The CEVA defendants and Coastal Cargo Co LLC (Coastal) sought to dismiss the plaintiffs' claims against them.

This case concerned water damage to two shipments of processed natural rubber owned by the plaintiffs. The CEVA defendants acted 'as common or private carriers for hire, vessel charterers, and/or transportation intermediaries'. Coastal, a stevedore and terminal operator, was hired by the CEVA defendants to receive and store the shipments upon their arrival in New Orleans.

The plaintiffs alleged that the rubber was delivered to the vessels in good order and condition, but arrived in New Orleans wet and damaged. The plaintiffs alleged that the bales were damaged during ocean transit before discharge, and then further damaged after unloading when they were stored outdoors and uncovered at the port of New Orleans.

Held: The Court denies both motions to dismiss the plaintiffs' claims.

The CEVA defendants argue that the plaintiffs' bailment claims against them are displaced by the US Carriage of Goods by Sea Act (COGSA) and do not state bailment claims because they do not allege that the CEVA defendants had exclusive possession of the cargo.

In opposition, the plaintiffs argue that their bailment claims against the CEVA defendants are not displaced by COGSA because the bailment claims relate to post-discharge cargo damage, and the CEVA defendants have taken the position that they were no longer acting as COGSA carriers once the cargo was offloaded from the vessel. According to the plaintiffs, because the CEVA defendants agreed to provide 15 days of free storage at the port of New Orleans and they contend they were no longer COGSA carriers after discharge, they became bailees of the cargo once it was offloaded from the vessel. The plaintiffs further argue that they did not have to allege that the CEVA defendants had exclusive possession of the cargo because they subcontracted to Coastal their obligation to store the cargo in New Orleans.

COGSA permits ocean carriers to limit their liability for 'packages' damaged in shipping to USD 500 per package unless the shipper declares a different value in the bill of lading: 46 USC § 30701 n. Ordinarily, COGSA applies from the time a package is loaded onto a vessel to when it is offloaded at the port, but parties can contract to expand the protection beyond the 'hook-to-hook' period and to other parties, including stevedores: Granite State Ins Co v Caucer Syndicate 1084 at Lloyd's 2020WL 8678020 *5 (SD Tex, 14 July 2020) (citing COGSA; Norfolk Southern Railway Co v Kirby 543 US 27-29 (2004) (CMI1454)). Courts generally agree that COGSA pre-empts other causes of action where it applies.

Here, the plaintiffs agree that COGSA applies for the period that the cargo was aboard the vessel. The parties, however, fundamentally disagree about when the CEVA defendants' responsibility for the cargo as a common carrier ended. As stated by the plaintiffs, the bailment claim against the CEVA defendants is pleaded in the alternative to the carrier liability claim because of the litigation position espoused by those defendants. The plaintiffs contend that, if the CEVA defendants' carrier liability terminated at the port, they then became liable as bailees for hire, which also makes them liable for the actions of anyone they entrusted with the goods, such as Coastal. See David Crystal Inc v Cunard SS Co 223 F Supp 273, 282 (SD NY 1963), affd 339 F 2d 395 (2d Cir 1964) observing that:

where, by the terms of the bill of lading, the contract of carriage terminates on discharge of the cargo from the ship, its liability changes from that of a common carrier to that of a warehouseman ... and the rule is well settled that a bailee for hire is responsible for the proper care, not only by himself but by anyone to whom he entrusts it and it makes no difference whether that other is an independent contractor or not.

The plaintiffs have stated bailment claims against the CEVA defendants that are not pre-empted by COGSA. If discovery shows otherwise, the CEVA defendants are not foreclosed from additional motion practice.