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TOKIO MARINE & FIRE INS. CO. v. HYUNDAI MERCHANT M

June 22, 1989

TOKIO MARINE & FIRE INSURANCE CO., LTD., as Subrogee of Mitsubishi International Corp., and MITSUBISHI INTERNATIONAL CORP., Plaintiffs,
v.
HYUNDAI MERCHANT MARINE CO., LTD., THE M/V PACKING, her engines, tackle, etc.; SOUTHERN PACIFIC RAILROAD, CHICAGO MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY and FAUCHER BROS. CARTAGE, Defendants


James B. Moran, United States District Judge.


The opinion of the court was delivered by: MORAN

JAMES B. MORAN, UNITED STATES DISTRICT JUDGE

 Plaintiffs Tokio Marine & Fire Insurance Co., Ltd. ("Tokio"), as subrogee of Mitsubishi International Corp., and Mitsubishi International Corp. ("Mitsubishi") bring this action against defendants Hyundai Merchant Marine Co., Ltd. ("Hyundai"), M/V Packing, Southern Pacific Railroad, Chicago, Milwaukee, St. Paul and Pacific Railroad Company, and Faucher Bros. Cartage (collectively "inland carriers") for damages sustained during the transportation of certain parcels. The inland carriers handled the shipment but were not parties to the original contract between Mitsubishi, the shipper, and Hyundai, the carrier. We review herein Hyundai's motion for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. *fn1" Finding no issue of material fact as to maximum liability, that motion is granted. Maximum liability cannot exceed $ 500.

 FACTS

 On May 31, 1985, Mitsubishi executed a contract with Hyundai for the shipment of three automatic assembly machines for blood-collecting needles from Yokohoma, Japan, to Chicago, Illinois. Prior to shipment, Hyundai issued an intermodal bill of lading -- #YOCG-0900 -- to accompany the machines to Chicago. Pursuant thereto, Hyundai handled the ocean portion of the shipment and was permitted to subcontract out the remainder of the journey to others.

 The machines were discharged from the vessel, M/V Packing, at the Port of Long Beach, California, and subsequently delivered by rail (via the Soo Line Railroad and Southern Pacific Railroad) and truck (Faucher Brothers) pursuant to separate contracts between those carriers and Hyundai. At some point during transportation, the machinery in container AMMU-200-290/0 sustained damage which remained undiscovered until arrival in Chicago. Through its freight forwarder, Mitsubishi gave timely notice of the damages to Hyundai and soon thereafter instituted this action against the vessel and all the carriers. Hyundai submits its motion for partial summary judgment contending that pursuant to the Carriage of Goods by Sea Act, 46 U.S.C.Appx. § 1300 et seq. ("COGSA"), its maximum liability is limited to $ 500.

 DISCUSSION

 A. The COGSA

 The COGSA governs all bills of lading evidencing the contract of "carriage of goods by sea . . . to ports of the United States, in foreign trade". 46 U.S.C.Appx. § 1300. Paragraph 31 of the bill of lading at issue -- YOCG-009900 -- explicitly invokes the strictures of the COGSA. That Act permits carriers to limit their liability to $ 500 per "package":

 
Neither the carrier nor the shipper 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 . . . unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

 46 U.S.C.Appx. § 1304(5) (1982).

 This limitation protects carriers who are often unaware of the value of goods they ship, and effectively requires shippers to bargain for greater protection. Ulrich Ammann Building Equipment, Ltd. v. M/V Monsun, 609 F. Supp. 87, 89 (S.D.N.Y. 1985). Accordingly, a shipper must be given a "full and fair opportunity" to avoid or increase the $ 500 limitation. Komatsu, Ltd. v. States S.S. Co., 674 F.2d 806, 809 (9th Cir. 1982).

 B. Bill of Lading

 At the outset we note that Hyundai issued a "through" bill of lading. "A through bill of lading governs the entire transportation of goods and applies to connecting carriers even though they are not parties to the contract." Marine Office of America Corp. v. NYK Lines, 638 F. Supp. 393, 398 (N.D. Ill. 1985). Whether a particular bill so qualifies is a question of fact, and the relevant indicia include whether the final destination is designated thereon, the ...


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