For two separate shipments, the plaintiff ocean carrier transported containers alleged to contain printing cartridges and other printing accessories from Florida to Peru. The carrier issued bills of lading containing a description and weight of the cargo as directed by the defendant freight forwarder, who was named on the bills of lading as the shipper. Pursuant to the commercial arrangements, the carrier was responsible for ‘port to port’ transport and the shipper was responsible for loading, counting, and sealing the containers and hiring a trucking company to transport the cargo from its premises to the port in Florida. After successful ocean carriage to the port in Peru, the consignee discovered that the majority of the items listed on the bills of lading were missing. The weight of the container was also different than the weight reflected on the bills of lading, but the seals were still intact. For the first shipment, the consignee made a claim under its insurance policy and the ocean carrier indemnified the insurer in the amount of USD 130,000. For the second shipment, the consignee filed a separate action against the ocean carrier, alleging damages in the amount of USD 124,000.

The plaintiff carrier filed suit against the shipper and the trucking company alleging multiple theories including ‘common law indemnity’ and ‘contractual indemnity’ under COGSA / Hague Rules art 3.5, which reads: 'the shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight, as furnished by him; and the shipper shall indemnify the carrier against all loss, damages, and expenses arising or resulting from inaccuracies in such particulars'. The defendant shipper moved to dismiss the claims on the basis that the plaintiff's common law claims were preempted by COGSA / Hague Rules and that the plaintiff did not state a claim to relief that is plausible on the alleged facts.

The issues before the court were:

(1) Whether COGSA / Hague Rules preempt a common law indemnity claim;

(2) Whether the plaintiff properly stated a claim for contractual indemnity under COGSA / Hague Rules art 3.5.

Held: Regarding the first issue, COGSA / Hague Rules applies on its own force from the period between when containers are loaded onto the vessel and when they are discharged. Consequently, any common law indemnity claims against the defendant are preempted to the extent the loss is alleged to have arisen during that period.

Regarding the second issue, the plaintiff properly stated a claim against the defendant under COGSA / Hague Rules art 3.5. In its complaint the plaintiff made factual allegations (1) that the defendant was named as the shipper on the bills of lading; (2) that the terms of the bills of lading and the language of COGSA / Hague Rules art 3.5 required the defendant to guarantee accuracy of the quantity and weight of the cargo at the time of shipment; and (3) that the quantity and weight of the cargo at the time of delivery did not match the particulars provided by the defendant at the time of shipment. Based on these factual allegations, the defendant was given ‘more than sufficient’ notice of the claim to defeat a motion to dismiss.