Starrag-Heckert Inc (the appellant) and Maersk Inc (the respondent) entered into a contract of affreightment embodied in a short form non-negotiable sea waybill. Under the waybill, a flat rack with three crates containing aerospace machinery were to be carried from Rotterdam to Long Beach, California, on the MV McKinney Maersk. The respondent acted as the US agent for the owners of the MV McKinney Maersk and Maersk Pacific Ltd, which operated the terminal at which the cargo was removed from the MV McKinney Maersk. The flat rack was unloaded from the MV McKinney Maersk at Maersk Pacific Ltd's terminal in the Port of Long Beach. The flat rack was moved from the dock to Maersk Pacific Ltd's container yard. While the flat rack was being parked, it tipped over onto its side, causing damage to the cargo in the three crates.

The parties filed cross-motions for partial summary judgment on whether the respondent could enforce the package liability limit of USD 500 per package under 46 USC § 30701 (COGSA), capping the respondent's liability at USD 1,500. The District Court granted the respondent's motion for partial summary judgment, limiting the respondent's total liability to USD 1,500. The District Court found that the respondent's combined transport bill of lading (CTBL) incorporated the package damage liability limit of the COGSA into the waybill, as expressly authorised by COGSA. The District Court rejected the appellant's claim that the respondent was required to provide actual notice of the extension of COGSA to any damage after unloading of the cargo and before 'delivery' of the goods. The District Court also found that under the terms of the CTBL, there was no 'delivery' of the machines. As a result, under the terms of the waybill and the CTBL, the package damage liability limit of USD 500 per package applied, and the respondent was not liable for more than USD 1,500 in damages. The appellant appealed.

Held: Appeal dismissed.

The COGSA limits damages against a carrier for loss or damage to goods in transit to USD 500. Ordinarily, the COGSA only applies 'from the time when the goods are loaded on to the time when they are discharged from the ship'. However, the COGSA expressly permits parties to a maritime shipping contract to provide for liability limitations beyond the 'tackle to tackle' period for damage that occurs before loading or after unloading of the goods from the ship.

The appellant's primary contention is that the failure of the waybill (that was actually provided to the appellant) to explicitly state that the CTBL (that was merely made available to the appellant) contractually extends the COGSA package limitation through to the delivery of the goods causes it to conflict with the COGSA, and therefore the package limitation cannot be enforced. The Court concludes that the respondent's waybill and CTBL are in harmony with the relevant provisions of the COGSA, and that the respondent is not required to give additional notice to enforce the package liability limitation or to contractually extend the terms of COGSA.

The appellant also argues that the package limitation violates the Harter Act's prohibition of clauses exculpating carriers from liability. This argument fails for two reasons. First, where the parties contractually extend COGSA to cover the damage, the Harter Act does not apply. Therefore, because the CTBL states that it is governed by the COGSA, and extends COGSA terms through to delivery of the goods, the Harter Act does not apply. Second, even if the Harter Act applies, it does not prohibit clauses that limit liability. Therefore, the Harter Act does not prohibit the enforcement of the COGSA's package limitation, or conflict with the package limitation.

Finally, the appellant contends that the word 'delivery' in the CTBL is ambiguous, and should be interpreted as limiting the package limitation to the 'tackle to tackle' period. This Court, however, agree with the District Court that the word 'delivery' in the context of the CTBL, describes an act beyond the mere placement of goods on the dock. The District Court properly interpreted the term 'delivery' in a manner consistent with both maritime law and the terms of the waybill and the CTBL.