United States District Court,

S.D. New York.

SONY COMPUTER ENTERTAINMENT INC., Sony Computer Entertainment America, and

Mitsui Sumitomo Insurance Co., Ltd., Plaintiffs

v.

NIPPON EXPRESS U.S.A. (ILLINOIS), INC., and NIPPON EXPRESS CO., LTD.,

Defendants and Third-Party Plaintiffs

v.

NORFOLK SOUTHERN RAILWAY COMPANY, Hyundai Merchant Marine Co., Ltd ., and H & M

International Transportation Inc., Third-Party Defendants.

April 9, 2004.

Memorandum and Order

STANTON, D.J.

Plaintiffs move for partial summary judgment holding defendant Nippon Express U.S.A. (Illinois) Inc. (“Nippon”) liable for the full amount of the plaintiffs’ actual loss. Nippon cross-moves for summary judgment holding that Nippon’s liability is limited. Nippon does not contest that the loss was caused by its agent Norfolk Southern’s negligence.

Facts

Plaintiff Sony Computer Entertainment engaged Nippon to deliver four containers of Sony Playstation game platforms from Japan to Sony Computer Entertainment America in Pitman, New Jersey. Nippon issued two waybills for the transport and delivery of the containers; the waybills incorporated by reference Nippon’s standard bill of lading. Nippon, a non-vessel-operating common carrier, in turn engaged Hyundai Merchant Marine Co. (“Hyundai”) to carry the containers from Tokyo to a U.S. east coast container yard. Hyundai issued its own bill of lading to Nippon. Hyundai transported the containers to Seattle by ship, from Seattle to Chicago via the Burlington Northern Santa Fe Railroad, and from Chicago to Croxton Yard in New Jersey via the Norfolk Southern Railway. Norfolk Southern issued EDI (Electronic Data Interchange) waybills, incorporating by reference the Norfolk Southern Circular in effect at the time, to Hyundai.

On the nights of October 22 and 23, 2001, unknown persons entered the open rear gate of Croxton Yard with tractors and stole two of the four containers, holding 1908 cartons of Playstations claimed to be worth over $1,300,000. The containers were in Norfolk Southern’s custody at the time of the theft.

Plaintiffs first sued Norfolk Southern, who claimed the benefit of a clause in its Circular that it asserted limited its liability to $500,000. Plaintiffs ultimately settled with Norfolk Southern for that amount. They now sue Nippon for the balance of their loss.

Discussion

1. Jurisdiction

The court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiffs Sony Computer Entertainment and Mitsui Sumitomo Insurance are Japanese corporations, and Sony Computer Entertainment America is a California corporation. Defendant Nippon is an Illinois corporation. This action has been discontinued, by stipulation, as against named defendant Nippon Express Co., Ltd. The citizenship of Hyundai and Norfolk Southern is immaterial because, as impleaded parties, they “fall within the ancillary jurisdiction of the courts and thus do not affect the court’s original determination of whether diversity exists.” 13B Wright & Miller, Federal Practice and Procedure § 3608, at pp. 453-44 (1984); see also Fidelity and Deposit Co. v. City of Sheboygan Falls, 713 F.2d 1261, 1266 (7th Cir.1983). The matter in controversy exceeds $75,000.

2. The Package Limitation

Nippon’s bill of lading contains what is known as a Himalaya Clause, which states that:

“Carrier” means Nippon Express U.S.A. (Illinois), Inc., the Underlying Carrier, the ship, her owner, Master, demise charterer, and if bound thereby, the time charterer and any substitute carrier, whether the owner, operator, charterer or Master shall be acting as carrier or bailee, as well as any of the agents, servants, and/or employees of the foregoing parties, including, but not limited to, stevedores, container yards, container freight stations, intermodal inland carriers (rail, truck, local truckers, and barge).

The effect of the Himalaya Clause is to include all the agents and sub- contractors of the carrier within the terms of the initial bill of lading. Here, the clause explicitly includes intermodal inland rail carriers.

Nippon’s bill of lading also contains a clause that caps its potential liability. Clause 8.2(a) states that:

Compensation shall not, however, exceed U.S. $500.00 per container, package, or unit unless with the consent of the Carrier, the Merchant has declared a higher value for the goods, such higher value has been stated in the space provided on this Bill of Lading, ad valorem, freight shall be paid, in which case such higher value shall be the limit. However, the Carrier shall not, in any case, be liable for an amount greater than the actual loss to the person entitled to make the claim and the Carrier will not be liable for a claim for lost profits or consequential damages.

That clause’s $500 per package limitation mirrors the $500 per package limitation on liability in the Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5) (“COGSA”).

In addition to the language in Clause 8.2(a) discussing the Ad Valorem rate, Nippon’s Waybill has a place on its front for the shipper to declare value. In the box headlined “Particulars Furnished by Shipper,” there is the following line: “Declared Value USD________. If Merchant enters a value, the Ad Valorem rate will be charged.” Sony Computer is an experienced shipper who used Nippon many times in the past. The waybill provided fair opportunity for Sony to avoid the $500 per unit limitation by declaring a higher value and paying a higher price. See General Electric Co. v. MV Nedlloyd, 817 F.2d 1022, 1029 (2nd Cir.1987) (“the language on the back of the Nedlloyd document incorporating COGSA’s provisions and the space for declaring excess value on the front are sufficient notice of the limitation of liability and the means of avoiding it”).

Plaintiff has lost 1908 cartons, thus capping potential liability under the bill of lading at $954,000. The limitation clause, combined with the Himalaya Clause, limits the liability of “the Carrier” (collectively Nippon, and its agents Hyundai and Norfolk Southern) to $954,000. Nippon is thus potentially liable for only $454,000, because Norfolk Southern has already paid $500,000 to the plaintiff. See Thyssen, Inc. v. S.S. Eurounity, 21 F.3d 533, 540-541 (2nd Cir.1994) (the COGSA $500 limitation “establishes that a plaintiff is entitled to a single recovery not to exceed the equivalent of $500 per package” even if there are multiple defendants).

3. Application of “law of that country” to the Inland Loss

Clause 7.3 is an alternative liability provision, under which the application of the particular principles governing liability depends on the location of the loss:

If it can be proved where the loss or damage occurred, the liability of the Carrier for the loss or damage to the goods will be as follows:

(a) With respect to loss or damage occurring during the period of carriage by sea, to the extent prescribed by COGSA or the applicable national legislation of other nations, as provided for [in] Clause 3 (Paramount Clause) hereof and in accordance with this Bill of Lading.

(b) With respect to loss or damage occurring during the period of carriage by land or inland waterways in any country for which this carrier has assumed responsibility of carriage, in accordance with the applicable law of that country, the inland carrier’s contracts of carriage and tariffs in force, and this Bill of Lading.

The parties suggest various arguments as to what the applicable law is, referring to (a) COGSA, and (b) the Harter Act, and (c) the Carmack Amendment.

a) COGSA

Under the heading “PARAMOUNT CLAUSE,” Clause 3.1 of the bill of lading states that:

Except as otherwise provided herein, for shipments by sea originating from or destined to the United States of America, its territories or possessions and between coastal port [sic.], this Bill of Lading shall have affect [sic.] subject to the provisions of the Carriage of Goods by Sea Act of the United States of America, approved April 16, 1936 (COGSA), 46 U.S.C. Sec. 1300- 1315, which is incorporated herein and made a part hereof, and nothing herein contained shall be [a] surrender by the Carrier of any of its rights and immunities or an increase of any of its responsibilities, liabilities, or limitation of liability under said Act.

Clause 3.2 further provides that:

The provisions stated in said Act except as specifically provided otherwise herein shall govern before loading on and after discharge from the vessel and throughout the entire time the Goods are in the custody of the Carrier.

Thus, by contract COGSA applies to all the stages of the shipment, including the loss in the Croxton Yard. “COGSA only applies by its own force, however, during ‘the period from the time when the goods are loaded on to the time when they are discharged from the ship.” ‘ See Hartford Fire Insurance Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 557 (2nd Cir.2000); 46 U.S.C. §§ 1301(e), 1302. Therefore to the extent COGSA applies to this loss, it applies only by contract, not by its own force, as the loss occurred during inland transport.

Application of COGSA to this inland loss thus adds a separate, consistent source of the $500 per package limitation.

b) Harter Act, 46 U.S.C. 190

This Act, which forbids clauses relieving vessels of liability for damage to cargo, was largely superseded by COGSA and does not apply here. Harter “governs the responsibilities of carriers until ‘proper delivery’ of the cargo has been made.” Colgate Palmolive Co. v. M/V “Atlantic Conveyor”, 1996 WL 742861, at *3 (S.D.N.Y. Dec.1, 1996). “Proper delivery occurs when the cargo is ready for inland transport.” Id. at *5. The loss here occurred following cross-country transport to New Jersey, long after the cargo was prepared for inland transport under the meaning of the Harter Act, so it does not apply.

c) The Carmack Amendment

The Carmack Amendment, 49 U.S.C. § 11706, governs the liability of rail carriers such as Norfolk Southern. Under § 11706(e), rail carriers are liable “for the actual loss or injury to the property.” Section 11706(c)(1) provides that:

A rail carrier may not limit or be exempt from liability imposed under subsection (a) of this section except as provided in this subsection. A limitation of liability or of the amount of recovery or representation or agreement in a receipt, bill of lading, contract, or rule in violation of this section is void.

The effect of that provision in § 11706, however, is diluted by the Staggers Rail Act, 49 U.S.C. § 10502(e), which provides: “Nothing in this subsection or section 11706 of this title shall prevent rail carriers from offering alternative terms.”

Norfolk Southern sets out such alternative terms in Section 8.2.1(3) of its Circular:

NS offers two alternative liability provisions: “Standard” liability and “Carmack” liability. UNLESS LANGUAGE EXPRESSLY SELECTING “CARMACK” IS INCLUDED IN THE ORIGINAL SHIPPING INSTRUCTIONS, ANY TENDER OF FREIGHT FOR TRANSPORTATION UNDER THIS CIRCULAR WILL BE ACCEPTED UNDER “STANDARD” LIABILITY COVERAGE PROVIDED AND NOT UNDER “CARMACK” COVERAGE.

Since it appears that “Carmack” coverage was not selected, the Playstations were shipped under Norfolk Southern’s “Standard” coverage, which is legitimate under the Staggers Rail Act, and therefore § 11706(c)(1) of the Carmack Amendment does not affect the validity of the liability limit.

No “applicable law of that country” under Clause 7.3(b) of the bill of lading affects Nippon’s liability for the inland loss.

4. Effect of Norfolk Southern’s $250,000 Liability Limitation

Norfolk Southern’s “Standard” liability coverage is described in Section 8.3.3(e) of its Circular under the heading “Standard Liability Provisions and Restrictions”:

Unless amended by written agreement signed by an authorized NS official prior to shipment (see “Counteroffer” in Terms and Conditions” in “General Contract Conditions” section), NS’s liability for loss, damage or delay to any shipments under this circular shall be limited to the lesser of the destination value of the cargo or $250,000.

Nippon argues that this $500,000 limit (two containers at $250,000 each) is all that plaintiffs may recover from this loss. Since they have been paid $500,000 by Norfolk Southern, says Nippon, they can recover nothing further from Nippon.

Nothing in Norfolk’s Circular extends Norfolk’s liability limitation to Nippon. [FN1] Norfolk’s Circular deals only with Norfolk Southern’s liability, and does not purport to address the relationship between the shipper and Nippon.

The relevant provision in Nippon’s bill of lading is Clause 7.3(b). It provides that the liability of the Carrier will be ” … in accordance with the inland carrier’s contracts of carriage and tariffs in force” as well as with the “law of that country” and with “this Bill of Lading.” Nippon argues that the reference to the inland carrier’s [i.e. Norfolk Southern’s] contract of carriage adopts Norfolk’s liability limitation clause as the one between plaintiffs and Nippon. To give such an effect to the reference to the inland carrier’s “contracts of carriage” would annul the specific $500 limitations of liability to which the parties agreed in Nippon’s bill of lading, and which is required by COGSA, which the parties agreed would apply.

As stated above, Nippon’s bill of lading not only stipulated the $500 limitation as one of its own terms, it also specified in Clause 3.2 that “except as specifically provided otherwise herein,” COGSA would apply to inland as well as ocean losses “throughout the entire time the goods are in the custody of the carrier.”

The allusion to the inland carrier’s contracts was general, as one of three items to be considered in determining the liability of the carrier (the other two being the law of that country and the terms of Nippon’s bill of lading). That broad reference is not specific enough to qualify the Norfolk Southern’s different liability limitation as one “specifically provided otherwise herein” and thus sub silentio emasculate the $500 figure in COGSA. Furthermore, the clause allowing for exceptions, if “specifically provided,” applies only to the effect to be given COGSA. The bill of lading nowhere allows an exception to its own specific $500 limitation, which use of the Norfolk figure would flatly contradict.

Accordingly, the limitation in Norfolk Southern’s circular does not reduce the amount specified in Nippon’s contract with the plaintiffs, although the actual amount paid by Norfolk Southern is properly deducted from the amount otherwise to be paid by Nippon.

Conclusion

Defendant Nippon’s liability is limited to a sum not exceeding the principal amount of $454,000. Pursuant to the agreement of the parties, the proof of the actual amount of damages will take place later.

So ordered.

FN1. By contrast, Hyundai does have a clause in its bill of lading that limits Hyundai’s liability to that of the inland carrier, but Nippon’s bill of lading has no similar language.

United States District Court,

D. Massachusetts.

RATIONAL SOFTWARE CORP., Plaintiff,

v.

STERLING CORP., Defendant.

March 31, 2004.

MEMORANDUM

TAURO, J.

Rational Software Corporation (“Plaintiff”) brought this action against Sterling Corporation (“Defendant”), a commercial moving company, after employees of Defendant dropped a computer disk array [FN1] that was owned by Plaintiff off of the back of one of Defendant’s trucks. The disk array was irreparably damaged. The Parties agree that the damage was caused solely by the negligence of Defendant’s employees. [FN2] Plaintiff seeks to recover $250,000. The Parties agree that $250,000 is the total amount of damages that Plaintiff sustained due to Defendant’s negligence. [FN3] Defendant, however, asserts that its liability for the damaged disk array is limited to a value of sixty cents per pound. [FN4] Defendant, therefore, asks this court to limit Plaintiff’s recovery to $924, as the disk array weighed 1,540 pounds. [FN5]

This court held a two-day bench trial to determine the amount of damages that Plaintiff is entitled to receive.

Findings of Fact

From 1997 to 2001, Plaintiff employed Defendant to move items to and from its various facilities within the Commonwealth of Massachusetts. [FN6] During that period, Plaintiff “did a tremendous amount of moving between” its facilities. [FN7] In fact, from 1997 to 2001, Defendant moved items for Plaintiff on over 200 occasions. [FN8] And, “the structure and the terms [were] pretty much the same for all of the[ ] moves that [Defendant] did for” Plaintiff. [FN9]

In connection with each of the moves, Defendant issued a standard bill of lading to Plaintiff. [FN10] Defendant, thus, issued over 200 bills of lading to Plaintiff from 1997 to 2001. [FN11] At the bottom of each bill of lading, in bold red print, there was a “Delivery Acknowledgment” section that included a space for the shipper to sign to confirm that “The Above Services Were Rendered and The Goods Have Been Received In Good Condition Except As Noted.” [FN12] An employee of Plaintiff signed every one of the over 200 bills of lading in the “Delivery Acknowledgment” section. [FN13]

Also at the bottom of each bill of lading, directly above the “Delivery Acknowledgment” section, and also in bold red print, there was a provision that purported to limit Defendant’s liability. It provided: “Unless A Different Value Is Declared, The Shipper Hereby Releases The Property To A Value Of $.60 Per Pound Per Article.” [FN14] Immediately after that liability-limiting provision, a space was provided for the shipper to declare a higher value. [FN15]

Michael W. Horn (“Horn”), the employee of Plaintiff who “[o]versaw the shipping and receiving” for the facilities that are relevant to this action, [FN16] initialed the liability-limiting provision on three of the abovementioned bills of lading. [FN17] On the other bills of lading, the liability-limiting provision was not initialed. [FN18] Over the course of its dealings with Defendant, Plaintiff did not once declare a value higher than sixty cents per pound. [FN19]

Defendant had a “policy [of] advis[ing][its] clients of the sixty cent per pound liability limitation,” [FN20] which was a “term[ ] and condition [ ]” of every move that it performed. [FN21] And, Defendant’s customers were told that if they wanted coverage that exceeded sixty cents per pound per item, they could purchase additional coverage either from Defendant or from an independent insurance carrier. [FN22] Defendant’s sixty cent per pound liability limitation is, moreover, standard throughout the commercial moving industry. [FN23]

Terrence J. Deignan (“Deignan”), the individual who “overs[aw] any work that” Defendant did for Plaintiff, [FN24] has stated that Plaintiff was informed, both orally and in writing, of the sixty cent per pound liability limitation prior to February 1, 2001, the day on which the damage in issue occurred. [FN25] What is more, Plaintiff has acknowledged that, prior to that date, it knew of Defendant’s sixty cent per pound liability limitation. [FN26] Plaintiff has also conceded that it “knew that if [it] wanted more [insurance], [it] could either buy it through [its] own insurance company or though [Defendant’s] insurance company.” [FN27]

In addition, prior to February 1, 2001, Defendant “had filed a Commodity Rate Tariff … with the Massachusetts Department of Telecommunications and Energy ….” [FN28] The Tariff expressly mentions Defendant’s standard sixty cent per pound per item liability limitation. [FN29] It also states that, if a shipper wants to declare a different value, it must enter that “value … on [the] Bill of Lading ….” [FN30] The Tariff was “referenced on every bill of lading [that Defendant] issued to [P]laintiff.” [FN31]

On February 1, 2001, Horn contacted Deignan and arranged for Defendant to move a computer disk array from one of Plaintiff’s Massachusetts facilities (“Facility One”) to another one of its Massachusetts facilities (“Facility Two”). [FN32] Horn did not know the value of the disk array. [FN33]

When Defendant’s employees arrived at Facility One to pick up the disk array, they did not provide Plaintiff with a bill of lading. [FN34] Upon its arrival at Facility Two, the disk array was dropped by employees of Defendant. [FN35] After the disk array was dropped, Horn, who was present at Facility Two, was given a bill of lading that was identical to the more than 200 bills of lading that Defendant had previously given to Plaintiff in connection with prior moves. [FN36] Deignan, who was also present at Facility Two, had written the following comments on the bill of lading: “Main Frame was dropped off of tailgate [and] fell to the ground–the extent of the damage at this time is not known. The outside has been damaged–do not know about the inside.” [FN37] Horn signed the bill of lading in the “Delivery Acknowledgment” section. [FN38] He did not declare a value higher than sixty cents per pound in the section of the bill of lading that contained the liability-limiting provision, but he did not separately sign or initial that section either. [FN39]

Horn has since testified that, at the time he signed the bill of lading, he thought that Defendant would be “responsible” for any damages caused by its own employees’ negligence, despite the bill of lading’s sixty cent per pound liability-limiting provision. [FN40] He has also since testified that he thought that Defendant used its bills of lading only as a means to record time for billing purposes. [FN41]

Conclusions of Law

Defendant argues that its liability for the damaged disk array is limited to a value of sixty cents per pound. To support its argument, Defendant points out that the bill of lading for the February 1, 2001 move contained a provision that limited its liability to a value of sixty cents per pound per item “Unless A Different Value Is Declared” [FN42] and that Plaintiff, an experienced shipper, signed the bill of lading without declaring a “Different Value.” Defendant also cites Plaintiff’s familiarity with its standard bill of lading form and its practice of limiting its liability to a value of sixty cents per pound per item to further support its argument. Additionally, Defendant contends that this court should enforce its sixty cent per pound liability limitation because it maintained a Tariff on file with the Massachusetts Department of Telecommunications and Energy that both referenced its sixty cent per pound liability limitation and afforded Plaintiff an opportunity to declare that the disk array had a value higher than sixty cents per pound. [FN43]

Plaintiff, however, asserts that it should not be bound by the sixty cent per pound liability limitation. It claims that, although Defendant had in place, on February 1, 2001, all of the mechanisms that it needed to effectively limit its liability to sixty cents per pound, it failed to properly implement those mechanisms. First, Plaintiff notes that it was not given, and did not sign, the bill of lading until after the disk array had been moved and damaged. Second, it emphasizes that its representative signed the bill of lading only in the “Delivery Acknowledgment” section, and not in the section that informed it of its opportunity to declare that the disk array had a value higher than sixty cents per pound. And, third, it insists that because “Defendant failed to follow the terms of its … Tariff,” [FN44] it should not now be allowed to rely on that Tariff. Plaintiff, moreover, maintains that it should not be bound by the bill of lading’s liability-limiting provision because, despite the existence of that provision and its knowledge of Defendant’s practice of limiting its liability, it thought that Defendant would be “responsible” for any damages caused by its own employees’ negligence and that the bill of lading served only to record time for billing purposes. [FN45]

[1][2][3] Because the computer disk array was transported entirely in intrastate commerce, the laws of the Commonwealth of Massachusetts govern this action. [FN46] According to Mass. Gen. Laws ch. 106, § 7-309(2), a carrier may contractually limit its liability, so long as it follows the requirements set forth in the statute:

Damages may be limited by a provision that the carrier’s liability shall not exceed a value stated in the document if the carrier’s rates are dependent upon value and the consignor by the carrier’s tariff is afforded an opportunity to declare a higher value or a value as lawfully provided in the tariff, or where no tariff is filed he is otherwise advised of such opportunity …. [FN47]

A “document” is defined as a “document of title.” [FN48] And, a ” ‘[d]ocument of title’ includes [a] bill of lading ….” [FN49]

[4] In accordance with § 7-309(2), the bill of lading that Plaintiff received in connection with the move in issue contains “a provision that [Defendant’s] liability [for damages] shall not exceed a value” of sixty cents per pound per item. [FN50] There can be no question that the bill of lading constitutes a “document” under the statute. [FN51] It is also clear that Defendant’s “rates are dependant upon value” within the meaning of that statute. [FN52] And, there is no dispute that, prior to the move in issue, Defendant “had filed a … Tariff … with the Massachusetts Department of Telecommunications and Energy ….” [FN53] This court must, therefore, decide whether Plaintiff, “by [Defendant’s] tariff[, wa]s afforded an opportunity to declare” that the disk array had a value higher than sixty cents per pound, or if Defendant is not permitted to rely on its Tariff, whether Plaintiff was “advised of” that opportunity. [FN54]

[5] This court believes that Plaintiff was both “afforded an opportunity to declare” that the disk array had a higher value and “advised of” that opportunity. [FN55] It is clear that Plaintiff, “by [Defendant’s] tariff [, was] afforded an opportunity to declare” that the disk array had a value higher than sixty cents per pound. The Tariff provides that any “declared value must be entered on [the] Bill of Lading ….” [FN56] And, the bill of lading that Plaintiff signed upon delivery of the damaged disk array stated, in bold red print, that “Unless A Different Value Is Declared, The Shipper Hereby Releases The Property To A Value Of $ .60 Per Pound Per Article.” [FN57] Immediately after that statement, there was a space where Plaintiff could have declared a higher value . [FN58]

[6] Plaintiff was also “advised of” its opportunity to declare that the disk array had a value higher than sixty cents per pound. Plaintiff has acknowledged that, prior to the move in issue, it was informed of Defendant’s standard sixty cent per pound liability limitation. [FN59] It has also admitted that it was told “that if [it] wanted more [insurance], [it] could either buy it through [its] own insurance company or through [Defendant’s] insurance company.” [FN60] Plaintiff, moreover, was a long-term client of Defendant, and Plaintiff’s representatives had signed over 200 bills of lading during the course of the Parties’ business relationship. [FN61] Every one of those bills of lading contained the same provision: “Unless A Different Value Is Declared, The Shipper Hereby Releases The Property To A Value Of $.60 Per Pound Per Article.” [FN62] In view of the above, Plaintiff cannot now claim that it was not “advised of” its opportunity to declare a higher value.

Defendant has, thus, complied with the requirements of § 7-309(2) . [FN63] And, although Plaintiff has articulated a number of arguments as to why it should not be bound by the sixty cent per pound liability limitation, none of those arguments is sufficient to relieve it of that limitation.

First, Plaintiff contends that, because the bill of lading was signed only in the “Delivery Acknowledgment” section, and not in the section that informed it of its opportunity to declare that the disk array had a value higher than sixty cents per pound, the bill of lading’s liability-limiting provision should not operate to limit its recovery. But, even though Plaintiff did not separately sign the section of the bill of lading that informed it of its opportunity to declare a higher value, that does not relieve it of the liability limitation. Plaintiff was a sophisticated shipper. And, it may be presumed that when it left blank the space on the bill of lading provided for declaring the released value of the disk array, it did so deliberately and with full knowledge of the consequences of its action. [FN64]

Second, Plaintiff asserts that, because it was not given a bill of lading when the disk array was picked up from Facility One, it was not “afforded an opportunity to declare” that the disk array had a value higher than sixty cents per pound. Although it is true that Plaintiff was not given the bill of lading until after the disk array had been dropped at Facility Two, it does not follow that Plaintiff was not “afforded an opportunity to declare” a higher value. At the time Horn signed the bill of lading, he knew that the disk array had been damaged, and there was nothing to prevent him from declaring that the disk array had a value greater than sixty cents per pound. [FN65] Yet, he did not declare a higher value, and despite its arguments to the contrary, Plaintiff is now bound by that decision. [FN66]

And, third, Plaintiff argues that this court should give no legal effect to the bill of lading’s liability-limiting provision because, when it signed the bill of lading, it thought that Defendant would be “responsible” for any damages caused by its own employees’ negligence [FN67] and that the bill of lading served only to record time for billing purposes. Those alleged misunderstandings are, however, irrelevant. Plaintiff, an experienced shipper, chose to ship according to the terms of the bill of lading, and it acknowledged its acceptance of those terms, including the liability limitation, when it signed that document. Plaintiff is, therefore, bound by those terms. [FN68] In addition, over the course of the Parties’ professional relationship, Plaintiff had received over 200 bills of lading from Defendant that were identical to the bill of lading in issue, and as a result, it should have been extremely familiar with the terms of that document when it signed it. Plaintiff cannot now claim that it did not understand those terms.

As a final matter, this court notes that it would be inequitable, at this point, to permit Plaintiff to avoid the liability limitation. “To allow [Plaintiff] not to declare the proper value of its shipment, avoid paying a higher rate, but then recover the true value of its goods would allow [Plaintiff] to have it both ways.” [FN69]

Conclusion

For the foregoing reasons, Defendant’s liability for the damaged disk array is limited to a value of sixty cents per pound or $924.

AN ORDER WILL ISSUE.

FN1. The disk array is a computer mainframe. See Def.’s Ex. E.

FN2. Pl.’s Ex. 1.

FN3. Id.

FN4. See Def.’s Conclusions of Law ¶¶ 1-11.

FN5. See Def.’s Proposed Findings of Fact ¶ 25.

FN6. Tr. Sept. 29, 2003 (“Tr.1”) at 28:18-25, 30:5-18.

FN7. Id. at 30:5-7.

FN8. Id. at 30:21-33:6; see Def.’s Ex. B. During that period, Defendant performed “two distinct types of moves” for Plaintiff: infrequent “major moves” and frequent “day-to-day stuff.” Tr. Sept. 30, 2003 (“Tr.2”) at 27:16-19. Plaintiff’s disk array was damaged during one of the frequent “day-to-day” moves. Id. at 30:7-9.

FN9. Tr. 1 at 40:4-11.

FN10. See Def.’s Exs. B, G.

FN11. See id.

FN12. Id.

FN13. See Def.’s Ex. B.

FN14. Def.’s Exs. B, G.

FN15. See id.

FN16. Tr. 1 at 28:12-25.

FN17. See Def.’s Exs. D-1, D-2, D-3.

FN18. See Def.’s Ex. B.

FN19. Tr. 1 at 55:17-56:4.

FN20. Tr. 2 at 75:6-21.

FN21. Id. at 5:2-5; see id. at 75:23-25.

FN22. See id. at 17:20-18:9.

FN23. Id. at 76:2-11.

FN24. Id. at 5:18-20.

FN25. See, e.g., id. at 10:5-11:16, 75:6-22. In connection with one of the “major moves” that Defendant performed for Plaintiff, Defendant provided Plaintiff with a written proposal that stated that Defendant’s liability was limited to a value of sixty cents per pound per item. See Tr. 1 at 40:19-46:22; Def.’s Exs. C, C-1, C-2. Although the move in issue was not a “major move,” Plaintiff was informed of Defendant’s liability- limiting policy on other occasions as well. See, e.g., Tr. 2 at 10:5-11:16, 75:6-22.

FN26. See, e.g., Tr. 1 at 48:16-20, 59:12-15.

FN27. Id. at 50:7-10.

FN28. Def.’s Proposed Findings of Fact ¶ 23; see Def.’s Ex. A. A tariff is “a publication stating the rates and charges between designated points or fixed distances of a common carrier and all rules in connection therewith.” 220 C.M.R. 260.02.

FN29. See Def.’s Ex. A at 3.

FN30. Id.

FN31. Def.’s Proposed Findings of Fact ¶ 23; see Def.’s Ex. B.

FN32. Tr. 1 at 56:7-22.

FN33. Id. at 59:2-5.

FN34. See Tr. 2 at 46:19-47:11.

FN35. See Tr. 1 at 62:4-6.

FN36. Id. at 64:18-65:23; see Def.’s Exs. B, E. It is significant to note that Horn signed a fair number of the more than 200 bills of lading in the “Delivery Acknowledgment” section. See Def.’s Ex. B.

FN37. Def.’s Ex. E.

FN38. Tr. 1 at 66:23-25; see Def.’s Ex. E.

FN39. See Def.’s Ex. E.

FN40. Tr. 1 at 74:11-20.

FN41. See id. at 31:15-32:12. Deignan, at his deposition, stated that the “signature on the bill of lading” served “[j]ust to verify that there was some work done on that particular day.” Tr. 2 at 51:1-8. At trial, however, Deignan testified that “one of the purposes [of the bill of lading] is to show that work was done.” Id. at 53:9-17 (emphasis added).

FN42. Def.’s Ex. B.

FN43. See Def.’s Conclusions of Law ¶ 11.

FN44. Pl.’s Proposed Findings of Fact ¶ 30.

FN45. See Tr. 1 at 31:15-32:12, 74:11-20; Pl.’s Proposed Findings of Fact ¶¶ 17, 22.

FN46. See 49 U.S.C. § 14501(c)(3)(A).

FN47. Section 7-309(2) represents the codification of the long- standing principle in Massachusetts law that a carrier’s liability for damages to a shipper’s property may be limited by the terms of an agreement between the parties. See, e.g., Boynton v. Am. Express Co., 221 Mass. 237, 108 N.E. 942, 943 (Mass.1915).

FN48. Mass. Gen. Laws ch. 106, § 7-102(e).

FN49. Mass. Gen. Laws ch. 106, § 1-201(15).

FN50. § 7-309(2); see Def.’s Ex. B.

FN51. § 7-309(2); see §§ 7-102(e), 1-201(15).

FN52. § 7-309(2). In New York, which has adopted a statute identical to § 7-309(2), it is well established that common carriers “may … limit liability based on their own negligence to declared value, if the shipper is given a choice of rates depending on the [shipper’s] valuation of the goods.” ABN AMRO Verzekeringen BV v. Geologistics Americas, Inc., 253 F.Supp.2d 757, 765 (S.D.N.Y.2003) (emphasis added); see also Nat’l Blouse Corp. v. Felson, 274 A.D. 164, 79 N.Y.S.2d 765, 767- 68 (1st Dep’t 1948) (“The established rule is that a common carrier cannot make a valid contract exempting itself from damages for negligence, and that such is the effect of a clause in a bill of lading fixing a maximum liability for loss in transit, unless the shipper is given a choice of rates depending on his valuation of the goods.”) (emphasis added). In this case, Defendant charged Plaintiff the rate that it charged because Plaintiff did not declare that the disk array had a value greater than sixty cents per pound. If Plaintiff had declared that the disk array had a value greater than sixty cents per pound, it would have been charged a higher rate. The rate that Defendant charged Plaintiff was, therefore, dependent upon Plaintiff’s valuation of the disk array.

FN53. Def.’s Proposed Findings of Fact ¶ 23; see Def.’s Ex. A.

FN54. § 7-309(2).

FN55. To be sure, there is a dispute over whether this court should allow Defendant to rely on its Tariff. Plaintiff insists that because “Defendant failed to follow the terms of its … Tariff,” it should not now be permitted to rely on it. See Pl.’s Proposed Findings of Fact ¶¶ 30-31. But, because Plaintiff was both “afforded an opportunity to declare” that the disk array had a higher value and “advised of” that opportunity, the dispute concerning Defendant’s Tariff is immaterial.

FN56. Def.’s Ex. A at 3.

FN57. Def.’s Ex. E (emphasis added).

FN58. See id.

FN59. See Tr. 1 at 48:16-20, 59:12-15.

FN60. Id. at 50:7-10, 79 N.Y.S.2d 765.

FN61. See Def.’s Ex. B.

FN62. See id. (emphasis added). On a few prior occasions, Horn initialed the provision that appears in the text. See Def.’s Exs. D-1, D-2, D-3.

FN63. See supra note 55.

FN64. See Mech. Tech. Inc. v. Ryder Truck Lines, Inc., 776 F.2d 1085, 1089 (2d Cir.1985) (“When a sophisticated shipper … leaves blank the space provided for declaring the released value of the goods, we will presume that he did so deliberately with full knowledge of the consequences under the applicable tariff.”); Hollingsworth & Vose Co. v. A-P-A Transp. Corp., 158 F.3d 617, 620 (1st Cir.1998) (holding that the shipper, “in leaving the declaration space blank in the bill of lading, agreed-by virtue of the tariff’s ‘unless[ a different value is declared’] clause-to” the limitation of liability that was stated in the carrier’s tariff).

FN65. In actuality, Plaintiff had a greater opportunity to declare a higher value than most shippers, as the damages it suffered were not speculative at the time it was “afforded an opportunity to declare” a higher value. Before Horn was given the bill of lading to sign, the following comments had been written on it: “Main Frame was dropped off of tailgate [and] fell to the ground–the extent of the damage at this time is not known. The outside has been damaged–do not know about the inside.” Def.’s Ex. E.

FN66. See Hollingsworth & Vose Co., 158 F.3d at 620 (“[T]he ordinary law of contracts … makes a party pretty much responsible for whatever he or she signs ….”); Lee v. Allied Sports Assocs., Inc., 349 Mass. 544, 209 N.E.2d 329, 333 (Mass.1965) (“It is the rule in this Commonwealth that the failure to read or to understand the contents of a release, in the absence of fraud or duress, does not avoid its effects.”).

FN67. But see Nat’l Blouse Corp. v. Felson, 274 A.D. 164, 79 N.Y.S.2d 765, 767-68 (1st Dep’t 1948) (“The established rule is that a common carrier cannot make a valid contract exempting itself from damages for negligence, and that such is the effect of a clause in a bill of lading fixing a maximum liability for loss in transit, unless the shipper is given a choice of rates depending on his valuation of the goods.” ) (emphasis added).

FN68. See Hollingsworth & Vose Co., 158 F.3d at 620; Lee, 209 N.E.2d at 333.

FN69. ABN AMRO Verzekeringen BV v. Geologistics Americas, Inc., 253 F.Supp.2d 757, 768 (S.D.N.Y.2003).