Siaci Saint Honore v. Ironbound Express, Inc. (884 F. Supp. 2d 100, 2012)

DECISION AND ORDER

VICTOR MARRERO, District Judge.

Plaintiff Siaci Saint Honoré (“Siaci”) brings this action as subrogee of LVMH Fragrance Brands (“LVMH”) and Ideal Logistics (“Ideal,” together with LVMH, “the Insured”) against defendants Iron-bound Express, Inc. (“Ironbound”) and Danmar Lines Ltd. (“Danmar,” together with Ironbound, “Defendants”) to recover $122,848.10 arising from the loss of the Insured’s cargo. By separate letters dated June 13, 2012 (Docket Nos. 20, 21), Defendants indicated their intent to move to dismiss Siaci’s complaint (the “Complaint”) based on the statute of limitations and a forum selection clause. Siaci replied by letter (“Reply”) (Docket No. 24) dated June 26, 2012. Having reviewed the parties’ submissions, the Court deems Defendants’ June 13, 2012 letters as constituting motions to dismiss the Complaint. For the reasons discussed below, Defendants’ motions to dismiss (the “Motions”) are GRANTED, and the Complaint is DISMISSED.

I. BACKGROUND

A. THE UNDERLYING SHIPPING TRANSACTION

This action arises out of an international shipment of goods from St. Quentin, France to Dayton, New Jersey, via the ports of Le Havre, France and New York. The Insured contracted with Danmar to transport 1320 packages of perfumes and cosmetics in an ocean shipping container between France and New York and then in an on-land carrier between New York and New Jersey. Danmar subsequently subcontracted with Ironbound to transport the goods in a motor carrier between New York and New Jersey.

To set forth its obligations under the shipping agreement and to provide evidence of the agreement’s terms, Danmar issued to the Insured an Express Sea Waybill (the “Bill”). The Bill is an inter-modal, “through” bill of lading, which incorporates both the ocean and inland portions of the transport into a single document and extends the Bill’s provisions to any subcontracts, such as Dan-mar’s subcontract with Ironbound.

According to Siaci, the goods were stolen while in the custody and control of Defendants during the inland portion of the shipment. Delivery should have taken place on January 17, 2011. The Insured learned of the loss on January 21, 2011, and shortly afterward received money for the value of the goods from Siaci, from whom the Insured had previously purchased a marine insurance policy. On February 2, 2012, Siaci filed suit against Defendants to recover the money disbursed to the Insured, claiming that the Defendants breached their obligations under the Bill.

B. RELEVANT PROVISIONS OF THE BILL OF LADING

Multiple provisions of the Bill are pertinent to the Court’s analysis of the Motions. The relevant provisions fall into two groups: (1) clauses establishing procedural limits to claims brought against Danmar and its subcontractors for loss or damage of cargo; and (2) clauses identifying the laws — statutes and the case law interpreting those statutes — that govern the enforceability of the Bill’s terms.

The first group includes the time bar clause (“Time Bar Clause”) and the forum selection clause (“Forum Selection Clause”). The Time Bar Clause provides that “... the Carrier [Le., Danmar or its subcontractor] shall be discharged of all liability under this Bill ... unless suit is brought within one year after the delivery of the Goods or the date when the Goods should have been delivered.” (Docket No. 20). The “Law and Jurisdiction Clause,” which subsumes the Forum Selection Clause, provides that any litigation arising under or related to the Bill shall “be determined exclusively by the competent courts of Basel-Stadt, Switzerland, and by no other court.” {Id.).

The second group of clauses, defining the legal standards that determine the validity of certain terms in the Bill, includes the Amount of Compensation Clause (“Compensation Clause”) and the Paramount Clause (“Paramount Clause”). The Compensation Clause distinguishes between the law that would apply to loss or damage occurring at sea and loss or damage not occurring at sea.

Where the loss or damage did not occur at sea, § 13.2(B) of the Compensation Clause (“§ 13.2(B)”) provides:

the liability of the Carrier shall be determined by the provisions contained in any international convention or national law which cannot be departed from by private contract to the detriment of the Merchant[] and would have applied if the Merchant had made a separate and direct contract with the Carrier in respect of the particular stage of carriage where the loss or damage occurred and had received as evidence thereof any particular document which must be issued in order to make such international convention or national law applicable.

(Id.). Section 13.2(B)(b) of the Compensation Clause

(“§ 13.2(B)(b)”) expounds on the terms of Danmar’s liability for non-sea carriage by specifically addressing its responsibilities during transportation in the United States from the port of discharge. This clause provides that the obligations of the carrier during such transportation “shall be subject to the inland carrier’s contracts of carriage and tariffs and any law compulsorily applicable as well as subject to any liability limitations contained in said inland carrier’s contracts.” (Id.).

Where the loss or damage happened during carriage at sea, § 13.2(C) of the Compensation Clause (“§ 13.2(C)”) states that the carrier’s liability for the alleged breach of duty is defined by a separate clause known as the “Paramount Clause,” which provides:

where the contract evidenced by this Bill of Lading is governed by the Carriage of Goods by Sea Act of the United States ... then provisions stated in the acts shall apply, respectively ... for the time the Goods are in the possession of the Carrier or its subcontractors, including the time following receipt prior to loading and following discharge prior to delivery. ...

(Id.).

II. DISCUSSION

The Court’s analysis of Defendants’ Motions turns on a dispute of contractual interpretation. The parties disagree about what body of law governs certain terms of the Bill and about the validity of two particular provisions, namely, the Forum Selection Clause and the Time Bar Clause. Specifically, the issues before the Court are: (1) whether the Carmack Amendment to the Interstate Commerce Act of 1887 (“Carmack”), 49 U.S.C. § 14706, et seq., or the Carriage of Goods by Sea Act (“COG-SA”), 46 U.S.C. § 30701, controls the Time Bar and Forum Selection Clauses, given that the loss of the Insured’s cargo allegedly occurred on land; and (2) if COGSA controls, whether the Court should honor the Forum Selection Clause and/or Time Bar Clause in light of relevant provisions of COGSA.

Siaci argues that in drafting the Bill, the parties agreed that determinations of liability for loss of cargo would be subject to Carmack, which preempts both the Forum Selection and Time Bar Clauses. Defendants contend that COGSA governs both the inland and overseas portions of travel covered by the Bill, and that, under COG-SA, the Forum Selection Clause and Time Bar Clause are presumptively enforceable.

A. THE GOVERNING LAW

1. The Carmack Amendment

Carmack governs the terms of bills of lading issued by rail and motor carriers operating within the United States. Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., — U.S.-, 130 S.Ct. 2433, 2440-41, 177 L.Ed.2d 424 (2010); Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 145 (2d Cir.2010). The statute may pertain to the case before the Court for two reasons. First, Carmack prohibits a contractually negotiated “period of less than 2 years for bringing a civil action against” a carrier. 49 U.S.C. § 14706(e)(1). Second, a plaintiff suing a carrier under Carmack faces constraints as to venue: he must bring his claim in a federal district court or state court in the United States. Id. § 14706(d).

In the statutory text, Carmack specifies a category of bills of lading that fall within its scope. Id. § 14706(a)(1) (“§ 14706(a)(1)”). Liability under a bill of lading is imposed on the carrier pursuant to Carmack’s provisions if

actual loss or injury to the [shipper’s] property [is] caused by: (A) the receiving carrier, (B) the delivering carrier, or, (C) another carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading....

Id.; see also 49 U.S.C. § 11706(a) (“§ 11706(a)”) (using nearly identical language to describe category of rail carriers subject to Carmack liability).

In Regal-Beloit, the Supreme Court of the United States closely examined § 11706(a) — a provision of Carmack laying out the criteria for the rail carriers under the. statute’s jurisdiction. See 130 S.Ct. at 2444. The Supreme Court found that Congress intended that Carmack control only the terms of bills issued by rail carriers which fit the description in § 11706(a). Id. According to the Supreme Court, a carrier is included in the category defined by § 11706(a) if it qualifies as a “receiving carrier.” Id. at 2443; see also Royal & Sun, 612 F.3d at 144 (extending RegalBeloit’ s interpretations of § 11706(a) to § 14706(a)(1), equivalent provision in Car-mack for motor carriers).

A “receiving rail carrier” is the initial carrier in the shipment that “receives” the property for domestic transportation at the journey’s point of origin. Regal-Beloit, 130 S.Ct. at 2443-44. Thus, the carrier must transport the goods in the United-States, and its carriage must chronologically precede transportation by all other carriers whose obligations are incorporated into the same bill of lading. Under this two-part analysis, “ascertaining the shipment’s point of origin is critical to deciding whether the shipment includes a receiving rail carrier.” Hartford Fire Ins. Co. v. Expeditors Int’l of Wash., Inc., No. 10 Civ. 5643, 2012 WL 2861433, *5 (S.D.N.Y. July 9, 2012) (quoting Regal-Beloit, 130 S.Ct. at 2443).

Because only “receiving carriers” can be bound by Carmack, the statute cannot “apply to [any] shipment originating overseas under a single through bill of lading.” RegaL-Beloit, 130 S.Ct. at 2435-36. In a transaction of this structure, neither carrier constitutes a “receiving carrier.” While the overseas carrier is the initial carrier, it does not transport goods domestically; likewise, any subsequent carrier — whether inland or maritime — may indeed receive cargo for transport within the United States, but its journey temporally follows another carrier under the same through bill. An inland carrier can therefore fall under Carmack’s jurisdiction only if it obtains the goods under its own, separate bill of lading or if it begins the shipment. As the Supreme Court explained, “[i]f Carmack’s bill of lading requirement did not refer to the initial carrier, but rather to any [rail or motor] carrier that in the colloquial sense received the property from another carrier, then every carrier during the shipment would have to issue its own separate bill,” which would be contrary to the purpose of Carmack. Id. at 2443 (internal quotations omitted).

2. COGSA

In contrast with Carmack, which was enacted to regulate bills of lading for domestic rail and motor carriers, COGSA serves as the governing statutory regime for all bills of lading issued by ocean carriers engaged in foreign trade “to or from ports of the United States....” 46 U.S.C. § 30701. Given the regularity of intermodal shipping contracts in the contemporary age of international commerce, courts often confront COGSA and Carmack as two competing and mutually exclusive statutory regimes in maritime breach of contract cases. See, e.g., Am. Home Assurance Co. v. Panalpina, Inc., No. 07 Civ. 10947, 2011 WL 666388, *2-*4 (S.D.N.Y. Feb. 16, 2011).

COGSA contains two provisions of particular relevance to this case. First, COG-SA both permits and promotes forum selection clauses similar to the one in the Bill at issue. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 528, 534, 115 S.Ct. 2322, 132 L.Ed.2d 462 (1995) (holding that arbitration clause in bill of lading under COGSA was presumptively enforceable); Am. Int’l Group Eur., S.A. v. Franco Vago Int’l, 756 F.Supp.2d 369, 376-77 (S.D.N.Y.2010) (citation omitted) (extending presumption of enforceability of arbitration clauses to forum selection clause in contract dispute governed by COGSA); Asoma Corp. v. M/V SOUTHGATE, No. 98 Civ. 7407, 1999 WL 1115190, *2 (S.D.N.Y. Dec. 7, 1999) (citations omitted) (noting that “countless courts” have honored forum selection clauses in bills of lading subject to COG-SA.). Additionally, COGSA imposes a one-year statute of limitations consistent with the Bill’s Time Bar Clause. See 46 U.S.C. § 30701(3)(6) (“In any event 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[.]”).

By its own force, COGSA applies to damage that occurs during “the period from the time when the goods are loaded on to the time when they are discharged from the ship.” Hartford Fire Ins. Co. v. Orient Overseas Containers Lines, Ltd., 230 F.3d 549, 557 (2d Cir.2000) (