The Cargo Letter

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Section A: Trade, Financial & Inland News | Section B: FF World Air News |
Section C: FF World Ocean News | Section D: FF in Cyberspace |
Section E: The Forwarder Broker World

OUR "E" Section: The Forwarder Broker World

7. New U.S. Transport Related Legal Cases

Norfolk Shipbuilding & Drydock Corp. v. Garris
U.S. Supreme Court
MARITIME LAW (Negligent Breach of Maritime Duty of Care Actionable When it Causes Death) U.S. Supreme Court held (opinion by Scalia; unanimously as to parts I, II-A, and II-B-1, 6-3 as to part II-B-2; concurrence in part by Ginsburg) that the negligent breach of a general maritime duty of care is actionable when it causes death.

Garris alleged that her son died as a result of injuries sustained while performing sandblasting aboard vessel berthed in the navigable waters of the U.S. Garris asserted the injuries were caused by negligence of Norfolk Shipbuilding & Drydock Corp. & sought damages under general maritime law. The District Court dismissed the complaint for failure to state a federal claim, stating that no cause of action exists, under general maritime law, for death resulting from negligence. The 4th Circuit Court of Appeals reversed. The U.S. Supreme Court affirmed, holding that negligent breach of a general maritime duty of care is actionable when it causes death. The Court reasoned that no rational basis within maritime law exists for denying recovery for death, while allowing recovery for non-deadly injury on the basis of negligence. Further, federal maritime statutes do not so occupy the field as to preclude a maritime cause of action for death based upon negligence.

United States v. Mead Corp.
U.S. Supreme Court
No. 99-1434 - The Long Awaited Customs Ruling
ADMINISTRATIVE LAW (Customs Classification Ruling Entitled to Limited Deference) U.S. Supreme Court held 8-1 (Opinion by Souter, dissent by Scalia) that a tariff classification ruling by the U.S. Customs Service does not deserve judicial deference pursuant to Chevron v. Natural Resources Defense Counsil, but is eligible to limited deference depending on its persuasiveness.

Mead Corporation imports notebooks, day-planners, and letter pads that were originally subject to a 4% tariff. U.S. Customs issued a letter ruling that day-planners fell into a "bound diary" category & would be subject to a higher tariff. Mead disagreed with the ruling and filed suit in the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit Court of Appeals held that the ruling at issue was not entitled to Chevron deference. The U.S. Supreme Court vacated & remanded, holding that, while the Customs ruling at issue did not have the force of law that required Chevron deference, it was entitled to respect depending on its persuasiveness pursuant to Skidmore.

Fireman's Fund Insurance v. Tropical Shipping
Eleventh Circuit Court of Appeals
June 19, 2001
Carriage of Goods by Sea Act ("COGSA"): to invoke COGSA's package limitation, the carrier must satisfy 2 preconditions: 1st, the carrier must give the shipper adequate notice of the $500 limitation by including a "clause paramount" in the B/L that expressly adopts the provisions of COGSA; & 2nd, the carrier must give the shipper a fair opportunity to avoid COGSA section 4(5)'s limitation by declaring excess value; since the B/L provided sufficient notice of the limitation of liability & provided an opportunity to declare excess value, COGSA's package limitation applied to the shipment; the district court correctly defined a mobile television stage as the relevant COGSA package & applied the $500 package limitation to a claim for its total destruction since the B/L legibly & clearly described the stage as "one unit" or "package" and the shipper did not declare the value of the stage on the bill of lading;  Marine Insurance: Florida law applies in resolving the insurers "other insurance" dispute; when 2 insurance policies contain "other insurance" clauses, the clauses are deemed mutually repugnant & both insurers share the loss on a pro rata basis in accordance with their policy limits.

Herman Family Revocable Trust v. The Vessel Teddy Bear
Ninth Circuit Court of Appeals
June 13, 2001
Admiralty Jurisdiction: since there was no admiralty jurisdiction over this dispute concerning aborted contract to sell a yacht, the court lacked subject matter jurisdiction & had no power to adjudicate either the in rem admiralty claims or the supplemental state law claims.

Demette v. Falcon Drilling Co.
Fifth Circuit Court of Appeals
June 12, 2001
Outer Continental Shelf Lands Act ("OCSLA"): the OCSLA applies to an injury suffered on the Fal-Rig #85 since it was jacked-up over the OCS at the time of Demette's injury & was therefore a device "temporarily attached to the seabed" for the purpose of drilling for oil under section 1333(a)(1) of the Act; further, since the contract for oil drilling services & the injury that invoked it were maritime in nature, maritime law applies of its own force and Louisiana state law does not apply; Longshore & Harbor Workers' Act/Indemnity : since section 1333(b) of the OCSLA extends the LHWCA to non-seamen employed on the OCS, Demette is entitled to LHWCA benefits "by virtue" of the OCSLA; in such a case, the LHWCA provides that reciprocal indemnity provisions between the employer and the vessel owner are enforceable, although section 905(b) of the LHWCA ordinarily bars the enforcement of indemnity agreements between employers and vessel owners; thus, since Demette's employer and the vessel owner each promised to indemnify the other, the indemnification is reciprocal and therefore valid & enforceable.

Commercial Union Insurance v. Sea Harvest Seafood Co.
Tenth Circuit Court of Appeals
June 11, 2001
Marine Insurance/Admiralty Jurisdiction: a claim under an open marine cargo insurance policy covering a shipment of frozen shrimp from Bangkok, Thailand to Philadelphia via California & Chicago was within the court's admiralty jurisdiction although the loss did occur during the Chicago to Philadelphia overland portion of the shipment; the cargo owner's claim of loss under the policy was properly denied by the district court under admiralty law since the loss resulted from a failure to attach a generator to the refrigerated container, which was not a loss due to "derangement or breakdown of the refrigerating machinery," as the term is used in marine insurance policies.

Espinal v. Royal Caribbean Cruises
Eleventh Circuit Court of Appeals
June 8, 2001
Maintenance & Cure: the district court erred in relying on general maritime law, rather than terms of the applicable Collective Bargaining Agreement ("CBA"), in calculating the amount of unearned sick wages due plaintiff seaman.

ConAgra Inc. v. Indian River Towing Co.
Eighth Circuit Court of Appeals
June 8, 2001
Damages: proving loss-of-use damages in an admiralty case involves 2 elements: 1st, a vessel owner must prove that profits have actually been, or may be reasonably supposed to have been, lost; and 2nd, the amount of lost profits must be proven with reasonable certainty; owner of a fleet of barges in this case met this burden by showing that there was a ready market for its barges and that it had no spare barges available to substitute for the damaged barges; Damages (Prejudgment Interest): prejudgment interest was properly awarded for the loss-of-use claim since it is awarded in admiralty suits to ensure full compensation for the injured party & should be granted unless there are exceptional or peculiar circumstances.

Louis Dreyfus v. Blystad Shipping & Trading Inc.
Second Circuit Court of Appeals
June 7, 2001
Arbitration/Charter Parties: the charter's New York arbitration clause, which provided that any "dispute arising from the making, performance or termination of this Charter Party" be arbitrated, was a broad arbitration clause; thus, by implicating the rights of Owner & the duties of Charterer under charter party, Owner's claims under collateral letters of indemnity given by Charterer in return for discharging cargo without presentation of the bills of lading were within the scope of the broad arbitration clause & were subject to New York arbitration.

Tisbury Towing v. Tug Venus
First Circuit Court of Appeals
June 5, 2001
Collisions/Casualties: trial court was not clearly erroneous in finding that the barge Owner had not met its burden of proving when the grounding incident in question occurred 7 therefore could not prove that the tug VENUS had ever grounded while towing its barge ALGOL 500.

De Chalus v. P & O Containers
Eleventh Circuit Court of Appeals
May 24, 2001
Carriage of Goods by Sea Act ("COGSA"): the correct package for purposes of COGSA's $500 per package limitation was not the container, or the 2,270 "cartons" of perfume on pallets as described on the bill of lading, but the 42 individual pallets, which were described as "packages" on the face of the bill of lading.

Newport News Shipbuilding v. Stallings
Fourth Circuit Court of Appeals
May 23, 2001
Longshore & Harbor Workers' Act: a small compensation award, based on an actual loss of earning capacity, does not as a matter of law preclude an employer from seeking relief under 8(f), which limits an employer's compensation liability to two years of benefits when a preexisting disability substantially aggravates a work-related injury.

In re Hellenic, Inc.
Fifth Circuit Court of Appeals
May 21, 2001
Limitation of Liability Act: once the claimant establishes negligence or unseaworthiness caused the loss, the owner of the vessel must prove that the  negligence was not within the owner's privity or knowledge to limit its liability; the construction superintendent whose negligence caused the loss, although he may have possessed significant power over the management of an individual job, could not make "basic business decisions" for the corporation and did not possess managing authority over "the field of operations" in which the negligence occurred, thus his negligence was not within the privity or knowledge of the corporate owner.

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Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.