                          RECOMMENDED FOR FULL-TEXT PUBLICATION
                               Pursuant to Sixth Circuit Rule 206
                                    File Name: 08a0175a.06

                   UNITED STATES COURT OF APPEALS
                                 FOR THE SIXTH CIRCUIT
                                   _________________


                                                        X
                                                         -
 ROYAL INSURANCE COMPANY OF AMERICA; FORD
                                                         -
 MOTOR COMPANY,
                                                         -
                          Plaintiffs-Appellants,
                                                         -
                                                             No. 06-1199

                                                         ,
           v.                                             >
                                                         -
                                                         -
                                 Defendant-Appellee, -
 ORIENT OVERSEAS CONTAINER LINE LTD.,

                                                         -
                                                         -
                                                         -
           v.
                                                         -
 M/V “CANMAR PRIDE,” CP SHIPS (UK) LTD., CPS             -
                                                         -
                  Third-Party Defendants-Appellees. -
 NO. 3 LTD., and CPS NO. 5 LTD.,

                                                        N
                         Appeal from the United States District Court
                        for the Eastern District of Michigan at Detroit.
                      No. 03-72574—Denise Page Hood, District Judge.
                                  Argued: January 23, 2007
                              Decided and Filed: May 8, 2008
           Before: BOGGS, Chief Judge; MERRITT and MOORE, Circuit Judges.
                                    _________________
                                         COUNSEL
ARGUED: James F. Sweeney, NICOLETTI, HORING, CAMPISE & SWEENY, New York, New
York, for Appellants. Thomas L. Tisdale, TISDALE & LENNON, Southport, Connecticut, Philip
G. Meyer, Farmington Hills, Michigan, for Appellees. ON BRIEF: James F. Sweeney,
NICOLETTI, HORING, CAMPISE & SWEENY, New York, New York, for Appellants. Thomas
L. Tisdale, TISDALE & LENNON, Southport, Connecticut, Philip G. Meyer, Farmington Hills,
Michigan, for Appellees.
                                 ______________________
                                  AMENDED OPINION
                                 ______________________
        KAREN NELSON MOORE, Circuit Judge. Plaintiffs-Appellants Ford Motor Co. (“Ford”)
and its cargo insurer, Royal Insurance Co. of America (“Royal”) (collectively, “Appellants”),
brought this action against Defendant-Appellee Orient Overseas Container Line Ltd. (“OOCL,” or


                                              1
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 2
                      Container Line Limited, et al.


“Appellee”), an ocean carrier, for damages arising from the loss of cargo during a transatlantic
voyage. OOCL impleaded Third-Party Defendants-Appellees M/V Canmar Pride, the carrying
vessel; CP Ships (UK) Ltd.; CPS No. 3 Ltd.; and CPS No. 5 Ltd. (collectively, “Third-Party
Appellees”). On September 29, 2005, the district court granted partial summary judgment for
OOCL and Third-Party Appellees, ruling that Appellants’ claims were subject to the $500-per-
package liability limitation prescribed by the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C.
§ 30701 et seq. Both the district court and this court authorized an interlocutory appeal of that
ruling, and Appellants now argue that the district court’s ruling should be reversed. For the reasons
set forth below, we REVERSE the judgment of the district court and REMAND this case for
further proceedings consistent with this opinion.
                                       I. BACKGROUND
A. Factual Background
        In February 2003, Ford and OOCL entered into a “Transportation Services Main Agreement”
(“TSM”) for the multimodal transport of Ford’s auto-transmission racks from Blanquefort, France
to various cities in the United States. The TSM provided for transportation of the goods by land
from the inland city of Blanquefort to the French port of Le Havre; by sea to Montreal, Canada; and
by land to inland cities in the United States including Louisville, Kentucky; Hazelwood, Missouri;
New Hope, Minnesota; and Westland, Michigan. Pursuant to the TSM, in March 2003, Ford
delivered to OOCL thousands of auto transmissions held in racks within containers. OOCL loaded
the cargoes on board CP Ships’ M/V Canmar Pride at the port of Le Havre. OOCL issued bills of
lading for the cargoes, showing Blanquefort as the “Place of Receipt,” Le Havre as the “Port of
Loading,” Montreal as the “Port of Discharge,” and multiple inland cities in the United States as the
“Place of Delivery.”
        During the voyage, the vessel encountered stormy weather that washed some of the
containers overboard and flooded others, damaging their contents. Appellants allege that the storm
resulted in the loss of 4,387 auto transmissions and damaged 840 transmission units. Royal
subsequently reimbursed Ford for the lost and damaged transmissions, pursuant to Ford’s marine-
insurance policy, in the amount of $5,700,299.20.
B. Legal Background
         In 1936, the United States enacted COGSA, 49 Stat. 1207 (1936) (current version at 46
U.S.C. §§ 30701 et seq.), which codified the 1924 International Convention for the Unification of
Certain Rules of Law Relating to Bills of Lading (“the Hague Rules”). COGSA applies to “[e]very
bill of lading or similar document of title which is evidence of a contract for the carriage of goods
by sea to or from ports of the United States, in foreign trade . . . .” 46 U.S.C. § 30701 (emphasis
added). The majority of the United States’ trading partners later adopted the Hague-Visby
Amendments of 1968 (“the Hague-Visby Rules”), which modified several provisions of the Hague
Rules. Several of these countries also adopted a 1979 Protocol, which changed the Hague-Visby
Rules from the gold standard to a limitation system based on the International Monetary Fund’s
Special Drawing Rights. The United States, however, has declined to adopt either the 1968 or the
1979 amendments and has chosen to retain COGSA’s enactment of the Hague Rules. Michael F.
Sturley, 2A Benedict on Admiralty § 17 (4th ed. 2004).
C. Procedural Background
       On July 2, 2003, Ford and Royal filed suit against OOCL in the United States District Court
for the Eastern District of Michigan, seeking to recover the value of the lost and damaged
No. 06-1199                Royal Ins. Co. of America, et al. v. Orient Overseas                               Page 3
                           Container Line Limited, et al.


transmissions. In its Answer, OOCL asserted the $500-per-package COGSA liability limitation as
an affirmative defense. OOCL subsequently filed a third-party complaint against Third-Party
Appellees. Ford and Royal moved to strike OOCL’s affirmative defense, arguing that the Hague-
Visby Rules, not COGSA, applied to the shipment and, therefore, that the liability limit was greater
than $500 per package.
         OOCL and Third-Party Appellees moved for partial summary judgment on the applicable
liability limitation and on the definition of a “package” for limitation purposes, arguing that each
rack of transmissions, and not each individual transmission, constituted a COGSA package. On1
September 29, 2005, the district court denied Appellants’ motion to strike and granted in part
OOCL’s and Third-Party Appellees’ motions for partial summary judgment, ruling that COGSA
applied (thereby limiting liability to $500 per package) and that each rack constituted a package for
the purposes of the limitation.
       Ford and Royal sought, and the district court granted, certification of the liability-limitation
and “package” issues for interlocutory appeal. We subsequently granted leave to appeal pursuant
to 28 U.S.C. § 1292(b), and Appellants now seek reversal of the district court’s ruling.
                                                  II. ANALYSIS
        This case requires us to consider, first, whether COGSA or the Hague-Visby Rules or both
apply as a matter of law to the ocean voyage between Le Havre,      France and Montreal, Canada.
Second, having determined which law applies ex proprio vigore,2 we must examine a complex bill
of lading to determine whether Ford and OOCL contracted for the liability limits set forth in
COGSA or in the Hague Visby Rules. The case presents an intellectual puzzle that we must resolve
without direct precedent as guidance, and our analysis should be understood as a default rule around
which cargo owners and carriers can contract.
        After considering relevant caselaw as well as principles of admiralty law, we reach the
conclusion that the Hague-Visby Rules apply ex proprio vigore to the ocean carriage in question,
between Le Havre and Montreal. We also conclude that COGSA does not apply ex proprio vigore
to an ocean voyage between two foreign ports, even though the ultimate destination of a through bill
of lading may be a city in the United States. But that does not end our inquiry. The Supreme
Court’s decision in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), affirmed the broad
principle that courts should evaluate multimodal contracts in their entirety rather than treat each of
the multiple stages in multimodal transportation as subject to separate legal regimes, which would
present an obstacle to efficient liability rules. We therefore hold today that as a matter of federal
common law COGSA liability rules apply to a multimodal maritime contract with an ultimate
destination in the United States, regardless of whether the contract provides for an intermediary stop
en route during the sea stage of transport or between the sea and land legs. The parties in this case,
however, were free to contract for application of the liability limits set forth in either the Hague-
Visby Rules or COGSA. The convoluted and contradictory nature of the contract at issue has led
us to apply the doctrine of contra proferentem and to construe the bill of lading against its drafter,
OOCL. We hold that OOCL and Ford contracted for application of the liability limits set forth in
the Hague-Visby Rules.



         1
           OOCL’s and Third-Party Appellees’ motions also sought summary judgment regarding whether all of the
transmissions alleged to have been damaged actually were damaged, but the district court declined to decide that issue.
         2
             The term ex proprio vigore means “[b]y their or its own force.” Black’s Law Dictionary 612 (8th ed. 2004).
No. 06-1199            Royal Ins. Co. of America, et al. v. Orient Overseas                        Page 4
                       Container Line Limited, et al.


A. Subject-Matter Jurisdiction
       The district court had subject-matter jurisdiction over this admiralty case pursuant to 28
U.S.C. § 1333. Pursuant to 28 U.S.C. § 1292(b), this court has jurisdiction over the appeal taken
from an Order of the United States District Court for the Eastern District of Michigan, entered on
September 29, 2005.
B. Standard of Review
        We review the district court’s order granting summary judgment de novo. DiCarlo v. Potter,
358 F.3d 408, 414 (6th Cir. 2004). “Summary judgment is proper if the evidence, taken in the light
most favorable to the nonmoving party, shows that there are no genuine issues of material fact and
that the moving party is entitled to a judgment as a matter of law.” Macy v. Hopkins County Sch.
Bd., 484 F.3d 357, 363 (6th Cir. 2007); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Fed. R. Civ. P. 56(c). We must ascertain “whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided that one party
must prevail as a matter of law.” Bryson v. Regis Corp., 498 F.3d 561, 569 (6th Cir. 2007) (citing
Anderson v. Liberty Lobby Inc., 477 U.S. 242, 256 (1986)). Regardless of the evidence put forth by
the nonmoving party, the moving party has the burden of establishing that “there is an absence of
evidence to support the nonmoving party’s case.” Patmon v. Mich. Supreme Ct., 224 F.3d 504, 508
(6th Cir. 2000) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Although Appellants
as well as Appellee and Third-Party Appellees in this case made cross-motions for summary
judgment before the district court, Ford and Royal now appeal the grant of partial summary
judgment to OOCL and Third-Party Appellees. Thus, this court must view OOCL and Third-Party
Appellees as the moving parties and Ford and Royal as the nonmoving parties.
C. Law Applicable to Ocean Carriage from Le Havre, France to Montreal, Canada
       Numerous commentators have noted that the advent of containerization and the
accompanying rise of multimodal “through” bills of lading issued by ocean carriers have
complicated the legal liability regimes governing shippers’ claims. Michael E. Crowley, The
Limited Scope of the Cargo Liability Regime Covering Carriage of Goods by Sea: The Multimodal
Problem, 79 Tul. L. Rev. 1461 (2005). Our decision in the case before us is especially difficult
because there exists little direct precedent on the issue and the lower federal court cases cited by
each side, for reasons elaborated below, are neither binding on this court nor persuasive.
        1. Hague-Visby Rules
        The Hague-Visby Rules compulsorily apply by their own terms to the carriage of goods by
sea from Le Havre to Montreal. The Visby amendments to the Hague Rules specified that they
apply to bills of lading for the carriage of goods between ports in two different States (i.e., countries)
if:
        (a)   the bill of lading is issued in a Contracting State, or
        (b)   the carriage is from a port in a Contracting State, or
        (c)   the Contract contained in or evidenced by the bill of lading provides that the
              rules of this Convention or legislation of any State giving effect to them are to
              govern the contract, whatever may be the nationality of the ship, the carrier, the
              shipper, the consignee, or any other interested person.
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 5
                      Container Line Limited, et al.


Art. 5, Protocol to Amend the International Convention for the Unification of Certain Rules of Law
Relating to Bills of Lading, Feb. 23, 1968, 1977 Gr. Brit. T.S. No. 83 (Cmnd. 6944) (entered into
force June 23, 1977), reprinted in 3 Thomas J. Schoenbaum, Admiralty and Maritime Law 862-63
(4th ed. 2004) [hereinafter the Hague-Visby Rules]. France is a signatory to the Hague-Visby Rules.
George F. Chandler III, A Comparison of “COGSA”, the Hague/Visby Rules, and the Hamburg
Rules, 15 J. Mar. L. & Com. 233, 289 (1984). Accordingly, the Hague-Visby Rules apply ex
proprio vigore to the voyage because the carriage was from a port, Le Havre, in the contracting state
of France.
       2. COGSA
         Our decision regarding whether COGSA applies by its own terms to the ocean carriage from
Le Havre, France to Montreal, Canada turns on whether we read COGSA according to the plain
language of the statute or according to an “ultimate destination” theory. COGSA applies to “[e]very
bill of lading or similar document of title which is evidence of a contract for the carriage of goods
by sea to or from ports of the United States, in foreign trade . . . .” 46 U.S.C. § 30701 (emphasis
added). “The term ‘carriage of goods’ covers the period from the time when the goods are loaded
on to the time when they are discharged from the ship.” 46 U.S.C. § 30701(1)(e). “The term
‘foreign trade’ means the transportation of goods between the ports of the United States and ports
of foreign countries.” 46 U.S.C. § 30701(13). Ford and Royal argue that COGSA did not apply as
a matter of law to the carriage of goods between Le Havre and Montreal because neither are ports
of the United States. In contrast, OOCL argues that COGSA should apply ex proprio vigore because
although Montreal served as the point of discharge, the ultimate destination of the cargo was cities
in the United States.
        Ford and Royal argue that settled admiralty law recognizes that COGSA applies by its own
terms during the “tackle-to-tackle” period in the carriage of goods between foreign and U.S. ports.
Indeed, we agree that to hold that COGSA applied by its own terms to the ocean voyage between
Le Havre and Montreal would contradict the plain language of the statute. See, e.g., Foster Wheeler
Energy Corp. v. An Ning Jiang MV, 383 F.3d 349, 355 (5th Cir. 2004) (holding that “COGSA only
applies compulsorily during the tackle-to-tackle period to contracts for the carriage of goods to or
from U.S. ports in foreign trade”); Schramm, Inc. v. Shipco Transp., Inc., 364 F.3d 560, 565 (4th Cir.
2004) (holding that “a discharge of goods occurs under COGSA when the goods are removed from
the ship at the final port of destination”); Nippon Fire & Marine Ins. Co. v. M.V. Tourcoing, 167
F.3d 99, 100-101 (2d Cir. 1999) (holding that COGSA applies because cargo was shipped from
Japan to the United States); Pan Am. World Airways, Inc. v. Cal. Stevedore & Ballast Co., 559 F.2d
1173, 1177 n.5 (9th Cir. 1977) (observing that “COGSA has been continuously interpreted as being
applicable from the time the ship’s tackle is hooked onto the cargo at the port of loading until the
time when cargo is released from the tackle at the port of discharge”); Firestone Tire & Rubber Co.
v. Almacenes Miramar, Inc., 452 F. Supp. 670, 671 (D.P.R. 1978) (holding that “COGSA applies
only to goods in shipment between the United States and a foreign port . . . and only while the goods
are on board ship”).
         The district court opinion as well as the briefs for OOCL and Third-Party Appellees rely
heavily on an unpublished case issued by the United States District Court for the Western District
of Washington. Tarnawski v. Schenker, Inc., No. C02-5659FDB, 2003 WL 22721987, at *3 (W.D.
Wash. May 6, 2003) (unpublished opinion), held that COGSA applied as a matter of law to the
carriage of goods from Hamburg, Germany to Montreal, Canada as part of a shipment originating
in Poland with the ultimate destination of Seattle, Washington. The Tarnawski opinion provided
little explanation as to why an ultimate-destination theory rather than the plain language of the
statute should apply, except for citing another case decided by the United States District Court for
the Central District of California. Joe Boxer Corp. v. Fritz Transp. Int’l, 33 F. Supp. 2d 851, 855
No. 06-1199               Royal Ins. Co. of America, et al. v. Orient Overseas                                  Page 6
                          Container Line Limited, et al.


(C.D. Cal. 1998), held that COGSA did not apply as a matter of law to a contract for the carriage
of goods from China to Guatemala via Long Beach, California. Joe Boxer, in turn, relied on
People’s Insurance Co. of China v. M/V Damodar Tanabe (In re Damodar Bulk Carriers, Ltd.), 903
F.2d 675, 680 (9th Cir. 1990), which held that a distress discharge in Hawaii during a shipment of
goods between ports in Chile and China was insufficient to invoke COGSA ex proprio vigore. On
their own, these cases are not enough to persuade us to adopt an ultimate-destination theory. Joe
Boxer and Damodar involved goods shipped by sea to and from foreign ports, with intermediary
stops at U.S. ports. Here, goods are similarly shipped between foreign ports. But although U.S.
cities were the ultimate destination of Ford’s auto transmissions, the contract provided for the
transmissions to be carried there over land and not by sea. In the present case, the ocean voyage did
not extend from France to a United States port with an intermediary stop in Montreal; rather, the
ocean voyage ended in Montreal. There is nothing in the Damodar or Joe Boxer opinions alone to
persuade us to hold that a port of discharge—the last stage of a shipment by sea—belongs in the
category of mere intermediary stops signaling no change in applicable maritime law.
        The other lower court cases upon which OOCL and Third-Party Appellees rely are also
unpersuasive. Hartford Fire Insurance Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d
549 (2d Cir. 2000), concerned a multimodal transportation contract pursuant to which cargo was
trucked from Wisconsin to Chicago, moved by rail to Montreal, shipped to Belgium, and then
discharged to a participating carrier who had the responsibility of trucking the cargo to the
Netherlands. Thieves stole the cargo during this last stage of the transport. The Second Circuit held
that the parties had not extended   COGSA by contract to the transport of the cargo by land from
Belgium to the Netherlands.3 Id. at 558-59. In support of an ultimate-destination theory, OOCL
points to footnote 10 of the Second Circuit opinion, stating that if the “dispute had involved the sea-
going portion of the transport, COGSA would apply ex proprio vigore . . . .” Id. at 557 n.10. But
this footnote is merely dicta and, furthermore, may contradict other dicta in the opinion suggesting
that COGSA would have applied to the ocean carriage only by contract and not ex proprio vigore.
See id. at 557 n.9.
         OOCL also cites in support of its ultimate-destination theory Gerling-Konzern v. Expeditors
International Ocean, No. 99 C 8348, 2000 WL 781434 (N.D. Ill. June 15, 2000) (unpublished
opinion). The United States District Court for the Northern District of Illinois held that a carrier’s
bill of lading did not extend its liability under COGSA to the periods before the goods were loaded
on the vessel and after the goods were discharged, during which COGSA did not apply ex proprio
vigore. Id. at *3. OOCL incorrectly states that Gerling-Konzern held that COGSA applied to the
carriage of goods by sea between Genoa, Italy and Montreal, Canada. Instead, Gerling-Konzern did
not definitively decide this question and merely observed “that whatever liability [the defendant]
may have under COGSA as a carrier would only arise during the period of ocean transport.” Id. at
*4 (emphases added).
       OOCL and Third-Party Appellees lastly argue that the Supreme Court’s decision in Norfolk
Southern Railway Co. v. Kirby requires us to interpret COGSA according to an ultimate-destination
theory. In Kirby, the Supreme Court held that admiralty jurisdiction extends to a contract dispute
when the “contract is a maritime one, and the dispute is not inherently local.” Kirby, 543 U.S. at 22-
23. The Court concluded that a contract for multimodal transportation involving both sea and land
carriage retains its maritime character. “[S]o long as a bill of lading requires substantial carriage
of goods by sea, its purpose is to effectuate maritime commerce—and thus it is a maritime contract.”


         3
           The contract in Hartford provided for the application of COGSA only in the absence of a different law directly
applicable to that stage of the transport and, in fact, another law applied: the Convention on the Contract for the
International Carriage of Goods by Road.
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 7
                      Container Line Limited, et al.


Id. at 27. In so holding, the Supreme Court rejected a spatial interpretation of maritime contracts
in favor of a conceptual one. Id. at 24.
        OOCL argues that the conceptual approach to admiralty taken by the Supreme Court in Kirby
suggests that COGSA applies as a matter of law whenever the ultimate destination of a shipping
contract is located in the United States. Appellants correctly note, however, that Kirby addressed
the question of subject-matter jurisdiction rather than COGSA’s applicability as a matter of law to
spatial or temporal realms beyond the plain language of the statute. Kirby’s holding of admiralty
jurisdiction over a dispute involving the land leg of a multimodal transportation contract does not
directly resolve the question of which maritime law applies in the present case. Kirby extended only
admiralty jurisdiction to the inland leg and not COGSA, itself, as a matter of substantive law.
Crowley, The Limited Scope of the Cargo Liability Regime, 79 Tul. L. Rev. at 1495 (citing Kirby,
543 U.S. at 36). Thus, Kirby did not suggest that a conceptual approach to admiralty means that
COGSA now applies ex proprio vigore to an ocean voyage between two foreign ports, if the ultimate
destination of a through bill of lading is a city in the United States.
       3. Federal Common Law
        Ninety years ago, the Supreme Court concluded that “Congress has paramount power to fix
and determine the maritime law which shall prevail throughout the country” and that “in the absence
of some controlling statute, the general maritime law, as accepted by the Federal courts, constitutes
part of our national law.” Southern Pac. R.R. Co. v. Jensen, 244 U.S. 205, 215 (1917). Thus, in the
absence of a federal statute, courts may apply federal common law. Sompo Japan Ins. Co. v. Union
Pac. R.R. Co., 456 F.3d 54, 74 (2d Cir. 2006) (citing E. River S.S. Corp.v. Transamerica Delaval
Inc., 476 U.S. 858, 864 (1986)). “What constitutes a relevant federal statute is determined solely
by whether a given statute applies by its own terms to a particular set of facts.” Id. Because neither
COGSA nor any other United States federal statute applies by its own terms to the ocean voyage
between Le Havre and Montreal, we must apply federal common law to decide the case. Other
courts have applied the Hague-Visby Rules where they apply as a matter of law and where COGSA
does not apply ex proprio vigore. See An Ning Jiang, 383 F.3d at 354-55 (finding that a cargo
owner and carrier had contracted to invoke COGSA liability limitations “only during periods and
for claims not governed by the Hague-Visby Rules” and that Hague-Visby, and not COGSA, applied
ex proprio vigore to the carriage of goods from Spain to China); Craddock Int’l Inc. v. W.K.P.
Wilson & Son, Inc., 116 F.3d 1095, 1107 (5th Cir. 1997) (holding that the Hague-Visby Rules and
not COGSA applied as a matter of law to the transport of cargo from Venezuela to Peru); In re
Damodar, 903 F.2d at 680 (holding that “a distress discharge is insufficient to invoke COGSA ex
proprio vigore” with respect to a contract for ocean transportation from Chile to China). None of
these cases, however, involved a contract for the carriage of goods that had an originating point or
ultimate destination in the United States. Accordingly, they do not persuade us to apply the Hague-
Visby Rules as a matter of federal common law in the instant case.
        Our primary goal is to advance the predictability and uniformity of maritime liability rules,
which Congress sought to achieve in 1936 by passing COGSA and which the Supreme Court
promoted in its 2004 decision in Kirby. Kirby’s reasoning affirms the broader principle that courts
should evaluate maritime contracts in their entirety rather than treating each of the multiple stages
in multimodal transportation as subject to separate legal regimes, which would be an obstacle to
uniform and efficient liability rules. The Court explained that the new technology of
containerization had popularized “through” bills of lading, by which cargo owners entered into a
single contract for multiple stages of transportation across oceans and to inland destinations. By
extending admiralty jurisdiction, the Court intended to promote cargo owners’ “efficient choice” to
arrange for multimodal transport via a single bill of lading. Kirby, 543 U.S. at 25-26. Although
COGSA does not apply by its own terms to the carriage of goods by sea between two foreign ports,
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                       Page 8
                      Container Line Limited, et al.


extending COGSA’s applicability to such a voyage when the ultimate destination of a through bill
of lading is in the United States will promote efficient contracting between cargo owners and
shippers. When the shipment of cargo has a point of delivery in the United States, we would render
contracts unpredictable if we made liability rules depend upon the location of the port of discharge,
which varies according to the changing needs of the carrier. Ford admits in the instant case that the
decision whether to route ships via Montreal or Norfolk,Virginia is one made by OOCL; Ford cares
only that OOCL offers a competitive price and delivers the goods in time. Joint Appendix (“J.A.”)
(Dunn Dep. at 65-66). It would only further confuse the already complex law governing multimodal
contract rules if a mid-voyage decision by a carrier to reroute a ship destined for Norfolk through
Montreal—because of bad weather or a problem with the port service—triggered different liability
limits.
         Kirby suggests that we should not use the particularized geography of cargo’s transport
across various oceans, railways, and highways to determine the applicable maritime law. In today’s
shipping industry, goods are commonly discharged at a port outside the United States and
subsequently moved by truck or rail into this country. If Montreal served as an intermediary
refueling stop on a shipping route between Le Havre and New York City, that stop would not lead
us to apply the Hague-Visby Rules rather than COGSA as a matter of law. See Joe Boxer, 33 F.
Supp. 2d at 855; In re Damodar, 903 F.2d at 680. The question now becomes whether, if the stop
in Montreal marks the end of the shipping stage and the beginning of the land stage of transport, that
fact should trigger the application of the Hague-Visby Rules rather than COGSA as a matter of law.
To begin, we observe that making the liability rule dependent on the mode of transport subsequent
to the stop in Montreal does not promote legal predictability and efficient contracting. Furthermore,
Kirby’s extension of both admiralty jurisdiction and federal maritime law to the land portions of
multimodal contracts encourages us to recognize that “the shore is now an artificial place to draw
a line.” Kirby, 543 U.S. at 25. Kirby causes us to read Damodar and Joe Boxer in a new light. We
hold today that an intermediary stop en route pursuant to a multimodal maritime contract with an
ultimate destination in the United States, regardless of whether the stop is during the sea stage of
transport or between the sea and land legs, should not prevent the application of COGSA liability
rules as a matter of federal common law. Our decision effectuates Congress’s intent when it passed
COGSA in 1936 to promote uniformity in shipping. We think that applying COGSA’s liability rules
to all carriage of goods by sea, in contracts for transportation with ultimate destinations in the United
States, effectuates Congress’s intent in a context that Congress could never have predicted: one in
which containerized transport and “through” bills of lading prevail.
D. The Bill of Lading and Liability Limitations
        1. Choice of Law
         As an initial matter, we must evaluate the choice of law under which we will examine the
terms of the bill of lading. The TSM consists of Ford’s Global Terms and Conditions and Ford’s
Supplemental Ocean Transportation Terms. J.A. at 859 (TSM). Clause 10 of Ford’s Supplemental
Terms, in turn, provides that OOCL’s bill of lading governs OOCL’s liability for loss or damage to
Ford’s commodities. J.A. at 861 (TSM). We first turn to Ford’s Global Terms and Conditions.
Clause 26(a) of those terms provides that: “[a] Purchase Order shall be governed by the law of
Buyer’s principal place of business without regard to conflict of laws provisions thereof, and
litigation on contractual causes arising from a Purchase Order shall be brought only in that
jurisdiction.” J.A. at 881 (TSM). Thus, Clause 26(a) suggests that we interpret the bill of lading
according to the substantive law of Michigan.
       The bill of lading, too, contains a choice-of-law provision. Appellants argue that the first
paragraph of Clause 30 of the bill of lading applies in the instant case. That paragraph states: “the
No. 06-1199               Royal Ins. Co. of America, et al. v. Orient Overseas                                 Page 9
                          Container Line Limited, et al.


rights and obligations of all parties concerned in connection with the carriage of the Goods
hereunder shall be governed by and construed in accordance with English law.” J.A. at 85 (Bill of
Lading at 8). However, the second paragraph of Clause 30 states that when COGSA “shall for any
reason whatsoever apply compulsorily to the carriage of the Goods hereunder then this Bill of
Lading, the contract contained in and/or evidenced hereby, and the rights and obligations of all
parties concerned . . . shall be governed by and construed in accordance with United States law.”
Id. Because we have determined that COGSA applies as a matter of federal common law, the
second paragraph of Clause 30 controls, which suggests that we should evaluate the terms of the bill
of lading in accordance with United States law.
          Accordingly, a conflict exists between Clause 26 of Ford’s Global Terms, directing us to
apply Michigan substantive law, and Clause 30 of OOCL’s bill of lading, directing us to apply
federal law. Well-founded principles of contract law establish that “specific terms and exact terms
are given greater weight than general language” and that “separately negotiated or added terms are
given greater weight than standardized terms . . . .” Restatement (Second) of Contracts § 203
(1981). Following these principles, we give greater weight to Clause 30 of the bill of lading because
it is the choice-of-law clause specific to the agreement for the carriage of goods negotiated between
OOCL and Ford. Clause 26, by contrast, represents general, standardized language applicable to
all of Ford’s contracts for production parts and non-production goods and services. In conclusion,
we apply United States law in   interpreting the contract, which we held above as a matter of federal
common law to be COGSA.4
        COGSA allows parties to contract for higher liability limitations than the $500 per package
limitation provided by the statute. 46 U.S.C. § 30701(4)(5). We thus evaluate the bill of lading to
determine whether the parties contracted for the higher liability limits provided by the Hague-Visby
Rules. In so interpreting the bill of lading, we look both to the federal maritime law of contracts as
well as to general principles of contract interpretation. See Maru Shipping Co. v. Burmeister &
Wain Am. Corp., 528 F. Supp. 210, 214 (S.D.N.Y. 1981) (holding that “[w]he[n] the federal law of
the sea provides . . . no clear precedent . . ., [the court] may look to the prevailing law of the land
as applied by the states.”) To ascertain these principles of contract interpretation, we look to this
and other circuits’ application of both federal-common-law principles and state law.
         2. Standard for Review of the Bill of Lading
       We consider as a threshold matter whether a judge or jury should resolve contract disputes.
“The proper interpretation of a contract is a question of law.” JP Morgan Chase Bank, N.A. v.
Winget, --- F.3d ---, No. 07-1096, 2007 WL 4355181, at *4 (6th Cir. Dec. 14, 2007) (applying
Michigan law) (quoting Archambo v. Lawyers Title Ins. Corp., 646 N.W.2d 170, 174 (Mich. 2002)).
Questions of contract interpretation, including those that form the basis for the grant of summary
judgment, are subject to de novo review. Meridian Leasing, Inc. v. Associated Aviation
Underwriters, Inc. 409 F.3d 342, 346 (6th Cir. 2005) (applying Michigan law) (citing Campbell v.
Potash Corp. of Sask., Inc., 238 F.3d 792, 797 (6th Cir. 2001)). “If a contract is clear and
unambiguous . . . there is no issue of fact to be determined.” Lincoln Elec. Co. v. St. Paul Fire &
Marine Ins. Co., 210 F.3d 672, 684 (6th Cir. 2000) (quoting Inland Refuse Transfer Co. v.
Browning-Ferris Indus. of Ohio, 474 N.E.2d 271, 272-73 (Ohio 1984)). In such instances, a court
should not use extrinsic evidence to “attempt to discern the intent of the parties,” but rather should
determine their intent from “the plain language of the contract.” United States v. Donovan, 348 F.3d


         4
            We note that as a practical matter it makes no difference to the case whether we apply Michigan’s rules of
contract interpretation or the rules established by federal common law because they are substantially similar as applied
to the issues raised by this case.
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 10
                      Container Line Limited, et al.


509, 512 (6th Cir. 2003). “The question of whether the language of an agreement is ambiguous is
a question of law.” Id. (citing Parrett v. Am. Ship Bldg. Co., 990 F.2d 854, 858 (6th Cir. 1993)).
Ambiguity exists “if the language is susceptible to two or more reasonable interpretations.” City of
Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 585 (6th Cir. 2001) (quoting D’Avanzo v. Wise &
Marsac, P.C., 565 N.W.2d 915, 918 (Mich. 1997)). “In making such a determination, a district court
is counseled to read the contract as a whole, and to give the contract language its ordinary and
natural meaning.” Id. The above principles of contract interpretation establish that ordinarily judges
interpret the language of contracts as a matter of law.
        If a contract contains ambiguities, it generally becomes the task of the fact-finder to use
extrinsic evidence to determine the intent of the parties. “When a contract is ambiguous, it is for the
jury to determine the meaning of its terms, subject to proper instructions and based upon ‘evidence
of the surrounding circumstances and the practical construction of the parties.’” Scott v. Anchor
Motor Freight, Inc., 496 F.2d 276, 280 (6th Cir. 1974) (quoting Tenn. Consol. Coal Co. v. United
Mine Workers of Am., 416 F.2d 1192, 1198 (6th Cir. 1969)). The jury thus uses extrinsic parol
evidence to resolve conflicting terms and meanings of an ambiguous contract. Lincoln Elec. Co.,
210 F.3d at 684-85 (quoting Construction Interior Sys., Inc. v. Marriott Family Rests., Inc., 984 F.2d
749, 754 (6th Cir. 1993)).
        Where there is no genuine issue of material fact appropriate for resolution by a fact-finder,
however, a court may rely on extrinsic evidence to aid in contract interpretation. The First Circuit
has reached the conclusion that “a judge may determine that the extrinsic evidence which is material
is uncontested, and so appropriately enter [summary] judgment.” Nadherny v. Roseland Prop. Co.,
390 F.3d 44, 49 (1st Cir. 2004) (citing Adria Int’l Group, Inc. v. Ferre Dev. Inc., 241 F.3d 103, 111
(1st Cir. 2001)). Or a court may determine that the evidence so overwhelmingly favors one
interpretation of the contract that “no reasonable person could decide the contrary.” Id. (quoting
Boston Five Cents Sav. Bank v. Sec’y of Dep’t of Hous. & Urban Dev., 768 F.2d 5, 8 (1st Cir.
1985)). Yet, the Fifth Circuit makes clear that when extrinsic evidence creates a genuine issue of
material fact as to the parties’ intent, the interpretation of the contract becomes a matter of fact
appropriately resolved by a jury. Southern Natural Gas Co. v. Pursue Energy, 781 F.2d 1079, 1081
(5th Cir. 1986).
        In the instant case, none of the parties have argued that the contract is ambiguous or that a
factual controversy exists regarding Ford’s and OOCL’s contractual intent, which would require
resolution by a fact-finder. Instead, Appellants as well as Appellee and Third-Party Appellees in
this case made cross-motions for summary judgment. Both sides argue that the plain language of
the contract unambiguously favors the interpretations they advance. We reverse a district court’s
award of summary judgment when the contract at issue is ambiguous and the appealing party has
raised a genuine issue of material fact. See, e.g., NILAC Int’l Mktg. Group v. Ameritech Servs., Inc.,
362 F.3d 354, 355 (6th Cir. 2004). In such instances, a jury and not a judge must consider extrinsic
evidence when the contract’s language does not make clear the intent of the parties. Id. at 359. By
contrast, in the instant case Appellants have raised no genuine issue of material fact regarding
ambiguous terms in the contract; there is no contested evidence for a jury to resolve. We therefore
conclude that the only questions of contract interpretation in this case are matters of law and that we
may proceed to analyze the contract.
       3. Principles of Interpretation
        Courts have often treated bills of lading as contracts of adhesion that are construed against
the drafter, and Appellants urge us to do the same in the instant case. Ford is a large, sophisticated
corporation with decades of experience engaging in international business transactions. For this
reason, we hesitate to conclude definitively that the contract for carriage of goods entered into by
No. 06-1199               Royal Ins. Co. of America, et al. v. Orient Overseas                                 Page 11
                          Container Line Limited, et al.


Ford and OOCL was a contract of adhesion. See, e.g., Union Planters Bank, N.A. v. Cont’l Cas. Co.,
478 F.3d 759, 766 (6th Cir. 2007) (holding that although courts frequently treat occurrence-based
insurance policies as contracts of adhesion, the panel would not similarly treat the contract at issue
“entered into by sophisticated parties” absent evidence that the plaintiff-appellant “was prevented
from negotiating” the disputed provision). But we note that several circuit courts of appeals have
treated bills of lading as contracts of adhesion, without any caveats regarding the relative size and
bargaining strength of the shipper and carrier. Courts resolve these ambiguities against the drafters
of the bill of lading (usually the carriers), but do not hesitate to rule in favor of carriers where there
are no ambiguities in the contract. See, e.g., Gamma-10 Plastics, Inc. v. Am. President Lines, Ltd.,
32 F.3d 1244, 1253 (8th Cir. 1994) (noting that “[a]lthough a bill of lading is a contract of adhesion,
the language in APL’s bills is clear and we can only interpret it to mean what it says”); Mori Seiki
USA, Inc. v. M/V Alligator Triumph, 990 F.2d 444, 448 (9th Cir. 1993) (holding that although a bill
of lading is a contract of adhesion and ambiguities must be construed against the carrier, no such
ambiguity existed in the bill of lading in question); SPM Corp. v. M/V Ming Moon, 965 F.2d 1297,
1302 (3d Cir. 1992) (holding that a bill of lading with ambiguous liability-limitation provisions
should be construed against the carrier); Monica Textile Corp. v. S.S. Tana, 952 F.2d 636, 643 (2d
Cir. 1991) (holding that “every shipper knows . . . bills of lading are contracts of adhesion
ambiguities in which must be resolved against the carrier” (internal quotation marks omitted)).
        We do not need to reach the conclusion that the bill of lading governing the liability
provisions of the contract between Ford and OOCL was a contract of adhesion, however, because
we can rely on the broader principle that ambiguities in contracts should be construed against the
drafter. “If a fair reading of the entire contract of insurance leads one to understand that there is
coverage under particular circumstances and another fair reading of it leads one to understand there
is no coverage under the same circumstances[,] the contract is ambiguous and should be construed
against its drafter . . . .” Northland Ins. Co. v. Stewart Title Guar. Co., 327 F.3d 448, 455 (6th Cir.
2003) (quoting Raska v. Farm Bureau Mut. Ins. Co., 314 N.W.2d 440, 441 (Mich. 1982)).
        As an initial matter, we must determine who should be considered the drafter in this case,
a question more complicated than one might think. Ford’s legal department drafted the boilerplate,
non-negotiable contract for ocean carriage that became the TSM between Ford and OOCL. J.A. at
502-04 (Dunn Dep. at 22-24). As we noted supra, Clause 10 of Ford’s Supplemental Ocean
Transportation Terms specifies that OOCL’s bill of lading governs the liability of OOCL as the
carrier. J.A. at 524 (Dunn Dep. at 72). There is no evidence that OOCL made its bill of lading
absolutely nonnegotiable, but the uncontested evidence is that, although Ford had the opportunity
to accept or reject the bill of lading, its terms were predetermined by OOCL and not open for
negotiation. J.A. at 509-10 (Dunn Dep. at 31-32). A manager at OOCL, Keith Slack, testified that
since 2000 OOCL had never changed its standard bill of lading language in any service-agreement
negotiations. J.A. at 345 (Slack Dep. at 34-35); J.A. at 354-55 (Slack Dep. at 73-74). We are
therefore faced with the question of whether5we should consider Ford the drafter for purposes of
applying the doctrine of contra proferentum, or whether we should consider OOCL the drafter as
the author of the specific instrument in question. Restatement (Second) of Contracts § 206 (1981),
however, makes clear that in choosing among meanings of a specific term within a larger agreement,
courts should generally prefer that meaning “which operates against the party who supplies the
words.” Accordingly, we apply the doctrine of contra proferentum against OOCL.



         5
            The contra proferentum doctrine applies “where contractual language is found to have more than one
interpretation. If the language is subject to more than one interpretation, ambiguities are construed against the drafter
of the language.” Marquette Gen. Hosp. v. Goodman Forest Indus., 315 F.3d 629, 632 n.1 (6th Cir. 2003) (applying
Michigan law).
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                     Page 12
                      Container Line Limited, et al.


         Even when this and other circuits have not termed bills of lading contracts of adhesion,
federal appellate courts have nonetheless resolved ambiguities in admiralty contracts against the
drafters of these contracts. See, e.g., Navieros Oceanikos, S.A. v. S.T. Mobil Trader, 554 F.2d 43,
48 (2d Cir. 1977); Associated Metals & Minerals Corp. v. M/V Vishva Shobha, 530 F.2d 714, 718
(6th Cir. 1976) (resolving ambiguity in the bill of lading “against the party . . . which prepared the
instrument”); cf. Vistar, S.A. v. M/V Sea Land Express, 792 F.2d 469, 471 (5th Cir. 1986) (holding
that “ambiguities in the contract unresolved at trial are to be resolved against the party who drafted
the contract”). Certainly, we should apply the doctrine of contra proferentem only “‘so long as other
factors’ relevant to interpretation are ‘not decisive[.]’” B.F. Goodrich Co. v. U.S. Filter Corp., 245
F.3d 587, 597 (6th Cir. 2001) (citing Restatement (Second) of Contracts § 206 cmt. a (1981)). The
instant case, however, as we explain below, involves a decidedly ambiguous contract and no
evidentiary dispute that might illuminate the parties’ intent as to whether COGSA or Hague-Visby
liability limitations apply.
       4. The Meaning of the Contract
        Before explicating the meaning of the contract, we observe that the TSM and the bill of
lading, in particular, represent to us extremely poor drafting. The terms of the bill of lading are
confused, conflicting, and opaque. Perhaps, Ford and OOCL as repeat players in the shipping
industry are familiar with the byzantine labyrinth of clauses meant to govern liability for multimodal
international transport. That they now ardently argue for two opposing interpretations of the
contract language, however, belies the notion that they shared any common assumptions about the
contract’s meaning. Regardless, the parties now rely on this court to resolve the dispute between
them and we are placed at a disadvantage in so doing because of the TSM’s lack of clarity. The
parties’ sloppy drafting may represent carelessness or an attempt by each side to disguise its own
intentions and evade hard negotiation. In either case, we urge Ford and OOCL to take far more care
in drafting future multimodal shipping contracts, to avoid expensive litigation and unnecessarily
consuming this court’s resources.
         The district court’s grant of summary judgment to OOCL turned, in part, on its determination
that Ford did not offer any extra consideration for the increase in OOCL’s liability resulting from
the use of Montreal as the port of discharge. Royal Ins. Co. of Am. v. Orient Overseas Container
Line Ltd., 408 F. Supp. 2d 415, 422 (E.D. Mich. 2005). Appellants, in contrast, argue that freight
rates were higher when Montreal served as the port of discharge than when OOCL used a U.S. port.
There does exist some cursory evidence that Ford and OOCL agreed upon higher rates to Montreal.
A chart in the bill of lading lists consistently higher rates when the destination port is Montreal than
when it is a port in the United States. J.A. at 74-75 (Rates and Charges). Without further
explanation, however, this chart is not sufficient to determine that Ford and OOCL contracted for
higher rates to Montreal for the purpose of covering OOCL’s increased liability. Appellants have
failed “to produce ‘more than a mere scintilla of evidence’ which would create a genuine dispute
for the jury.” Leary v. Daeschner, 349 F.3d 888, 897 (6th Cir. 2003) (quoting Thompson v. Ashe,
250 F.3d 399, 405 (6th Cir. 2001)). Neither is OOCL’s blanket assertion that Ford did not bargain
for higher liability rates adequate to persuade us that such an agreement did not exist. The problem
in this case is that while the contract at issue is far from clear, the parties have simply made legal
arguments and have not produced any evidence as to their contractual intent. In the absence of
sufficient evidence to establish a genuine issue of material fact regarding the parties’ intent, and
because the parties have not averred that they would provide further evidence at trial, we apply the
rule of contra proferentum in construing the ambiguous terms of this contract. See Francosteel
Corp. v. M/V Pal Marinos, 885 F. Supp. 86, 89-90 (S.D.N.Y. 1995).
      Ford and Royal argue that Clause 4(B)(2)(a) of the bill of lading mandates that if the loss or
damage occurs at a known time or place, then OOCL’s liability shall be that which is provided for
No. 06-1199            Royal Ins. Co. of America, et al. v. Orient Overseas                        Page 13
                       Container Line Limited, et al.


by any international convention or national law that would have applied had the parties entered into
a separate contract for that stage of transport. In the instant case, however, Clause 4(C) rather than
Clause 4(B)(2)(a) is controlling. Prior language within 4(B)(2)(a) provides for the application of
Clause 4(C) “where loss or damage occurs to the Goods from the time when the Goods are loaded
on board the Vessel at the Port of Loading until the time when the Goods are discharged from the
Vessel at the Port of Discharge.” J.A. at 79 (Bill of Lading at 2). Because both parties agree that
the loss and damage to Ford’s auto transmissions occurred at sea, somewhere between Le Havre and
Montreal, Clause 4(C) governs our interpretation of OOCL’s liability.
        The parties contest the meaning of Clause 4(C), the Clause Paramount. Clause 4(C) provides
as follows:
        All carriage under this Bill of Lading . . . shall have effect subject to any legislation
        enacted in any country making the Hague or Hague-Visby Rules compulsorily
        applicable and in the absence of any such legislation in accordance with the Hague
        Rules or COGSA in the case of carriage to or from the United States of America.
J.A. at 80 (Bill of Lading at 3). Appellants argue that COGSA applies only as a default, when
legislation making the Hague or Hague-Visby Rules compulsorily applicable is not present. OOCL
argues, in contrast, that because COGSA enacted the Hague Rules, reading Clause 4(C) in the
manner urged by Appellants would render the last portion superfluous. In other words, OOCL
suggests that if the contract was for the carriage of goods to the United States, both the first and
second portions of Clause 4(C) would make COGSA applicable. But OOCL’s argument for
superfluity cuts against it as well as in its favor. In the case of carriage to the United States, the first
portion of Clause 4(C) becomes redundant given the application of COGSA in the last portion of
the Clause.
        We agree with neither the interpretation of Clause 4(C) advanced by Ford and Royal nor that
advanced by OOCL. The most reasonable interpretation of Clause 4(C) is that it anticipated three
distinct situations: (1) carriage to and from two countries other than the United States subject to
legislation in at least one of those countries making the Hague Rules or Hague-Visby Rules
compulsorily applicable; (2) carriage to and from countries that made neither applicable, in which
case the Hague Rules would apply as a default; (3) carriage between the United States and a foreign
country, whereby COGSA would apply as a matter of law. This interpretation of Clause 4(C)
explains the function of the language “in the absence of any such legislation” by recognizing the
Clause’s intention to make the Hague Rules the default liability scheme, absent effective legislation
raising liability in accordance with the Hague-Visby Amendments. Our interpretation of Clause
4(C) also explains why there exists some redundancy of language when the carriage is to the United
States. Our interpretation of Clause 4(C) yields the initial conclusion that the ocean carriage at issue
between Le Havre and Montreal exemplifies the first anticipated situation because both France and
Canada make Hague-Visby Rules compulsorily applicable.
        Nevertheless, we must consider whether the multimodal contract at issue actually
exemplifies the third anticipated situation because the United States constitutes the ultimate
destination of the goods, despite the ocean carriage’s end in Montreal. OOCL argues that “COGSA
applies to all carriage to and from the United States of America, whether by truck, rail, etc., and not
merely when the port of loading or the port of discharge is a U.S. port.” OOCL Br. at 27. If we read
narrowly the language in Clause 4(C) “to or from the United States,” then we would reach the
conclusion that the carriage of goods by sea from Le Havre to Montreal did not involve carriage to
the United States. Accordingly, the Hague-Visby Rules would apply because France is a contracting
state and, under the first portion of Clause 4(C), the carriage would be subject to France’s legislation
making those rules compulsorily applicable. If, however, we read the language “to or from the
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                   Page 14
                      Container Line Limited, et al.


United States” broadly, as OOCL suggests we should, then there would arise an internal conflict in
Clause 4(C). The first portion of the Clause would make the Hague-Visby Rules applicable, and the
last portion of the Clause would make COGSA applicable.
         Because we are obligated by the doctrine of contra proferentum to construe ambiguities in
the contract against OOCL as the drafter, we reach the conclusion that Clause 4(C) makes OOCL’s
liability subject to the Hague-Visby Rules and not COGSA. This conclusion is in keeping with other
lower federal court cases that treat the mention of the Hague-Visby Rules in clauses paramount that
are similar but not identical to the one at issue in the present case as demonstrating an agreement by
the carrier to accept the Hague-Visby liability limits. See, e.g., Itel Container Corp. v. M/V Titan
Scan, 139 F.3d 1450, 1454-55 (11th Cir.) (reading the general clause paramount to apply the Hague-
Visby Rules in part because of the presence of a forum-selection clause applying English law that
was more specific than the general boilerplate language of the clause paramount), cert. denied, 525
U.S. 962 (1998); Francosteel Corp., 885 F. Supp. at 89-90 (construing a bill of lading against the
carrier to find that the contract incorporated the Hague-Visby Rules); Associated Metals v. M/V Star
Skarven, 1995 A.M.C. 505, 515 (S.D. Fla. 1994) (applying the Hague-Visby Rules in keeping with
a “Visby Paragraph” of the general clause paramount to shipment from the contracting state of
Finland); Ilva U.S.A., Inc. v. M/V Botic, Civ. A. No. 92-717, 1992 WL 296562, at *2, 1993 A.M.C.
240 (E.D. Pa. Oct. 6, 1992) (finding that the first paragraph of the general clause paramount
incorporated the Hague-Visby Rules into the bill of lading and the second paragraph made them
compulsorily applicable); Associated Metals & Minerals Corp. v. M/V Arktis Sky, No. 90 Civ. 4562
(JSM), 1991 WL 51087, at *5, 1991 A.M.C. 1499 (S.D.N.Y. Apr. 3, 1991) (holding that the carriage
of goods from Spain, which adopted the Visby Amendments, came under the scope of the second
paragraph of the general clause paramount covering actions where the Hague-Visby Rules apply),
vacated and remanded on other grounds, 978 F.2d 47 (2d Cir. 1992); Daval Steel Prods. v. M/V
Acadia Forest, 683 F. Supp. 444, 447 (S.D.N.Y. 1988) (holding that the bill of lading calls for the
incorporation of the higher liability limits provided by the Hague-Visby Rules when issued in a
jurisdiction where those rules apply); cf. Francosteel Corp. v. M/V Deppe Europe, No. 90 Civ. 1442
(RPP), 1990 WL 121683, at *3, 1990 A.M.C. 2962 (S.D.N.Y. 1990) (holding that Daval Steel would
be controlling but for the presence of a carrier option preserving the benefits of COGSA for the
carriers). But see Acciai Speciali Terni USA, Inc. v. M/V Berane, 182 F. Supp. 2d 503, 508 n.8 (D.
Md. 2002) (holding that the language of the general clause paramount is insufficient to demonstrate
an agreement by a carrier to accept the Hague-Visby liability limits absent further evidence of this
intent).
       We next evaluate how Clause 4(C), the general clause paramount, interacts with Clause 4(D),
which is entitled “USA Clause Paramount (if applicable).” Clause 4(D)(1) reads:
       If carriage includes carriage to, from or through a port in the United States of
       America this Bill of Lading shall be subject to COGSA, the terms of which are
       incorporated herein and shall be paramount throughout carriage by sea and the entire
       time that the Goods are in the actual custody of the Carrier or its sub-contractor at
       the sea-terminal in the United States of America before loading onto the Vessel or
       after discharge therefrom as the case may be. (emphasis added)
J.A. at 80 (Bill of Lading at 3). OOCL argues that the affidavit of Christy Beck, a customer
serviceperson employed by OOCL who is familiar with the routing of goods by rail in the United
States and Canada, establishes that the goods would have traveled by rail from Montreal to the
Canadian Pacific Railyard in the Port of Detroit.
       Appellants argue that Clause 4(D) is “expressly subjunctive and contingent” because
preceded by the qualifying phrase “if applicable.” Appellants Reply Br. at 18. Appellants also
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 15
                      Container Line Limited, et al.


argue that the purported extension of COGSA in Clause 4(D)(1) to cover transshipment by land or
sea “through” a port in the United States demonstrates OOCL’s assumption that the law governing
loss at sea was that enacted by the country in which the point of discharge was located. Appellants
Br. at 14-15. Lastly, Appellants argue that Beck’s loose use of the term “port” contravenes both the
word’s ordinary meaning and the technical definitions of the “Port of Detroit” and the “Port of
Chicago,” as explained by the Executive Director of the Detroit/Wayne County Port Authority,
Curtis Hertel, and the Executive Director of the Illinois International Port District, Anthony Ianello.
Appellants Reply Br. at 19 (citing Hertel Decl. at 2-3 and Ianello Decl. at 1-2). In sum, Appellants
argue that the bill of lading provided for the goods’ transport by rail from Montreal to railyards in
Detroit and Chicago located outside those cities’ ports and, therefore, the invocation of COGSA in
Clause 4(D)(1) does not determine OOCL’s liability.
        The conflicting evidence and argument regarding the meaning of the term “port” establishes
two plausible interpretations of Clause 4(D)(1). Without evaluating the relative credibility of the
Beck Affidavit and the Hertel Declaration, we conclude that Hertel’s interpretation of the meaning
of the “Port of Detroit” better accords with the language of Clause 4(D)(1). Clause 4(D)(1) provides
for the extension of COGSA by contract to the periods before goods are loaded on to the vessel and
after they are discharged, so long as they are in the custody of OOCL or its subcontractor “at the sea-
terminal in the United States of America.” The latter phrase makes clear that OOCL intended the
term “port” in Clause 4(D)(1) to refer to a “sea-terminal.” Although OOCL averred that the
Canadian Pacific Railyard is within the Port of Detroit, OOCL never argued that the railyard is a
sea-terminal.
         On the other hand, we have held above that as a matter of federal common law COGSA
applies to the ocean voyage from Le Havre to Montreal despite the fact that Montreal is plainly not
a U.S. port. The most reasonable interpretation of Clause 4(D)(1) is that OOCL intended to extend
COGSA by contract when COGSA applied as a matter of law to the ocean voyage, to periods prior
to and following “tackle-to-tackle,” so long as the goods remained within the custody of OOCL or
its subcontractor. Because we have held above that COGSA applies as a matter of federal common
law to the carriage of goods from Le Havre to Montreal when the ultimate destination of the goods
is in the United States, we hold that Clause 4(D)(1) is generally applicable. We therefore do not
need to resolve the competing evidence regarding the definition of the Port of Detroit, which would
remain the responsibility of a jury.
        Clause 4(D)(1), however, does not specify to which particular situations it applies. If we
take the language from Clause 4(D)(1)—“paramount throughout carriage by sea”—out of context,
then it appears that OOCL intended to make COGSA applicable to both the sea voyage and the
periods before and after discharge. When the clause is read as a whole and in harmony with the
other clauses of the contract, however, it becomes clear that its purpose was to extend COGSA by
contract, when COGSA was already applicable to the sea voyage, to the periods “before loading [the
goods] onto the Vessel or after discharge therefrom.” Clause 4(D)(1). Indeed, the attorney for
OOCL admitted at oral argument that the intent of Clause 4(D)(1) was to extend COGSA beyond
the tackle-to-tackle period. Because we reached the conclusion above that Clause 4(C) made the
Hague-Visby Rules applicable to the sea voyage as a contractual matter, however, there is no need
to invoke Clause 4(D)(1), which addresses the periods beyond the “tackle-to-tackle” period. In the
instant case, the goods were lost at sea; therefore, this is not a case in which Clause 4(D)(1) comes
into operation.
    OOCL argues that Clause 4(D)(4) further extends COGSA by default to all carriage when
COGSA does not otherwise apply. Clause 4(D)(4) states:
No. 06-1199            Royal Ins. Co. of America, et al. v. Orient Overseas                      Page 16
                       Container Line Limited, et al.


        Except as provided herein in Clauses 4(D)(1) and (2), and where COGSA does not
        apply by operation of law, Carrier’s liability will be governed by COGSA unless its
        liability under some other body of law applicable to the particular stage of the
        transport where the loss occurred is more favorable to the Carrier (with regards to
        defenses and limitations), in which case that other body of law will apply.
J.A. at 80 (Bill of Lading at 3) (emphasis added). Here, we have held above that COGSA applied
to the sea carriage of goods between Le Havre and Montreal as a matter of federal common law.
Clause 4(D)(4) standing alone, therefore, does suggest that there exists no exception to COGSA’s
applicability under the bill of lading. But Clause 4(D)(4)’s provision for COGSA liability
limitations conflicts with Clause 4(C)’s provision for the Hague-Visby Rules. This ambiguity once
again forces us to resort to the doctrine of contra proferentum. Accordingly, we hold that Clause
4(C), which applied the Hague-Visby Rules, controls OOCL’s liability.
        One might argue that Clause 4(D)(4) trumps Clause 4(C). The contention would be that with
the exception of situations anticipated by Clauses 4(D)(1) and (2) and those where COGSA does not
apply as a matter of law, Clause 4(D)(4) makes COGSA’s liability limitations applicable, regardless
of what Clause 4(C) suggests. The key question, however, is whether Clause 4(C), the Clause
Paramount, or Clause 4(D), the USA Clause Paramount, applies. The title of Clause 4(D)(4)
explicitly makes that clause conditional by including the qualifying phrase “if applicable.” Given
the ambiguity as to whether Clause 4(C) or Clause 4(D)(4) applies, we believe it appropriate to place
the burden on OOCL as the drafter of the bill of lading to explicitly and clearly state its own liability
limits.
         In addition, Himalaya Clauses in OOCL’s bill of lading make Hague-Visby’s liability
limitations that are applicable to OOCL similarly applicable to Third-Party Appellees. Such clauses
extend liability limitations to downstream parties expected to take part in the contract. Kirby, 543
U.S. at 20 & n.2. Clause 1 of OOCL’s bill of lading extends “the benefit of all the rights and
defenses provided for” in the bill of lading to second persons or entities “including without
limitation, the Vessel, her owner, operator, demise, time, slot and space charterer” who is also
denominated a “carrier/bailee.” J.A. at 78 (Bill of Lading at 1). Clause 25(c) provides that “the
Vessel and every subcontractor of the Carrier of any nature whatsoever . . . shall have the benefit
of every right, defence [sic], limitation and liberty of whatsoever nature herein contained or
otherwise available to the Carrier as if such provisions were expressly for its benefit . . . .” J.A. at
84 (Bill of Lading at 7). Therefore, we hold that, because the Hague-Visby Rules govern OOCL’s
liability, they also govern that of Third-Party Appellees.
E. The Definition of a Package or Unit
       As a matter of law and by agreement of the parties, the applicable version of the
Hague-Visby Rules is the 1979 Special Drawing Rights Protocol (“the SDR Protocol”). As we held
above, because the carriage of goods to Montreal originated in Le Havre and because France was
a signatory to the Hague-Visby Rules, Clause 4(C) makes the Hague-Visby Rules applicable.
France has adopted the SDR Protocol. J.A. at 157 (Courtois Decl. at ¶¶ 3-4). The SDR Protocol
replaces Article IV(5)(a) of the Hague-Visby Rules and provides for the following liability limits:
        Unless the nature and value of such goods have been declared by the shipper before
        shipment and inserted in the bill of lading, 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 goods
        in an amount exceeding the equivalent of 666.67 [SDR] per package or unit or 2
        [SDR] per kilogramme of gross weight of the goods lost or damaged, whichever is
        the higher.
No. 06-1199           Royal Ins. Co. of America, et al. v. Orient Overseas                    Page 17
                      Container Line Limited, et al.


Protocol Amending the International Convention for the Unification of Certain Rules of Law
Relating to Bills of Lading, Brussels, December 21, 1979, reprinted in 6 Benedict on Admiralty
1-32.2 Doc. No. 1-2A (7th ed. 2007). Thus, when the SDR Protocol is applicable, as in the current
case, a court should limit the carrier's liability to the higher of 666.67 SDR per package or unit or
2 units of account per kilogramme of gross weight of the goods at issue.
         Appellants argue that in the “Quantity” column of the bill of lading, OOCL identified and
described each of the thousands of auto transmissions that Ford shipped as a “unit.” Appellants Br.
at 6, 25 (citing J.A. at 98 (OOCL Bills of Lading Ex. C. at 2)). OOCL does not dispute this
contention and instead argues only that, under COGSA liability limits, each rack within the
container rather than each auto transmission constitutes one COGSA package. OOCL Br. at 36-38.
But we have reached the conclusion that the bill of lading binds OOCL by the Hague-Visby and not
the COGSA liability limits. Accordingly, we turn to the bill of lading to assess the number of units
listed by OOCL. The bill of lading, however, is sufficiently confusing to make it inadvisable for us
to reach a conclusion as to the total number of units listed. A total of forty-three consecutive pages
in the bill of lading include “Quantity” columns with various numbers of units listed. J.A. at 98-140
(OOCL Bills of Lading Ex. C at 2-44). An understanding of what exactly these numbers reference,
where the pages duplicate and should not be counted twice, and ultimately how to calculate the total
number of units listed requires a factual understanding of the practices of the shipping industry and
specifically OOCL’s bill of lading. Surveying and weighing such factual evidence is the job of the
fact-finder. Therefore, we remand to the district court for further proceedings consistent with this
opinion. We reiterate that, as a matter of law, the total number of units so listed will constitute the
number of packages or units to be used to assess the limits set by the Hague-Visby Rules to OOCL’s
liability. Of course, the Hague-Visby Rules only set limits to liability; actual liability will depend
on other relevant factors, which have not yet been addressed by the parties or the district court.
                                        III. CONCLUSION
        Because the district court erroneously interpreted the bill of lading to apply COGSA instead
of the Hague-Visby Rules, and because additional briefing and fact-finding may be required before
the liability limitation may be appropriately applied, we REVERSE the district court’s judgment
and REMAND this case for further proceedings consistent with this opinion.
