IN THE UNITED STATES COURT OF
FOR THE ELEVENTH CIRCUIT
D.C. Docket No. 97-01720-CV-KMM
POLO RALPH LAUREN, L.P.,
POLO RALPH LAUREN CORP.,
f.d.b.a. General Accident Insurance
TROPICAL SHIPPING & CONSTRUCTION
Appeal from the United States District
for the Southern District of Florida
(June 21, 2000)
Before COX and DUBINA, Circuit Judges,
and KRAVITCH, Senior Circuit Judge.
KRAVITCH, Senior Circuit Judge:
This appeal centers on what recourse,
if any, an owner of goods lost at sea has against the carrier
when the owner of the goods is not a named party to the bill
of lading. We also address the novel issue of what cause of action
is afforded under the Carriage of Goods by Sea Act, 46 U.S.C.
§ 1300-1315 (1999) ("COGSA").
I. BACKGROUND AND PROCEDURAL
Appellants Polo Ralph Lauren, L.P.
("Polo") and its subrogated insurer, General Accident
Insurance Company ("General Accident"),1 seek damages for cargo lost overboard
while in transport with Appellee Tropical Shipping & Construction
Company ("Tropical"). Polo apparently entered into
a bailment contract2
with Drusco, Inc. ("Drusco") for the manufacture and
delivery of 4643 pairs of mens' pants. Under the terms of this
agreement, Polo sent fabric to Drusco in Florida, which Drusco
then cut and pre-assembled before shipping the fabric pieces
to the Dominican Republic to be sewed into finished pants. Drusco
entered into similar arrangements with several other clothing
manufacturers and combined the pants from all of the manufacturers
into two large sealed containers that it delivered to Tropical.
Drusco also arranged for the return shipment of the finished
trousers to Florida where it would add designer accoutrements
before returning them to the manufacturers for sale to retailers.
While en route from the Dominican
Republic to Florida, the container containing Polo's cargo was
lost overboard in rough seas. General Accident paid Polo $197,907.80
for its loss. Polo, in a three count complaint against Tropical
filed in the Southern District of Florida, asserted claims for
breach of contract, bailment, and negligence. In a motion
for partial summary judgment, Tropical sought judgment on the
contract claim or, in the alternative, to limit the extent of
damages recoverable by Polo to the value of the fabric shipped
to Drusco. The district court granted the motion as to the contract
claim on the ground that Polo did not have standing because it
was not named in the bills of lading. The court also granted
summary judgment to Tropical on the bailment and negligence claims
as preempted by COGSA.3 Polo timely appealed, challenging
both the district court's conclusion that COGSA provides an exclusive
remedy and that Polo is barred from seeking redress under COGSA.
A. COGSA - An Exclusive Remedy
COGSA, enacted in 1936, governs
"all contracts for carriage of goods by sea to or from ports
of the United States in foreign trade." 46 U.S.C. §
1312 (1999). "The purpose of COGSA was to achieve international
uniformity and to redress the edge in bargaining power enjoyed
by carriers over shipper and cargo interests by setting out certain
duties and responsibilities of carriers that cannot be avoided
even by express contractual provision." Thomas J. Schoenbaum,
Admiralty and Maritime Law § 8-15, at 537 (2d ed.
1994). Although the act is not explicit, courts have agreed that
a plaintiff states a prima facie claim under COGSA by
demonstrating delivery of goods in sound condition to a carrier
and their subsequent receipt in damaged condition. The burden
then shifts to the carrier to establish that the damage was not
caused by its negligence. See id. § 8- 22, at 556.
The first question before us is
whether this COGSA cause of action excludes all other remedies.
Citing St. Paul's Fire & Marine Ins. Co. v. Marine Transp.
Servs. Sea-Barge Group, Inc., 727 F. Supp. 1438, 1442 (S.D.
Fla. 1989), the district court held that COGSA provided an exclusive
remedy and therefore preempted Polo's tort claims. On appeal,
Polo challenges the district court's reliance on St. Paul
Fire & Marine and offers contrary appellate authority
for the proposition that COGSA does not preclude tort law claims.
We conclude that because COGSA applies
in this case, it provides Polo's exclusive remedy.4 COGSA
was intended to govern all contracts for carriage of goods between
the United States and foreign ports. See 46 U.S.C. §
1312 (1999). Although the statute is silent on its preemptive
scope, it states that it does not supersede any laws "insofar
as they relate to the duties, responsibilities, and liabilities
of the ship or carrier prior to the time when the goods are loaded
on or after the time they are discharged from the ship."
Id. § 1311. Because COGSA governs during the time
after cargo is loaded and before it is removed from the ship,
the implication from this provision is that COGSA, when it applies,
supersedes other laws. The few courts addressing this issue have
reached the same conclusion. See Sail America Found.
v. M/V T.S. Prosperity, 778 F. Supp. 1282, 1285 (S.D.N.Y.
1991); St. Paul Fire & Marine, 727 F. Supp. at 1442;
B.F. McKernin & Co. v. United States Lines, Inc.,
416 F. Supp. 1068, 1071 (S.D.N.Y. 1976).
We have found no cases in which
a court has allowed a tort claim to proceed when COGSA applies.
A few courts have permitted cargo owners or shippers to bring
bailment claims against vessel owners, but only after a determination
that COGSA liability did not lie. See Tuscaloosa Steel
Corp. v. M/V "Naimo", 1993 A.M.C. 622, 626-27 (S.D.N.Y.
1992) (equity permitted a cargo owner to bring a tort claim against
a negligent vessel owner who was not a "carrier" within
the meaning of COGSA); DB-Trade Int'l, Inc. v. Astramar,
1988 A.M.C. 766, 767 (N.D. Ill. 1987) (same); cf. Nichimen
Co. v. M/V Farland, 462 F.2d 319, 325-26 & n.1 (2d Cir.
1972) (had COGSA not applied to plaintiff's claim, the defendant
carrier would have had to meet a different standard defending
against a federal bailment claim).
Even though Polo concedes that COGSA
applies, it maintains the viability of its tort claims as brought
under COGSA. In Polo's view, because COGSA incorporated elements
of tort law, it may bring a tort claim even if a contract claim
under COGSA would fail. We disagree. That COGSA claims are hybrids
born of elements from contract and tort does not change the fact
that the resulting claim is a unitary statutory remedy, rather
than an array of common law claims.5
Many courts have recognized that
a COGSA claim against a negligent carrier for lost or damaged
goods comprises elements of both contract, arising from the breach
of the contract of carriage, and tort, issuing from the breach
of the carrier's duty of care. See Associated Metals
& Minerals Corp. v. Alexander's Unity MV, 41 F.3d 1007,
1017 (5th Cir. 1995) (COGSA claim against negligent carriers
for lost goods or damaged was a hybrid contract and tort claim
and was thus a "preferred maritime lien"); Texport
Oil Co. v. M/V Amolyntos, 11 F.3d 361, 367 (2d Cir. 1993),
overruled on other grounds by Wilton v. Seven Falls Co.,
515 U.S. 277, 115 S. Ct. 2137 (1995) (collateral source rule
applies to COGSA claim because it is a mixture of contract and
tort); All Alaskan Seafoods, Inc. v. M/V Sea Producer,
882 F.2d 425, 430 (9th Cir. 1989) (cargo claims under Ship Mortgage
Act sounded in tort and thus were entitled to preferred lien
status); Oriente Commercial, Inc. v. The American Flag Vessel,
529 F.2d 221, 223 (4th Cir. 1975) (COGSA claims against negligent
carriers bore an element of tort and are thus "preferred
maritime liens" against defaulted vessels).
Although recognizing the COGSA claim's
hybrid nature, these cases do not stand for the proposition that
COGSA provides various causes of action, both contract and tort,
from which a plaintiff may choose in seeking redress from a negligent
carrier. Nothing in the language of COGSA or the cases interpreting
it leads us to believe otherwise. We therefore conclude that
COGSA affords one cause of action for lost or damaged goods which,
depending on the underlying circumstances, may sound louder in
either contract or tort.
The parties here agree that COGSA
applies to Polo's claim against Tropical. Because COGSA provides
an exclusive remedy, the district court properly granted summary
judgment on Polo's actions in bailment and negligence.6
B. Polo's Standing to Bring a COGSA
In its motion for partial summary
judgment, Tropical sought judgment on Polo's COGSA claim7 on
the ground that Polo was not named in the bills of lading. The
district court rejected Polo's argument that it was a third-party
beneficiary to the bills of lading and granted summary judgment.
In its motion for reconsideration Polo raised the alternative
argument that the terms and conditions in the bills of lading
contained numerous references to the "owner of the goods"
as distinct from both shippers and consignees, and that owners
of the shipped goods were a readily identifiable class of persons
intended to be benefitted by the terms of the bills of lading.
Tropical maintains that Polo waived this argument by failing
to raise it earlier.
Polo sufficiently raised the third-party
beneficiary argument before the district court. Polo's reliance
on the bills of lading's references to the term "owner of
the goods" to sustain Polo's breach of contract claim is
not a new argument, but part and parcel of its original argument
that it was an intended third-party beneficiary to the bills
of lading. The argument therefore is properly before us.
Polo is not named in the bills of
lading. Contracts bind only named parties unless both parties
to the contract clearly express an intent to benefit a third
party. See Blu-J, Inc. v. Kemper C.P.A. Group,
916 F.2d 637, 640 (11th Cir. 1990). This rule of strict construction
applies with equal force in contracts of carriage. See
Hale Container Line, Inc. v. Houston Sea Packing Co.,
137 F.3d 1455, 1465 (11th Cir. 1998). The third party need not
be mentioned by name as long as the contract refers to a "well
defined class of readily identifiable persons" that it intends
to benefit. Generali v. D'Amico, 766 F.2d 485, 490 (11th
Cir. 1985) (internal quotations omitted). Polo argues that the
inclusion of the "owner of the goods" in the bills
of lading evinces a clear intent to benefit that class of persons.
The two bills of lading underlying
this action list two different companies in the Dominican Republic
as shipper/exporter, Drusco as both consignee and notifying party,
and Tropical as carrier. The owner of the goods is not specified
anywhere on the forms. The front of the forms, however, contains
the following clause:
In accepting this ocean bill of
lading the shipper, consignee and owner of the goods agree to
be bound by all of its stipulations, exceptions, and conditions,
whether written, printed, or stamped on the front or back thereof,
any local customs or privileges to the contrary notwithstanding.8
The back of the bills of lading
uses the phrase "shipper, consignee or owner of the goods"
repeatedly in defining the conditions of the contract of carriage.
The final clause of the bills iterates that the "Shippers,
Consignees and Owners of the goods and the Holder of the Bill
of Lading expressly agree to all its terms."9 Polo argues that these recurring
references to the "owner of the goods" intend to benefit
Our research found one case presenting
strikingly similar facts, the reasoning of which we find persuasive.
In All Pacific Trading, Inc. v. Vessel M/V Hanjin Yosu,
7 F.3d 1427 (9th Cir. 1993), the court considered a consolidated
action brought by nine owners of damaged goods and their insurers.
Eight of the nine plaintiffs delivered their goods to different
non-vessel- operating common carriers ("NVOCCs") who
issued bills of lading to the shippers and then delivered the
goods to the carrier, who in turn executed separate bills of
lading with the NVOCCs. See id. at 1429-30. The cargo
owners were not named in the bills of lading with the carrier.
See id. at 1430. The court rejected the carrier's argument
that the plaintiff cargo owners lacked standing to sue because
it found that the cargo owners were actual parties to the bills
of lading under their definition of "Merchant." See
id. at 1431-32. As with the bills of lading before us, those
bills of lading contained a clause obligating the "owner
of the goods" to their terms. See id. at 1432.
Polo's parallel contention is that
well-established principles of maritime law grant an owner of
lost or damaged cargo standing to sue for damages based on its
proprietary interest in the goods, even if the owner is not explicitly
named in the bill of lading.10 See, e.g., Schoenbaum,
supra, § 8- 10.11
Relying on the repeated references to the unnamed "owner
of goods" in the bills of lading, Polo maintains that it
is a proper party in interest to seek recovery from Tropical
for the lost cargo.12
Under either theory of recovery,
Tropical contends that summary judgment was appropriate because
Polo never presented sufficient evidence of its ownership of
the lost goods. The record generated by this case is regrettably
sparse, but our review of its limited contents finds evidence
of Polo's ownership of the goods sufficient to withstand summary
judgment. Polo submitted an affidavit of Karen Jeannetti-Pascucci,
Senior Director of Treasury and Risk Operations at Polo,13
which attested that "POLO RALPH LAUREN owned 100% of the
subject cargo, which consisted of 4,643 pairs of finished pants,
at the time of the loss."14 Polo also presented deposition
testimony of Daniel H. Moss, Executive Vice-President of Drusco,
who stated that, "The cargo was dropped overboard. It was
Polo's fabric. I owe Polo for the fabric."15 Mr. Moss further testified that,
under Drusco's contract with Polo, "Polo ships me their
fabric. . . . I cut it. I ship it to the Dominican Republic.
. . . I buy what is known as trimmings or sundries and add that
to it. I add the value of the labor to stitch it together. I
ship it back."16
The bills of lading, with their numerous references to "owner
of the goods," were also before the district court.
The bills of lading between Tropical
and Drusco recurrently refers to the "owner of the goods"
and specifically binds the "owner of the goods" to
its terms and obligations, creating the possibility that Polo
would have standing to sue as owner of the goods or as a third-party
beneficiary to the bills of lading. Although this court does
not express an opinion on whether Polo ultimately will be able
to prove ownership of the lost trousers, there was sufficient
evidence before the district court of Polo's ownership to render
improvident its grant of summary judgment on Polo's COGSA claim.
C. Polo's Agency Argument
Polo contends in the alternative
that it has standing to sue under the bills of lading as an undisclosed
principal to Drusco, who acted as its agent in signing the bills
of lading. See New Jersey Steam Navigation Co. v. Merchants'
Bank, 47 U.S. (6 How.) 343, 380-81 (1848). Tropical and Polo
dispute whether this agency argument was presented sufficiently
to the district court or whether it is being raised for the first
time on this appeal. This court's review of the record comports
with the latter view. In its complaint and response to Tropical's
motion for partial summary judgment, Polo asserted its rights
only as owner of the goods and as third-party beneficiary to
the bill of lading, but never raised an agency argument.17
This court may consider an issue
not brought before the district court in the following narrow
First, an appellate court will consider
an issue not raised in the district court if it involves a pure
question of law, and if refusal to consider it would result in
a miscarriage of justice. Second, the rule may be relaxed where
the appellant raises an objection to an order which he had no
chance to raise at the district court level. Third, the rule
does not bar consideration by the appellate court in the first
instance where the interest of substantial justice is at stake.
Fourth, a federal appellate court in justified in resolving an
issue not passed on below . . . where the proper resolution is
beyond doubt. Finally, it may be appropriate to consider an issue
first raised on appeal if that issue presents significant questions
of general impact or of great public concern.
Narey v. Dean, 32 F.3d 1521, 1526-27 (11th Cir. 1994)
(quoting Dean Witter Reynolds, Inc. v. Fernandez, 741
F.2d 355, 360-61 (11th Cir. 1984)).
Polo propounds four of these five
bases as justification for considering its agency argument, none
of which are availing. First, determination of the existence
of an agency relationship is a factual question. Second, we do
not find that the interest of substantial justice is at stake
here when Polo forsook its opportunity to present its agency
argument to the district court. Third, the resolution of this
issue, in light of the scanty record, is hardly beyond doubt.
Finally, although this court appreciates Polo's view that matters
of great moment are implicated by this appeal, we cannot agree
that resolution of Polo's relationship with Drusco in this instance
warrants exception to the general rule that matters must be presented
before the district court in the first instance. We therefore
decline to consider Polo's agency argument.
If Polo is allowed to maintain any
cause of action against Tropical, Tropical contends that its
damages should be limited to $35,155.25, the value of the fabric
that Polo delivered to Drusco. Polo counters that well-established
maritime law sets the value of lost goods as the fair market
value of the goods upon their arrival, and that the value of
the then-finished pants totaled $179,916.25.18 Resolution of this issue is best
left to the district court in the first instance if it finds
that Polo is entitled to damages.
Based on the foregoing reasons,
we AFFIRM the district court's grant of summary judgment on Polo's
bailment and negligence claims and REVERSE the district court's
grant of summary judgment to Tropical on Polo's COGSA claim and
REMAND for further proceedings consistent with this opinion.
AFFIRMED in part; REVERSED and
REMANDED in part.
For clarity, this opinion
refers only to Polo.
This contract was never made
part of the record.
The contract claim was not
originally styled as a COGSA claim in the complaint, although
COGSA was asserted as one basis for the court's jurisdiction,
but the court and the parties treated the claim as such. The
preemption argument did not appear in the briefs; the parties
presumably raised it during oral argument.
Polo does not dispute that
COGSA governs this controversy. See Appellants' Br. at
Polo's complaint therefore
should have stated a single COGSA claim instead of three separate
causes of action. At some point in the proceedings before the
district court, the contract claim was treated as the COGSA claim,
thus segregating the remaining tort claims even though it appears
that Polo intended all three claims as COGSA claims.
If Polo's argument, at its
root, is merely that determination of a proper party in interest
for a COGSA claim should not be limited to contract principles
but should also make reference to tort claims, that argument
is adequately addressed in this court's conclusion, infra,
that the district court failed to consider fully Polo's ability
to bring a COGSA claim as owner of the lost goods.
As noted earlier, the court
treated Polo's contract claim as a COGSA claim.
Compl., Ex. A, in R.,
Pl's Mot. for Recons., Ex.
A, in R., Tab 41.
This argument was raised in
Polo's response to Tropical's motion for partial summary judgment.
See Pl.'s Resp. & Mem. of Law in Opp'n to Def.'s Mot.
for Partial Summ. J. at 3, in R., Tab 29.
Tropical voices concern over
the possibility of double recovery in the suits brought by Drusco
and Polo. Polo acknowledges its obligation to Drusco, however,
and any remaining apprehensions "are matters for practical
determination." Compagnie de Navigation Fraissinet &
Cyprien Faire, S.A. v. Mondial United Corp., 316 F.2d 163,
172 & n.14 (5th Cir. 1963). For example, on remand, Polo
could agree to consolidate its claim with Drusco's or reduce
its request for damages by the amount sought by Drusco in its
complaint. The record demonstrates that Drusco and Polo are amenable
to making such arrangements. See Pl.'s Reply to Def.'s
Resp. to Pl.'s Mot. for Recons., Ex. A, in R. Tab 45 (letter
from Drusco's counsel to Polo's counsel); Notice of Pendency
of Other Actions and Mot. to Consolidate, in R., Tab 10
(filed by Polo).
Admiralty cases, like any
other, must be brought by a real party in interest. See
Fed. R. Civ. P. 17(a); Farbwerke Hoeschst A.G. v. M/V "Don
Nicky", 589 F.2d 795, 797 (5th Cir. 1979) ("The
Federal Rules of Civil Procedure are fully applicable in admiralty
cases."). Depending on the circumstances of the underlying
transaction, a proper admiralty plaintiff might be the shipper
or consignee named in the bill of lading, or the owner of the
goods, with consideration given to which party had a proprietary
or financial stake in the lost or damaged goods, and which party
bore the risk of loss. For example, when a shipper sells goods
to a buyer, determination of whether the seller or buyer is the
real party in interest turns on whether title to the goods passed
from the former to the latter at the point of shipment or of
receipt of the goods. See Grant Gilmore & Charles
L. Black, Jr., The Law of Admiralty § 3-6 at 100-08
(2d ed. 1975). This case presents somewhat unusual circumstances
in that the goods were being sent and received by the same party.
Tropical questions the affidavit
because Polo filed a correction after learning that the affidavit
misstated that Polo had already paid Drusco for its services.
This error, however, does not undermine the accuracy of the remainder
of the affidavit.
Pl.'s Resp. & Mem. of
Law in Opp'n Def's Motion for Partial Summ. J., Ex. 1 ¶
2, in R., Tab 29.
Pl.'s Mot. for Partial Summ.
J. as to Damages, Ex. 1 at 8, in R., Tab 36.
Id. at 8-9, in
R., Tab 36.
Even if Polo had raised it,
there is no evidence in the record to support Polo's contention
that Drusco acted as its agent. Although Polo cites portions
of its bailment agreement with Drusco, that agreement was never
made part of the record. In addition, the testimony of Drusco's
Vice-President regarding its relationship with Polo could be
characterized equally well as that of agent or independent contractor.
Polo acknowledges that $27,977.75
of that amount would be set aside for Drusco for the value of
its services performed. See Appellants' Reply Br. at 10.
Under the terms of its insurance policy, General Accident paid
Polo the market value of the lost goods plus 10%, for a total
payment of $197,907.80.