Charles Mitchell Henderson III, James Aloysius Saville Jr., Hill Rivkins LLP, New York, NY, for Plaintiff.
Edward William Floyd, Eva-Maria Mayer, Floyd Zadkovich (US) LLP, New York, NY, for Defendant.
MEMORANDUM AND ORDER
LEWIS J. LIMAN, United States District Judge:
*1 Defendant Kuehne + Nagel Inc. t/a Blue Anchor America Line (“Defendant” or “K+N”) moves, pursuant to Federal Rule of Civil Procedure 56, for an order granting it partial summary judgment on its affirmative defenses, including the second, third, and ninth defenses raised in its answer. Dkt. No. 25. Plaintiff HDI Global Insurance Co. (“Plaintiff” or “HDI”) opposes the motion and moves to strike the second, third, and ninth affirmative defenses. Dkt Nos. 33–34. The parties have agreed to a bench trial and are to be ready for trial by October 21, 2024. Dkt. No. 30.
For the following reasons, both motions are denied.
In brief, the dispute between the parties arises from damage caused when a container loaded with electrical wire harnesses (the “Cargo”) destined for Charleston, South Carolina, fell into the water while it was being loaded for shipment at the Port of Barcelona in Spain. Defendant K+N is a non-vessel-operating common carrier (“NVOCC”) that, among other things, provides ocean transportation but does not operate the vessels that engage in the ocean transportation. Dkt. No. 27 ¶ 1. At the time of the Cargo damage, K&N was providing NVOCC services for non-party Mahle Behr Charleston, Inc. (“Mahle Behr”). Id. at ¶ 23. Plaintiff HDI is an insurance company that provided an insurance policy to Mahle Behr related to the Cargo. Dkt. No. 1 at 1. Four sea waybills were prepared for transportation of the Cargo (the “Sea Waybills”). Dkt. No. 27 ¶ 24.1
The front of the Sea Waybills contains columns which are completed for the Number of Packages and Description of Goods. The number of packages listed under the Number of Packages Column corresponds to cartons of Cargo. A representative example is as follows:
The reverse side of the Sea Waybills contains a set of terms and conditions (“T&Cs”). The DEFINITIONS section of the T&Cs contains a definition of Package. It states:
“Package” where a Container is loaded with more than one package or unit, the packages or other shipping units enumerated on the face of this sea waybill as packed in such Container and entered in the box on the face hereof entitled “Total number of Containers or Packages received by the Carrier” are each deemed a Package.
Dkt. No. 28-7.
Section 6 of the T&Cs is titled “CARRIER’S LIABILITY.” Section 6.1(c) under that title states as follows:
*2 Neither the Carrier nor the Vessel shall in any event be or become liable in any amount exceeding US$500 per package or customary freight unit. For limitation purposes under COGSA, it is agreed that the meaning of the word “package” shall be any palletised and/or unitized assemblage of cartons which has been palletised and/or unitised for the convenience of the Merchant, regardless of whether said pallet or unit is disclosed on the front hereof.
Id.
Under section 1304(5) of the Carriage of Goods by Sea Act (“COGSA”), a carrier shall not be “liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package … unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading,” or the parties agree to a higher limit. 46 U.S.C. § 1304(5). COGSA also provides that any bill of lading must show “[e]ither the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper.” Id. § 1303(3)(b).
The parties spar over the meaning of the term “package” as applied to the Sea Waybills. The parties do not dispute that K + N’s liability for the Cargo damage is limited under COGSA’s $500 “per package” limitation. 46 U.S.C. § 1304(5). However, the parties dispute whether the relevant “packages” are the 480 cartons of Cargo or the 24 pallets on which those cartons were packed. Because COGSA does not define “package,” courts have struggled with the question over time. See, e.g., Orient Overseas Container Line, (UK) Ltd. v. Sea-Land Service, Inc., 122 F. Supp. 2d 481, 486 (S.D.N.Y. 2000) (“If it was the COSGA drafters’ purpose to ‘avoid the pains of litigation,’ they must be rolling in their graves. Myriad courts have struggled with what a COGSA ‘package’ is.”); see alsoAllied Intern. Am. Eagle Trading Corp. v. S.S. Yang Ming, 672 F.2d 1055, 1057 (2d Cir. 1982).
Both parties cite to the Second Circuit’s decision in Seguros Illimani S.A. v. M/V Popi P, 929 F.2d 89, 93 (2d Cir. 1991). In considering how to define “package” for purposes of COGSA’s liability determination, that court instructed that the “primar[y] question” was “whether the bill of lading, construed as a contract, reveals the parties’ agreement on the appropriate COGSA ‘package.’ ” Id. at 94. The court wrote that:
The number appearing under the heading “NO. OF PKGS.” is our starting point for determining the number of packages for purposes of the COGSA per-package limitation, and unless the significance of that number is plainly contradicted by contrary evidence of the parties’ intent, or unless the number refers to items that cannot qualify as “packages,” it is also the ending point of our inquiry. “Package” is a term of art in the ocean shipping business, and parties to bills of lading should expect to be held to the number that appears under a column whose heading so unmistakably refers to the number of packages. That approach, evident in our more recent cases, encourages precision in filling out a key aspect of important documents, and the more consistently it is followed, the more it should minimize disputes.
Id. (internal citations omitted).
Plaintiff asserts that under Seguros, the Court’s inquiry ends with the language under the heading “Number of Packages.” Dkt. No. 30 at ECF p. 20. In the “Number of Packages” column in the Sea Waybills at issue here the parties listed “120 Packages,” “200 Packages,” “20 Packages,” and “140” Packages respectively. Dkt. No. 28-7. In other words, the parties put the number of cartons in the “Number of Packages” column. The “Description of Goods” column reinforces that the cartons are the packages—a representative Sea Waybill states in that column “Electrical Material 120 Packages Into 6 Pallets.” Id.
*3 Defendant argues that under Seguos, there is plain evidence of the parties’ contrary intent. The T&C’s state that that the meaning of the work “package” is pallet for COGSA purposes. Dkt. No. 28-7; Dkt. No. 35 at ECF pp. 9–10. Defendant argues that Seguros’s focus on the Number of Packages column is “irrelevant” in light of the T&Cs.
The Court cannot resolve the dispute between the parties based on the undisputed facts as reflected in the parties’ respective Rule 56.1 statements. Understanding what “package” means is primarily an exercise in contract interpretation to determine the parties’ intent. See, e.g., Yang Ming, 672 F.2d at 1061 (“[T]he bill of lading expresses a contractual relationship, in which the intent of the parties is the overarching standard.”); Hercules OEM Grp. v. Zim Integrated Shipping Servs. Ltd., 2023 WL 6317950 (S.D.N.Y. Sept. 28, 2023) (“In this Circuit, the question of what constitutes the COGSA package is largely and in the first instance a matter of contract interpretation.” (internal citations omitted)). Plaintiff is not entitled to judgment in its favor based solely on the language of the front of the Sea Waybills. Seguros states that the Number of Packages is dispositive except where that number is “plainly contradicted by contrary evidence of the parties’ intent,” 929 F.2d at 94, and here there is a question not adequately answered by the parties’ summary judgment papers whether the language in the T&Cs “plainly” contradicts the language on the front. By the same token, however, Defendant comes to the conclusion that the parties clearly intended to base COGSA liability on the number of pallets and not on the number of cartons only by reading the Number of Packages language out of the Sea Waybills. It is a fundamental principle of contract interpretation that courts should strive to give meaning to the entire agreement and not render any aspects superfluous. SeeHercules OEM, 2023 WL 6317950, at *10 (“an interpretation that gives reasonable and effective meaning to all terms of a contract is preferable to one that leaves a portion of the writing useless or inexplicable”) (internal citations omitted); see alsoCertified Multi-Media Sols, Ltd. v. Preferred Contractors Insurance Company Risk Retention Grp., LLC, 674 Fed. App’x 45, 47 (2d Cir. 2017) (general rules of contract interpretation include construing contract to give full meaning and effect to all provisions and avoid interpretations that render clauses superfluous or meaningless). K + N seeks to ascribe meaning to the language under Number of Packages by suggesting that the number of packages under that heading was entered to satisfy United States customs regulations. Dkt. No. 26 at ECF pp. 20–21. But that raises a question of fact. K&N’s Rule 30(b)(6) deponent admitted that customs regulations could have been satisfied with information under the Description of Goods heading. See Dkt. No. 32 at ECF p. 17; Dkt. No. 31-1 at ECF p. 5. K + N has also argued that it simply inputted the numbers given to it by the shipper, Dkt. No. 35 at ECF p. 10, but HDI has argued that K + N in fact drafted the Sea Waybill and had the last opportunity to change the Sea Waybills, Dkt. No. 32 at ECF pp. 16–17. Plaintiff has not provided evidence regarding the shipper’s contemporaneous understanding of the numbers it was providing for the Number of Packages column and their importance to the question of potential damage liability. In its summary judgment papers, Defendant has not offered a satisfactory understanding that would render the Number of Packages heading anything other than surplusage if its reading of the T&Cs were adopted.2 Neither party has provided significant evidence of industry practice.
*4 The Court appreciates that each party would like the Court to give the Sea Waybills and COGSA an interpretation as a matter of law and that it was the promise of Seguors that the court be able to do so in most cases. However, where as here, the parties’ competing summary judgment papers do not remove the potential ambiguity and permit a result as a matter of law, and particularly when the parties have agreed to a bench trial where the issues may be further elucidated, the only answer the Court can give is to deny the motions and await that further elucidation. See, e.g., Royal Ins. Co., 2004 WL 369268, at *6; Fireman’s Fund Ins. Co. v. Yang Ming Marine Transport Corp., 2002 WL 31040340 (S.D.N.Y. Sept. 12, 2002); Haemopharm, Inc. v. M/V MSC Indonesia, 2002 WL 732118, at *3 (S.D.N.Y. Apr. 24, 2002).
Accordingly, the motions for partial summary judgment and to strike affirmative defenses are DENIED. The parties are directed to appear in person at a status conference on September 18, 2024 at 4 p.m. in Courtroom 15C at the 500 Pearl Street Courthouse, to discuss the timing and format of the upcoming bench trial.
SO ORDERED.
All Citations
Slip Copy, 2024 WL 4188345
Footnotes
1
In this case, the parties operated under the Sea Waybills rather than traditional bills of lading. The Second Circuit has stated that “A sea waybill is like a bill of lading, except that bills of lading are negotiable while waybills are not.” Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 141 n.5 (2d Cir. 2010); see alsoHerod’s Stone Design v. Mediterranean Shipping Company S.A., 846 Fed App’x 37, 39 (similar). Both parties cite cases analyzing bills of lading indistinguishably and neither party has argued that the difference affects their dispute. Thus, the Court analyzes the Sea Waybills as equivalent to bills of lading.
2
Judge Rochon’s opinion in Hercules OEM, 2023 WL 6317950, does not answer the question presented by this case. There, the parties disputed whether the relevant package was the cartons holding the cargo or the pallets in which the cartons were loaded, but the front side of the bill of lading had no heading for number of packages and only referenced an attached list that referred to cartons. Id. at * 9. In that circumstance, the court was required to look to the terms and conditions for an understanding of the parties’ intent.
Sook H. Lee, Law Offices of Sook H. Lee, Irving, TX, for Plaintiff.
Ross Ian Landau, Swain and Dipolito LLP, Long Beach, CA, Frank Xavier Dipolito, Swain and Dipolito LLP, Gardena, CA, for Defendant STPW Inc.
Gregory James Goodheart, Goodheart Law Offices, West Hills, CA, for Defendant One Way Only Trans, Inc.
Elliot S. Blut, Blut Law Group APC, Los Angeles, CA, for Defendant OMI Truck Parking Facilities, Inc.
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT [42]
OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
*1 Plaintiff Lotte Global Logistics Co., Ltd. (“Lotte”), as assignee of Samsung SDI Co., Ltd. (“Samsung”), brings this interstate shipping action against Defendants One Way Only Trans, Inc. (“OWOT”), STPW Inc. (“STPW”) and OMI Truck Parking Facilities, Inc. (“OMI”). (Compl., ECF No. 1.) STPW removed the entire case from state court, (NOR, ECF No. 1), and Lotte now moves for summary judgment seeking joint and several liability against OWOT and STPW for lost cargo under the Carmack Amendment. (Mot. Summ. J. (“Mot.” or “Motion”), ECF No. 42; Compl. ¶¶ 9–15.) For the reasons discussed below, the Court GRANTS the Motion.1
II. FACTUAL BACKGROUND
The following facts are taken from Lotte’s Statement of Uncontroverted Facts (“PSUF”), ECF No. 42-2, STPW’s Statement of Genuine Disputes of Material Fact, (“SGDF”), ECF No. 48-1, and OWOT’s Separate Statement of Undisputed Facts (“OWOT AMF”), ECF No. 47-2.2
Lotte is a Korean corporation that provides domestic and international trade logistics services. (PSUF 7.) Lotte Global Logistics, North America (“LGLNA”) is Lotte’s wholly owned subsidiary in the United States and a licensed property broker by the Federal Motor Carrier Safety Administration (“FMCSA”). (Id. at 18.) OWOT and STPW are California corporations that provide trucking services and have the operating authority of motor carriers from the FMCSA. (Id. at 8–9.) Victor Melendez is the president of OWOT, and Jose Marroquin is the president of STPW. (Id. at 8, 21.) OMI is a California corporation that operates container storage yards. (Id. at 10.) This action arises from the theft of one forty-foot container of 128 packages of lithium ion batteries (“Cargo”), which was part of a seventeen-container shipment (“Shipment”), stolen from one of OMI’s storage yards in Commerce, California (“OMI Yard”). (Id. at 1–2.)
Samsung is a Korean corporation that manufactures and exports lithium-ion batteries and agreed to sell and deliver its batteries to Nextera Energy Constructors (“Nextera”) in Kingman, Arizona. (Id. at 3, 12–13.) On or before October 20, 2022, Samsung retained Lotte to transport the Shipment via ocean carrier from Busan, Korea to the Port of Los Angeles in Los Angeles, California (“Port”). (ECF No. 11.) Upon arrival to the Port, the Shipment would be transported to Kingman, Arizona via motor carrier. (Id. at 11.) On November 1, 2022, the Shipment was sent from Busan to the Port pursuant to Waybill No. SEL1441122, which identified Samsung as the shipper and Nextera as the consignee. (Id. at 3, 17; Decl. Sangwan Kim ISO Mot. (“Kim Decl.”) Ex. A (“Waybill”), ECF No. 42-5.) The batteries contained in the Shipment had passed a quality inspection test and were affixed with a seal. (PSUF 13–16.)
*2 On November 3, 2022, LGLNA and OWOT entered into a Broker-Carrier Agreement (“Agreement”) in which OWOT, identified as a “Registered Motor Carrier,” agreed to transport the Shipment from the Port to Kingman. (Id. at 19; Decl. Wendy Chavana ISO Mot. (“Chavana Decl.”) Ex. A (“Agreement”), ECF No. 42-6.) Melendez signed the Agreement as CEO3 of OWOT. (Chavana Decl. ¶ 5.) Under the Agreement, OWOT was required to comply with all state, federal and local hazardous materials (“HAZMAT”) licensing requirements. (Chavana Decl. ¶ 1(F).) During the relevant time, OWOT had one tractor and did not have a HAZMAT permit or an FMCSA property broker license. (PSUF 8.) In contrast, STPW had twenty-two drivers and did have a HAZMAT permit. (Id. at 9.) At the time, Melendez—while performing duties as the president of OWOT—was also a driver for STPW. (Id.; Decl. Sook H. Lee ISO Motion (“Lee Decl.”) Ex. B (“STPW Resp. to ROGs”) No. 3, ECF No. 42-3; Decl. Jose Marroquin (“Marroquin Decl.”) ¶ 3, ECF No. 48-2.)
Before the Shipment arrived at the Port of Los Angeles, LGLNA issued a delivery order (“DO” or “LGLNA DO”) requesting that OWOT transport the Shipment from Fenix Marine Terminal in San Pedro, California (“Terminal”) to Kingman. (PSUF 20; Chavana Decl. Ex. B (“LGLNA DO”).) At the same time, LGLNA sent OWOT a dangerous goods declaration by Samsung. (PSUF 20; Chavana Decl. Ex. C (“HAZMAT Decl.”).) Melendez received the LGLNA DO and HAZMAT Declaration. (PSUF 21; Lee Decl. Ex. E (“Melendez Dep.”) 19:11–25.) Melendez then asked Marroquin if STPW could move the Shipment. (PSUF 21; Melendez Dep. 22:19–25, 23:4–20; 24:1–5.)
Thereafter, OWOT sent DOs to STPW, with specific pick-up times concerning the Shipment, and STPW sent Pick-Up and Delivery Receipts as proof of delivery (“PODs”). (PSUF 22; Lee Decl. Ex. F (“OWOT DOs and STPW PODs”).) The OWOT DOs noted the Shipment’s HAZMAT requirement and attached the HAZMAT Declaration. (Lee Decl. Ex. F.) STPW also issued dispatch orders to its drivers for delivery of the Shipment. (SGDF 38; Suppl. Decl. Sook H. Lee ISO Mot. (“Suppl. Lee Decl.”) Ex. D (“Dispatch Orders”), ECF No. 49-1.) The dispatch orders provided “special instructions” that noted the HAZMAT requirement. (Suppl. Lee Decl.)
The Shipment arrived at the Port on November 12, 2022. (PSUF 23.) On November 15, 2022, Daniel Banegas of OWOT arranged for four of the Shipment’s containers to be picked up from the Terminal. (PSUF 24; Lee Decl. Ex. D (“Banegas Emails”).) On November 16, 2022, the remaining thirteen containers, including the Cargo, were picked up at the Terminal and dropped off at the OMI Yard by STPW drivers, including Melendez. (PSUF 25; Banegas Emails; Lee Decl. Ex. I (“Shipment PODs”).) Specifically, at or around noon on November 16, 2022, Melendez picked up the Cargo from the Terminal. (PSUF 26; Lee Decl. Ex. H (“Cargo EIR, POD and Forged POD”).) Melendez then prepared a POD, by recording the container number (CGMU5420924), chassis number (TLXZ4520924), and seal number (H8269960) on STPW letterhead, which he presented to personnel at the OMI Yard. (PSUF 26; Lee Decl. H.) Melendez, also acting as STPW’s driver, drove a tractor (license no. YP52224) owned by STPW. (PSUF 26.)
Late in the evening on November 16, 2022, at approximately 11:45 p.m., a driver in a red tractor with STPW placards presented a forged POD on STPW letterhead to OMI’s personnel, picked up the Cargo, and left the OMI yard seventeen minutes later, on November 17, 2022, at 12:02 a.m. (PSUF 27; Lee Decl. Ex. G (“Police Report”).) Later that day, the container was found empty in Ontario, California. (PSUF 28.) The Shipment’s remaining sixteen containers were delivered to Kingman on November 18 and 21–22, 2022, without incident. (PSUF 29; Lee Decl. Ex. I.)
*3 On December 2 and 7, 2022, OWOT sent LGLNA seventeen invoices, totaling $55,624.00, which LGLNA paid on December 28, 2022, and January 4, 2023. (PSUF 30; Chavana Decl. Ex. D (“Invoices”), Ex. E (“Payments”).) On December 19, 2022, Lotte received a Claim Notice from Samsung demanding payment of the Cargo’s invoice value in the amount of $533,157.12. (PSUF 32.) On January 9, 2023, Sook H. Lee, on behalf of LGLNA, sent Notice of Claim for the stolen Cargo to OWOT, STPW, and OMI. (Id. at 31.) On or about March 21, 2023, Lotte paid the full amount to Samsung in exchange for an assignment of Samsung’s right to recover damages from Defendants. (Id. at 33.) On June 26, 2023, Lotte Insurance Co., Ltd. paid Lotte the full $533,157.124 amount and subrogated to Lotte’s right and remedies in this action. (Id. at 34.)
On March 23, 2023, Lotte filed a lawsuit in state court—on behalf of Lotte Insurance—against OWOT, STPW, and OMI, seeking a total of $547,849.99 in damages. (Id. at 36.) In its Complaint, Lotte asserts four causes of action against OWOT and STPW: 1) liability for loss of cargo under the Carmack Amendment; 2) violation of 49 U.S.C. §§ 13902, 14707, and 14916; 3) negligence; and 4) breach of bailment. (Compl. ¶¶ 16–29.) On May 10, 2023, STPW, on behalf of all Defendants, removed this action to federal court. (See generally NOR.) Lotte now moves for summary judgment on its first cause of action against Defendants OWOT and STPW—liability for loss of cargo under the Carmack Amendment.5 (See generally, Mot.) The Motion is fully briefed. (OWOT Opp’n, ECF No 47; STPW Opp’n, ECF No. 48; Reply, ECF No. 49.)
III. LEGAL STANDARD
A court “shall grant summary judgment 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). A disputed fact is “material” where it might affect the outcome of the suit under the governing law, and the dispute is “genuine” where “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The burden of establishing the absence of a genuine issue of material fact lies with the moving party. SeeCelotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
Once the moving party satisfies its initial burden, the nonmoving party cannot simply rest on the pleadings or argue that any disagreement or “metaphysical doubt” about a material issue of fact precludes summary judgment. Seeid. at 324; Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The non-moving party must show that there are “genuine factual issues that … may reasonably be resolved in favor of either party.” Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (emphasis omitted) (quoting Anderson, 477 U.S. at 250). Courts should grant summary judgment against a party who fails to make a sufficient showing on an element essential to her case when she will ultimately bear the burden of proof at trial. Celotex, 477 U.S. at 322–23.
In ruling on summary judgment motions, courts “view the facts and draw reasonable inferences in the light most favorable” to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007) (internal quotation marks omitted). Conclusory, speculative, or “uncorroborated and self-serving” testimony will not raise genuine issues of fact sufficient to defeat summary judgment. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002); Thornhill Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Moreover, though the court may not weigh conflicting evidence or make credibility determinations, there must be more than a mere scintilla of contradictory evidence to survive summary judgment. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).
*4 The court may assume that material facts claimed and adequately supported are undisputed except to the extent that such material facts are (a) included in the opposing party’s responsive statement of disputes and (b) controverted by declaration or competent written evidence. C.D. Cal. L.R. 56-4. The Court is not obligated to look any further in the record for supporting evidence other than what is actually and specifically referenced. Id.
IV. DISCUSSION
Lotte moves for summary judgment on the ground that it has established a prima facie case for liability against OWOT and STPW under the Carmack Amendment. (See Mot. 5). OWOT and STPW oppose the Motion on the sole ground that there is genuine dispute as to whether they were operating as a “motor carrier” within the meaning of the Carmack Amendment. (OWOT Opp’n 5; STPW Opp’n 2.)
A. Carmack Amendment
The Carmack Amendment, 49 U.S.C. § 14706 et seq., is part of the Interstate Commerce Act and “provides the exclusive cause of action for interstate shipping contract claims.” Pac. Indem. Co. v. Atlas Van Lines, Inc., 642 F.3d 702, 707 (9th Cir. 2011) (quoting White v. Mayflower Transit, L.L.C., 543 F.3d 581, 584 (9th Cir. 2008)). The Carmack Amendment “subjects common carriers and freight forwarders transporting cargo in interstate commerce to absolute liability for actual loss or injury to property.” Ins. Co. of N. Am. v. NNR Aircargo Serv. (USA), Inc., 201 F.3d 1111, 1115 (9th Cir. 2000). “[T]he statute codifies the common-law rule that a carrier, though not an absolute insurer, is liable for damage to goods transported by it unless it can show that the damage” was the result of an unexpected cause. Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964). However, liability does not extend to brokers. CGU Int’l Ins., PLC v. Keystone Lines Corp., No. C-02-3751 SC, 2004 WL 1047982, at *2 (N.D. Cal. May 5, 2004) (“Carmack governs carriers but not brokers.”).
Under the Interstate Commerce Act, a “broker” is defined as:
a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent, sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.
49 U.S.C. § 13102(2). The Code of Federal Regulations adds:
Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.
49 C.F.R. § 371.2(a). By contrast, a “motor carrier” is “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). The term “transportation” includes:
(A) a motor vehicle, vessel, warehouse, wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, regardless of ownership or an agreement concerning use; and
(B) services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers of passengers and property.
49 U.S.C. § 13102(23). “The difference between a carrier and a broker is often blurry.” CGU, 2004 WL 1047982, at *2. “The crucial distinction is whether the party legally binds itself to transport, in which case it is considered a carrier.” Id. (citing 49 C.F.R. § 371.2(a)).
*5 To establish a prima facie case of liability under the Carmack Amendment, a shipper must show “delivery in good condition, arrival in damaged condition, and the amount of damages.” Thousand Springs Trout Farms, Inc. v. IML Freight, Inc., 558 F.2d 539, 542 (9th Cir. 1977) (quoting Mo. Pac. R.R. Co., 377 U.S. at 138). The burden then shifts to the carrier to show “both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability.” Ibid. Here, the parties do not dispute that Samsung delivered the Cargo in good condition and that Lotte suffered damages in the amount of $547,849.99 for total loss of the Cargo. (PSUF 13–16, 36.) Thus, OWOT and STPW are subject to absolute liability for this loss if they were operating as motor carriers. The Court now turns to address whether OWOT and STPW were operating as motor carriers under the Carmack Amendment.
B. OWOT
Courts have recognized that a party can become liable under the Carmack Amendment by signing a Motor Carrier Agreement that identifies the party as a “motor carrier.” Contessa Premium Foods, Inc. v. CST Lines, Inc., No. 2:10-cv-7424-RSWL (FFMx), 2011 WL 3648388, at *3 (C.D. Cal. Aug. 18, 2011) (noting that representation as a “carrier” in motor carrier agreement is evidence of motor carrier status). And “a carrier is not automatically considered a broker because it requests another carrier to perform the transportation. Rather, … motor carriers … are not brokers within the meaning of this section,” when the motor carriers, “arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.” KLS Air Express, Inc. v. Cheetah Transp. LLC, No. CIV S-05-2593 FCD DAD, 2007 WL 2428294, at *4 (E.D. Cal. Aug. 23, 2007) (alteration in original) (quoting 49 C.F.R. § 371.2(a)); see alsoCGU, 2004 WL 1047982, at *2 (determining an entity has liability under the Carmack Amendment if the carrier accepts responsibility for ensuring delivery of the goods, “regardless of who actually transported them”). Finally, when a party sends a direct invoice to a shipper for transportation services, this “create[s] an inference that [it] held itself out to [p]laintiff as a transporter of property.” Contessa, 2011 WL 3648388, at *4 (finding direct invoice by defendant to plaintiff for the entire loading and transportation process is circumstantial evidence of carrier status).
Here, the undisputed facts demonstrate: (1) OWOT had the authority of motor carrier from the FMCSA, (PSUF 8); (2) Melendez, as OWOT’s president, signed a Motor Carrier Agreement that identified OWOT as a motor carrier, (id. at 19; Chavana Decl. Ex. A); (3) OWOT accepted LGLNA’s DO and HAZMAT Declaration and agreed to transport the Shipment, (PSUF 24–25; Chavana Decl. Exs. B, C); (4) all communications for pick-up and delivery of the Shipment, including notification of the stolen Cargo, were between LGLNA and OWOT, (PSUF 24–25; Lee Decl. Ex. D; Suppl. Lee Decl. Exs. A, B); and (5) OWOT sent a total of seventeen invoices and PODs to LGLNA related to each container of the Shipment, (PSUF 30; Chavana Decl. Exs. D, E). This is sufficient to demonstrate that OWOT was acting as a motor carrier under the Carmack Amendment.
OWOT makes two arguments, both of which the Court finds unpersuasive. First, OWOT argues it was acting as a broker under the Agreement. (OWOT Opp’n 9.) However, there is no evidence that OWOT held itself out to LGLNA as arranging the Shipment for another party (i.e., STPW) to serve as the carrier. See 49 U.S.C. § 13102(2). In fact, OWOT does not have an FMCSA broker license. (PSUF 8.) And even if it did, “a broker shall not, directly or indirectly, represent its operations to be that of a carrier.” 49 C.F.R. § 371.7(b). OWOT’s argument cannot be reconciled with the undisputed facts demonstrating it signed the Agreement as a registered motor carrier, accepted the terms of LGLNA’s delivery, and agreed to transport the Shipment. Moreover, all of the events described above occurred before Melendez—acting on behalf of OWOT—even approached Marroquin regarding STPW’s driving or transporting the containers.
*6 Second, OWOT argues it notified LGLNA that STPW would transport the Shipment because OWOT did not have a HAZMAT permit. (OWOT Opp’n 9.) OWOT argues this voided the Agreement. (Id.). As a preliminary matter, OWOT has adduced no evidence to support its position besides Melendez’s own deposition testimony. (Decl. Gregory J. Goodheart ISO OWOT Opp’n (“Goodheart Decl.”) Exs. A–N (“Melendez Dep. Excerpts”), ECF No. 47-1.) In establishing a genuine dispute to a material fact, the party opposing a motion for summary judgment must rely on more than its own self-serving and uncorroborated testimony. Villiarimo, 281 F.3d at 1061; Thornhill Publ’g, 594 F.2d at 738. Melendez’s claims of a subsequent and superseding spoken arrangement to the Agreement do not meet that threshold.
Furthermore, Melendez’s testimony does not support the contention that LGLNA knew about the alleged superseding arrangement. For example, OWOT claims that “OWOT told plaintiff that STPW would be the firm handling the subject shipment and not OWOT. Plaintiff agreed with this arrangement.” (OWOT AMF 3.) Here, OWOT’s proffered evidence merely demonstrates that Melendez “believe[d]” LGLNA knew STPW would transport the Shipment because he testified: “I think my son let them know.” (Goodheart Decl. Ex. C). Whereas the undisputed evidence supports the inference that Melendez’s son, Banegas, did no such thing. The undisputed evidence reflects that Banegas sent LGLNA several emails in November 2022: November 3 (providing a price quote and confirming OWOT could handle the Shipment), November 17 (notifying LGLNA of the theft), and November 28 (assisting in resolution of the insurance claim). (Suppl. Lee Decl. Exs. A B). These emails do not reference STPW as an additional carrier nor do the emails clarify OWOT’s inability to perform under the Agreement. As such, the Court finds LGLNA was not noticed that STPW would transport the Shipment because OWOT did not have a HAZMAT permit.
In sum, the Court finds OWOT fails to produce any evidence supporting its assertion that Lotte had knowledge of OWOT’s arrangement with STPW—regardless of what the OWOT-STPW relationship was. Rather, the undisputed record demonstrates that OWOT took responsibility for transportation of the Shipment by holding itself out as a motor carrier and subsequently demanded compensation for performance under the Agreement. Accordingly, the Court determines OWOT is liable as a motor carrier under the Carmack Amendment.
C. STPW
A “motor carrier” is a person providing motor carrier transportation for compensation. 49 U.S.C. § 13102(14). When a trucking company hires independent drivers to use its own tractors to transport a shipment, this is evidence of its status as a motor carrier. AXA Corp. Sols.Assurance v. Great Am. Lines, Inc., No. 10-cv-2023-MAS (TJB), 2015 WL 9460558, at *1 (D.N.J. Aug. 22, 2016) (notwithstanding assertions that another motor carrier handled all “operation, dispatching, and accounting,” a trucking company was also a motor carrier under the Carmack Amendment where “it is undisputed that [it] hired the driver and owned the tractor-trailer that transported the Freight.”). The Court finds AXA persuasive and instructive in the present case, as it demonstrates that one party’s motor carrier status does not preclude another party’s status as a motor carrier. Additionally, the undisputed facts may demonstrate that two parties acted as motor carriers with respect to the same shipment, even where questions remain as to their arrangement with one another. To the extent that the facts presented here raise such questions, they do not create a genuine dispute as to STPW’s motor carrier status.
STPW was a licensed FMCSA motor carrier with a HAZMAT permit. (PSUF 9.) As such, STPW was authorized to transport the Shipment. Melendez asked Marroquin if STPW would move the Shipment and, thereafter, OWOT issued DOs to STPW and STPW issued corresponding PODs to OWOT. (PSUF 22; Lee Decl. Ex. F.) The OWOT DOs provided specific pickup times related to the Shipment, as well as a notification that a HAZMAT permit was required to transport the Shipment. (Lee Decl. Ex. F.) The OWOT DOs requested STPW to “Bill to One Way Only Trans Inc.” (Id.). Consistent with the appointment times, STPW dispatched its trucks and drivers to pick up the full containers at the Terminal, store them briefly at the OMI Yard, then deliver the containers to Nextera—where the Cargo was offloaded, and ultimately return the empty containers to Long Beach, California. (PSUF 22; Suppl. Lee Decl. Ex. D.) Each driver that moved one of the Shipment’s seventeen containers was “employed by” STPW. (PSUF 9.)
*7 STPW argues these facts fail to demonstrate that STPW transported the Cargo or received compensation in connection with transportation of the Cargo. (STPW Opp’n 6, 7). This argument relies on three claims, all made by Marroquin in his declaration. (Marroquin Decl. 3, 5–8.) First, Marroquin states Melendez was an independent contractor with STPW, who at no time had ownership interest in STPW. (Id. ¶ 3). Second, he states Melendez asked if he could “borrow” STPW tractors and “hire” STPW drivers to move the containers, but that Marroquin did not give Melendez authority to move the containers under STPW’s operating authority or HAZMAT permit. (Id. ¶¶ 5–8.) Third, Marroquin states STPW did not contract with or expect compensation from LGLNA, OWOT, or any other entity in connection with the Cargo. (Id. ¶¶ 11, 13.)
STPW asserts no evidence beyond Marroquin’s own assertions. Nor does STPW proffer evidence demonstrating how any driver could have moved the containers without a HAZMAT permit—much less that Marroquin successfully conditioned the use of STPW’s HAZMAT certified trucks and drivers in that regard. (See OWOT SSUF 20.) Moreover, several of Marroquin’s statements conflict with Melendez’s deposition testimony. For example, Melendez testified he was Marroquin’s business partner and they shared a bank account. (Melendez Dep. 19:22–25, 22:19–25, 76:10–25.) He also testified that, in December 2022, Marroquin told Melendez to “wait” before forwarding LGLNA’s payments, and that STPW recently inquired about that money. (Id. at 67:2–14, 68:5-15, 68:20–69:8, 74:7–11; 75:13–76:9).
It is true that the record invites speculation as to the exact nature of STPW and OWOT’s relationship. For example, Lotte has provided PODs for each container in the Shipment, (Lee Decl. Ex. I), and some are on STPW letterhead, while some are on OWOT letterhead. The “EIR” indicates the Cargo was picked up at the Terminal by OWOT in STPW’s tractor, while the POD that Melendez issued and presented at the OMI Yard is on STPW letterhead, as is the forged POD used to steal the Cargo. (Lee Decl., Ex. H Cargo EIR, POD and Forged POD.) However, Plaintiff has demonstrated that at least five of the PODs on STPW letterhead specifically correlate with DOs issued by OWOT, instructing STPW on pick-up and billing with respect to one of the Shipment’s seventeen containers. (Lee Decl. Ex. F, OWOT DOs and STPW PODs.) This is circumstantial evidence, not only that Marroquin accepted Melendez’s proposal to move the Shipment, but that the Cargo was moved pursuant to that agreement.
Therefore, the Court finds Lotte has demonstrated that STPW fulfilled OWOT’s request to transport the Shipment, which it was authorized to do, entitling STPW to compensation. As such, the Court finds STPW acted as a motor carrier under the Carmack Amendment. Accordingly, STPW fails to raise a genuine dispute as to any material fact—as to its motor carrier status in this case—and is therefore subject to – absolute liability under the Carmack Amendment.
V. CONCLUSION
For the reasons discussed above, the Court GRANTS Plaintiff’s Motion for Summary Judgment. (ECF No. 42).
IT IS SO ORDERED.
All Citations
Slip Copy, 2024 WL 3886092
Footnotes
1
Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.
2
The Court has reviewed OWOT’s Separate Statement of Undisputed Facts and determined this document is functionally intended to be OWOT’s additional material facts. (OWOT AMF 2.) As such, the Court will cite to it operatively as OWOT’s submission of additional material facts.
3
Melendez signed the Agreement as the “CEO” of OWOT. (Chavana Decl. ¶ 5). To clarify, Melendez is listed as the “President” of OWOT but apparently also performs acts as the CEO of OWOT. (PSUF 8; See Chavana Decl. ¶ 5.) Accordingly, the Court will continue to refer to Melendez as the “President” of OWOT.
4
Additionally, back in December of 2022, Lotte arranged and paid for transportation of the stolen Cargo’s replacement and suffered an additional $14,692.87 in damages. (PSUF 35.)
5
In its Complaint, Lotte asserts four causes of action against OWOT and STPW. (Compl. ¶¶ 16–29.) In its Motion, Lotte notified the Court that Lotte will only seek summary judgment on Lotte’s first cause of action. (Mot. 5.) Lotte will not pursure its second, third, or fourth causes of action against OWOT and STPW. (Mot. 5.) Accordingly, the Court DISMISSES Lotte’s second, third, and fourth causes of action against OWOT and STPW.
