     11-1467
     Edso Exporting LP v. Atlantic Container Line AB


                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 20th day of March, two thousand twelve.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                GUIDO CALABRESI,
 9                ROSEMARY S. POOLER,
10                              Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13      EDSO EXPORTING LP,
14
15                   Plaintiff-Appellee,
16
17                   -v.-                                               11-1467
18
19      ATLANTIC CONTAINER LINE AB,
20
21                   Defendant-Appellant,
22
23      M.V. ATLANTIC COMPASS, her engines, boilers, etc.,
24
25                   Defendant.
26
27      - - - - - - - - - - - - - - - - - - - -X


                                                 1
 1   FOR APPELLANT:             Vincent M. DeOrchis
 2                              DeOrchis & Partners, LLP
 3                              New York, NY
 4
 5
 6   FOR APPELLEE:              James F. Sweeney, III, David E.
 7                              Sigmon
 8                              Nicoletti Hornig & Sweeney
 9                              New York, NY
10
11
12        Appeal from a judgment of the United States District
13   Court for the Southern District of New York (McMahon, J.).
14
15        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
16   AND DECREED that the district court’s judgment is reversed
17   and the case is remanded to the district court for entry of
18   partial summary judgment in favor of the defendant.
19
20        Defendant Atlantic Container Line AB (“ACL”) appeals
21   from the district court’s grant of partial summary judgment
22   in favor of plaintiff Edso Exporting LP (“Edso”) on the
23   issue of defendant’s liability for the damage to plaintiff’s
24   crane while in transit from Baltimore to Tripoli. We assume
25   the parties’ familiarity with the underlying facts, the
26   procedural history, and the issues presented for review.
27
28        The Carriage of Goods by Sea Act, Pub. L. No. 521,
29   § 4(5), 49 Stat. 1207 (1936), reprinted in note following 46
30   U.S.C. § 30701 (“COGSA”), limits a carrier’s liability for
31   damage in connection with the transportation of goods to
32   $500 per package, “or in case of goods not shipped in
33   packages, per customary freight unit . . . unless the nature
34   and value of such goods have been declared by the shipper
35   before shipment and inserted in the bill of lading.” It is
36   undisputed both that the crane was unpackaged and that Edso
37   failed to declare its value in the bill of lading. Edso’s
38   damages are therefore limited under COGSA to $500 “per
39   customary freight unit.” The district court concluded that
40   the customary freight unit was each cubic meter of the
41   crane. On appeal, ACL argues that the customary freight
42   unit was each item shipped.
43
44

                                  2
 1        “While some courts have held that the customary freight
 2   unit is the measurement customarily used to calculate the
 3   rate to be charged,” in this Circuit “the customary freight
 4   unit is not the standard unit of measure used in the
 5   industry, but the actual freight unit used by the parties to
 6   calculate freight for the shipment at issue.” FMC Corp. v.
 7   S.S. Marjorie Lykes, 851 F.2d 78, 80 (2d Cir. 1988)
 8   (internal quotation marks omitted). “To determine the
 9   customary freight unit for a particular shipment, the
10   district court should examine the bill of lading, which
11   expresses the contractual relationship in which the intent
12   of the parties is the overarching standard. A district
13   court may also consider the tariff required to be filed with
14   the Federal Maritime Commission, which also sets forth the
15   freight rate.” Id. (internal quotation marks and citation
16   omitted). Where the bill of lading and the filed tariff are
17   unambiguous as to the freight unit used to calculate freight
18   for the shipment at issue, “the inquiry is ended” and a
19   court may not consider extrinsic evidence of the parties’
20   intent, including negotiations. Id. at 80-81. In
21   particular, if the bill of lading and tariff unambiguously
22   establish that freight is charged on a lump sum basis, or
23   based on the number of items shipped, it is irrelevant that
24   the parties may, as a practical matter, have calculated
25   freight based on the weight or volume measurements of the
26   goods. See Vigilant Ins. Co. v. M/T “Clipper Legacy”, 656
27   F. Supp. 2d 352, 359 (S.D.N.Y. 2009); Ulrich Ammann Bldg.
28   Equip. Ltd. v. M/V Monsun, 609 F. Supp. 87, 91 (S.D.N.Y.
29   1985).
30
31        On the facts before us, we conclude that the bill of
32   lading and tariff, when read together, unambiguously
33   establish that freight was charged on a per-item, rather
34   than per-cubic meter, basis. The bill of lading does not on
35   its face state that freight is calculated based on the cubic
36   volume of the crane; instead, it describes the basis of the
37   $7,320 freight charge as “AA”, or “As Agreed.” Any
38   ambiguity as to the meaning of this phrase is resolved by
39   the tariff, which is expressly incorporated by reference in
40   the bill of lading. The tariff identifies a Base Freight of
41   $7,320 and the Basis as “Each (EA).” In the context of the
42   $7,320 figure immediately above, “Each (EA)” can only refer
43   to each crane.
44

                                  3
 1        Because the bill of lading, as supplemented by the
 2   tariff, unambiguously establishes that the customary freight
 3   unit in this case was each crane shipped, the district court
 4   erred by considering extrinsic evidence as to how the
 5   parties calculated the $7,320 figure. Edso argues that the
 6   quote confirmation, which indicates that the crane was
 7   “Rated at $60w/m,” was incorporated in the bill of lading.
 8   But the bill of lading merely references the confirmation,
 9   without any elaboration. By contrast, it expressly
10   incorporates by reference the tariff. If the parties had
11   intended to also incorporate the terms of the quote
12   confirmation, they would have done so explicitly.
13
14        Since we find no ambiguity in the governing documents
15   concerning the basis on which freight was charged, ACL was
16   entitled to partial summary judgment limiting its damages to
17   $500. See, e.g., Nowak v. Ironworkers Local 6 Pension Fund,
18   81 F.3d 1182, 1192 (2d Cir. 1996).
19
20        We have considered Edso’s remaining arguments and find
21   them to be without merit. For the foregoing reasons, the
22   judgment of the district court is hereby reversed.
23
24
25
26                              FOR THE COURT:
27                              CATHERINE O’HAGAN WOLFE, CLERK
28




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