Cargo - Central Analysis Bureau

Aeronet Worldwide, Inc. v. AB&M Interstate Servs., Inc.

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

AERONET WORLDWIDE, INC., Plaintiff,

AB&M INTERSTATE SERVICES, INC., MOBI EXPRESS, INC., and DOES 1–10 Defendants.

6:22-cv-01081 (BKS/TWD)

Filed 10/10/2023

Attorneys and Law Firms

Appearances:

For Plaintiff: William E. Lakis, Jr., Lakis Law Offices, PC, 145 North Franklin Turnpike, Suite 122, Ramsey, NJ 07446

MEMORANDUM-DECISION AND ORDER

Brenda K. Sannes Chief U.S. District Judge

I. INTRODUCTION

*1 Plaintiff Aeronet Worldwide, Inc. brought this action against Defendants A B & M Interstate Services, Inc., AB&M Interstate Services, Inc., AB&M Logistics, LLC, Mobi Express, Inc., and Does 1 through 10, alleging violations of 49 U.S.C. § 14706, et seq. (the “Carmack Amendment” to the Interstate Commerce Act), and related state laws. (Dkt. No. 1).¹ Defendant Mobi Express has not answered the Complaint or otherwise appeared in this action. Presently before the Court is Plaintiff’s Motion for Default Judgment against Defendant Mobi Express under Rule 55(b) of the Federal Rules of Civil Procedure. (Dkt. No. 29). For the reasons that follow, Plaintiff’s Motion is denied.

II. FACTS²

Plaintiff is a Texas corporation doing business in the state of New York. (Dkt. No. 1, ¶ 2). Defendant Mobi Express is a Pennsylvania corporation also doing business in the state of New York. (Id. ¶ 6). Plaintiff alleges that Defendants, including Defendant Mobi Express, “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action.” (Id. ¶ 9).

In 2020, “Plaintiff’s related entities” arranged for Defendants to “transport two pallets comprised of 66 boxes containing 1,320 units of automobile part assembly kits (the “Cargo”) from Auburn, New York[,] to … Laredo, Texas[,]” under “Aeronet waybill no. 111102405.” (Id. ¶¶ 10–11, 15). “The Cargo was duly tendered in its entirety to [ ] Defendants in good order and condition,” but was “never delivered and was lost.” (Id. ¶¶ 10, 16). Plaintiff alleges that “[i]n agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.” (Id. ¶ 17).

“The commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11). Therefore, Plaintiff alleges, “[a]s a direct and proximate result of [ ] Defendants’ breach of their statutory obligations under the Carmack Amendment, Plaintiff has suffered or will suffer principal damages in the sum of not less than [ ] [$]109,681.02.” (Id. ¶¶ 11, 18).

III. DISCUSSION

A. Procedural Requirements

*2 “Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, under Rule 55(a), the plaintiff must obtain a clerk’s entry of default. Fed. R. Civ. P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”); see also Local Rule 55.1 (requiring a party seeking a clerk’s entry of default to “submit an affidavit showing that (1) the party against whom it seeks a judgment … is not an infant, in the military, or an incompetent person (2) a party against whom it seeks a judgment for affirmative relief has failed to plead or otherwise defend the action … and (3) it has properly served the pleading to which the opposing party has not responded.”). Second, under Rule 55(b)(2), the plaintiff must “apply to the court for entry of a default judgment.” Priestley, 647 F.3d at 505; see also Local Rule 55.2(b) (“A party shall accompany a motion to the Court for the entry of a default judgment, pursuant to Fed. R. Civ. P. 55(b)(2), with a clerk’s certificate of entry of default … a proposed form of default judgment, and a copy of the pleading to which no response has been made.”).

Here, Plaintiff has complied with the procedural requirements for obtaining a default judgment against Defendant Mobi Express. On March 7, 2023, Plaintiff requested a clerk’s entry of default under Rule 55(a), and, as required by Local Rule 55.1, Plaintiff submitted an affidavit affirming that Defendant Mobi Express (1) is not an infant, in the military, or an incompetent person; (2) was properly served; and (3) has defaulted in this action. (Dkt. No. 19, at 1–2). Plaintiff properly served Defendant Mobi Express in accordance with Federal Rule of Civil Procedure 4(h)(1)(B) by serving the Complaint on an authorized agent for Defendant Mobi Express. (Dkt. No. 5). On March 7, 2023, Plaintiff received a clerk’s entry of default against Defendant Mobi Express. (Dkt. No. 20). And, on April 7, 2023, Plaintiff moved for a default judgment against Defendant Mobi Express under Federal Rule of Civil Procedure 55(b)(2) and Local Rule 55.2(b). (Dkt. No. 29). Therefore, as the procedural requirements for entry of a default judgment are met, the Court will address liability.

B. Liability

By failing to appear in this action or respond to Plaintiff’s Complaint, Defendant Mobi Express is deemed to have admitted the factual allegations in the Complaint with respect to liability (as distinct from damages). Greyhound Exhibitgroup, Inc., 973 F.2d at 158 (“[A] party’s default is deemed to constitute a concession of all well pleaded allegations of liability”). “The decision whether to enter default judgment is committed to the district court’s discretion.” Greathouse v. JHS Sec. Inc., 784 F.3d 105, 116 (2d Cir. 2015) (citation omitted). Even where a defendant has admitted all well-pleaded facts in the complaint by virtue of default, a district court “need not agree that the alleged facts constitute a valid cause of action,” and may decline to enter a default judgment on that ground. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (quoting Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Indeed, the Second Circuit has “suggested that, prior to entering default judgment, a district court is ‘required to determine whether the [plaintiff’s] allegations establish [the defendant’s] liability as a matter of law.’ ” Id. (citation omitted).

Here, although Plaintiff pleads claims under both the Carmack Amendment and state law, the Carmack Amendment “preempts all state law on the issue of interstate carrier liability.” Aviva Trucking Special Lines v. Ashe, 400 F. Supp. 3d 76, 79 (S.D.N.Y. 2019)). Consequently, only the Carmack Amendment claim can be maintained.

The Carmack Amendment governs the liability of common carriers for loss or damage to goods transported in interstate commerce and creates uniform national rules that preempt all state and common law claims against carriers. See Project Hope v. M/V IBN SINA, 250 F.3d 67, 73–74, n. 6 (2d Cir. 2001); 49 U.S.C. § 14706(d). It “relieve[s] cargo owners ‘of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.’ ” Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 98 (quoting Reider v. Thompson, 339 U.S. 113, 119). The statute imposes broad liability on common carriers for all losses relating to goods they transport in interstate commerce. See Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117–18 (2d Cir. 1999); Union Pacific R.R. v. Greentree Transp. Trucking, 293 F.3d 120, 127 (3d Cir. 2002). “Indeed, Carmack effectively codified the strict liability rule that governed the liability of common carriers at common law.” Sompo Japan Mut. Auto. Ins. Co. v. Union Pac. R.R. Co., 456 F.3d 54, 59 (2d Cir. 2006), abrogated on other grounds by Kawasaki, 561 U.S. 89 (2010).

*3 Under the Carmack Amendment, a plaintiff establishes a prima facie case by showing “delivery [to the carrier] in good condition, arrival in damaged condition, and the amount of damages.” Mo. Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). For example, in Federal Insurance Co. v. CLE Transportation, Inc., the plaintiff sufficiently pleaded the elements of a claim under the Carmack Amendment by alleging that a “shipment of confections, drinks, and candy [was] initially delivered to [the defendant] in ‘good order and condition[,]’ … that [the defendant] failed entirely to deliver the bequeathed bonbons to California[,] [and that] [p]ursuant to its obligations under [an] insurance contract, [the plaintiff] [had] paid at least $96,850.35 for the losses suffered.” See No. 18-cv-11119, 2020 WL 1503455, at *2, 2020 U.S. Dist. LEXIS 55422, at *5 (S.D.N.Y. Mar. 30, 2020).

Here, Plaintiff alleges that on or about October 17, 2020, “Defendants” received the Cargo, shipped under “Aeronet waybill no. 111102405,” in “good order and condition.” (Dkt. No. 1, ¶¶ 10, 16). Plaintiff further alleges that “Defendants” failed entirely to deliver the Cargo to Laredo, Texas, where it was estimated to arrive on or about October 20, 2020. (Id.). And, finally, Plaintiff alleges that “[t]he commercial invoice value of the Cargo lost was [ ] $70,189.00,” (id. ¶ 10), and that Plaintiff has “already suffered principal damages in excess of [ ] [$]39,492.02” addressing “[a] disputed claim” brought against Plaintiff by certain entities with an interest in the Cargo, (id. ¶ 11).

While these facts resemble those in Federal Insurance Co., however, they lack specificity as to the relationships between Plaintiff and each Defendant, and Defendant Mobi Express and Defendant AB&M Interstate Services, and as to each Defendant’s role in the events giving rise to this action. In Federal Insurance Co., the plaintiff insurance company alleged that the shipper entered into a contract with a particular carrier and that that carrier received the goods to be transported. See 2020 WL 1503455, at *1, 2020 U.S. Dist. LEXIS 55422, at *1. By contrast, here Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. It is unclear whether Plaintiff entered into a contract with Defendant Mobi Express and whether Defendant Mobi Express received the Cargo from Plaintiff. Moreover, Plaintiff has failed to plausibly allege a relationship between Defendants, instead referring to “Defendants” as a group and relying on a series of conclusory allegations. (See, e.g., Dkt. No. 1, ¶ 10 (“Defendants undertook to transport [the Cargo] from Auburn, New York[,] to … Laredo, Texas”); ¶ 9 (Defendants “were at all times material herein the agents, servants, employers, and/or employees of each of the other Defendants, and each of them, as such, were acting in the course and scope of their employment and/or agency at all times relevant to this action”); ¶ 17 (“In agreeing to transport the Cargo for consideration and receiving said Cargo for that purpose, [ ] Defendants were acting as motor truck carriers and were the carriers within the meaning of 29 U.S.C. § 14706, et seq.”)).

“ ‘[N]othing in Rule 8 prohibits collectively referring to multiple defendants where the claim alerts [the] defendants that identical claims are asserted against each defendant,’ so long as the allegations ‘provide[ ] enough information to put [each defendant] on notice of its alleged role’ ” in the misconduct at issue. Hunter v. Shanghai Huangzhou Elec. Appliance Mfg. Co., 505 F. Supp. 3d 137, 150 (N.D.N.Y. 2020) (quoting Tardibuono-Quigley v. HSBC Mortg. Corp. (USA), No. 15-cv-6940, 2017 WL 1216925, at *8, 2017 U.S. Dist. LEXIS 47982, at *22–23 (S.D.N.Y. March 30, 2017) (citations omitted)). As this Court has observed, the question is whether the allegations, even if they “refer to ‘Defendants’ collectively without distinguishing each Defendant’s particular role,” “simply ‘give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests,’ ” with “fair notice” defined as “that which will enable the adverse party to answer and prepare for trial, allow the application of res judicata, and identify the nature of the case so that it may be assigned the proper form of trial.” Id. (quoting Richards v. Johnson & Johnson, Inc., No. 17-cv-00178, 2018 WL 2976002, at *2, 2018 U.S. Dist. LEXIS 97899, at *4–5 (N.D.N.Y. June 12, 2018) (citations omitted)).

*4 Nevertheless, as discussed above, Plaintiff has not alleged any particularized facts regarding Defendant Mobi Express’ role in the events giving rise to this action. Nor has Plaintiff supplied documentary evidence in support of the same.³ Therefore, it is not clear, based on the Complaint, that Plaintiff has stated a claim against Defendant Mobi Express under the Carmack Amendment.

In any event, the Court declines to enter a default judgment against Defendant Mobi Express because Defendant AB&M Interstate Services’ continued participation in this litigation precludes Plaintiff’s request for a default judgment as to Defendant Mobi Express. See Grazette v. Rockefeller, No. 20-cv-965, 2022 WL 252631, at *2, 2022 U.S. Dist. LEXIS 16077, at *5 (S.D.N.Y. Jan. 26, 2022).

“[D]efault judgment cannot be issued where the relief requested would prejudice actively litigating defendants.” Knowles-Carter v. Feyonce, Inc., No. 16-cv-2532, 2017 WL 11567528, at *5, 2017 U.S. Dist. LEXIS 233031, at *15 (S.D.N.Y. Sept. 23, 2017) (collecting cases). “The key inquiry is whether the default judgment could result in inconsistent outcomes for similarly situated defendants.” El Omari v. Buchanan, No. 20-cv-2601, 2021 WL 465431, at *3, 2021 U.S. Dist. LEXIS 24776, at *6-7 (S.D.N.Y. Feb. 9, 2021). In some cases where non-defaulting and defaulting defendants “share a ‘closely related,’ if not identical, defense,” for instance, courts have denied a default judgment motion on the grounds that granting a default judgment against the non-defaulting defendant “would, in effect, decide the case before … the non-defaulting … Defendant had an opportunity to be heard.’ ” Known Litig. Holdings, LLC v. Navigators Ins. Co., No. 12-cv-269, 2015 WL 13636078, at *2-3, 2015 U.S. Dist. LEXIS 193205, at *7-8 (D. Conn. Feb. 11, 2015) (discussing case law).

*5 Here, Defendant AB&M Interstate Services is a named Defendant and continues to actively deny its liability, including in its Answer to the Complaint and Crossclaim against Defendant Mobi Express. (Dkt. No. 18). Moreover, both Defendants share certain common, virtually identical defenses, including that Plaintiff never delivered the Cargo to Defendants and that the Cargo did arrive in Laredo, Texas, in good order and condition. Of course, granting a default judgment as to liability against Defendant Mobi Express now would not prejudice Defendant AB&M Interstate Services’ ability to raise these defenses in its litigation with Plaintiff, since default judgments have no collateral estoppel effect against non-defaulting defendants in the same litigation. See Rivera v. Limassol Grocery, Corp., No. 16-cv-6301, 2019 WL 1320339, at *6, 2019 U.S. Dist. LEXIS 2821, at *19-21 (E.D.N.Y. Jan. 4, 2019) (discussing this principle and citing case law); Lemache v. Tunnel Taxi Mgmt., LLC, 354 F. Supp. 3d 149, 155-56 (E.D.N.Y. 2018) (same), report & recommendation adopted, 354 F.Supp.3d 149 (E.D.N.Y. 2019) (same). However, doing so would raise the prospect of inconsistent outcomes, since it is possible that, after granting a default judgment against Defendant Mobi Express based in part on its admission (through its default) that Plaintiff did deliver the Cargo to Defendants and that the Cargo did not arrive in Laredo, Texas, Defendant AB&M Interstate Services could later escape liability by proving that Plaintiff did not deliver the Cargo to Defendants, or that the Cargo did arrive in Laredo, Texas.

Furthermore, the Court perceives no meaningful prejudice to Plaintiff by reserving a formal judgment as to Defendant Mobi Express’ liability for a later stage of the case. Even if the Court were to grant Plaintiff’s request for a default judgment as to liability now, it would reserve a decision on damages for a later stage of the case, when a liability determination has been made as to the non-defaulting Defendant and a total damages award may be assessed against all Defendants together. Hunter, 505 F. Supp. 3d at 161. “Without a damages calculation to accompany the liability determination, no final judgment could be entered in [Plaintiff’s] favor, and there could be no enforceable judgment that [they] could attempt to collect.” Lemache, 354 F. Supp. 3d at 155. Moreover, because a default judgment against Defendant Mobi Express would have no collateral estoppel effect against the non-defaulting Defendant, granting such a default judgment now “does not assist [Plaintiff] in litigating the case against” Defendant AB&M Interstate Services. Id. For the foregoing reasons, the Court declines to enter a default judgment against Defendant Mobi Express at this time.

IV. CONCLUSION

For these reasons, it is hereby

ORDERED that Plaintiff’s Motion for Default Judgment (Dkt. No. 29) is DENIED without prejudice, with leave to refile after resolution of the claims against the actively litigating Defendant.

IT IS SO ORDERED.

All Citations

Slip Copy, 2023 WL 6599077

Footnotes

The claims against A B & M Interstate Services, Inc. and AB&M Logistics, LLC were dismissed by stipulation of the parties on March 9, 2023. (Dkt. No. 24).
The facts are taken from the Complaint. (Dkt. No. 1). Because Defendant Mobi Express has failed to respond to the Complaint, the well-pleaded allegations therein are deemed admitted and assumed to be true for purposes of this Motion. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
The Second Circuit has observed that a motion for default judgment may be granted based on “the factual allegations in the complaint, combined with uncontroverted documentary evidence submitted by plaintiffs” with their motion. Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Contr., LLC, 779 F.3d 182, 189 (2d Cir. 2015); see also, e.g., Cabrera v. 1560 Chirp Corp., No. 15-cv-8194, 2017 WL 1289349, at *11, 2017 U.S. Dist. LEXIS 33380, at *28–29 (S.D.N.Y. March 6, 2017) (applying Bricklayers and its progeny and relying on affidavit outside the complaint to find that Plaintiff met elements of a FLSA claim on a motion for default judgment), report & recommendation adopted, 2017 WL 1314123, 2017 U.S. Dist. LEXIS 53368 (S.D.N.Y. Apr. 6, 2017); Zurita v. Bergen Pizza Inc., No. 12-cv-3874, 2016 U.S. Dist. LEXIS 28170, at *8–10 (March 1, 2016) (same), report & recommendation adopted, 2016 WL 1089262, 2016 U.S. Dist. LEXIS 35938 (E.D.N.Y. March 21, 2016). This approach is also consistent with Federal Rule of Civil Procedure 55(b)(2), which establishes that “[t]o the extent that the plaintiff’s allegations are inadequate, ‘a district court has discretion … to require proof of necessary facts’ to satisfy itself that there is ‘a valid cause of action.’ ” Cent. Produce Corp. v. 32-18 M&M Corp., No. 17-cv-3841, 2018 WL 4327923, at *2, 2018 U.S. Dist. LEXIS 114731, at *5 (E.D.N.Y. July 9, 2018) (quoting Au Bon Pain, 653 F.2d at 65), report & recommendation adopted, 2018 WL 4326925, 2018 U.S. Dist. LEXIS 154092 (E.D.N.Y. Sept. 10, 2018); see also Fed. R. Civ. P. 55(b)(2) (providing that “[t]he court may conduct hearings … when, to enter or effectuate judgment, it needs to … establish the truth of any allegation by evidence”).

End of Document

Beaumont v. Vanguard Logistics Servs. United States, Inc.

United States District Court for the Southern District of New York

September 27, 2023, Decided; September 27, 2023, Filed

22-cv-6235 (MKV)

GARY BEAUMONT, Plaintiff, -against- VANGUARD LOGISTICS SERVICES (USA), INC., POLICE OFFICERS JOHN DOES 1-10, and ABC COMPANIES 1-10, Defendants.

Core Terms

bill of lading, district court, shipping, package, fair opportunity, reverse side, Reply, damaged, argues, cargo, partial summary judgment, forum selection clause, maritime, preempts, parties, notice

Counsel: [*1] For GARY BEAUMONT, Plaintiff: STEVEN D. ROTHBLATT, LEAD ATTORNEY, LAW OFFICES OF ROTHBLATT LAW, LLC, ISELIN, NJ.

For Vanguard Logistics Services (USA), Inc., Defendant: George N. Styliades, Cherry Hill, NJ.

Judges: MARY KAY VYSKOCIL, United States District Judge.

Opinion by: MARY KAY VYSKOCIL

Opinion

OPINION & ORDER DENYING MOTION FOR PARTIAL SUMMARY JUDGMENT

MARY KAY VYSKOCIL, United States District Judge:

Plaintiff Gary Beaumont brings this action against Defendant Vanguard Logistics Services (USA), Inc. (“VLS”) to recover money for damage that his property sustained when VLS shipped a container of his property from Sydney, Australia to New York. VLS moves for partial summary judgment, arguing that any damages are limited to $500 pursuant to the United States Carriage of Goods by Sea Act (“COGSA“), 46 U.S.C. § 30701, and the parties’ contract. For the reasons set forth below, the motion for partial summary judgment is DENIED.

I. BACKGROUND¹

A. Facts

Plaintiff Gary Beaumont entered into an agreement with Defendant Vanguard Logistics Services (USA), Inc. (“VLS”) to ship Beaumont’s property from Sydney, Australia to New York. See VLS Bill of Lading; Beaumont Bill of Lading; see also Beaumont Aff. ¶ 9. The property consisted of “1 CRATE” containing a “USED MOTORCYCLE/RIDING GEAR,” as well [*2] as one bicycle, a collection of DVDs, and assorted framed prints. See VLS Bill of Lading; Beaumont Bill of Lading; see also Beaumont Aff. ¶ 12 (describing the motorcycle as “a hand built Italian Ducati Multi Strada 1200 MTS 1200”). There is no dispute that the shipment consisted of one package [ECF No. 37 (“Pl. Opp.”) at 1 (“one crate”)]. See VLS Bill of Lading (“Total No. of Pkgs. 1”); Beaumont Bill of Lading (“Total No. of Pkgs. 1”).

Through its “non-vessel operating common carrier in Hong Kong,” VLS issued a bill of lading for the shipment [ECF No. 33 ¶ 2; ECF No. 34 (“Def. Mem.”) at 1]. See Pl. Opp. at 1; VLS Bill of Lading; Beaumont Bill of Lading. However, the parties dispute what, precisely, was sent to Beaumont. That is, the parties agree that the bill of lading has a “back” page or “REVERSE SIDE” that lists various terms and conditions. VLS Bill of Lading; Beaumont Bill of Lading; Pl. Opp. at 2; Reply at 2. Specifically, the back page includes a paragraph entitled “LIMITATION OF LIABILITY,” which states that “the value of the cargo shall be deemed to be $500 per package” unless “otherwise provided” and mentions COGSA. VLS Bill of Lading ¶ 19. But Beaumont maintains that he [*3] “never saw the reverse side of the Bill of Lading” because he “placed the shipping order via email,” and then “only the top half of the [bill of lading] was sent” back to his shipping agent. Beaumont Aff. ¶ 16.

Beaumont offers evidence that, after his shipment arrived at a warehouse in New Jersey, VLS accidentally damaged his property when a “forklift” dropped a “much larger item on top of [his] cargo” [ECF No. 36-1, Ex. A]. Beaumont alleges that his motorcycle was destroyed and seeks to recover $39,089.35 [ECF No. 18 (“AC”) ¶¶ 15, 18].

B. Procedural History

Beaumont filed a complaint in state court in New Jersey, and VLS removed the case to the United States District Court for the District of New Jersey on the basis of diversity jurisdiction and maritime jurisdiction [ECF No. 1]. VLS then moved to transfer the case to the Southern District of New York pursuant to a forum selection clause on the back of the bill of lading [ECF No. 6]. Beaumont opposed that motion, arguing that: (1) no admiralty jurisdiction exists because his property was damaged on land in a warehouse; (2) the forum selection clause was an unenforceable contract of adhesion and that a “reasonably prudent person” would [*4] not have been aware of the forum selection clause in “very tiny” print on the back of the bill of lading; and (3) COGSA does not apply because the property was damaged on land [ECF No. 8].

The New Jersey district court granted the motion of VLS to transfer the case [ECF No. 11]. Beaumont v. Vanguard Logistics Servs. (USA), Inc., 615 F. Supp. 3d 253, 258 (D.N.J. 2022). The court ruled that admiralty jurisdiction exists because the “bill of lading requires substantial carriage of goods by sea,” and “thus it is a maritime contract.” Beaumont, F. Supp. 3d at 258 (quoting Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 27 (2004)). The court ruled that the forum selection was enforceable even if it were “part of an adhesion contract.” Beaumont, F. Supp. 3d at 260 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)). With respect to the applicability of COGSA, the New Jersey district court observed:

Because the cargo was damaged on land, Plaintiff contends that COGSA is inapplicable. However, “[a]ll cargo shipments carried by sea to or from the United States are subject to COGSA.” [Fireman’s Fund Ins. Co. v. M.V. DSR Atlantic, 131 F.3d 1336, 1339 (9th Cir. 1997)]. Moreover, the [bill of lading] expressly extends the application of COGSA to “the entire time the Carrier is responsible for the Goods,” including “after discharge from the vessel.” B/L, ¶ 4(a). By the [bill of lading’s] express terms, COGSA governs the land transport of the goods at issue. See Kirby, 543 U.S. at 29, 125 S.Ct. 385 (recognizing that parties may extend COGSA‘s applicability [*5] by contract to the entire period in which goods would be under carrier’s responsibility, including period of inland transport). Accordingly, Defendant argues that COGSA preempts Plaintiff’s state law claims. See Polo Ralph Lauren, L.P. v. Tropical Shipping & Const. Co., Ltd., 215 F.3d 1217, 1220 (11th Cir. 2000) (“COGSA, when it applies, supersedes other laws.”); Amazon Produce Network, LLC v. M/V LYKES OSPREY, 553 F. Supp. 2d 502, 506 (E.D. Pa. 2008) (COGSA “provides an exclusive remedy for damage to cargo incurred during carriage between foreign and United States ports.”). However, the Court need not resolve this dispute to rule on the pending transfer motion.

Beaumont, F. Supp. 3d at 262 n.9.

After the New Jersey district court transferred the case to this Court, Beaumont filed the Amended Complaint, which is the operative pleading [ECF No. 18 (“AC”)]. In the Amended Complaint, Beaumont asserts claims: for common law negligence, AC ¶¶ 11-18; pursuant to COGSA, AC ¶¶ 19-21; for breach of maritime contract, AC ¶¶ 22-25; for liability under “federal maritime common law of bailment,” AC ¶¶ 26-30; and under the New Jersey Consumer Fraud Act, AC ¶¶ 31-40.

VLS filed the pending motion for partial summary judgment [ECF Nos. 31, 32, 33, 34 (“Def. Mem.”)]. It argues that COGSA and the terms of the bill of lading limit any damages to $500 and that COGSA preempts Beaumont’s other claims. Beaumont filed an opposition [*6] [ECF Nos. 36, 37 (“Pl. Opp.”)], and VLS filed a reply [ECF Nos. 38, 39, 40 (“Reply”), 41].

II. LEGAL STANDARD

Summary judgment should be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a dispute. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court “may not make credibility determinations or weigh the evidence.” Jaegly v. Couch, 439 F.3d 149, 151 (2d Cir. 2006). The court “must resolve all ambiguities and draw all permissible inferences in favor of the non-moving party.” Id. If there is evidence in the record that supports a reasonable inference in favor of the opposing party, summary judgment is improper. See Brooklyn Ctr. For Indep. of the Disabled v. Metro. Transportation Auth., 11 F.4th 55, 64 (2d Cir. 2021)

III. DISCUSSION

The United States Carriage of Goods by Sea Act (“COGSA“), 46 U.S.C. § 30701, states that “[n]either the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package.” COGSA § 4(5). This per package limitation on liability does not apply, however, “if the shipper does not have a fair opportunity to declare higher value and pay an excess charge for additional protection.” Nippon Fire & Marine Ins. Co. v. M.V. Tourcoing, 167 F.3d 99, 101 (2d Cir. 1999). Here, the parties dispute whether Beaumont had a “fair opportunity” to [*7] declare a higher value for the contents of the package he shipped.

VLS argues that COGSA applies to this case, since the New Jersey district court ruled that the bill of lading is a maritime contract, and Beaumont now asserts a claim under COGSA. See Def. Mem. at 4-5. VLS further argues that the “Bill of Lading validly extended the protection of COGSA throughout the time that VLS was responsible for Beaumont’s property,” and that, since the “Amended Complaint relies on the Bill of Lading,” Beaumont “is bound by the terms thereof.” Def. Mem. at 4-5. VLS stresses that there is no question Beaumont’s “1 crate” constitutes one package under COGSA. Def. Mem. at 6. Finally, VLS argues that COGSA preempts Beaumont’s other claims. Def. Mem. at 7-9. Thus, VLS contends, it is entitled to a ruling that its total potential liability cannot exceed $500.

VLS, however, entirely fails to contend with the fair opportunity doctrine in its opening brief. To be sure, where a bill of lading “explicitly incorporate[s] COGSA‘s provisions or refer[s] in some way to the $500 per package limitation,” this “constitute[s] prima facie evidence of fair opportunity.” Royal Ins. Co. v. M.V. ACX Ruby, No. 97-cv-3710 (MBM), 1998 WL 524899, at *3 (S.D.N.Y. Aug. 21, 1998). And VLS submits in support of its motion a version [*8] of the bill of lading that contains the relevant paragraph, entitled “LIMITATION OF LIABILITY,” which states that “the value of the cargo shall be deemed to be $500 per package” unless “otherwise provided” and mentions COGSA. VLS Bill of Lading ¶ 19. However, Beaumont submits evidence that he “never saw the reverse side of the Bill of Lading” because he “placed the shipping order via email,” and then “only the top half of the [bill of lading] was sent” back to his shipping agent. Beaumont Aff. ¶ 16. He submits a version of the bill of lading that does not contain the relevant language. See Beaumont Bill of Lading. Thus, there is evidence in the record to support Beaumont’s position. See Brooklyn Ctr. For Indep. of the Disabled, 11 F.4th at 64.

In its reply brief, VLS asserts that the district court judge in New Jersey previously rejected the contention that Beaumont lacked notice of the reverse side of the bill of lading. Reply at 1. This assertion is incorrect. Based on this Court’s review of the record, Beaumont never argued in his briefing to the New Jersey district court that the COGSA $500-per-package limitation does not apply because VLS failed to send the reverse side of the bill of lading. Rather, Beaumont argued that the forum selection [*9] clause was an unenforceable contract of adhesion and that a “reasonably prudent person” would not have been aware of the forum selection clause in “very tiny” print on the back of the bill of lading [ECF No. 8]. In response, the New Jersey district court ruled that it did not matter whether the bill of lading was a contract of adhesion. Beaumont, F. Supp. 3d at 260. The New Jersey district court also commented that there was no issue as to whether Beaumont had sufficient notice, citing a version of the bill of lading supplied by VLS. Beaumont, F. Supp. 3d at 261. None of that reasoning applies here, since COGSA requires a fair opportunity to declare higher value than its $500 limitation, and, as explained, above Beaumont does offer evidence that he lacked sufficient notice.

VLS also argues in its reply that Beaumont had a fair opportunity because the front of the bill of lading states: “FOR EXCESS AD VALOREM VALUE SEE CLAUSE 19 ON REVERSE SIDE.” Reply at 2. According to VLS, this was sufficient to put Beaumont on notice that the bill of lading had a reverse side. Beaumont, meanwhile, points out that the front of the bill of lading says “Page 1 of 1,” suggesting that there was no second page. See Beaumont Bill of Lading. At this stage of [*10] the case, the Court cannot weigh the conflicting evidence and decide whether the front of the bill of lading provided Beaumont with sufficient notice and a fair opportunity to avoid the $500 limitation on liability. See Jaegly, 439 F.3d at 151.

Rather, the Court’s role on summary judgment is only to determine whether there is a material dispute, and it is clear there is such a material factual dispute here. Moreover, since it remains to be seen whether COGSA imposes any limitation on VLS’s liability, it is premature to decide whether COGSA preempts Beaumont’s other claims. Cf. Alpina Ins. Co. v. Trans American Trucking Serv., Inc., 2004 WL 1673310, at *4 (S.D.N.Y. July 28, 2004) (“When COGSA limits liability, it preempts state law. . . .”) (emphasis added).

IV. CONCLUSION

For the reasons set forth above, the motion for partial summary judgment is DENIED. The Clerk of Court respectfully is requested to close the motion at docket entry 31. The parties shall appear for a Post Discovery Conference on October 26, 2023 at 10:00 a.m. A joint status letter and any pre-motion submissions are due one week before the conference.

SO ORDERED.

Date: September 27, 2023

New York, NY

/s/ Mary Kay Vyskocil

MARY KAY VYSKOCIL

United States District Judge

End of Document

¹The facts are drawn from the declarations, affidavits, and exhibits that the parties submitted in connection with this motion [ECF Nos. 32, 36, 38, 39, 41]. VLS properly submitted a statement of facts pursuant to Local Civil Rule 56.1 and the Court’s Individual Rules [ECF No. 33]. Beaumont failed to do the same. As such, VLS contends that its own statement of facts should be “deemed admitted,” and the Court should rule that there is no material dispute of fact in this case [ECF No. 40 (“Reply”) at 1]. However, as explained below, Beaumont submits an affidavit and exhibits that make clear there is a material dispute about whether VLS sent Beaumont the portion of the bill of lading that discloses the $500 per package limitation on liability and, therefore, provides a fair opportunity to declare higher value and pay an excess charge for additional protection [ECF No. 32-2 (“VLS Bill of Lading”); ECF No. 36-1, Ex.1 (“Beaumont Aff.”) ¶¶ 16, 17, 18; ECF No. 36-1, Ex. C (“Beaumont Bill of Lading”), ECF No. 36-1, Ex. D]. See Nippon Fire & Marine Ins. Co. v. M.V. Tourcoing, 167 F.3d 99, 101 (2d Cir. 1999).