United States Court of Appeals, Eleventh Circuit.

WERNER ENTERPRISES, INC., Plaintiff Counter Defendant, Third Party Plaintiff, Appellee, Ace Seguros SA, Consol. Plaintiff Appellant,

v.

WESTWIND MARITIME INTERNATIONAL, INC., Westwind International, Inc., Defendants Counter Defendants Third Party Defendants Appellees, Transpro Logistics, Inc., Defendant Counter Claimant Third Party Defendant Appellee.

Jan. 12, 2009.

ANDERSON, Circuit Judge:

In this case, Ace Seguros, S.A. (“Ace”) sued Werner Enterprises, Inc. (“Werner”) to recover the full value of a shipment of lost cell phones under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (“  Carmack Amendment”). The district court, in a summary judgment ruling in favor of Werner, sustained Werner’s limitation of its liability. Ace appeals.

Communicaciones Nextel de Mexico, S.A. de C.V. (“Nextel”) had the cell phones manufactured, and arranged through intermediaries to have Werner, a common carrier, transport them. Nextel insured the full value of its shipments through Ace, its insurance company. The cell phones were stolen during transit. Ace paid Nextel’s claim for the loss, and was subrogated to the interests of Nextel.

The primary issue in this case involves the validity of Werner’s limitation of its liability (to $200,000). That issue in turn depends on whether this case is distinguishable from the Supreme Court’s decision in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004). We determine that Kirby is not distinguishable. Ace also argues that Werner did not take the steps necessary under the Carmack Amendment to limit its liability. We conclude that the contractual limitation of liability here complied with the applicable statutory requirements. Finally, Ace argues that the district court applied an incorrect rate of prejudgment interest. We find no error. Accordingly, for the reasons set forth in greater detail below, we affirm.

I. BACKGROUND

In 1999 or 2000, Nextel began using Westwind Maritime International, Inc. and Westwind International, Inc. (collectively “Westwind”) to arrange for the transportation of cell phones from a Motorola plant in Plantation, Florida to a customs broker in Texas. Westwind brokered approximately one shipment a week of Motorola cell phones for Nextel from Florida to Texas.

The invoice for Westwind’s services (“Invoice”), the only contract between Nextel and Westwind, notified Nextel that third parties carriers might limit their liability for loss. Paragraph 7 of the Invoice stated:

Declaring Higher Value to Third Parties. Third parties to whom the goods are entrusted may limit liability for loss or damage; the Company will request excess valuation coverage only upon specific written instructions from the Customer, which must agree to pay any charges therefore; in the absence of written instructions or the refusal of the third party to agree to a higher declared value, at Company’s discretion, the goods may be tendered to the third party, subject to the terms of the third party’s limitations of liability and/or terms and conditions of service.

Nextel received this standard shipping invoice approximately 250 times prior to the loss at issue.

Beginning around 2000, Westwind periodically arranged for carriage of the Motorola cell phones through Transpro Logistics (“Transpro”). In November of 2000, Transpro entered into a Broker Transportation Agreement (“BTA”) with Werner. The BTA governed the general business relationship between the parties. Paragraph 6 contained the following limitation of liability clause:

Carrier’s liability for loss, damage or injury to cargo occurring while in the possession or under the control of Carrier hereunder, and resulting from Carrier’s performance of the services provided for in this Agreement, shall be the same standard of liability imposed by 49 U.S.C. Section 14706 and applicable common law. Provided, that the Carrier’s maximum liability for loss or damage to cargo shall not in any event exceed Two Hundred Thousand Dollars ($200,000) per truckload shipment unless a higher degree of liability is specifically assumed in writing by an authorized representative of Carrier.

Paragraph 3 of the BTA also incorporated Werner’s tariff, and item 380 of the tariff includes the following provision:

On domestic shipments within the United States of America and Canada, shippers may, at their option, select liability coverage for loss or damage to cargo as set forth in 49 U.S.C. § 14706 (“  Carmack Liability”) as provided in item 385. If Carmack Liability is not selected, Carrier’s liability for loss or damages to shipments within the United States and Canada is limited to the lesser of (1) the actual value of the cargo so lost or damaged, or (2) a maximum of Two Hundred Thousand Dollars ($200,000) per truckload shipment.

Item 385 of the tariff states:

Title 49 U.S.C. § 14706 provides for full value liability and other liability terms for the carrier and shipper regarding loss and damage to cargo. In order for the full liability terms of the provision to apply to any shipment transported by Carrier the shipper must comply with all of the following requirements:

1. The shipper must notify Carrier no less than seventy-two (72) hours prior to pickup of the shipment for transportation that the shipper chooses Carmack Liability protection.

2. The shipper must have prepaid the Carmack Liability rate which is computed as (a) the rate quoted to shipper in writing, or in the absence of a specific written quotation, the rate contained in Carrier’s standard rate matrix, plus (b) two hundred fifty percent (250%) of said rate.

3. The shipping instructions on the bill of lading or shipping document must specifically note: (a) that the shipment is moving under 49 U.S.C. § 14706 full liability terms, and (b) that the shipment is subject to Carmack Liability rates.

(emphasis in original). Nextel never requested full liability coverage from Westwind for any shipment. Thus, Westwind never requested full liability coverage from Transpro, which never invoked the provisions of item 385 in Werner’s tariff. Nextel insured the full value of all its shipments through Ace.

On October 8, 2004, a shipment of 7,958 cell phones valued at approximately $1,251,673.30 was stolen from one of Werner’s trucks. At Nextel’s request, the lost shipment was carried under a Motorola manifest signed by the Werner driver. The district court granted summary judgment in favor of Ace as to liability for the lost shipment. However, the district court also granted Werner’s motion for summary judgment as to limitation of liability and entered a judgment in the amount of $200,000.Ace appeals the latter ruling.

II. DISCUSSION

Two Supreme Court precedents go a long way toward resolving this dispute. First, we will discuss these decisions and the manner in which they foreclose many of Ace’s arguments. We then turn to the requirements under the Carmack Amendment to limit liability. Finally, we discuss the appropriate rate of prejudgment interest.

A. Cargo Owners (i.e.Shippers) are Bound by Liability Limitations Negotiated Between an Intermediary and a Carrier

In Norfolk Southern Railway Co. v. Kirby, the Supreme Court set an efficient default rule for liability limitations in carriage contracts: “When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.”  543 U.S. 14, 33, 125 S.Ct. 385, 398, 160 L.Ed.2d 283 (2004). Kirby hired International Cargo Control (“ICC”) to arrange for the shipment of machinery from Australia to Huntsville, Alabama. Kirby accepted a contractual liability limitation in ICC’s bill of lading. Id. at 19, 125 S.Ct. at 390. Then, ICC hired Hamburg Sud to transport the cargo from Australia to Savannah and on to Huntsville, and accepted an even greater limitation of liability in Hamburg Sud’s bill of lading. Next, Hamburg Sud hired Norfolk Railway to transport the machinery from Savannah to Huntsville. A “Himalaya Clause” extended the limited liability in Hamburg Sud’s bill of lading to Norfolk.Maritime law governed all the contracts. The Norfolk train derailed causing extensive damage to the cargo. Kirby sued Norfolk for the full value of its loss. Norfolk invoked the limitation of liability in Hamburg Sud’s bill of lading. Id. at 21, 125 S.Ct. at 391-92. Applying its default rule, the Court held that the limitation of liability in Hamburg Sud’s bill of lading bound Kirby. Id. at 34-36, 125 S.Ct. at 399-400.In doing so, the Court sought to eliminate the need for carriers to commit time and effort investigating long chains of parties and agreements, thereby potentially causing higher shipping rates. Id. at 34-35, 125 S.Ct. at 399. Furthermore, the Court found the rule equitable. Id. at 35, 125 S.Ct. at 399. Kirby retained the option to sue ICC under the terms it negotiated in ICC’s bill of lading. Id.

The Supreme Court expressly derived its holding from Great Northern Railway Co. v. O’Connor, 232 U.S. 508, 34 S.Ct. 380, 58 L.Ed. 703 (1914).See  Kirby, 543 U.S. at 33, 125 S.Ct. at 398. O’Connor employed the Boyd Transfer Company to arrange for the shipment of some of her personal effects from Minnesota to Oregon. The Boyd Company used Great Northern to transport the cargo. Great Northern’s tariff stated that household goods with a value not to exceed $10 per hundredweight were shipped at a rate of $1 per hundredweight. The railroad’s bill of lading, signed by the Boyd Company, indicated that O’Connor’s cargo was shipped on the $1 rate and released at a value of $10 per hundredweight. The goods were lost en route and O’Connor sued Great Northern to recover their full value. Great Northern invoked the limitation of liability in its tariff and bill of lading. Great Northern, 232 U.S. at 509-510, 34 S.Ct. at 381. The Court held that “the carrier had the right to assume that the transfer company could agree upon the terms of the shipment.”  Id. at 514,34 S.Ct. at 383.The plaintiff’s remedy for loss beyond the amount of the limitation was against the Boyd Company. Id.

These cases guide us to dispose of and foreclose several of Ace’s arguments, as follows. First, Kirby’s teaching is not limited to maritime law. Kirby expressly derived its holding from Great Northern, a non-maritime case.Furthermore, the principles of fairness and efficiency animating the Kirby rule are not unique to the maritime context. As evidenced by the circumstances of this case, contracts for carriage on land as well as sea may involve extended chains of parties and agreements. Thus, the benefits of allowing carriers to rely on limitations of liability negotiated by intermediaries are equally as great here as under maritime law.

Second, Westwind’s failure to negotiate a liability limitation with Transpro does not affect the application of the Kirby rule. In Kirby, each intermediary negotiated a limitation of liability with the party immediately downstream. See  Kirby, 543 U.S. at 18-21, 125 S.Ct. at 390-91. Here, Transpro and Westwind did not negotiate a limitation of liability. As a consequence, Ace argues that contracts downstream from this “gap” cannot be imputed back to Nextel. However, the holding in Kirby did not depend on each party’s negotiation of a liability limitation. In fact, the rule expressly made such interactions irrelevant. Carriers do not need to investigate upstream contracts. They are entitled to assume that the party entrusted with goods may negotiate a limitation of liability. To hold otherwise would defeat the principle of efficiency that motivated the Kirby holding. Moreover, this again produces an equitable result. The cargo owner retains the option to sue the intermediary who failed to protect itself by negotiating a liability limitation.

Ace relies heavily on Atkins Machinery v. CH Powell Co., Inc., 455 F.Supp.2d 461 (D.S.C.2006), to bolster its argument. However, Atkins provides no support for Ace’s position.In Atkins, the plaintiff contracted with a freight forwarder to make arrangements for the transportation of some of its machinery. The freight forwarder contracted with D.M. Consol Line (“DML”) to charter space on an American President Lines (“APL”) vessel. APL hired Cooper, L.L.C. (“Cooper”) to perform stevedore services. Cooper negligently damaged the machinery. The plaintiff sued Cooper to recover damages. Cooper sought to limit its liability under the terms of APL’s standard bill of lading. Id. at 463.The district court rejected this argument because Cooper failed to show that DML and APL intended APL’s standard bill of lading to apply to the handling of the particular machinery that was damaged.Id. at 469-70.In fact, the district court found that there was no evidence DML and APL negotiated any limitation of liability with respect to this particular machinery. Thus, Atkins stands for the unremarkable proposition that Cooper could not limit its liability under a contract none of the parties ever agreed would govern the handling of the cargo at issue. In other words, Cooper was entitled to no limitation of liability where Cooper had no contract (nor was a beneficiary of any contract) entitling it to do so.

Ace makes a strained to attempt to argue that this opinion, decided after Kirby, supports the assertion that each intermediary must negotiate a limitation of liability. Just as DML and APL failed to negotiate a limitation of liability, Ace argues that Westwind and Transpro also failed to negotiate for a limitation. According to Ace, because Transpro failed to negotiate a limitation of liability with Westwind, Transpro was no longer “empowered” under traditional agency principles to negotiate a limitation of liability with Werner. Atkins does not stand for such a sweeping proposition, which, as discussed above, would be squarely inconsistent with the holding and rationale of Kirby. Atkins merely states the common sense rule that in order to limit a cargo owner’s recovery the intermediary and the carrier must agree to some limitation of liability.

B. A Carrier Must Give a Cargo Owner or Its Intermediary a Reasonable Opportunity to Choose Between Two or More Levels of Liability

Under the Carmack Amendment, a carrier of property in interstate commerce is liable for “the actual loss or injury to the property caused by” the carrier. 49 U.S.C. § 14706(a)(1). However, a carrier may limit its liability “to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.”Id.  § 14706(c)(1)(A). The Eleventh Circuit uses a four-step inquiry to determine whether a carrier has effectively limited its liability under the Carmack Amendment. A carrier must: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission, (2) give the shipper a reasonable opportunity to choose between two or more levels of liability, (3) obtain the shipper’s agreement as to the choice of liability, and (4) issue a receipt or bill of lading prior to moving the shipment. Sassy Doll Creations, Inc. v. Watkins Motor Lines, 331 F.3d 834, 838-39, 841 (11th Cir.2003). Ace claims that Werner did not meet the second element of this test. We disagree.

In Sassy Doll, the reasonable opportunity to choose was also in dispute.There, the shipper brought an action against the carrier to recover damages for the full value of a lost shipment of perfume. Id. at 836.The carrier’s tariff required the shipper to indicate in writing on the bill of lading the total dollar amount of excess liability coverage requested. The bill of lading contained a declared value box, where the shipper filled in the actual value of the perfume.However, the bill of lading did not contain a section for the shipper to insert a request for additional coverage.Id. at 837-38.Accordingly, this Court found: “Forcing the shipper to express a choice where there is no proper place to do so is not providing the shipper with a reasonable opportunity to choose.”Id. at 843.

Relying on this authority, Ace argues that-contrary to the requirement of Sassy Doll that the shipper must have an opportunity to choose a higher level of liability-the BTA gave the carrier, rather than the shipper, the power to assume a higher amount of coverage. According to Ace, this is the same type of illusory choice seen in Sassy Doll.Ace relies on Paragraph 6 of the BTA, which states: “Carrier’s maximum liability for loss or damage to cargo shall not in any event exceed Two Hundred Thousand Dollars ($200,000) per truckload shipment unless a higher degree of liability is specifically assumed in writing by an authorized representative of Carrier.”However, we do not read the BTA as Ace urges. Paragraph 6 must be read in conjunction with Paragraph 3, which incorporates the terms of Werner’s tariff. The tariff states: “shippers may, at their option, select liability coverage for loss or damage to cargo as set forth in 49 U.S.C. § 14706 (‘  Carmack Liability’) as provided in item 385.”These terms can be readily reconciled. Thus, under the BTA, the shipper is given the opportunity to elect full liability coverage by completing the steps listed in item 385 of the tariff, paying the increased freight rate and obtaining the carrier’s authorization in writing. Contrary to Ace’s argument, in this case it is the shipper (or Transpro, the shipper’s agent to select limited liability pursuant to Kirby) who ultimately has the power to elect higher coverage.The carrier simply has the right to approve the request and charge a correspondingly higher rate.

We also disagree with Ace’s assertion that the shipping document itself must include the choice of rates in order for the shipper to have a reasonable opportunity to choose between them. Our decision in Siren, Inc. v. Estes Express Lines, 249 F.3d 1268 (11th Cir.2001), forecloses this argument. In Siren, the shipper sued the carrier for the full value of a lost shipment of razor blades. The shipper prepared the bill of lading. It indicated that the shipment would travel under “Class 85,” a designation commonly understood throughout the trucking industry to limit a carrier’s liability to $11.87 per pound. Furthermore, the carrier’s tariff stated that Class 85 shipments included a liability limitation of $11.87 per pound. Id. at 1269.The question before this Court was whether the bill of lading could limit the carrier’s liability if it did not incorporate by reference the carrier’s tariff, and choice of liability limitations. Id. at 1270.We referred to the statute itself that allowed a carrier to limit its liability, by “written agreement between the carrier and the shipper.”Id. at 1270 (quoting 49 U.S.C. § 14706(c)(1)(A)). We held:

The statute merely requires that the carrier and shipper agree in writing to a reasonable value, above which the carrier will not be liable. In other words, the statute requires nothing more than a valid written contract between the parties establishing a reasonable value for the purpose of limiting the liability of the carrier.

Id. at 1271 (citation omitted).

We were particularly persuaded by the fact that the shipper drafted the bill of lading. Id. In fact, we have consistently been reluctant to protect a sophisticated shipper from itself when it drafts a shipping document. See  Sassy Doll, 331 F.3d at 843 (“Our sympathy does not go out to the drafter of a bill of lading who blames another party for the results that flow from defects in that document”); Swift Textiles, Inc., v. Watkins Motor Lines, Inc., 799 F.2d 697, 704 (11th Cir.1986) (holding that the shipper could not complain that it did not have actual notice of a tariff provision incorporated by reference in a shipping document prepared by the shipper’s own agent).

The facts of this case are analogous. Nextel requested the use of the Motorola manifest rather than a bill of lading as the shipping document. We are not persuaded by the allegations of defect in that document. Werner and Transpro entered into the BTA, a valid written contract, which incorporated Werner’s tariff and provided that each shipment was “deemed to move on a uniform straight bill of lading” as contained in Werner’s tariff. The tariff limited Werner’s liability to $200,000 per truckload unless Transpro selected higher liability. Moreover, the tariff, in item 385, gave precise instructions to the shipper (or in this case to Transpro, the shipper’s agent to select limited liability pursuant to Kirby) as to how to select a higher level of liability coverage. Therefore, we conclude that Werner and Transpro entered into a written contract providing the shipper with a reasonable opportunity to choose between two or more levels of liability. As we held in Siren, this is all that is required under the Carmack Amendment. The manifest itself did not need to include the choice of levels of liability and rates; that choice was provided in a separate written contract, and Transpro chose not to increase the liability for this shipment or any of its shipments on behalf of Nextel. Thus, the requirements of the Carmack Amendment, as laid out in Sassy Doll, are satisfied.

C. The Rate of Prejudgment Interest

[10][11][12] The district court’s decision to award prejudgment interest is reviewed for abuse of discretion. In Re Int’l Admin. Serv., Inc. v. Northern, 408 F.3d 689, 709 (11th Cir.2005).“In the absence of a controlling statute, the choice of a rate at which to set the amount of prejudgment interest is also within the discretion of a federal court.”  Id. at 710;see also  Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1447 (11th Cir.1998).“That decision is ‘guided by principles of reasonableness and fairness, by relevant state law, and by the relevant fifty-two week United States Treasury bond rate, which is the rate that federal courts must use in awarding post-judgment interest.’”In Re Int’l Admin. Serv., Inc., 408 F.3d at 710 (quoting Indus. Risk Insurers, 141 F.3d at 1447 (citing 28 U.S.C. § 1961)).0 The district court used as guidance the rate that federal courts use in awarding post-judgment interest. Ace presented no evidence to show that this was unfair or an abuse of discretion. Accordingly, we find no error.

III. CONCLUSION

For the foregoing reasons, we affirm the district court’s entry of summary judgment as to limitation of liability in favor of Werner.

AFFIRMED.

FN* Honorable Maurice B. Cohill, Jr., United States District Judge for the Western District of Pennsylvania, sitting by designation.

We review the entry of summary judgment de novo. See  Whately v. CNA Ins. Co., 189 F.3d 1310, 1313 (11th Cir.1999). Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine issue of fact and compels judgment as a matter of law. Id.;Fed.R.Civ.P. 56(c).

Ace’s remaining arguments are dismissed without need for further discussion.

Himalaya Clauses extend liability limitations to downstream parties, in this case to “all agents … (including inland) carriers … and all independent contractors whatsoever.”  Kirby, 543 U.S. at 20-21, 125 S.Ct. at 391.

Ace’s attempt to distinguish Great Northern fails. When the Supreme Court decided Great Northern, the law required carriers to file tariffs for household goods with the Interstate Commerce Commission. Interstate Commerce Act, ch. 104 § 6, 24 Stat. 379, 381 (1887); see also  Great Northern, 232 U.S. at 511, 34 S.Ct. at 382. Ace contends that the act of filing the tariff gave cargo owners notice of its liability limitations. However, the ICC Termination Act of 1995 eliminated the tariff filing requirement for household good carriers. SeePub.L. No. 104-88, 109 Stat. 803, 868-69 (codified at 49 U.S.C. § 13702). As a result, Ace argues that the Supreme Court’s reliance on Great Northern no longer justifies the expansion of Kirby into non-maritime law because cargo owners no longer have notice of liability limitations in carriers’ tariffs. This argument cannot succeed. Merely filing a tariff does not give a cargo owner notice of liability limitations because the cargo owner remains unaware if its intermediary actually selects the limited liability rate. In fact, this was the exact factual circumstance in Great Northern. 232 U.S. at 510, 34 S.Ct. at 381. Furthermore, Kirby was decided in 2004, long after the tariff filing requirements were altered in 1995. In relying on Great Northern, the Supreme Court gave no indication that its holding was affected by the change in tariff filing requirements. Thus, Ace asserted no persuasive reason for limiting to decline to extend Kirby to beyond maritime cases.

Moreover, Atkins is a federal district court decision from another Circuit, and would not be binding in any event.

The Trucking Industry Regulatory Reform Act of 1994, Pub.L. No. 103-311, 108 Stat. 1673, and the ICC Termination Act of 1995 (“ICCTA”), Pub.L. No. 104-88, 109 Stat. 803, made several statutory changes that alter the first prong of this test. First, ICCTA abolished the Interstate Commerce Commission (“ICC”) and replaced it with the Surface Transporation Board. Second, these Acts eliminated the requirement that certain carriers file tariffs with the ICC, and substituted the requirement that a carrier provide a shipper, on request, with “a written or electronic copy of the rate, classification, rules, and practices, upon which any rate applicable to its shipment or agreed to between the shipper and carrier is based.”49 U.S.C. § 13710(a); see  Sassy Doll, 331 F.3d at 841. In other circumstances carriers are now required to file tariffs with the Surface Transportation Board. See49 U.S.C. § 13702.

Sassy Doll, decided in 2003, resolved a direct dispute between a carrier and a cargo owner. By virtue of Kirby, decided in 2004, the second element is now satisfied if the carrier gives the cargo owner or its intermediary notice and a reasonable opportunity to choose between two or more levels of liability. Ace’s insistence that the second element of Sassy Doll requires that the carrier not only give such notice of liability limitations to the intermediary with whom the carrier deals, but also requires the carrier to give such notice to each intervening intermediary (and ultimately to the owner or shipper) is inconsistent with the Supreme Court’s ruling in Kirby.“[W]hen it comes to liability limitations for negligence resulting in damage, an intermediary can negotiate reliable and enforceable agreements with the carriers it engages.”  Kirby, 543 U.S. at 33, 125 S.Ct. at 398. Contrary to Ace’s argument, Kirby eliminated the need for carriers to investigate the long chain of intermediaries. Id. at 34-35, 125 S.Ct. at 399. Moreover, although not necessary under Kirby, Nextel did have notice of the liability limitation. Paragraph 7 of Westwind’s Invoice expressly stated that downstream intermediaries might limit liability.

As noted in the text, in Sassy Doll, the shipper indicated on the bill of lading the full value of the shipped goods, thus fulfilling a major portion of the process to select full liability coverage under the carrier’s tariff. Unlike Sassy Doll, in the instant case no one on behalf of Nextel ever indicated to Werner what the full value of the goods was or that full liability coverage was sought. Transpro did not do so in its written agreement with Werner. Neither Nextel nor its manufacturer, Motorola, so indicated. The manifest under which the goods were carried was silent in this regard.

Transpro of course was party to the BTA and also possessed a copy of Werner’s tariff which was incorporated.

0. In Sunderland Marine Mutual Insurance Co. v. Weeks Marine Construction Co., 338 F.3d 1276, 1280 (11th Cir.2003), we held, in that admiralty case, that the rate of prejudgment interest that should be awarded is the prime rate during the relevant period. As evidenced by the pre-Sunderland case cited in the text, and other binding pre-Sunderland cases, district courts have long had discretion in this circuit to set the rate of prejudgment interest in both maritime and non-maritime contexts. See also  Kilpatrick Marine Piling v. Fireman’s Fund Ins. Co., 795 F.2d 940, 947 (11th Cir.1986) (holding that admiralty courts have discretion in setting the rate of prejudgment interest). Because panels prior to the decision in Sunderland had held that the choice of a rate for prejudgment interest is within the discretion of the district court, we need not address the binding effect of Sunderland, even in a maritime case. We hold only that in this non-maritime case, Sunderland is not binding, and the district court did not abuse its discretion.

NOT FOR PUBLICATION

United States District Court, D. New Hampshire.

George TSIATSIOS

v.

ANHEUSER-BUSCH, INC.

Civil No. 07-CV-003-JL.

Jan. 16, 2009.

Michael J. Sheehan, Sheehan Law Office, Concord, NH, for George Tsiatsios.

Arthur G. Telegen, Foley Hoag LLP, Boston, MA, Lawrence S. Smith, Ransmeier & Spellman, Concord, NH, for Anheuser-Busch, Inc.

ORDER

JOSEPH N. LAPLANTE, District Judge.

The plaintiff, George Tsiatsios, sued Anheuser-Busch, Inc. in New Hampshire Superior Court alleging intentional interference with contractual relations. Tsiatsios claimed that one of Anheuser-Busch’s managers intentionally and improperly interfered with his employment at Gauthier Farm Enterprises, Inc. (Gauthier Farm). Anheuser-Busch removed the case to this court, see28 U.S.C. § 1441, and moved for summary judgment. SeeFed.R.Civ.P. 56. The court has jurisdiction under 28 U.S.C. § 1332 (diversity). After oral argument, and for the reasons set forth below, the court grants Anheuser-Busch’s motion.

I. APPLICABLE LEGAL STANDARD

Summary judgment is appropriate where “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”Fed.R.Civ.P. 56(c); see Dávila v.  Corporación De P.R. Para la Difusión Pública, 498 F.3d 9, 12 (1st Cir.2007).“The object of summary judgment is to pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required.”Id. (internal quotation omitted). A trialworthy issue of fact, however, “does not spring into being simply because a litigant claims that one exists.”  Griggs-Ryan v.. Smith, 904 F.2d 112, 115 (1st Cir.1990).“[T]he nonmoving party must produce hard evidence of a material factual dispute to survive a summary judgment motion.”  U.S. v. 6 Fox Street, 480 F.3d 38, 42 (1st Cir.2007) (internal citation omitted).

In making this determination, the “court must scrutinize the record in the light most flattering to the party opposing the motion, indulging all reasonable inferences in that party’s favor.”  Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1st Cir.2003). The following facts are set forth in accordance with that standard.

II. BACKGROUND

Anheuser-Busch, the defendant, brews beer at its Merrimack, New Hampshire plant. Beer fermentation, the process which gives beer its alcohol content and carbonation, creates a grain byproduct commonly known in the industry as “spent grain.” To dispose of that grain, Anheuser-Busch contracted with Blue Sky Ag Marketing (Blue Sky)  to purchase and oversee spent grain removal from the Merrimack brewery. Over the years, Blue Sky has subcontracted with various trucking companies to haul the spent grain from the brewery to its customers at local farms.

Blue Sky is a grain by-products broker. It sold the spent grain to farmers throughout New England as cattle feed.

Starting in 2000, George Tsiatsios worked for Elgin Cartage, Ltd., as a tractor-trailer truck driver, then for Milford Transportation, Inc., and then Gauthier Farm Enterprises, Inc. as each company assumed the hauling contract with Blue Sky. With each trucking company, Tsiatsios’ job responsibilities included driving onto Anheuser-Busch’s property, monitoring the grain levels in the brewery’s storage tanks, loading the spent grain onto his truck, and hauling the grain to Blue Sky’s customers. As Tsiatsios was repeatedly made aware, Anheuser-Busch promulgated safety and security rules requiring truck drivers such as himself to wear identification badges, hard hats, safety glasses, and earplugs while on brewery property. By his own concession, Tsiatsios understood that a failure to comply with these rules would result in his being banned from the brewery. For example, Tsiatsios acknowledges that in early 2004, soon after another grain driver suffered an eye injury at the brewery, Tsiatsios received a memo from his employer at the time, Milford Transportation, advising:

Any driver that is observed not wearing safety equipment and their ID badge at the brewery will be banned from entering the brewery.

If you are banned from the brewery, you will not have a job. We cannot load for you.

This is a very serious matter and could result in loss of the contract by Milford Transportation or Blue Sky Ag North. No exceptions will be considered.

In the four months preceding Tsiatsios’ termination alone, Blue Sky and Milford Transportation reminded him of Anheuser-Busch’s safety and security rules, and stressed the importance of adhering to them, on at least five separate occasions.

Tsiatsios began driving for Gauthier Farm on July 1, 2004, but was terminated four days later following an altercation with Roland Vance, Anheuser-Busch’s resident health and safety manager. That morning, Tsiatsios drove his truck to the Anheuser-Busch brewery to pick up spent grain, just as he had on numerous prior occasions for Gauthier Farm and its predecessor haulers, and waited in a nearby control room for his truck to fill with grain. Soon thereafter, Vance entered this room and found Tsiatsios, who he did not know, without an identification badge  and wearing aviator sunglasses that did not comply with the brewery’s policy on protective eyewear.Vance introduced himself and explained that he worked for Anheuser-Busch. While the two men had not previously met, Tsiatsios was aware that a man named “Roland Vance” worked for Anheuser-Busch and had “something to do with safety.”

Prior to his encounter with Vance, Tsiatsios claims to have spoken with a security guard at the brewery about obtaining an identification badge, but had been told that security personnel were out of “blanks.”

Tsiatsios acknowledges having read the specific portion of one memo advising him “that prescription eye glasses or sunglasses are not a substitute for safety glasses.”Milford Transportation had previously issued Tsiatsios the required safety glasses, but he was not wearing them at the brewery that day.

Vance then asked Tsiatsios who he was, why he was on Anheuser-Busch property, and how he had gotten into the grain loading area. Tsiatsios repeatedly refused to identify himself to Vance, and would only reveal that he was at the brewery to load grain. Following a brief discussion regarding the appropriateness of the sunglasses he was wearing, Tsiatsios walked out of the room while Vance was still asking him questions, ignoring or disregarding Vance’s requests that he stop.

While claiming to have left the control room to check on the amount of grain in his trailer, Tsiatsios has been unable to provide any explanation for why he continually refused to identify himself. When directly and repeatedly questioned on this point at his deposition, Tsiatsios repeatedly testified only that “I was there to load grain,” and that he did not identify himself “[b]ecause I didn’t.”

Don Paulson, Blue Sky’s director of operations, was at the brewery overseeing the transition from Milford Transportation to Gauthier Farm when he observed Tsiatsios exit the control room followed by Vance. While none of these men were familiar with one another prior to this incident, Paulson did believe that Tsiatsios was one of Gauthier Farm’s grain drivers. Paulson approached Tsiatsios and briefly spoke with him about what had just happened before advising him to put on a proper pair of safety glasses. As Blue Sky’s representative at the brewery, Paulson then introduced himself to Vance and asked for his version of the events. Vance relayed that when he came upon Tsiatsios in the control room he lacked proper safety equipment and, when confronted, refused to identify himself or adequately explain his presence before walking away. Vance then impressed upon Paulson the importance that Anheuser-Busch placed on drivers’ adherence to its safety policies and indicated that Tsiatsios’ behavior-failing to identify himself to an Anheuser-Busch employee and rudely responding when asked to do so-was unacceptable. Paulson informed Vance that he would contact Tsiatsios’ employer about the incident and rectify the situation.

Paulson relayed Vance’s account and his own observations to Chris Gauthier, the vice president in charge of trucking at Gauthier Farm. Paulson informed Gauthier that he did not want Tsiatsios, whom Gauthier had confirmed was the employee in question, back on Anheuser-Busch property. Later, after confirming Paulson’s version of the events with Vance, Gauthier terminated Tsiatsios’ at-will employment with Gauthier Farm.There is no evidence before the court that Vance ever excluded Tsiatsios from the brewery himself or instructed anyone at Blue Sky or Gauthier Farm to do so.

At oral argument, Tsiatsios conceded that there was nothing improper about Gauthier Farm’s termination of his employment.

III. ANALYSIS

Under New Hampshire law, a plaintiff alleging intentional interference with contractual relations must show that “(1) the plaintiff had an economic relationship with a third party; (2) the defendant knew of this relationship; (3) the defendant intentionally and improperly interfered with this relationship; and (4) the plaintiff was damaged by such interference.”  Singer Asset Fin. Co., LLC v. Wyner, 156 N.H. 468, 478 (2007). Anheuser-Busch argues that Tsiatsios has not only failed to present any evidence that it intentionally or improperly interfered with his employment at Gauthier Farm, but that, as a matter of law, it “cannot be held liable in tort where it was acting to protect its legitimate interests, requiring that [Tsiatsios, a business invitee] comply with its known safety and security rules.”Tsiatsios responds that summary judgment should be denied because the record “could support a jury finding that Vance acted intentionally and improperly toward plaintiff.”Specifically, he argues that Vance’s characterization of Tsiatsios’ behavior as unacceptable contained an implicit directive to Blue Sky to ban Tsiatsios from the brewery.

A. Intentional interference

To establish that the defendant’s interference was intentional and improper, a “plaintiff ha[s] to ‘show that the interference with his contractual relations was either desired by the defendant or known by [it] to be a substantially certain result of [its] conduct.’ “ Demetracopoulos v. Wilson, 138 N.H. 371, 374 (1994) (quoting Restatement (Second) of Torts  § 767 cmt. d). Here, the only interference alleged by Tsiatsios consists of Vance’s statements to Paulson regarding what transpired in the control room. The record shows only that Vance, when questioned by Paulson, relayed his version of the events, stressed the importance of following the brewery’s safety procedures in the future, and indicated that Tsiatsios’ actions and behavior were unacceptable. Assuming, arguendo, that affirmatively banning Tsiatsios from the plant would have constituted intentional interference, the record is bereft of any evidence that anyone from Anheuser-Busch actually excluded Tsiatsios from its brewery. Nor is there any evidence that an Anheuser-Busch representative asked anyone at Blue Sky or Gauthier Farm to do the same. Indeed, it is Paulson, Blue Sky’s man on site, who swears in his affidavit-the lone piece of evidence before the court that addresses this aspect of Tsiatsios’ claim-that “I told Mr. Gauthier … that I did not want Tsiatsios back on Anheuser-Busch property.” Paulson unilaterally made the decision to exclude Tsiatsios from the brewery, and there is nothing in the record to suggest the contrary.See  Singer, 156 N.H. at 478 (noting that element of claim is that interference must be intentional).

Tsiatsios’ argument is further attenuated by the fact that Vance’s statements were not made to anyone at Gauthier Farm, but to a representative from Blue Sky.

Tsiatsios argues that Vance’s statements to Paulson were a “thinly veiled code for ‘get rid of that man,’ “ and, therefore, improper. He asks the court to infer that since the brewery’s rules were (according to Tsiatsios) only loosely enforced on drivers, and, because he “followed the well-known and longstanding practice of drivers to not wear the ID tags and safety equipment,” Vance’s statements must have been intended to effect his termination. The underlying premise of this argument, however-that since Anheuser-Busch made little effort to enforce its rules, a termination based upon a purported violation of these rules must have been improper-has no support in the record. Rather, the summary judgment record establishes that Anheuser-Busch made a consistent and concerted effort to ensure the grain drivers’ compliance with its policies. Tsiatsios acknowledges that he and other drivers received numerous notices in the months preceding his termination reminding them that it was necessary to follow the brewery’s safety policies, clarifying any confusion as to what safety equipment was deemed appropriate, and warning that any failure to comply would result in termination. (Defs.’ Mot. for Summ. J. Ex. D-I; Pl.’s Dep. 157, 161, 166-67, 170, 171-72, 173-74, 179.)

Further, even if the court accepted that Anheuser-Busch had ordered Tsiatsios’ exclusion from the brewery, there is no evidence before the court that Anheuser-Busch desired, or was substantially certain, that doing so would result in his termination from Gauthier Farm. Tsiatsios argues that Anheuser-Busch must have been aware of this as “[i]t was common knowledge that trucking companies like Milford and Gauthier existed to service the [ ] brewery and that the drivers for Milford and then Gauthier, like plaintiff, worked exclusively hauling grain.”But his only evidence in support of that assertion is the affidavit of his brother, fellow spent grain hauler Charles Tsiatsios, stating: “It is common knowledge among the drivers, among the security staff at the brewery that we deal with every day, and among the companies that contract with the brewery that if a driver is banned from the brewery that person has just lost his job.”(Charles Tsiatsios Aff. ¶ 10.) Even crediting this affidavit, as generally required on a motion for summary judgment, see  Mulvihill, 335 F.3d at 19;but see  Schubert v. Nissan Motor Corp. in U.S.A., 148 F.3d 25, 30 (1st Cir .1998) (noting that only affidavits based on personal knowledge should be considered by a court ruling on summary judgment); Fed.R.Civ.P. 56(e)(1); Fed.R.Evid. 602, Tsiatsios’ brothers speaks only of grain drivers, security personnel, and trucking companies working at the brewery. He fails to ascribe this “common knowledge” to the only party whose knowledge is relevant to the inquiry; Anheuser-Busch. Thus, the Charles Tsiatsios’ affidavit is not probative of whether the defendant’s conduct was intentional.

It was established at oral argument that security personnel at the Merrimack plant are employed by an outside contractor, and are not Anheuser-Busch’s employees.

As Tsiatsios has failed to present evidence that Anheuser-Busch’s alleged interference with his employment was intentional as that term is understood under the applicable law, Anheuser-Busch is entitled to judgment as a matter of law.

B. Improper interference

As an alternative basis for granting summary judgment, the court notes that even intentional interference, “in itself, is legally insufficient to state a claim. Rather, only improper interference is deemed tortious in New Hampshire.”  Kilty v. Worth Dev. Corp., No. 05-2101 2006 WL 1606174, at(1st Cir. June 13, 2006) (internal citation omitted) (emphasis in original). Under New Hampshire law, interfering with the contractual relations of another is not improper-and, thus, not tortious-where the defendant merely relayed truthful information to a third party, or interfered as a means to protect its own legitimate interests.

Citing the Restatement (Second) of Torts  § 772, New Hampshire courts have long recognized the permissibility of interference with a contract by conveying “truthful information” or “honest advice” to a third person. See, e.g.,  Feeney v. Kressy, No. 05-CV-461-JD, 2006 WL 1081128, at(D.N.H. Apr. 20, 2006) (“New Hampshire … recognizes a privilege for a person to interfere with a contract by giving honest advice to a third person”; Riblet Tramway Co., v. Ericksen Assoc., Inc., 665 F.Supp. 81, 87 (D.N.H.1987) (applying New Hampshire law); Montrone v. Maxfield, 122 N.H. 724, 726 (1982) (“any truthful information or honest advice given by the defendant cannot constitute wrongful interference”). As the Restatement explains, there is nothing improper about intentionally causing a third party to break off a contractual relationship by giving truthful information:

There is of course no liability for interference with a contract … on the part of one who merely gives truthful information to another. The interference in this instance is clearly not improper. This is true even though the facts are marshaled in such a way that they speak for themselves and the person to whom the information is given immediately recognizes them as a reason for breaking his contract or refusing to deal with another.

Restatement (Second) of Torts  § 772 cmt. b (1979). Here, the uncontroverted evidence is that Paulson asked Vance what had happened in the control room. In response, Vance merely provided what he believed-and what Tsiatsios concedes-was truthful information. Apart from the characterization of his behavior as unacceptable, Tsiatsios does not dispute the conclusion that the substance of Vance’s statements was truthful; his argument, instead, is that Vance improperly intended for his comments to result in Tsiatsios’ termination from Gauthier Farm. As explained supra Part III(A), however, this argument has no evidentiary support.

But even assuming, arguendo, that Anheuser-Busch intended to cause Tsiatsios’ termination, New Hampshire law provides that certain conduct, which would otherwise amount to tortious interference with contractual relations, is justified where an employer has acted to protect its own legitimate interests. See, e.g.,  Emery v. Merrimack Valley Wood Prods., Inc., 701 F.2d 985, 989 (1st Cir.1983) (enforcing former employee’s covenant not to compete); Donovan v. Digital Equip. Corp., 883 F.Supp. 775, 788 (D.N.H.1994) (same); Nat’l Employment Serv. Corp. v. Olsten Staffing Serv., 145 N.H. 158, 160 (2000) (enforcing restrictive covenant); Roberts v. General Motors Corp., 138 N.H. 532, 541 (1994) (recognizing franchisor’s legitimate interest in selecting its franchisees); Technical Aid Corp. v. Allen, 134 N.H. 1, 10 (1991). The Restatement, which is cited as authority in a number of the above cases, explains that:

One who, by asserting in good faith a legally protected interest of his own … intentionally causes a third person not to perform an existing contract … does not interfere improperly with the other’s relation if the actor believes that his interest may otherwise by impaired or destroyed by the performance of the contract or transaction.

Restatement (Second) of Torts  § 773. Here, Vance’s statements to Paulson manifested nothing more than Anheuser-Busch’s interest in enforcing its safety and security policies. This interest involves numerous legitimate concerns including public safety, workplace safety, its own economic interests, and, as often is the case, insulation from civil liability.

Tsiatsios has failed to establish a genuine issue of material fact warranting trial. The undisputed facts of this case establish that Anheuser-Busch neither intentionally nor improperly interfered with the employment relationship between Tsiatsios and Gauthier Farm, both of which he must prove to support his claim. See  Singer, 156 N.H. at 478. Anheuser-Busch, therefore, is entitled to judgment as a matter of law. SeeFed.R.Civ.P. 56(c).

IV. CONCLUSION

For the foregoing reasons, the court grants Anheuser-Busch’s motion for summary judgment (document no. 29) on Tsiatsios’ claim for intentional interference with contractual relations. The clerk shall enter judgment accordingly and close the case.

SO ORDERED.

D.N.H.,2009.

Tsiatsios v. Anheuser-Busch, Inc.

Slip Copy, 2009 WL 114557 (D.N.H.), 2009 DNH 009

END OF DOCUMENT