AMAZON PRODUCE NETWORK, L.L.C. v. NYK LINE

Filing 17

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 9/21/2015. 9/21/2015 ENTERED AND COPIES E-MAILED.(kp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
AMAZON PRODUCE NETWORK, LLC
v.
NYK LINE aka NIPPON YUSEN
KAISHA aka NYK LINE (NORTH
AMERICA) INC.

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CIVIL ACTION

NO. 15-952

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AMAZON PRODUCE NETWORK, LLC
v.
NYK LINE aka NIPPON YUSEN
KAISHA aka NYK LINE (NORTH
AMERICA) INC.

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CIVIL ACTION

NO. 15-953

_________________________________________________________________
AMAZON PRODUCE NETWORK, LLC
v.
NYK LINE aka NIPPON YUSEN
KAISHA aka NYK LINE (NORTH
AMERICA) INC.

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CIVIL ACTION

NO. 15-954

MEMORANDUM
Bartle, J.

September 21, 2015
These three actions arise under the Carriage of Goods

by Sea Act (“COGSA”), 46 U.S.C. § 30701 note.1

The complaints

invoke this Court’s admiralty or maritime jurisdiction under

1. The Complaints make reference to COGSA in its previous form,
46 U.S.C. §§ 1300 et seq. In 2006, COGSA was recodified at
46 U.S.C. § 30701 historical and statutory notes. Act of Oct. 6,
2006. Pub. L. No. 109-304, 120 Stat. 1485; see also, e.g.,
Starrag v. Maersk, Inc., 486 F.3d 607, 610 n.1 (9th Cir. 2007).

28 U.S.C. § 1333 as well as its jurisdiction under 28 U.S.C.
§ 1337 relating to Acts of Congress regulating commerce.
The plaintiff, Amazon Produce Network, LLC, a fruit
importer, alleges that it contracted as consignee for various
shipments of mangoes from Nicaragua and Costa Rica.

The mangoes

were carried aboard the M/V ENA and the M/V HAMMONIA ROMA
chartered by defendant NYK Line a/k/a Nippon Yusen Kaisha a/k/a
NYK Line (North America), a Japanese corporation.

When the

mangoes arrived at Port of Los Angeles, California, they were
damaged.

Plaintiff seeks to recover for its losses.
The defendant has moved to dismiss all three cases on

the basis of a forum selection clause which provides for dispute
resolution in a Japanese Court under Japanese law.

The terms and

conditions governing the shipments of the mangoes were contained
in sea waybills or bills of lading.

They all included the same

forum selection clause:
(Governing Law and Jurisdiction) The
contract evidenced by or contained in this
Bill shall be governed by Japanese law
except as may be otherwise provided herein.
Notwithstanding anything else to the
contrary contained in this Bill or in any
other contract, any and all actions against
the Carrier in respect of the Goods or
arising out of the Carriage shall be brought
before the Tokyo District Court in Japan to
the exclusion of the jurisdiction of any
other courts . . . .
Plaintiff contends that the application of Japanese law
would contravene COGSA.

Plaintiff also maintains that the
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defendant’s motion must be denied as procedurally flawed because
defendant has incorrectly sought dismissal for improper venue
under Rule 12(b)(3) of the Federal Rules of Civil Procedure.
The Supreme Court, in Atlantic Marine Construction Co.
v. U.S. District Court, __ U.S. __, 134 S. Ct. 568 (2013),
delineated the proper procedural mechanism for enforcing a forum
selection clause in a contract.2

The Court explained that if

venue is proper under 28 U.S.C. § 1391, a motion to dismiss under
Rule 12(b)(3) for improper venue or a motion to dismiss or
transfer under 28 U.S.C. § 1406(a)3 because venue is laid in the
wrong district cannot be the basis on which to proceed where the
forum selection clause calls for adjudication in a different
federal forum.

Instead, a motion to transfer must be made under

28 U.S.C. § 1404(a).4

2. The parties to the contract were a construction company and
its subcontractor. The subcontractor’s lawsuit against the
construction company was filed in the Western District of Texas.
The forum selection clause required the lawsuit to be brought in
the Circuit Court in the City of Norfolk, Virginia, or in the
U.S. District Court for the Eastern District of Virginia, Norfolk
Division. The construction company moved to dismiss for wrong
venue under 28 U.S.C. § 1406(a) and improper venue under Rule
12(b)(3) and in the alternative for transfer under 28 U.S.C.
§ 1404(a) to the Eastern District of Virginia.
3. 28 U.S.C. § 1406(a) provides: “The district court of a
district in which is filed a case laying venue in the wrong
division or district shall dismiss, or if it be in the interest
of justice, transfer such case to any district or division in
which it could have been brought.”
4. 28 U.S.C. § 1404(a) reads: “For the convenience of parties
and witnesses, in the interest of justice, a district court may
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When venue is proper and the forum selection clause
calls for dispute resolution in a state or foreign tribunal, it
is not possible to effect a transfer under § 1404(a).

In this

circumstance, the Supreme Court instructs that the defendant must
seek dismissal under the doctrine of forum non conveniens.

Id.

at 580.
These pending actions, as noted above, rely on this
Court’s admiralty jurisdiction under 28 U.S.C. § 1333 as well as
on its jurisdiction under 28 U.S.C. § 1337 over Acts of Congress
regulating commerce.

Admiralty actions, with certain exceptions,

are deemed to be civil actions governed by the Federal Rules of
Civil Procedure.

See Fed. R. Civ. P. 1 & 2.

The venue statute,

28 U.S.C. § 1391, does not apply to admiralty claims.
28 U.S.C. § 1390(b); Fed. R. Civ. P. 82.

See

In admiralty, an action

may be brought against a corporation in any district court as
long as the court has personal jurisdiction over it.

In other

words, venue and personal jurisdiction in this instance are
conflated.

Sunbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d

28, 31 n.5 (3d Cir. 1993).

However, the law with respect to the

transfer of non-admiralty civil actions governs the transfer of
admiralty actions.

See 28 U.S.C. § 1390(b).

transfer any civil action to any other district or division where
it might have been brought or to any district or division to
which all parties have consented.”
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The defendant states in its supporting brief that it is
moving to dismiss for improper venue based on Rule 12(b)(3),
although the motion itself never mentions the Rule.

There is

also no specific reference to forum non conveniens.

Defendant

simply makes the straightforward argument that the forum
selection clause renders venue improper.

Nowhere in its motion

or brief does defendant assert that venue in the Eastern District
of Pennsylvania is improper under § 1391 or that personal
jurisdiction (and thus proper admiralty venue) is lacking.

Thus,

on the record before us, venue is proper in this district and the
correct ground to support a motion to dismiss because of a forum
selection clause is the doctrine of forum non conveniens.

See

Atl. Marine Constr. Co., 134 S. Ct. at 580.
While defendant references Rule 12(b)(3) and not forum
non conveniens, it relies in its brief on cases where that
doctrine is the basis for the court’s decision.

We conclude that

defendant, albeit inartfully, has done enough to advocate under
the appropriate procedural vehicle for its motion to dismiss.
Consequently, we must determine whether principles of forum non
conveniens preclude enforcement of the forum selection clauses.
The Supreme Court has explained that the principles
governing the doctrine of forum non conveniens are the same as
those under 28 U.S.C. § 1404(a), which is merely a codification
of the doctrine.

Atl. Marine Constr. Co., 134 S. Ct. at 574.

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Nonetheless, when a forum selection clause is at issue, the usual
§ 1404(a) balancing-of-interest analysis does not apply.

No

weight is to be given to plaintiff’s choice of forum or to the
parties’ private interests or to the original venue’s choice of
law rules as articulated in Van Dusen v. Barrack, 376 U.S. 612
(1964).

Cf. Jumara v. State Farm Ins. Co., 55 F.3d 873, 880

(3d Cir. 1995).
factors.

The Court may only consider public interest

Atl. Marine Constr. Co., 134 S. Ct. at 581-83.

As the

Supreme Court concluded, “in all but the most unusual cases
. . . , ‘the interest of justice’ is served by holding parties to
their bargain.”

Id. at 583; see also M/S Bremen v. Zapata Off-

Shore Co., 407 U.S. 1 (1972).
The plaintiff, relying on the public interest, argues
that the forum selection clause should not be honored because a
Japanese court would not fully apply COGSA.

We turn to its

provisions.
Congress has dictated that COGSA “applies to a carrier
engaged in the carriage of goods to or from any port in the
United States.”

46 U.S.C. § 30702.

Since the mangoes were

shipped from Nicaragua and Costa Rica to Los Angeles, COGSA is
clearly implicated.

The statute includes the following language:

(8) Any clause, covenant, or agreement in a
contract of carriage relieving the carrier
or the ship from liability for loss or
damage to or in connection with the goods,
arising from negligence, fault, or failure
in the duties and obligations provided in
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this section, or lessening such liability
otherwise than as provided in this Act,
shall be null and void and of no effect.
COGSA § 3(8), 46 U.S.C. § 13701 note.
COGSA further provides:
(5) Neither 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 lawful money of
the United States, or in case of goods not
shipped in packages, per customary freight
unit, or the equivalent of that sum in other
currency, unless the nature and value of
such goods have been declared by the shipper
before shipment and inserted in the bill of
lading.
COGSA § 3(5), 46 U.S.C. § 13701 note.
The waybills and bills of lading for the shipments of
the mangoes all state:
26. (Limitation of Liability) (1) The Carrier
shall not in any event be liable for any loss
of or damage to or in connection with the
Goods or the Carriage in an amount exceeding
666.67 Units of Account per package or unit
or 2 Units of Account per kilogramme of gross
weight of the Goods lost or damaged,
whichever is the higher. The Unit of Account
mentioned in the preceding sentence is the
Special Drawing Right (SDR) as defined by the
International Monetary Fund. Notwithstanding
anything else contained herein, if this Bill
covers the Goods moving to or from the United
States of America, and if the following is
not invalid or unenforceable under the local
law of the jurisdiction in which legal
proceedings are brought, then the amount of
the foregoing limitation shall instead be
U.S. $500 per package or customary freight
unit.

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Plaintiff has submitted the affidavit of Teishi Aizawa,
an experienced Japanese admiralty lawyer.

According to the

affidavit, the Tokyo District Court will apply Japanese law which
incorporates the Hague Visby Rules to the exclusion of COGSA.
These Rules employ what is known as a special drawing right (SDR)
as the unit of account.

As noted above, the waybills and bills

of lading also use SDRs to measure liability and limit liability
to 666.67 SDRs for each package.

As of April 1, 2015, a United

States dollar was worth .724763 SDR.
666.67 by .724763.

Mr. Aizawa then multiplies

He maintains that the product, $483.18, is

the maximum payment by defendant for any package.
than the $500 maximum incorporated into COGSA.

This is less

Although the

limitation of liability section of the waybills and bills of
lading recognize the $500 per package maximum limitation under
COGSA, the provision will only apply “if [it] is not invalid or
unenforceable under the local law in which legal proceedings are
brought . . . .”
The defendant has countered with an affidavit of an
experienced Japanese admiralty lawyer, Takeya Yamamoto.

He

agrees with plaintiff’s affiant that a Japanese Court would apply
the Hague Visby Rules through its own COGSA and that the proper
unit of account is the SDR.

It is also undisputed that the

Japanese Court would award a maximum of 666.67 SDRs per package.
Nonetheless, Mr. Yamomoto correctly points out that the

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plaintiff’s affiant has made the wrong calculation.

The

conversion rates as of April 1, 2015, are as follows:
U.S. $1.00 = SDR
SRD1
= U.S.$

.724763
1.379760

Plaintiff’s affiant made the mistake of calculating the
conversion of dollars into SDRs, which is irrelevant.

The proper

calculation is the conversion of SDRs into dollars since the
Japanese court will be granting damages in SDRs.

Changing SDRs

into dollars is determined by multiplying 666.67 by 1.379760.
The product is $919.84, which, of course, is in excess of the
$500 limitation in COGSA.

Consequently, a Japanese court

invoking Japanese law would award a cargo owner or consignee a
maximum sum in SDRs which is worth more, not less, than would be
awarded in dollars under United States law.
The Supreme Court has declared that “the central
guarantee of § 3(8) [of COGSA] is that the terms of a bill of
landing [sic] may not relieve the carrier of the obligations or
diminish the legal duties specified by the Act.”

Vimar Seguros y

Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 539 (1995)
(hereinafter “M/V Sky Reefer”).

That section of COGSA declares

that “lessening such liability otherwise than as provided in this
Act shall be null and void and of no effect.”

Id. at 534.

In

M/V Sky Reefer, as in this case, “the relevant question [was]
whether the substantive law to be applied will reduce the
carrier’s obligations to the cargo owner below what COGSA
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guarantees.”

Id. at 539.5

If Japanese substantive law is

applied as required under the forum selection clause, the answer
to the question is “no.”
Under forum non conveniens, the Court must consider
only public interest factors in determining whether the forum
selection clause in issue is enforceable.
Co., 134 S. Ct. at 582.

Atl. Marine Constr.

Plaintiff has presented no public

interest factors which would override the bargain made by these
sophisticated parties for adjudication of their disputes in a
Japanese forum under Japanese law.
is to no avail.

Plaintiff’s reliance on COGSA

Congress has prohibited carriers bringing goods

into the United States by sea from inserting into shipping
documents language lessening their liability to parties who have
an interest in the goods.

COGSA specifically provides that any

such contractual limitation “shall be null and void and of no
effect.”

COGSA § 3(8), 46 U.S.C. § 13701 note.

As the Supreme

Court observed, COGSA was designed to “correct specific abuses by

5. The specific question the Supreme Court faced in M/V Sky
Reefer was whether the increased cost of litigating the action
under a forum selection clause requiring arbitration in Japan
equated to lessening the liability of the carrier under COGSA.
The Court held that that statutory provision did not encompass
“the transaction cost of litigation.” The Court also determined
that it was premature to determine whether the arbitrators would
apply COGSA in the Japanese Hague Rules which are less favorable
to the cargo owners. Since the District Court would retain
jurisdiction, it could deal with any issue at the enforcement
stage. Unlike that case, the case before us does not contain an
arbitration provision.
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carriers” which were common in the 19th century.
515 U.S. at 534-35.

M/V Sky Reefer,

Those abuses included “capping any damage

awards per package.”

Id. at 535.

However, the forum selection

clause at issue does not cap damages below what COGSA allows.
Instead, the clause permits the owner or consignee of the goods
to obtain more.
In sum, there is no lessening of liability in this case
and, thus, the strong public policy embodied in COGSA is not
undermined.

Only in “the most unusual cases” does the interest

of justice mandate non-enforcement of a forum selection clause.
Atl. Marine Constr. Co., 134 S. Ct. at 583.

Plaintiff has not

met its “burden of showing that public interest factors
overwhelmingly disfavor” dispute resolution in Japan pursuant to
Japanese law.

See id.

The forum selection clauses here are

valid and enforceable.
Accordingly, the motions of defendant to dismiss these
actions based on a forum selection clause will be granted.