United States District Court,S.D. New York.

AMERICAN HOME ASSURANCE COMPANY a/s/o Oce Printing Systems GmbH, Plaintiff,

v.

KUEHNE & NAGEL (AG & CO.) KG, Defendant and Third-Party Plaintiff,

v.

Alliance Air and Polar Air Cargo, Inc., Third-Party Defendants.

March 26, 2008.

OPINION AND ORDER

DOUGLAS F. EATON, United States Magistrate Judge.

This case arises out of an air shipment from Germany to Illinois in August 2004. The actual air carrier was Polar Air Cargo, Inc. (“Polar”), pursuant to a contract between Polar and Kuehne & Nagel (AG & Co.) KG (“K & N”). After being sued for cargo damage, K & N filed a third-party complaint in June 2007 against (a) Polar and (b) Polar’s ground handling agent Alliance Air (“Alliance”).

K & N concedes that its claim against Polar is barred by the two-year time bar in the Montreal Convention. But K & N argues that the time bar is inapplicable to its claim against Polar’s agent because that agent was not itself an air carrier.

For the reasons set forth below, I reject K & N’s argument and I grant Alliance’s motion for summary judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The following facts are set forth in Alliance’s Local Civil Rule 56.1 Statement (which K & N has not disputed) and the declarations and exhibits cited therein.

On August 5, 2004, K & N, a freight forwarder, issued its House Air Waybill to Océ Printing Systems GMBH (“Océ”). K & N acknowledged that it had received the cargo from Océ. As the contract carrier, K & N agreed to deliver the cargo from Munich, Germany to Chicago, Illinois to the consignee, Caterpillar, Inc. Also on August 5, 2004, K & N contracted with Polar, which agreed to assume all of the responsibilities and duties of the air carriage. Polar issued its Air Waybill, which listed the shipper as “KN Airlift GmbH” and the consignee as “Kuehne & Nagel, Inc.” Alliance (the party that now asserts the two-year time bar) was Polar’s ground handling agent at Chicago’s O’Hare Airport.

On August 9, 2004, the cargo arrived at O’Hare aboard Polar flight 605. Pursuant to Polar’s ground handling agreement, Alliance picked up the cargo from the tarmac and brought it to Alliance’s warehouse within the airport. On August 12, 2004, K & N’s trucking company picked up the cargo from Alliance and delivered it to K & N in Elk Grove, Illinois.

More than two years later, on August 23, 2006, American Home Assurance Company, as the subrogated cargo underwriter for Océ, filed this cargo damage lawsuit against Océ’s contract carrier K & N. On October 12, 2006, K & N filed an Answer and Third-Party Complaint; for reasons unclear to me, K & N named Martinair Holland, N .V. (“Martinair”) as the third-party defendant. On June 11, 2007, plaintiff filed an Amended Complaint which merely added a second theory. On June 12, 2007, K & N filed its Answer to the Amended Complaint and a revised Third-Party Complaint for contribution and indemnification. This Third-Party Complaint no longer named Martinair; instead it sued Polar (the air carrier) and Alliance (Polar’s ground handling agent).

On July 13, 2007, an Answer to the revised Third-Party Complaint was filed by Alliance (technically by International Marketing Consultants Inc., which does business under the Alliance name and which I will continue to refer to as “Alliance”). That same day, Polar, in lieu of filing an Answer, moved to dismiss. Polar’s motion invoked the two-year time bar; K & N filed no opposition, and I dismissed the Third-Party Complaint as to Polar on September 7, 2007.

On September 14, 2007, Alliance moved for summary judgment and invoked the two-year time bar. On September 29, 2007, K & N filed opposition papers, and on October 19, 2007, Alliance filed a reply memorandum.

DISCUSSION

The Montreal Convention “is an entirely new treaty that unifies and replaces the system of liability that derives from the Warsaw Convention.”Ehrlich v. American Airlines, Inc., 360 F.3d 366, 371 (2d Cir.2004); Montreal Convention, Art. 1, 1999 WL 33292734.It became effective in the United States in November 2003 and in Germany in June 2004 (more than a month prior to the Air Waybill contracts in our case). (Alliance’s 56.1 St. ¶¶ 13-14.) The Montreal Convention “applies to all international carriage of persons, baggage or cargo performed by aircraft for reward.”Ehrlich, 360 F.3d at 372.

Article 35(1) of the Montreal Convention says:

The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

Case law regarding the Montreal Convention is quite limited; hence the parties begin by discussing cases that interpreted the identical provision contained in Article 29(1) of the Warsaw Convention.

According to the majority of those cases, the two-year period of limitation “constitutes a condition precedent-an absolute bar-to bringing suit, including third-party actions for contribution and indemnification, not commenced within two years.”Split End Ltd. v. Dimerco Express (Phils) Inc., 1986 WL 2199, at(S.D.N.Y. Feb.11, 1986) (Carter, J.).Split End is directly on point; it ruled that the two-year limit barred contribution and indemnification claims by a contract carrier against (a) the actual air carrier and (b) the air carrier’s ground handling agent at the destination airport. See also Data General Corp. v. Air Express Int’l Co., 676 F.Supp. 538, 540-41 (S.D.N.Y.1988) (Tenney, J.) (the two-year limit barred contribution and indemnification claims against third-party air carrier); Royal Ins. Co. v. Emery Air Freight Corp., 834 F.Supp. 633, 635-36 (S.D.N.Y.1993) (Haight, J.) (same).

K & N concedes that, under both Conventions, the two-year time bar “appl[ies] to suits for indemnity and contribution against a carrier,” and that hence K & N was obliged to drop its claim against the air carrier Polar. (K & N Memo. p. 2.) But K & N argues that the time bar is inapplicable to its claim against Polar’s agent because that agent was not itself an air carrier. K & N cites three cases that ruled the time bar to be inapplicable. Those cases are fairly old, and none of them is directly on point.

1. Connaught Laboratories Ltd. v. Air Canada, 15 Av.Cas. (CCH) 17,795, 17,708, 1978 D.L.R. Lexis 4281 (Ontario High Court of Justice 1978), where a single judge opined that the two-year time bar did not apply to a contribution claim by one air carrier (Air Canada) against another air carrier (Andes Airlines). K & N inaccurately states that Air Canada was claiming against a “non-carrier agent.” (K & N Memo. p. 3.) Moreover, in 1993, Judge Haight wrote: “The limited persuasive value of the Connaught case is plainly outweighed by cases decided in this district and involving suits between carriers that have been held to come under the Warsaw Convention.”Royal Ins. Co., 834 F.Supp. at 634.

2. Mitchell, Shackleton & Co., Ltd. v. Air Express Int’l, Inc., 704 F.Supp. 524, 527-28 (S.D.N.Y.1989) (Kram, J.). In Mitchell, the plaintiff used an air carrier to ship cargo from England to New York. Upon its arrival in New York, the machine was damaged while being off-loaded by the air carrier’s ground handling agent. The plaintiff sued the air carrier, which filed a third-party complaint against its own ground handling agent. Judge Kram accepted Judge Carter’s Split End decision, but she held that the two-year limit was intended to protect carriers and was inapplicable to a third-party complaint for indemnity brought by the actual air carrier against its own non-carrier agent. The case at bar is different in two respects: (1) K & N was not the actual air carrier, and (2) K & N is not suing its own agent.

3. Sabena Belgian World Airlines v. United Airlines, Inc., 773 F.Supp. 1117, 1120 (N.D.Ill.1991), where Judge Conlon followed Mitchell and wrote: “While the Warsaw Convention’s limitations unquestionably applied to the main action against Sabena, the policies underlying the two-year bar would not be served by applying the limitation period to Sabena’s action for reimbursement [against Sabena’s own ground handling agent].”

Those three cases do not detract from the authority of Split End; it was cited with approval by Mitchell, which was then cited with approval by Sabena. Split End is on all fours with our case; Judge Carter ruled that the two-year limit barred a third-party complaint by a contract air carrier against (a) the actual air carrier and (b) the air carrier’s ground handling agent at the destination airport.

K & N muddies Split End’s facts by quoting one sentence from Mitchell where Judge Kram made a tiny error. Referring to Split End and Data General, she wrote: “Unlike these cases, however, third-party defendant Triangle is not an air carrier, but a ground handler.”Mitchell at p. 526.In Split End, however, one third-party defendant was indeed a ground handler. Judge Kram correctly noted this in her preceding paragraph, and again on page 527:

In Split End, the third-party action was initiated by a freight forwarder against the carrier and its [the carrier’s] ground operations agent…. In contrast, this is an indemnification suit by a carrier against its [own] non-carrier agent.

As I stated earlier, Judge Kram accepted the ruling in Split End, and Split End is on all fours with our case.

Mitchell and Sabena made a special exception where an actual air carrier was suing its own agent. But they recognized that settled case law enforced the Warsaw Convention’s limitations against anyone else who sued a carrier’s agent, even though the Warsaw Convention used the term “carrier” without specifically including a carrier’s servants or agents. Mitchell, 704 F.Supp. at 526-27;Sabena, 773 F.Supp. at 1119.

The new Montreal Convention has a new Article 30(1) that specifically extends the conditions and limits of liability to the agents and servants of the air carrier. Article 30(1) states:

If an action is brought against a servant or agent of the carrier arising out of damage to which the Convention relates, such servant or agent, if they prove that they acted within the scope of their employment, shall be entitled to avail themselves of the conditions and limits of liability which the carrier itself is entitled to invoke under this Convention.

Nevertheless, K & N makes two more arguments as to why it should be allowed to sue Polar’s agent even after the two-year time limit has barred its suit against Polar.

First. K & N argues that the protection of Article 30(1) should not be extended to an “agent of the carrier” unless the agent is itself a carrier. But that would be a tortured reading of Article 30(1)’s words: “a servant or agent of the carrier.”No one could possibly argue that a servant of the carrier must himself be a carrier. And the Montreal Convention had no need to talk about an “agent” of a carrier if the agent must itself be a carrier. Moreover, that would be a dramatic departure from the case law that interpreted the Warsaw Convention. True, in Split End the ground handler happened to be an airline (Aer Lingus) but it provided no air carriage to the cargo in question. See Kabbani v. Int’l Total Services, 805 F.Supp. 1033, 1039-40 (D.D.C.1992), where Judge Oberdorfer held that the Warsaw Convention’s liability limits protected the carrier’s independent contractor who supplied security services and took possession of a passenger’s purse at a security checkpoint in the airport prior to departure. See also Waxman v. C.I.S. Mexicana de Aviacion, 13 F.Supp.2d 508, 513-15 (S.D.N.Y.1998), where Judge Cote held that the Warsaw Convention’s liability limits protected a carrier’s agent’s subcontractor which negligently cleaned the airplane prior to departure.

Second. K & N argues that there is a triable issue of fact as to whether Alliance “acted within the scope of [its] employment.”It submits a declaration from its attorney Ernest H. Gelman, who has no personal knowledge but annexes two exhibits. Exhibit A is, he concedes, a copy of the Alliance delivery ticket for the cargo in question. It recites that the shipment was “received in full and apparent good order and condition;” it was signed by K & N’s trucker John Morales and by Alliance’s Sheldon Williams at 19:53. Exhibit B is a copy of a K & N form applying to the U.S. Customs Service for permission to transfer the cargo “to a C.F.S. transfer to Kuehne & Nagel, Inc., 1470 Brummel Ave., Elk Grove Village, IL.”It was signed by John Morales with the date but no time. It was signed at 21:00 by “Dani M[?]” of K & N who noted:

1 SKD CRASHED

SHOCK WATCH IT IS ACTIVE

I would assume that “Dani” examined the cargo in Elk Grove, after it was driven there by K & N’s trucker John Morales. If this were all, the inference would be that Mr. Morales caused the damage. However, although the K & N form had no space allotted for a fourth signature, nevertheless, at the bottom of Exhibit B, someone wrote “1 Box crushed Shock active” and below this is what appears to be the signature of Sheldon Williams, with no date or time. Mr. Gelman asserts that Exhibit A “was presented to Mr. Morales for signature before the cargo was transferred from the Alliance Air warehouse to his truck.”

Even if we were to assume this to be true, and even if Mr. Williams were to testify that the box was crushed before he transferred it to Mr. Morales, it is still clear that Alliance “acted within the scope of [its] employment” as an agent of the carrier Polar. Those words were added to the Montreal Convention against the backdrop of the Warsaw Convention. The earlier Convention gave its protections to the “carrier,” an undefined term which the courts construed to include “air carriers’ agents performing services ‘in furtherance of the contract of carriage.’ “ Waxman, 13 F.Supp.2d at 514, citing four cases and, later on the same page, American Home Assurance Co. v. Jacky Maeder (Hong Kong) Ltd., 969 F.Supp. 184, 191-92 (S.D.N.Y.1997), where Judge Kaplan recognized that a cargo warehousing agent would be entitled to liability limitation to the same extent as would its carrier principal.

Alliance has proven that it was “acting within the scope of [its] employment” as Polar’s agent:

1. Alliance was acting under its IATA Standard Ground Handling Agreement with Polar by picking up the cargo from the tarmac, holding the cargo in its warehouse at the airport, and delivering the cargo to K & N’s trucker. (See undisputed Lee Decl. and its Exh. 1.)

2. Alliance was performing Polar’s duty under Article 13(1) of the Montreal Convention: delivering the cargo to the consignee shown on Polar’s Air Waybill.

3. Alliance’s ground handling services were typical of services performed “in furtherance of the contract of carriage.”Waxman, 13 F.Supp.2d at 514.

K & N has not disputed these key facts. Mr. Gelman’s declaration has merely attempted to show that the damage occurred during the period when Alliance was handling the cargo, but he has not disputed that Alliance was doing Polar’s work. For the purposes of the two-year limit barring suit, it is immaterial whether Alliance did that work badly.

CONCLUSION

I grant Alliance Air’s motion for summary judgment, and I dismiss the Third-Party Complaint. The Clerk’s Office has already removed Polar Air Cargo, Inc. from the caption as of September 7, 2007. I now direct the Clerk’s Office to remove both Alliance Air and Martinair Holland, N.V. from the caption. I direct plaintiff’s attorney and Kuehne & Nagel’s attorney to place a joint telephone call to my courtroom deputy Helen Lewis at 212-805-6183 to schedule a telephone conference with me.

LIMITED BRANDS, INC., et al, Plaintiffs,

v.

F.C. (FLYING CARGO) INT’L TRANSPORTATION LTD., et al., Defendants.

March 31, 2008.

OPINION AND ORDER

EDMUND A. SARGUS, JR., District Judge.

This case came on for trial on March 11 through 13, 2008. The Plaintiffs, Limited Brands, Inc. (“Limited”), Mast Industries, Inc. (“Mast”) and Victoria’s Secret Stores, Inc. (“Victoria’s Secret”) contend that the Defendant, F.C. Int’l Transportation, Ltd. (“Flying Cargo”) is liable for damages under the Carriage of Goods by Sea Act (“COGSA”), 46 App. U.S.C. § 1300, et seq. In turn, the Defendant contends that, to the extent it is liable to the Plaintiffs, Cross-Claim Defendants Cargo Connections Logistics, Corp. (“Cargo Connections”), and Palmer Industries, Inc. (“Palmer”) are responsible to it for any damages. For the reasons that follow, the Court finds in favor of the Defendant, Flying Cargo, as to the claims brought against it by the Plaintiffs. Consequently, the Court also finds in favor of Cargo Connections and Palmer.

I.

The parties have stipulated to a number of facts relevant to the issues in this case. Plaintiff Mast is a wholly owned subsidiary of the Limited and sister corporation to Victoria’s Secret. Mast arranges for the delivery of manufactured goods to Victoria’s Secret at its Columbus, Ohio locations. In 2003, Mast arranged for the purchase of certain goods from Delta Galil Industries, Ltd., located in Tel Aviv, Israel. Mast in turn contracted with the Defendant, Flying Cargo, for the shipment of 596 cartons of garments from Israel to Columbus, Ohio. The parties entered into an agreement for transport on or about May 21, 2003.

Prior to the contract at issue in this case, Mast had hired Flying Cargo for other transportation services since 1998. During this time, Flying Cargo was hired by Mast for shipments as to goods purchased by Mast in Israel.

While the parties do not dispute the existence of such business relationship, neither party was able to produce a written contract establishing the rights and obligations of the parties regarding the shipment at issue in this case. Mast has presented evidence that it forwarded to Flying Cargo and invitation for bid regarding the period extending from June 1, 2003 through May 20, 2004. While the parties in fact engaged in the kinds of services described in the invitation, no party produced a final written contract as evidence at trial. Evelyn Cohen of Flying Cargo testified that on August 1, 2003 she signed page 12 of the contract proposed in the invitation to bid. This page referred only to delay penalties. Moreover, at the time of signing, the shipment in question had already been lost or stolen.

Plaintiffs presented some testimony that the parties had entered into a prior written agreement which expired in the spring of 2003 and was to be the basis for a new agreement covering the shipment in this case. No such agreement was produced; the prior agreement covered air, and not sea, transportation.

On May 21, 2003, Delta delivered the goods at issue to the Port of Haifa, Israel for ultimate delivery to Columbus, Ohio. Bills of lading were then issued by Danmar Lines listing Delta as the shipper and the consignee as Mast Industries, Inc. The bills of lading identified Columbus, Ohio as the place of delivery. Plaintiffs presented 49 pages of packing lists prepared by Delta, prior to the loading of the container at Delta’s factory. (Plaintiffs’ Ex. C) Also submitted at trial were 22 pages of invoices issued by Delta to Mast. (Plaintiffs’ Ex. D) Plaintiffs also offered 22 pages of Certificates of Origin issued by Delta to Mast describing the goods to be transported. Plaintiffs also submitted the sea waybill detailing the precise weight of the shipment and 22 pages of documents submitted to the United States Customs Service, Department of the Treasury, in connection with the arrangement for passage of the goods at issue.

The record in this case also includes testimony regarding the relationship between Danmar Lines and Flying Cargo. The bills of lading were issued by Danmar Lines, with Flying Cargo listed as agents for the carrier. According to both Yossi Leeran and Evelyn Cohen, both employees of Flying Cargo, Danmar Lines issued bills of lading for Flying Cargo in Israel, while Flying Cargo served as Danmar’s agent in the United States. According to Ms. Cohen, neither Danmar nor Flying Cargo ever took possession of the container and merchandise. Ms. Cohen also testified that Flying Cargo was paid to cause the transportation of the goods from Israel to Columbus and that such payment was made with one disbursement. In turn, Flying Cargo was responsible for paying all shippers involved in the transportation.

Once the container arrived at the Maher Terminal in New York City, Cargo Connections was to perform land carriage from New York to Columbus, Ohio. The parties disagree as to how Cargo Connections was selected for such services. According to James E. Pryor of Mast Industries, Cargo Connections was a long-term inland carrier for Mast. Mast negotiated a favorable rate with Cargo Connections and simply passed along to Flying Cargo the option of using Cargo Connections at such favorable rates for land transportation. Pryor testified that Flying Cargo was not required, however, to contract with Cargo Connections. In contrast, Ms. Cohen testified that Flying Cargo was required to use Cargo Connections at the direction of Mast. In the invitation to bid sent by Mast and never formally accepted by Flying Cargo, the form to be used by the bidders included categories to be filled in to described proposed rates. The line for ground transportation had the charges already filled in. (Plaintiffs’ Ex. 1, page 14) Flying Cargo contends that this establishes Mast’s requirement that Cargo Connections be hired. It is undisputed that Flying Cargo was ultimately compensated at an amount which included the fees to be charged by Cargo Connections. It is also undisputed that such amount was a pass through from Mast to Flying Cargo to Cargo Connections.

Cargo Connections contracted with Palmer to transport the container from Maher Terminal to Palmer’s container yard in Newark, New Jersey. Thereafter, the container could not be located and the goods at issue were never delivered to Columbus, Ohio. According to the Plaintiffs, the value of the goods was $582,947.62. According to Minerva Calderon, the retail value of the 106,000 bras purchased by Victoria’s Secret was $2,356,000.04. Mast seeks the lower of the two numbers as representing the full cost of the loss.

Ms. Calderon testified that the amount claimed by Mast was not the amount Mast paid to Delta, but instead was the selling price from Mast to Victoria’s Secret. Mast presented additional testimony from Thomas Fields, a loss prevention specialist employed by Limited Brands. He investigated the loss of the goods and was ultimately able to track down and recover approximately 503 of the 106,000 missing bras. The recovered bras were destroyed and none were resold. No testimony was adduced regarding the condition of the bras at the time of recovery.

In summary, the goods in questions were loaded into the container at the Delta facility. The container itself was then sealed before it was placed on the ship in the Port of Haifa. Delta caused the container to be moved from its factory to the port. Once the container was loaded at the Delta facilities, no other party had knowledge of the contents of the container. No employee of Delta testified as to the packing of the container and no employee of Delta testified as to the method of preparing and storing packing lists, serial numbers or tracking systems.

II.

The parties agree that the law applicable to this case is found in the Carriage of Goods by Sea Act (“COGSA”), 46 App. U.S.C. § 1300, et seq. As the Supreme Court has held “… so long as a bill of lading requires substantial carriage of goods by sea, its purpose is to effectuate maritime commerce and thus it is a maritime contract. Its character as a maritime contract is not defeated simply because it also provides for some land carriage.”Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 27 (2004).

In providing for the regulation and carriage of goods by sea, COGSA imposes upon a carrier of goods the duty “to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.”Id. at § 1303(2). The statute also requires the carrier to issue a bill of lading containing a description of the goods. Id. at § 1303(3). The statute further provides that the bill of lading is prima facie evidence that the carrier received the goods as described. Id. § 1303(4).

The first issue the Court must resolve is whether Flying Cargo functioned as a carrier or a freight forwarder. This distinction is oftentimes of great importance, since a carrier, as noted above, assumes the duty of care for the goods and is directly involved in the transporting of the cargo. In contrast, a freight forwarder is an entity which only makes arrangement for transportation of the cargo at the request of the shipper. A freight forwarder, which does not typically issue a bill of lading, is liable only for its own negligence and is not responsible for the ultimate delivery of the goods. U.S. v. American Union Transport, 327 U.S. 437, 442-43 (1946).

In a recent decision from this Court, the distinction between carrier and freight forwarder was well analyzed. In Limited Brands, Inc. v. UTI U.S., Inc., Case No. 03-CV-1268, 2005 WL 1629777 (S.D.Ohio July 8, 2005) (King, M.J.), this Court initially held that the determination of whether a party is a carrier or freight forwarder depends on the function performed, and not the terminology used. The Court determined that a number of factors were relevant in determining whether a party acted as a carrier, including, “(1) the way the parties obligation is expressed in documents pertaining to the agreement; (2) the history of dealings between the parties; (3) the issuance of a bill of lading; and (4) how the party made its profit.”Id. at * 2.

The Court finds that these factors, considered collectively, weigh in favor of a finding that Flying Cargo acted as a carrier, rather than freight forwarder. Although Flying Cargo did not issue the bills of lading, such documents were issued at the direction of Flying Cargo by a company with whom Flying Cargo had a reciprocal agreement as to shipments originating in the United States. In addition, the parties had a history of dealings in which Flying Cargo was responsible for the transportation of goods from Israel to Columbus, Ohio, the ultimate destination of the goods. Finally, the Court notes that Flying Cargo was paid for the costs of transportation from the beginning of the transit to the Columbus, Ohio location. All other transporting entities were to be paid by Flying Cargo.Weighing these factors as a whole, the Court concludes that Flying Cargo acted as a carrier, as the term is used in COGSA.

The Court has not addressed the first factor expressed in UTI, that being the expression of the parties obligations in contract documents accompanying the shipments. As noted above, the record does not establish the existence of a written contract. Further, the testimony regarding prior contracts, which cannot be located, is insufficient to establish the parties’ actual intent.

Under §§ 1303 and 1304 of COGSA, the owner of the goods establishes a prima facie case by demonstrating that the cargo was delivered in good condition, and the goods were either damaged or stolen in transit. Daewoo Intern. (America) Corp. v. Sea-Land Orient Ltd., 196 F.3d 481, 484 (3d Cir.1999). Were this the end of the analysis, Mast would be entitled to judgment in its favor. A different analysis is used, however, when the goods shipped are in a sealed container, the contents of which are not discoverable from a visual, external examination. Id. at 485.A great number of cases have held that in such circumstances, a bill of lading is not prima facie evidence of the content of a concealed container. E.g., Security Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77 (4th Cir.2004); A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997 (11th Cir.2003); Plastique Tags, Inc. v. Asia Trans Line, Inc., 83 F.3d 1367 (11th Cir.1996); Bally, Inc. v. M.V. Zim America, 22 F.3d 65 (2d Cir.1994); Westway Coffee Corp. v. M.V. Netuno, 675 F.2d 30 (2d Cir.1982); Caemint Food, Inc. v. Brasileiro, 647 F.2d 347 (2d Cir.1981); Hoover Motor Exp. Co. v. U.S., 262 F.2d 832 (6th Cir.1959).

In Bally, supra, the court held that in the case of a sealed container, the shipper must present evidence establishing that the goods delivered to the carrier were in good order. Reliance upon the bill of sale is insufficient; the shipper must present affirmative evidence regarding the items placed within the sealed container. Bally, F.3d at 69.

In Old Dominion Freight Lines, the court analyzed the quantum of evidence necessary to establish the contents of a sealed container.The plaintiff presented an affidavit of its distribution manager who described in detail the process used to ship cigarettes. The affidavit described the procedures employed upon the arrival of a truck, the removal of the product from the distribution center to the loading dock, the confirmation of the shipping order as closed out, the issuance of a bill of lading and the weighing of the product. Nonetheless, the court found that the affidavit made no claim of personal familiarity as to the precise shipment. Further, the court found that the initials on the bill of lading indicated that the employee actually examined the contents of the shipment. Nonetheless, the court concluded that the record did not demonstrate whether the seal was placed on the cargo before or after the defendant’s driver had the opportunity to inspect the goods. The court concluded that the plaintiff-shipper had failed to meet its burden of proof as establishing the contents of a sealed container. Old Dominion Freight Lines, 391 F.3d at 84-86.

While this case arose under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, courts have held that the analysis under this statute regarding bills of lading is identical to COGSA. Project Hope v. M/V IBN SINA, 250 F.3d 67, 73 (2d Cir.2001).

A similar analysis was undertaken in A.I. G. Uraguay.In this case, the court noted that in cases involving lost shipments, the burden of proof upon the shipper of a sealed container is quite high. The court noted:

When the shipment was lost, destroyed, or damaged to such extent that it is impossible to tell what was contained in the shipment, then the question is not only the original condition of the shipment, but also the contents of the shipment. When a sealed shipment disappears or is destroyed, we cannot tell by looking at the remains of the shipment, if any, what it originally contained. Therefore, we have said in these circumstances that we require “direct” evidence of the original contents and condition of the shipment to prove a prima facie case.

334 F.3d at 1004 (emphasis in original). The court also noted that the term “direct evidence” referred to the testimony of an eyewitness to the loading of the container. Id. at 1005.The court also acknowledged that in the modern economy large scale production and rapid loading of goods “are the hallmark of the efficiency sought by our nation’s corporations.”Id. at 1007.From this, the court concluded that eyewitness testimony is not the only method by which proof of the contents of a sealed container may be established. The court found:

We have never said that eyewitness testimony is the only direct evidence that will suffice, but we have said repeatedly that documentary evidence must be supplemented by other direct evidence. However, what we mean to prevent by requiring this additional “direct” evidence is having the contents of a sealed container proved solely by after-the-fact documentation. When business records are routinely and systematically made contemporaneously with the packing and packaging of a particular shipment, and these documents clearly identify the specific contents of those shipments, then we perceive no problem in accepting that proof as the type able to meet the shipper’s burden. It is especially so where, as here, there is no incentive for the shipper to falsify the packing lists. Accordingly, we find that the packing lists, which incorporate pre-loaded serial numbers scanned during the process by which the Abiatar order was filled, are sufficient direct evidence of the contents of the shipments to sustain AIG’s prima facie burden.

Id. at 1007.The Sixth Circuit has also held that a bill of lading does not provide a prima facie case as to the condition or contents of a container, if the goods were not open to inspection and otherwise visible. Hoover Motor Exp. Co., 262 F.2d at 833-34.

It is clear from the case law that a shipper has a high burden of proof in establishing the contents of a sealed container which could not be inspected by a carrier. A bill of lading is insufficient to make such proof. Earlier cases required eyewitness testimony to meet such burden. While that requirement has been somewhat loosened by the decision is A.I.G. Uraguay, supra, it is clear that the packing procedure be precise, measurable, and verifiable by the shipper.

In this case, Mast has failed to meet such burden. It is undisputed that the Plaintiffs have not produced eyewitness testimony regarding the contents of the sealed container. While a number of exhibits were introduced into evidence relating to the packing of the goods together with order forms and certificates of origin, no witness testified as to systems used for packing, the preparation of the documents or the method by which items were counted and placed into the container. The exhibits relating to the items placed in the container were only identified by an employee of Mast, whose work did not involve the verification of the loading of containers, and a witness employed by an import manager hired by Mast, whose work did not include supervision of the loading of containers. These two witnesses were at best able to describe business records used by them in tracking the container and permitting the items through customs. Neither witness gave testimony regarding the procedures used at the point of loading, which is the gravamen of the Plaintiffs’ burden of proof. In the absence of any other evidence establishing the contents of the container, Plaintiffs have simply failed to meet their burden of proof on this issue. As such, Plaintiffs fail in the claim for damages against the carrier, Flying Cargo.

Insofar as the Plaintiffs’ claim fails against the Defendant, in turn, Flying Cargo’s cross-claims against Palmer and Cargo Connection for contribution are rendered moot.

Because the resolution of this issue necessitates judgment in favor of the Defendant, the Court does not address the other issues raised by the Defendant and cross-claim Defendants.

III.

Based upon the foregoing, the Court finds by a preponderance of the evidence that the Plaintiffs have failed to establish their claim for damages against Flying Cargo. The Court finds in favor of Flying Cargo with regard to the claims of the Plaintiffs and finds in favor of the cross-claim defendant regarding the claims of Flying Cargo. The Clerk is directed to enter judgment in favor of Flying Cargo.

IT IS SO ORDERED.