Global Oil Tools, Inc. v. Expeditors International of Washington, Inc. et al

Filing 113

ORDER AND REASONS granting 54 , 88 Motions for Summary Judgment. For the foregoing reasons, the Court GRANTS Hapag-Lloyd's and Ports America's motions for summary judgment. Plaintiff's claims against Hapag-Lloyd and Ports America are DISMISSED WITH PREJUDICE. Expeditors' and Andrea Merzario's crossclaims against Ports America are DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 4/2/2018. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GLOBAL OIL TOOLS, INC.
VERSUS

CIVIL ACTION
NO. 16-16372

EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC. ET AL.

SECTION “R” (1)

ORDER AND REASONS
Before the Court are defendant Hapag-Lloyd (America), LLC’s and
Ports America Louisiana, L.L.C.’s motions for summary judgment. 1 For the
following reasons, the Court grants the motions. The Himalaya clause in the
relevant bill of lading forecloses the liability of Hapag-Lloyd and Ports
America to plaintiff. Ports America is further entitled summary judgment on
two crossclaims against it because it was not negligent.

I.

BACKGROUND
Plaintiff sells tools for oil and gas exploration. 2 In early 2016, plaintiff

was in negotiations to sell a large number of tools, allegedly worth $2.4
million, as well as intellectual property, to an overseas buyer.3

1
2
3

R. Docs. 54, 88.
R. Doc. 87-2 at 2.
Id. at 2-3; R. Doc. 16 at 9 ¶ 28.

In

anticipation of the sale, plaintiff packed these tools and intellectual property
into two shipping containers, and contracted with defendant Expeditors
International of Washington, Inc. (Expeditors) to arrange for the shipment
of these containers to Romania.4 Expeditors arranged for the containers to
sail from New Orleans on March 12, 2016, aboard a ship operated by HapagLloyd.5 The containers arrived in New Orleans from Houma, Louisiana on
March 8, 6 but plaintiff (through Expeditors) requested that Hapag-Lloyd
delay the trans-Atlantic shipment for two weeks. 7
The containers were then scheduled to sail in late March aboard the
M/V BAVARIA. On March 22, plaintiff instructed Expeditors to delay the
shipment again. 8 Expeditors relayed this instruction to Hapag-Lloyd, but
Hapag-Lloyd failed to relay it to defendant Ports America, the stevedoring
company responsible for loading containers onto the M/V BAVARIA. 9 The
ship, with plaintiff’s containers on board, sailed on March 28. 10

R. Doc. 87-2 at 2-3; R. Doc. 87-3 (shipper’s letter of instructions to
Expeditors).
5
R. Doc. 112-7 at 1.
6
R. Doc. 87-2 at 3.
7
R. Doc. 76-1 at 5-6.
8
R. Doc. 87-2 at 4.
9
See R. Doc. 88-2 at 1-2, 10; R. Doc. 112-7 at 13-14 (Hapag-Lloyd
booking confirmation reflecting shipment date of April 2).
10
R. Doc. 112-7 at 16-17 (Hapag-Lloyd booking confirmation reflecting
that plaintiff’s containers were loaded in error on the M/V BAVARIA and
sailed on March 28). Hapag-Lloyd discovered the mistake on the same day,
2
4

After the ship sailed, plaintiff acquiesced in the discharge of its
containers at Constanta, Romania. 11 The containers were transshipped in
Cagliari, Italy, and arrived at Constanta on April 23, 2016. 12 A bill of lading,
dated March 28, was approved by plaintiff on May 27.13 The bill of lading
identifies Romarftrans Group Srl. (RGS) as plaintiff’s intermediate
consignee.14 RGS is Andrea Merzario, S.A.’s agent in Romania.15 Acting
through RGS, and pursuant to plaintiff’s instructions, Andrea Merzario
moved the containers to a bonded storage facility in June 2016.16 The sale of
plaintiff’s tools and intellectual property was never consummated, and the
containers remain in Constanta. Some tools were purportedly damaged
during transit.17

see id., and plaintiff learned of the mistaken shipment shortly thereafter, R.
Doc. 87-2 at 5.
11
R. Doc. 87-2 at 8; R. Doc. 82-10.
12
R. Doc. 112-5.
13
R. Doc. 112-4 (authenticated bill of lading); R. Doc. 112-3 at 13 (email
in which plaintiff approved bill of lading). Plaintiff contends that the bill of
lading is dated September 28, 2016. Although the date on the document is
somewhat difficult to read, no reasonable juror, examining the document
closely, would read the date as “09/28/16” rather than “03/28/16.”
14
R. Doc. 112-4 at 2.
15
See R. Doc. 82-11 (letter of attorney authorizing RGS, on behalf of
Andrea Merzario, to represent plaintiff’s interests in Romania).
16
R. Docs. 82-13, 82-14.
17
R. Doc. 87-2 at 6; R. Doc. 87-7.
3

Plaintiff sued Expeditors and Zurich American Insurance Company,
Expeditors’ liability insurer, on November 15, 2016, for damages and
declaratory relief.18 Plaintiff added Hapag-Lloyd, Ports America, and Andrea
Merzario as defendants on March 13, 2017.19 Several defendants have filed
crossclaims and counterclaims.20 Hapag-Lloyd now moves for summary
judgment on plaintiff’s claims,21 and Ports America moves for summary
judgment on plaintiff’s claims and Expeditors’ and Andrea Merzario’s
crossclaims. 22 Plaintiff and Expeditors have filed oppositions,23 but Andrea
Merzario has not.

II.

LEGAL STANDARD
Summary judgment is warranted when “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); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994). When assessing whether a dispute as to any material

R. Doc. 1.
R. Doc. 16. Plaintiff also sued, and later voluntarily dismissed, New
Orleans Terminal, LLC. See R. Doc. 41.
20
See R. Docs. 26, 33, 50.
21
R. Doc. 54.
22
R. Doc. 88.
23
R. Docs. 87, 91, 92.
4
18
19

fact exists, the Court considers “all of the evidence in the record but refrain[s]
from making credibility determinations or weighing the evidence.” Delta &
Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99
(5th Cir. 2008).

All reasonable inferences are drawn in favor of the

nonmoving party, but “unsupported allegations or affidavits setting forth
‘ultimate or conclusory facts and conclusions of law’ are insufficient to either
support or defeat a motion for summary judgment.” Galindo v. Precision
Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at
1075. A dispute about a material fact is genuine “if 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).
If the dispositive issue is one on which the moving party will bear the
burden of proof at trial, the moving party “must come forward with evidence
which would entitle it to a directed verdict if the evidence went
uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1264-65 (5th Cir. 1991). The nonmoving party can then defeat the motion by
either countering with evidence sufficient to demonstrate the existence of a
genuine dispute of material fact, or “showing that the moving party’s
evidence is so sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.” Id. at 1265.
5

If the dispositive issue is one on which the nonmoving party will bear
the burden of proof at trial, the moving party may satisfy its burden by
merely pointing out that the evidence in the record is insufficient with
respect to an essential element of the nonmoving party’s claim. See Celotex,
477 U.S. at 325. The burden then shifts to the nonmoving party, who must,
by submitting or referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest upon the
pleadings, but must identify specific facts that establish a genuine issue for
trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of
summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION
A.

The Bill of Lading Bars Plaintiff’s Claims Against
Hapag-Lloyd and Ports America

Hapag-Lloyd and Ports America seek summary judgment on plaintiff’s
claims against them based on the Himalaya clause in the bill of lading. A
bill of lading is a contract between a shipper and a carrier for transportation
of goods. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 18-19 (2004) (“A bill
6

of lading records that a carrier has received goods from the party that wishes
to ship them, states the terms of carriage, and serves as evidence of the
contract for carriage.”). The contract “enunciates the responsibility of the
carrier to deliver enumerated goods to a specified location.”24 Interocean
S.S. Corp. v. New Orleans Cold Storage & Warehouse Co., 865 F.2d 699, 703
(5th Cir. 1989).

As contracts of adhesion, bills of lading are “strictly

construed against the carrier.” Id. (quoting Allied Chem. v. Companhia de
Navegacao, 775 F.2d 476, 482 (2d Cir. 1985)). But “contracts for carriage of
goods by sea must be construed like any other contracts: by their terms and
consistent with the intent of the parties.” Kirby, 543 U.S. at 397.
Here, Expeditors issued the bill of lading for plaintiff’s containers,
although Expeditors did not actually own or operate the ship that
transported the containers. In this transaction, Expeditors acted as a nonvessel operating common carrier—a type of intermediary between the
shipper (plaintiff) and the vessel-operating common carrier (Hapag-Lloyd).
See GIC Servs., L.L.C. v. Freightplus USA, Inc., 866 F.3d 649, 657 (5th Cir.

A nonnegotiable bill of lading directs the carrier to deliver the goods to
a specific person, called a consignee. See 1 Thomas Schoenbaum, Admiralty
and Maritime Law § 10-11 (5th ed. 2017)). A negotiable bill, on the other
hand, “functions as a document of title” and directs the carrier to deliver the
goods to the holder of the bill. Id. (emphasis omitted). Expeditors’ bill of
lading in this case states that it is nonnegotiable. R. Doc. 112-4 at 2.
7
24

2017). With respect to plaintiff, Expeditors played the role of carrier; with
respect to Hapag-Lloyd, however, Expeditors played the role of shipper. See
1 Admiralty and Maritime Law § 10-7.
In its capacity as carrier, Expeditors owed a number of statutory duties
to plaintiff under the Carriage of Goods by Sea Act (COGSA).

Most

importantly, COGSA requires the carrier to “properly and carefully load,
handle, stow, carry, keep, care for, and discharge the goods carried.” 46
U.S.C. § 30701 note sec. 3(2).

In other words, and subject to several

exceptions, Expeditors was “liable to [plaintiff] if ‘anything happen[ed] to the
cargo during the voyage.’” GIC Servs., 866 F.3d at 657 (quoting Prima U.S.
Inc. v. Panalpina, Inc., 223 F.3d 126, 129 (2d Cir. 2000)). The bill of lading
issued by Expeditors incorporates the provisions of COGSA. 25 See 46 U.S.C.
§ 30701 note sec. 13.
The bill of lading also includes a Himalaya clause, which reads:
Merchant undertakes that no claim or allegation shall be made
against any Person or Vessel whatsoever other than Carrier,
including the Carrier’s servants or agents, any independent
contractors (at any time) and their servants or agents,
Participating Carriers, and all others by whom the whole or any
R. Doc. 88-2 at 18. This clause is known as the clause paramount. See
Brown & Root, Inc. v. M/V Peisander, 648 F.2d 415, 420 (5th Cir. 1981).
Although COGSA applies of its own force only “from the time when the goods
are loaded on to the time when they are discharged from the ship,” 46 U.S.C.
§ 30701 note sec. 1(e), the clause paramount provides that “COGSA shall
govern before loading” as well. R. Doc. 88-2 at 18.
8
25

part of the Carriage, whether directly or indirectly, is procured,
performed, or undertaken, which imposes or attempts to impose
upon any such Person or Vessel any liability whatsoever in
connection with the Good or the Carriage . . . .26
In other words, plaintiff covenanted not to sue any party involved in the
transportation of its shipping containers, except Expeditors. Thus, under the
plain language of the bill of lading, plaintiff relinquished any right to sue
Hapag-Lloyd or Ports America.
Plaintiff offers several arguments to resist the application of the
Himalaya clause. First, plaintiff argues that the Himalaya clause does not
apply because the bill of lading was not issued until after the erroneous
shipment.27 Relatedly, plaintiff argues that the bill of lading fails for lack of
consideration because it was executed after shipment.28 But courts routinely
enforce bills of lading issued after goods are damaged during carriage. See,
e.g., Uncle Ben’s Int’l Div. of Uncle Ben’s, Inc. v. Hapag-Lloyd
Aktiengesellschaft, 855 F.2d 215, 217 (5th Cir. 1988) (rejecting argument
that because “the bills of lading were issued after the containerization, they

R. Doc. 88-2 at 30. The clause further extends “all exemptions,
limitations of, and exonerations from liability provided by Law or by” the bill
of lading “to all agents, servants, employees, representatives, Participating
Carriers (including road, rail, water and air carriers), [and] stevedores.” Id.
Such limitations of liability include those provided by COGSA.
27
R. Doc. 87 at 17-18.
28
Id. at 20.
9
26

cannot apply to the claims in question”); Luckenbach S.S. Co. v. Am. Mills
Co., 24 F.2d 704, 705 (5th Cir. 1928).
In Luckenbach, for example, a fire destroyed a number of cots during
loading. The bill of lading, which was “in accordance with its standard form,”
exempted the carrier from liability for damages because of fire. Luckenbach,
24 F.2d at 705. The shipper argued that this exemption did not apply
because the bill of lading was not issued until after the fire. But the Fifth
Circuit enforced the bill of lading, holding that the bill “evidenced the
contract the parties entered into at the time the goods were delivered and
accepted.” Id. At that time, “an implied understanding arose from common
business experience that the carrier would issue such bill of lading as it was
its custom to issue to shippers in the usual course of its business.” Id. Here,
as in Luckenbach, the standard bill of lading reflected the contract of carriage
that the shipper and carrier entered into when the goods were delivered to
the carrier. The bill of lading is not unenforceable merely because it was
issued after the erroneous shipment.
Second, plaintiff argues that the bill of lading is unenforceable because
plaintiff never signed or approved it. 29 But a bill of lading need not be signed
by a shipper to be enforceable, so long as the shipper had notice of the bill of

29

Id.
10

lading’s terms. See, e.g., Am. Ry. Express Co. v. Lindenburg, 260 U.S. 584,
590-91 (1923); Royal Air, Inc. v. AAA Cooper Transp., Inc., 395 F. Supp. 2d
436, 440 (W.D. La. 2005); Vesta Forsikring AS v. Mediterranean Shipping
Co., SA, No. 00-1938, 2001 WL 1660255, at *4-5 (S.D. Tex. Aug. 10, 2001).
The record indicates that plaintiff had notice of the bill of lading’s terms and
explicitly approved the bill of lading by email on May 27, 2016. 30
Third, plaintiff argues that the covenant not to sue in the Himalaya
clause is unenforceable because it violates public policy.31

Specifically,

plaintiff points to 46 U.S.C. § 30704, which provides: “A carrier may not
insert in a bill of lading . . . a provision avoiding its liability for loss or damage
arising from negligence or fault in loading, stowage, custody, care, or proper
delivery. Any such provision is void.” Plaintiff argues that the covenant not
to sue Hapag-Lloyd violates this provision because Hapag-Lloyd is a carrier
within the meaning of 46 U.S.C. § 30704. Plaintiff also suggests that HapagLloyd violated COGSA by not issuing a bill of lading itself.
Hapag-Lloyd did issue a bill of lading, which properly designated
Expeditors as the shipper. 32 See 1 Admiralty and Maritime Law § 10-7

30
31
32

R. Doc. 112-3 at 13.
R. Doc. 92 at 6.
R. Doc. 112-6.
11

(“With respect to the vessel and her owner, the [non-vessel operating
common carrier] is a shipper or customer.”). But Hapag-Lloyd does not rely
on this bill of lading in its summary judgment motion. Instead, Hapag-Lloyd
relies on the Himalaya clause in Expeditors’ bill of lading.
At least two circuit courts, as well as one section of this Court, have
enforced

Himalaya

clauses

that

include

covenants

not

to

sue

subcontractors. 33 See Sompo Japan Ins. Co. v. Norfolk S. Ry. Co., 762 F.3d
165 (2d Cir. 2014); Fed. Ins. Co. v. Union Pac. R.R. Co., 651 F.3d 1175 (9th
Cir. 2011); Royal SMIT Transformers BV v. HC Bea-Luna M/V, No. 1614647, 2017 WL 2364362 (E.D. La. May 31, 2017).

The Ninth Circuit

regarded such a covenant not to sue as “an enforcement mechanism rather
than a reduction of ‘the carrier’s obligations to the cargo owner below what
COGSA guarantees.’” Fed. Ins., 651 F.3d at 1180 (quoting Fireman’s Fund
Ins. Co. v. M/V DSR Atl., 131 F.3d 1336, 1339 (9th Cir. 1997)); see also id. at
1179-80 (“The Supreme Court has distinguished between impermissible

While neither the Fifth Circuit nor the Supreme Court has addressed a
covenant not to sue in a Himalaya clause, the Supreme Court in Kirby
enforced a classic Himalaya clause, which extends a carrier’s limitation of
liability under COGSA to the carrier’s subcontractors. The Court held that
“[t]he plain language of the Himalaya Clause indicates an intent to extend
the liability limitation broadly,” and found “no reason to contravene the
clause’s obvious meaning.” 543 U.S. at 31-32.
33

12

contracts that reduce the carrier’s obligations and enforceable contracts that
affect only the ‘mechanisms’ of enforcing a shipper’s rights.” (citing Vimar
Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 535 (1995)).
Likewise, the Second Circuit treated a covenant not to sue as “simply an
ordering mechanism.” Sompo, 762 F.3d at 182. Because the bill of lading
preserved the shipper’s right to sue the carrier and the carrier’s right to sue
the allegedly negligent subcontractor, the Second Circuit held that the
covenant not to sue did not violate public policy. Id. at 183. The Court finds
this reasoning persuasive, and holds that the covenant not to sue contained
in the Himalaya clause is enforceable.
Finally, plaintiff argues that the Himalaya clause does not apply
because Ports America and Hapag-Lloyd acted without authority, and
outside any contractual relationship, when they erroneously loaded
plaintiff’s containers. 34 But the covenant not to sue covers any party “by
whom . . . any part of the Carriage . . . is . . . performed.” Hapag-Lloyd and
Ports America clearly performed part of the carriage as contemplated by the
bill of lading, which the Court has already deemed enforceable. Accordingly,
the Himalaya clause bars plaintiff’s claims against Hapag-Lloyd and Ports

34

R. Doc. 87 at 21; R. Doc. 92 at 4.
13

America. Hapag-Lloyd and Ports America are entitled summary judgment
on plaintiff’s claims against them.
B.

There Is No Evidence of Ports America’s Negligence

Ports America further seeks summary judgment on plaintiff’s claims,
and Expeditors’ and Andrea Merzario’s crossclaims, on the ground that there
is no evidence of wrongdoing by Ports America.35 Specifically, Ports America
asserts that it properly loaded plaintiff’s containers as instructed by HapagLloyd and did not damage the containers.
Plaintiff’s claims against Ports America sound in negligence.36 “To
establish maritime negligence, a plaintiff must ‘demonstrate that there was
a duty owed by the defendant to the plaintiff, breach of that duty, injury
sustained by [the] plaintiff, and a causal connection between the defendant’s
conduct and the plaintiff’s injury.’” Canal Barge Co. v. Torco Oil Co., 220
F.3d 370, 376 (5th Cir. 2000) (quoting In re Cooper/T. Smith, 929 F.2d 1073,

R. Doc. 88 at 4-8.
Expeditors and Andrea Merzario assert crossclaims of breach of
contract, breach of warranty or duty, willful or intentional conduct, and
conversion, in addition to negligence and gross negligence, against Ports
America and other defendants. R. Doc. 26 at 13 ¶ 15; R. Doc. 50 at 3 ¶ 9. But
there is no support, either in the pleadings or in the record, for any claim
against Ports America other than negligence. Moreover, neither Expeditors
nor Andrea Merzario presents any basis for Ports America’s liability in
response to Ports America’s summary judgment motion. The Court
therefore confines its analysis to the negligence claim against Ports America.
14
35

36

1077 (5th Cir. 1991)). Plaintiff asserts that Ports America breached its duty
to inspect plaintiff’s containers; to inform Hapag-Lloyd of the condition in
which the containers were loaded; and to determine whether loading was
proper, whether there was proper documentation, and whether the
containers and goods had been inspected and insured.37
A stevedore must “use reasonable care and ordinary diligence in the
loading and stowage of cargo.” Falcon Constr. Co. v. Bacon Towing Co., 613
F. Supp. 221, 223 (S.D. Tex. 1985). This duty may include alerting the vessel
of any known risk to the cargo. See, e.g., F.J. Walker Ltd. v. Motor Vessel
Lemoncore, 561 F.2d 1138, 1148 (5th Cir. 1977) (noting that a stevedore
“must at least inform the vessel of a serious hazard being created” as a result
of unloading cargo). But the parties point to no authority for the proposition
that a stevedore has a duty to inspect shipping containers that it did not pack,
or to ensure that the containers are properly inspected, insured, and
documented. Nor is there any evidence suggesting that Ports America had
any reason to believe that the containers had been improperly packed. 38
Moreover, Ports America was entitled to follow the loading
instructions of Hapag-Lloyd. Ports America had no contractual relationship

R. Doc. 92 at 2-3.
See R. Doc. 88-2 at 1 (declaration by Ports America employee stating
that Ports America did not pack plaintiff’s containers).
15

37

38

with either Expeditors or plaintiff, and it relied solely on Hapag-Lloyd’s
loading instructions.39 There is no evidence suggesting that Ports America
had any reason to believe that it should not load the containers onto the M/V
BAVARIA. Accordingly, Ports America is entitled summary judgment on
plaintiff’s claims, and Expeditors’ and Andrea Merzario’s crossclaims,
against it.

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Hapag-Lloyd’s and Ports

America’s motions for summary judgment. Plaintiff’s claims against HapagLloyd and Ports America are DISMISSED WITH PREJUDICE. Expeditors’
and Andrea Merzario’s crossclaims against Ports America are DISMISSED
WITH PREJUDICE.

2nd
New Orleans, Louisiana, this _____ day of April, 2018.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

39

Id. at 1-2.
16