Evans Delivery Co Inc (Evans) was a carrier providing transport services on behalf of customers. One of its operating divisions was Z Intermodal (Z), aka D7 Transportation Inc (D7). GFA Alabama Inc (GFA) was a freight forwarder.

In February 2022, GFA engaged Evans to render transport services on GFA's behalf. GFA was aware that Z was the carrier actually performing the transport. While GFA would contact D7, D7 would hold itself out to GFA as Z. After Evans rendered the services, Evans would invoice GFA with each invoice indicating that Z was a division of Evans. Each time, GFA would pay the invoices to Evans, not D7.

Evans sought USD 136,245 in unpaid freight and other charges for services rendered on behalf of GFA. GFA refused to pay due to its counterclaim related to the theft of three containers from D7's yard at 4909 Old Louisville Road, Garden City, Georgia. GFA alleged that it was 'forced to pay their vendors and customers $149,634.04 as a direct result of the loss of the freight'.

Three bills of lading issued by LX Pantos Co Ltd covered the stolen containers. They each indicated a port of loading in 'SHINHANG (BUSAN) KOREA', a port of discharge in 'SAVANNAH', and a place of delivery in 'MCDONOUGH, GA'. The bills contained paramount clauses providing that '[t]he Carriage of Goods by Sea Act of the United States of America (COGSA) shall apply to the carriage of goods by sea, whether on deck or under deck, if compulsorily applicable to this FBL or would be applicable but for the goods being carried on deck in accordance with a statement on this FBL'.

Evans sought summary judgment both on its claim for unpaid freight and on GFA's counterclaim. GFA did not dispute that it owed Evans for transport services. However, it argued that it was entitled to offset or recoup its counterclaims against the unpaid freight.

Held: Motions for summary judgment denied. The parties are directed to file supplemental briefs addressing whether GFA may seek indemnification (in recoupment or otherwise) of Evans's claim for freight. If the parties wish to mediate this dispute, they should contact the Court.

The parties' respective rights and responsibilities stem from the bills: 'A bill of lading records that a carrier has received goods from the party that wishes to ship them, states the terms of carriage, and serves as evidence of the contract for carriage': Norfolk S Ry Co v Kirby 543 US 14, 18-19 (2004) (CMI1454).

The Carriage of Goods by Sea Act (COGSA), codified in a note to 46 USC § 30701, 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': Kirby 29. However, § 7 of the Act provides that parties to the bill of lading may extend its coverage to land transport prior to loading and subsequent to discharge from the ship:

Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.

Here, COGSA's coverage was extended to land transport of all the goods in question.

The Eleventh Circuit has clarified that 'COGSA, when it applies, supersedes other laws': Polo Ralph Lauren LP v Tropical Shipping & Constr Co 215 F 3d 1217, 1220 (11th Cir 2000) (CMI1536). COGSA § 3(6) provides for a one-year statute of limitations for loss or damage by a carrier. GFA's original counterclaim was filed on 15 March 2024, more than 2 years after the alleged theft of the shipping containers, which means that the counterclaim would be barred to the extent that COGSA applied.

However, the counterclaim is not barred by the COGSA statute of limitations for two reasons. First, even assuming that the statute of limitations has run, GFA can raise its claim defensively.

Second, the Former Fifth Circuit sitting en banc clarified that claims in the nature of indemnity arising from damage or loss to goods covered by COGSA are not subject to the one-year COGSA limitation: Hercules Inc v Stevens Shipping Co 698 F 2d 726, 731 (Former 5th Cir 1983) (CMI1718). In either case, the statute of limitations is no obstacle.