United States of America v. Sealift, Inc. et al

Filing 12

OPINION AND ORDER denying 5 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM. The United States shall file within thirty days a more detailed amended complaint providing at least a summary of the basic facts and nature of the alleged breaches of contract, individually or by grouping if appropriate, on which it brings suit.(Signed by Judge Melinda Harmon) Parties notified.(rvazquez)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
UNITED STATES OF AMERICA,

§
§
Plaintiff,
§
§
VS.
§
§
SEALIFT, INC., in personam, and §
M/V ABBY G, its engines, tackle,§
etc., in rem; and
§
M/V ADVANTAGE, its engines,
§
tackle, etc., in rem; and
§
M/V CLEVELAND, its engines,
§
tackle, etc., in rem; and
§
M/V HARRIETTE, its engines,
§
tackle, etc., in rem; and
§
M/V MARILYN, its engines,
§
tackle, etc., in rem; and
§
M/V NOBLE STAR, its engines,
§
tackle, etc., in rem; and
§
M/V TSGT JOHN A CHAPMAN, its
§
engines, tackle, etc., in rem; §
and
§
M/V WILSON, its engines, tackle,§
etc., in rem,
§
§
Defendants.
§

CIVIL ACTION NO. H-13-1150

OPINION AND ORDER
Pending before the Court in the above referenced cause,
grounded in the Carriage of Goods By Sea Act (“COGSA”), 46 U.S.C.
§ 30701, et seq., and alleging loss and damage to cargo transported
under contracts of carriage from 2007-2011 on multiple voyages
aboard M/V Abby G, M/V Advantage, M/V Cleveland, M/V Harriette, M/V
Marilyn, M/V Noble Star, M/V TSGT John A Chapman, and M/V Wilson
(collectively, “Vessels”), all owned, operated, chartered, managed,
and otherwise controlled by Defendant Sealift, Inc. (“Sealift”), is
-1-

Sealift’s

motion

to

dismiss

for

failure

to

state

a

claim

(instrument #5) under Federal Rule of Civil Procedure 6(b).
The

United

States

seeks

$3,269,070.08

in

damages,

plus

interests and costs, arrest of the eight vessels, and a judgment of
condemnation and sale entered against the arrested property, with
the claim to be paid from the proceeds of the sale.

Attached to

United States’s Complaint (#1) is Schedule A, listing the cargoes
in surveys and tabulating the damages.
Standard of Review
Federal Rule of Civil Procedure 8(a)(2) provides, “A pleading
that states a claim for relief must contain . . . a short and plain
statement of the claim showing that the pleader is entitled to
relief.”
pursuant

When a district court reviews a motion to dismiss
to

Fed.

R.

Civ.

P.

12(b)(6),

it

must

construe

the

complaint in favor of the plaintiff and take all well-pleaded facts
as true. Randall D. Wolcott, MD, PA v. Sebelius, 635 F.3d 757, 763
(5th Cir. 2011), citing Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir.
2009).
“While a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, . . . a
plaintiff’s

obligation

‘entitle[ment]

to

to

relief’

provide

the

requires

more

‘grounds’
than

of

his

labels

and

conclusions, and a formulaic recitation of the elements of a cause
of action will not do . . . .”

Bell Atlantic Corp. v. Twombly, 127

-2-

S.

Ct.

1955,

1964-65

(2007)(citations

omitted).

“Factual

allegations must be enough to raise a right to relief above the
speculative level.”
Federal

Practice

Id. at 1965, citing 5 C. Wright & A. Miller,

and

Procedure

§

1216,

pp.

235-236

(3d

ed.

2004)(“[T]he pleading must contain something more . . . than . . .
a statement of facts that merely creates a suspicion [of] a legally
cognizable right of action”). “Twombly jettisoned the minimum
notice pleading requirement of Conley v. Gibson, 355 U.S. 41 . . .
(1957)[“a complaint should not be dismissed for failure to state a
claim unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to
relief”], and instead required that a complaint allege enough facts
to state a claim that is plausible on its face.”

St. Germain v.

Howard,556 F.3d 261, 263 n.2 (5th Cir. 2009), citing In re Katrina
Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007), citing
Twombly, 127 S. Ct. at 1974).

“‘A claim has facial plausibility

when the pleaded factual content allows the court to draw the
reasonable

inference

misconduct alleged.’”

that

the

defendant

is

liable

for

the

Montoya v. FedEx Ground Package System,

Inc., 614 F.3d 145, 148 (5th Cir. 2010), quoting Ashcroft v. Iqbal,
129 S. Ct. 1937, 1940 (2009).

The plausibility standard is not

akin to a “probability requirement,” but asks for more than a
“possibility that a defendant has acted unlawfully.”
U.S. at 556.

Twombly, 550

Dismissal is appropriate when the plaintiff fails to

-3-

allege “‘enough facts to state a claim to relief that is plausible
on its face’” and therefore fails to “‘raise a right to relief
above the speculative level.’”

Montoya, 614 F.3d at 148, quoting

Twombly, 550 U.S. at 555, 570.
As noted, on a Rule 12(b)(6) review, although generally the
court may not look beyond the pleadings, the Court may examine the
complaint, documents attached to the complaint, and documents
attached to the motion to dismiss to which the complaint refers and
which are central to the plaintiff’s claim(s), as well as matters
of public record.

Lone Star Fund V (U.S.), L.P. v. Barclays Bank

PLC, 594 F.3d 383, 387 (5th Cir. 2010), citing Collins, 224 F.3d at
498-99; Cinel v. Connick, 15 F.3d 1338, 1341, 1343 n.6 (5th Cir.
1994).
Sealift’s Motion to Dismiss (#5)
Sealift

argues

that

the

complaint

“provides

a

woefully

incomplete notice of the factual basis for the United States’
claims” an fails to plead a plausible claim .

#1 at p.1.

Claiming

that each of the food aid cargoes transported by Sealift for USAID1
over a four-year period is unique and subject to a distinct and
separate USAid Booking Note.

The loading/delivery and discharge

terms vary with the nature of the shipment and establish when the
ocean carrier’s responsibility starts and ends for the shipment and
1

USAID stands for the United States Agency for International
Development, which administers the Food for Peace Program. 7
U.S.C. § 1721.
-4-

subsequently the carrier’s liability or lack thereof.2

While

Schedule A attached to the Complaint identifies the port of loading
for each shipment, it does not specify the ports of discharge,
identify Defendants’ agents who accepted the shipments and agreed
to transport them, identify the stevedores involved in the loading
process, indicate the cause and nature of the damage, assert
whether the goods were damaged before they reached a point of rest
in the designated transit terminal before loading onto the Vessels,
nor describe circumstances surrounding discharge of the cargo.
Sealift complains that some of the cargo damage is described as
“marine losses” and distinguished from “U.S. Port losses.”

It

argues that an ocean carrier’s responsibility for alleged cargo
damage noted at the time of discharge depends on whether the cargo

2

For example, a common “Load/Delivery in a standard USAID
Booking Note is “FAS VESSEL NAMED PORT OF LOADING (POL).” “Free
alongside ship,” or FAS, values “include all costs of
transportation and delivery of goods to the dock.” 22 C.F.R. §
211.2(k). To trigger a carrier’s responsibility for a FAS
shipment, the cargo must be “delivered to the Carrier at the
first point of rest within a USDA approved transport terminal
within the commercial limits of the named port of loading.” #5,
Ex. A at ¶1(a). In contrast, for another common category, “PrePositioned Cargo--Port of Landing, the USAID POL cargo loading
terms provide,
The Carrier (or its agents or stevedores) shall sign
nonnegotiable dock receipts, indicating acceptance of
the cargoes in good order. Upon this acceptance, cargo
is deemed to be in a delivered position and becomes the
full responsibility of the contracted Carrier. The
cargoes moving directly from rail cars or trucks to the
performing vessel or containers are considered to be
FAS cargoes.
-5-

was

“containerized

complaint.

or

breakbulk,”

not

distinguished

in

the

Moreover Clause 2 of the standard USAID booking note

governs “Discharge/Delivery Terms” and distinguishes such terms as
delivery at “a place of rest at discharge port,” “[d]elivered to
port warehouse or CFS,” and “warehouse delivery.”
Nor, maintains Sealift, does the complaint allege that all
conditions precedent necessary to state a cognizable claim, e.g.,
the list of documents that must be provided by USAID to an ocean
carrier to support a cargo damage claim set out in 22 C.F.R. §
211.9 (including notice to the ocean carrier; survey reports,
outrun reports, discharge reports, and tally reports; information
about the cause of the loss; and documentation about the amount of
the damage).
Finally

Sealift

objects

that

Schedule

A,

Ex.

A

to

the

Complaint, fails to specifically identify evidence of Defendants’
receipt of the cargo in good order and condition and the damage
surveys essential for a prima facie case of cargo damage.

It

notes, for example, that although bill of lading numbers are
provided, a significant part of the United States’ claim purportedy
occurred prior to the loading of the cargo or the issuance of the
bill of lading.
United States’ Opposition (#6)
Insisting that its Complaint satisfies the requirements of
Rule 8(a) while Schedule A satisfies Federal Rule of Evidence 1006

-6-

as a summary to prove the content of business records of shipments
that

the

United

States

will

introduce

at

trial.

Sealift’s

conclusory allegation that Schedule A is “cumbersome and confusing”
does not make it so and does not warrant disregarding it.

The

government goes on to explain how to read Schedule A to find
specific factual information about a cargo shipment and satisfies
Rule 8's notice pleading standard.

It also explains how Schedule

A summarizes the documents, including identifying specific ocean
bills of lading for each claim, the specific losses recorded in
Vessel Loading Observation tallies in each load port, and specific
losses surveyed at each discharge to state a prima facie case for
presumption of liability against Sealift under COGSA.

Schedule A

also provides specific references to documents issued by Sealift
that will enable Sealift to identify key loading terms for each
shipment

and

distinguish

between

breakbulk

and

containerized

shipments.
The United States also argues that contrary to Sealift’s
representation, there is no regulatory condition precedent to the
government’s

commencing

an

action

against

Sealift.

Sealift

misconstrues 22 C.F.R. § 211.9, which applies to the Commodity
Credit Corporation and “non governmental cooperating sponsors,”
i.e., private charitable organizations that receive the food aid
donated by the United States for distribution to needy regions of
the world. The nongovernmental cooperating sponsor is the shipper.

-7-

The regulation does not give a detailed list of documents that
USAID must provide to an ocean carrier to support a cargo damage
claim, nor does it present any conditions precedent to commencing
suit against the ocean carrier for lost or damaged cargos.
Moreover, if the cooperating sponsor fails to comply with the
regulation, the United States’s right to sue the ocean carrier is
not prejudiced.

The United States asserts that to the extent that

it, as the assignee of the original shipper’s claim, becomes the
nominal

shipper

for

purposes

of

this

lawsuit,

it

provides

references to all of the documents necessary to identify the
grounds of the shipper’s claim.
Sealift’s Reply (#7)
Sealift insists that to determine the United States’ breach of
contract

allegations

for

numerous

shipments

under

different

contracts through the references in Exhibit A would take Sealift
several years’ worth of review of extrinsic documents.

Moreover

the Complaint fails to provide any details of any alleged breaches
of any contract.

In addition Sealift complains of the lack of

information in documents attached to the United States’ responses.
After considering the dispute, the Court finds that dismissal
is not appropriate.

Nevertheless, the United States intentionally

decided to sue Sealift for damage on multiple voyages by eight
different vessels over a four-year-long period.

The Court agrees

with Sealift that the complaint and its exhibit provide sparse

-8-

information. It finds that Sealift should not be unfairly burdened
by having to engage in overly burdensome discovery at this notice
stage of the litigation simply to find out the basic grounds for
the

government’s

shipments.

claims

of

cargo

damage

from

the

numerous

Accordingly the Court

ORDERS that Sealift’s motion to dismiss is DENIED, but that
the United States shall file within thirty days a more detailed
amended complaint providing at least a summary of the basic facts
and nature of the alleged breaches of contract, individually or by
grouping if appropriate, on which it brings suit.
SIGNED at Houston, Texas, this

30th

day of

January , 2014.

___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

-9-