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Greenpack of Puerto Rico, Inc v. American President Lines

July 6, 2012



The opinion of the court was delivered by: Torruella, Circuit Judge.

Before Lynch, Chief Judge, Torruella and Selya, Circuit Judges.

Plaintiff-Appellant Greenpack of Puerto Rico, Inc. ("Greenpack") appeals the dismissal of its claim for damages resulting from a delayed delivery of perishable food items from Puerto Limon, Costa Rica to San Juan, Puerto Rico. The district court dismissed the complaint as time-barred by the statute of limitations in the Carriage of Goods by Sea Act ("COGSA" or the "Act"), Pub. L. No. 521, ch. 229, 49 Stat. 1207 (1936), reprinted in 46 U.S.C. § 30701 note (2006) (previously codified at 46 U.S.C. app. §§ 1300-1315 (2000)). Having considered the parties' claims, we affirm the district court's decision.

I. Background

In October of 2009, Greenpack hired Defendant-Appellee American President Lines ("APL") to ship four crates of perishable foodstuffs*fn1 from Costa Rica to San Juan. Although APL had promised to convey Greenpack's cargo to San Juan within seven days, it did not. The food allegedly sat on the dock in Costa Rica for a number of days before being loaded on board. The last container arrived in San Juan on November 18, 2009. Perhaps predictably, the items in the crates were no longer fit to sell upon their arrival in San Juan, and the Department of Agriculture duly decommissioned all four cargos.*fn2

On February 3, 2011, Greenpack filed suit against APL in the Puerto Rico Superior Court, claiming breach of contract and demanding damages for the lost cargo. On March 23, 2011, APL removed the action to the U.S. District Court for the District of Puerto Rico, and subsequently moved for dismissal or judgment on the pleadings under Rules 12(b)(6) and 12(c), respectively.

APL argued that COGSA governed the relationship between the parties and that therefore Greenpack's claim was time-barred by the Act's one-year statute of limitations. See COGSA § 3(6), 46 U.S.C. § 30701 note (previously codified at 46 U.S.C. app. § 1303(6)) (providing that "the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered"). Greenpack opposed APL's argument by positing that the Harter Act, 27 Stat. 445 (1893) (codified previously at 46 U.S.C. app. §§ 190-196 and presently at 46 U.S.C. §§ 30701-30707), rather than COGSA, governed any liability arising from these shipments. Since the Harter Act contains "no specific limitations period for suits by a consignee against a carrier," under Greenpack's theory, its suit was not time-barred as long as it was filed within a "reasonable" time. Ins. Co. of N. Am. v. P.R. Marine Mgmt., Inc., 768 F.2d 470, 473 (1st Cir. 1985).

Greenpack's complaint had alleged in general terms that the damage to its cargo was caused by "the delay in the transportation of the same by APL." In its pleadings, Greenpack advanced the theory that the damage likely occurred during those days that the food remained on the dock in Costa Rica, prior to being loaded on the vessel. For purposes of its motion to dismiss, APL did not contest that the loss may have occurred at a point in time when the goods were in its possession prior to loading. And this fact, which we accept as true at this stage in the proceedings, Gray v. Evercore Restructuring L.L.C., 544 F.3d 320, 324 (1st Cir. 2008), is key to the parties' dispute.

The timing of the loss alleged by Greenpack is germane to the question of which statutory structure controls the parties' liability. "By its terms, COGSA governs bills of lading for the carriage of goods 'from the time when the goods are loaded on to the time when they are discharged from the ship.'" Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 29 (2004) (quoting COGSA § 1(e), 46 U.S.C. § 30701 note (previously codified at 46 U.S.C. app. § 1301(e)) defining "carriage of goods" under the Act); see Antilles Ins. Co. v. Transconex, Inc., 862 F.2d 391, 392 (1st Cir. 1988) (noting and citing case for proposition that COGSA applies from time goods in international commerce are loaded onto a ship until they are released from the ship's tackle at port). In other words, "COGSA applies when there is a contract for carriage of goods between a foreign port and a port of the United States," Barretto Peat, Inc. v. Luis Ayala Colon Sucrs., Inc., 896 F.2d 656, 659 (1st Cir. 1990), but only during the interval when the cargo is at sea, also referred to as the "tackle-to-tackle" period.*fn3 Without more, damage that occurred on the dock during the land portion of the shipment's journey, or outside of the tackle-to-tackle period (i.e., "beyond the tackles"), would escape COGSA's statute of limitations and, as Greenpack argued in its opposition to APL's motion, the Harter Act would govern.*fn4

As recognized by the district court, however, "the parties to a shipping contract may agree to extend [COGSA's] coverage to the period before loading or after unloading of the goods." Ins. Co. of N. Am., 768 F.2d at 475. See Kirby, 543 U.S. at 29 (noting that "COGSA [] gives the option of extending its rule by contract" to cover "the entire period in which [the goods] would be under [a carrier's] responsibility, including the period of the inland transport") (citing COGSA § 7, 46 U.S.C. § 30701 note (previously codified at 46 U.S.C. app. § 1307)).*fn5 The issue before the district court was therefore whether the bills of lading in this case extended the time-for-suit provision of COGSA to the period when the damage allegedly occurred, i.e., prior to loading the cargo on board the ship.

Although the four containers of perishable food were shipped separately, they were governed by identical bills of lading, all of which were referenced in the complaint. APL successfully argued before the district court that these bills of lading contained a "Paramount Clause" that specifically incorporated COGSA to cover the period prior to loading and after discharge.

The relevant language is contained in subsection (iv) of the Paramount Clause, which reads in pertinent part as follows:

Prior to loading onto the Vessel and after discharge from the Vessel or if the stage of Carriage during which the loss or damage to Goods occurred cannot be proved, the Carrier's liability shall be governed under the Hague Rules, except that the limitation shall be US$500 per package or per shipping unit as stated in [the bill of lading's "Package Limitation" clause], and for this purpose the Hague Rules shall be extended to the periods before loading and sub-sequent [sic] to discharge and to the entire period of the Carrier's responsibility.

As the district court noted, the Paramount Clause in the bills of lading explicitly references COGSA's relationship to the Hague Rules*fn6 in its subsection (i), which ...

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