Admiralty – Contract – Through Bill – Limitation of Liability – COGSA

G&P Trucking Co. v. Zurich American Insurance Co. (Lawyers Weekly No. 002-148-15, 12 pp.) (Margaret Seymour, S.J.) 3:14-cv-00501; D.S.C.

Holding: The bill of lading in question left the “Place of Delivery” blank; however, the parties’ evidence convinces the court that the listing of defendant SKF USA, Inc. as consignee was actually a designation of the final destination of the goods.

The court concludes that the bill of lading is a through bill of lading under the Carriage of Goods by Sea Act (COGSA), which is subject to a Himalaya clause. Defendants’ remedy is against the shipper rather than the plaintiff-carrier.

Other factors also indicate that the bill of lading was a through bill: (1) the use of the term “prepaid” (meaning the shipper had arranged a line of credit to cover payment of the freight charge); (2) the lack of a separate domestic bill of lading; (3) the shipper’s use of a single invoice that included charges for inland freight in Spain, ocean freight, and inland freight from Georgia to Tennessee; and (4) plaintiff’s billing of the shipper – not the defendant-receiver – for its services.

Although COGSA applies only to shipments from foreign ports to U.S. ports (and vice versa), the parties, by the bill of lading, may extend to third parties the limitation of liability granted the carrier by COGSA. A carrier’s liability under COGSA is limited to $500 “per package.” Here, the terms and conditions associated with the bill of lading limited the plaintiff-carrier’s liability to that provided by COGSA, i.e., $500 per package.

The bill of lading was issued by the shipper and covers all subcontractors used by the shipper, including plaintiff. Defendants’ recourse is therefore against the shipper rather than of any of the shipper’s subcontractors such as plaintiff. Pursuant to the terms of the bill of lading, plaintiff has no liability to defendants.