1992).
Not paying the additional amount implies a conscious decision to adhere to COGSA’s limited
liability. In fact, both Fishman and MacClenny chose not to opt out of COGSA’s limitation but
instead transferred the risk of loss greater than the COGSA limitations from themselves to their
insurer. See Travelers Indem. Co. v. The Vessel Sam Houston, 26 F.3d 895, 900 (9th Cir. 1994)
(“[A] shipper who chooses to insure its cargo through an independent insurance company has
made a conscious decision not to opt out of COGSA’s liability limitation”). Fishman’s
reembarque form further supports this theory in that it declares the insurance value of the
shipment as well as the value of the goods leaving port. As a result of the clear statements on the
bill of lading and declaration forms and the fact that Fishman chose not to opt out of COGSA
coverage, the district court’s award to them of $19,500 stands.
10
In the related case, both the cargo manifest and the bill of lading clearly
indicated the “dozens” of pants being shipped. See Ins. Co., No. 97-1782-CIV-
King. There was also evidence that the “dozen” referred to in that opinion was
actually packaged units of twelve pair rather than the Fishman dozen at issue here.
Thus, the carrier in that case was on notice that the dozens would constitute
packages. See Sony Magnetic Prods. Inc. v. Merivienti O/Y, 863 F.2d 1537, 1542
n.7 (11th Cir. 1989). This is not the case with Fishman and Tropical, where
Fishman gave Tropical no indication that the relevant unit in question would be a
dozen.
Furthermore, Tropical rightly asserts that the cases are factually dissimilar
and legally incomparable because there is no indication that the Insurance Co.
district court considered all the relevant case law in the matter, i.e., Hayes-Leger
and the Second Circuit case law adopted therein. As a result, we find that the cases
are factually and legally distinct and that collateral estoppel does not apply.
MacClenny Products
A. Containerized Packaging
For MacClenny, the case is different. It argues that a single jacket packaged
on a hanger and enclosed in a poly bag is understood in the industry to be the unit
of packaging. Furthermore, uncontroverted evidence in the form of affidavits state
11
that U.S. Customs compels the parties to specify the jackets as units, thus
establishing each packaged jacket as a standard shipping unit. The cargo manifest
given to Tropical Shipping indicates that 5000 units or packages are being shipped
for a total value of $23,750. The bill of lading also corroborates this description.8
Marks and Quantity Description of goods Gross weight
Numbers
As Addr. 1 x 40' Stc. 5,000 Units 7515
Men’s Jackets
Tropical, nonetheless, offers two reasons why MacClenny should recover
only $500 for a single container lost instead of the 5,000 units MacClenny claims.
The first reason is that while most courts are reluctant to recognize containers as
packages because it “is inconsistent with a congressional purpose of establishing a
reasonable minimal level of liability,” Mitsui, 636 F.2d at 820, containers will be
treated as COGSA “packages” if the bill of lading so provides. See Hayes-Leger,
765 F.2d at 1080-81. Second, they argue that only the container size “1 x 40'” is
listed in the quantity column and no other packaging measurement is indicated.
8
Additionally, over the years, Tropical has informed MacClenny when shipments did not
conform to the number of units indicated in the bill of lading and that number was adjusted by
the one or two units that the container fell short. Evidence of this course of dealing may very
well establish that both parties understood each suit to be a COGSA unit. See e.g., Ins. Co. of N.
Am. v. NNR Aircargo Serv. (USA), Inc., 201 F.3d 1111, 1113-14 (9th Cir. 2000).
12
The world of cargo shipping has changed substantially since the
implementation of COGSA in 1936. See generally, Joseph C. Sweeney, The Prism
of COGSA, 30 J. Mar. L. & Com. 543 (1999); Howard M. McCormack, Uniformity
of Maritime Law, History, & Perspective from the U.S. Point of View, 73 Tul. L.
Rev. 1481 (1999); Schmeltzer & Peavy, Prospects and Problems of the Container
Revolution, 1 J. Mar. L. & Com. 203 (1970). At the time of the law’s enactment,
Congress did not and could not foresee the advent of containerized shipping. See
Allstate Ins. Co. v. Inversiones Navieras Imparca, C.A., 646 F.2d 169, 170 (5th
Cir. Unit B May 1981). While the practice of shipping goods in individualized
containers has helped to prevent exposure of products to the elements, it has
created infinite difficulties in applying COGSA to shipments that are lost at sea.
Tropical correctly assesses our reluctance to hold that a container is a package,
where more accurately it may be considered but “a modern substitute for the hold
of the vessel.” Northeast Marine Terminal Co. v. Caputo, 432 U.S. 249, 270
(1977). In fact:
[W]e cannot escape the belief that the purpose of § 4(5) of COGSA
was to set a reasonable figure below which the carrier should not be
permitted to limit his liability and that “package” is thus more sensibly
related to the unit in which the shipper packed the goods and
described them than to a large metal object, functionally a part of the
ship, in which the carrier caused them to be “contained.”
13
Leather’s Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 815 (2d Cir. 1971) (holding
that the 99 bales of leather inside a container constituted the relevant package for
COGSA purposes); see also Allstate, 646 F.2d at 172-173 (cartons of electronic
equipment); Marcraft Clothes, Inc. v. M/V “Kurobe Maru”, 575 F. Supp. 239, 243
(S.D.N.Y. 1983) (suits on hangers); Inter-American Foods, Inc. v. Coordinated
Caribbean Transport, Inc., 313 F. Supp. 1334, 1339 (S.D. Fla. 1970) (cartons of
frozen shrimp). Therefore, we approach any attempt to define a container as a
COGSA package with great reluctance.
Moreover, our inquiry into the matter does not end where Tropical would
like at a quick glance at the “number of packages” column on the bill of lading.9
While the “number of packages” column is plainly our starting point in
determining these issues, the analysis does not end there. See Hayes-Leger, 765
F.2d at 1081; Seguros “Illimani” S.A. v. M/V Popi P, 929 F.2d 89, 94 (2d Cir.
1991). “[W]hen a bill of lading refers to both containers and other units
susceptible of being COGSA packages, it is inherently ambiguous.” Monica Textile
Corp. v. S.S. Tana, 952 F.2d 636, 642 (2d Cir. 1991); Mitsui, 636 F.2d at 822-23.
Such ambiguity is normally resolved against the carrier absent evidence that both
9
As previously stated, where the bill of lading does not accurately reflect information
provided by the shipper to the carrier, we look beyond it to the documents provided by the
shipper. See In re Belize Trading, 993 F.2d at 792.
14
the shipper and carrier clearly and explicitly agreed to treat the container as a
package.10 There is no such explicit agreement here.
This Court has also stated that the limitation on recovery will not be
followed where the carrier description is self-serving. See Belize Trading, 993
F.2d at 792. Similar to the present case, Belize involved a dispute in which the
shipper indicated in the cargo manifest the number of packages it intended to
declare per container and the carrier in writing the bill of lading ignored the
delineation and simply wrote “1 container.” The Belize court distinguished Belize
from Hayes-Leger by stating that in Hayes-Leger, the parties agreed that the bill of
lading would only indicate containers. See id. at 792 n.6. There was no such
agreement here. In the bill of lading sent to MacClenny after the ship set sail,
Tropical listed only the dimensions of the container in the quantity column.
In this case, while the dimensions of the container were indicated in the
quantity column, the description states that “5000 units men’s suits” are inside the
container. MacClenny presented evidence that the description of 5000 units may
be attributed to U.S. Customs rules and regulations and represents a kind of de
10
The reason for such skepticism in approach, which many courts have implicitly
recognized, is that a bill of lading is nothing more than a contract of adhesion, and rarely does a
shipper intend to provide COGSA coverage to the container alone and not to some form of the
goods stowed inside it. Allowing recovery for the container where no other explicit reference
was made to packaging is simply a legal convenience to ensure a minimal level of recovery. See
Mitsui, 636 F.2d at 816-17.
15
facto shipping unit. MacClenny’s reembarque contains roughly the same
information as the bill of lading but the commercial invoice on the other hand
clearly indicates that each jacket is a package.11 This internal conflict between the
documents written by MacClenny’s agents further complicates the issue.
Despite the ambiguities and conflicts among the evidence presented at
summary judgment, a review of both the customs declaration form and reembarque
indicate that MacClenny of their own will stipulated under the number of packages
column only one. The evidence presented in competing motions for summary
judgment that each garment-on-hanger is a recognized shipping unit is
inconclusive.12 Furthermore, our precedent has clearly required that the number of
packages that are declared must be indicated in the number/quantity of packages
column on the bill of lading. See Hayes-Leger, 765 F.2d at 1081. Absent such an
indication (and in light of the circumstances such as the present), the shipper’s own
11
A quick sampling of the commercial invoice reveals the following designations:
UNITS DESCRIPTION
Packages: 1 Men’s Jackets
1,706 50% wool 50% lambswool
1,264 74% polyester 21% wool 5% silk
12
MacClenny is also unable to argue that each unit is a “customary freight unit” as they
are not “customarily used as the basis for the calculation of the freight rate to be charged.”
Caterpillar Overseas S.A. v. Marine Transport, Inc., 900 F.2d 714, 722 (4th Cir. 1990)
16
documents as the next most reliable source of information should give some clear
indication that more than one package is being shipped in order to claim multiple
losses.
After more than ten years in the shipping business, MacClenny is hard
pressed to argue that it did not understand the significance of correctly completing
all the declaration forms and bills to COGSA recovery. In light of the fact that
neither the bill of lading nor the reembarque or customs form offer any clear
indication that each garment-on-hanger was the relevant unit of packaging being
shipped and our precedent holding that such information need be provided, we
affirm the district court’s award of $500 for a single container shipped.13
B. Intra-Court Comity
Finally, appellants ask us to consider whether the district court erred in not
applying intra-court comity and following the decisions of Dorby Frocks, No. 95-
0331-CIV-LENARD. We will address this issue only briefly. We are aware of the
need for consistency in the administration of the judicial process. The issue takes
on greater saliency in cases such as this where an attempt is made not just to divine
13
This is not to say that there may never be a case where the conflict between the
information provided in the quantity column and description column would lead to a different
result. There was simply not enough evidence to support that conclusion in this case. It is also
our hope that by providing a bright-line rule now, such conflicts may be avoided in the future
and shippers and carriers alike will be on notice as to how to proceed.
17
the thoughts of Congress but to create judicial precedent consistent with the
opinions of this Circuit, the federal judiciary generally, and, as this is a matter of
international convention, a result not entirely devoid of the awareness of the
potential for international disparity.
Nonetheless, it should be noted that there is a paucity of case law dealing
with intra-court comity. Courts follow the doctrine to provide a uniform
interpretation of the law. See United States v. Anaya, 509 F. Supp. 289, 293 (S.D.
Fla. 1980), aff’d sub nom United States v. Zayas-Morales, 685 F.2d 1272 (11th Cir.
1982). Unlike circuit court panels where one panel will not overrule another, see
Julius v. Johnson, 755 F.2d 1403, 1404 (11th Cir. 1985), district courts are not held
to the same standard. See Anaya, 509 F. Supp. at 293 n.2 (holding that even district
court cases decided by panels of three have no precedential value). While the
decisions of their fellow judges are persuasive, they are not binding authority. See
Aguirre v. United States, 956 F.2d 1166 (9th Cir. 1992) (unpublished); Stephen J.
Powell, M. Linda Concannon, Stare Decisis in the Court of International Trade:
One Court or Many?, 408 PLI/Comm 351, 358-361 (1987). As a result, the
district court cannot be said to be bound by a decision of one of its brother or sister
judges. Based on this, as well as the lack of precedent to conclude that intra-court
18
comity applies between courts on the district court level, we find that this issue has
no merit.14
CONCLUSION
After thorough review of the issues before us, we affirm the district court’s
ruling as to both Fishman & Tobin and MacClenny Products.
AFFIRMED.
14
Appellants also raise the issue of stare decisis. We choose not to address that issue as it
can only apply in situations where a court is bound by its own controlling decisions or that of
courts to which it is obedient. See Jaffree v. Wallace, 705 F.2d 1526, 1532 (11th Cir. 1983), aff’d
472 U.S. 38 (1985). In the case of the Southern District of Florida Court, the only courts it must
be obedient to are this Circuit and the Supreme Court of the United States. See id; Motorcity of
Jacksonville, Ltd. v. Southeast Bank N.A., 120 F.3d 1140, 1143 (11th Cir. 1997).
19