This case involved alleged damage to shipments of 26 containers of soybeans. The soybeans were shipped to Qingdao, China, in two shipments. The shipments were delayed. The containers were released on 27 October 2022. They were not picked up by the consignee until at least 21 November 2022. The plaintiff shipper contended that the delays were caused by the Chinese government issuing a COVID-19-related lockdown and by the defendant carrier overbooking vessels, failing to promptly correct errors on the bills of lading, and refusing to release the cargo to customs while wrongly asserting that the shipper had outstanding charges. It further alleged that the containers remained the defendant's responsibility until after they cleared customs. The defendant denied the allegations.

The plaintiff brought a claim under the US Carriage of Goods by Sea Act (COGSA) and for breach of contract. The defendant moved for summary judgment on the basis that the case was not filed within the one-year statute of limitations period. Alternatively, the defendant moved for partial summary judgment limiting the damages for the claim to USD 500 per package under COGSA's liability limit provision.

Held: The defendant's motions are denied without prejudice as premature. The plaintiff's motion to continue is granted.

The defendant moves for summary judgment on the entirety of the COGSA claim as barred by the statute of limitations. The plaintiff filed its complaint on 14 November 2023. The parties dispute whether 'delivery' occurred more than one year prior to that date. Summary judgment is not proper at this time.

As an initial matter, the plaintiff argues that the defendant cannot avail itself of COGSA's statute of limitations because the defendant's actions amounted to an unreasonable deviation. However, the Eleventh Circuit has stated that because 'a deviation in the delivery terms creates no greater risk that plaintiff will not be able to file suit within the statutory period' it 'joins the Fifth Circuit in concluding that an unreasonable course deviation does not nullify COGSA's one year statute of limitation': Mesocap Ind Ltd v Torm Lines 194 F 3d 1342, 1345 (11th Cir 1999) (CMI1733). That holding is binding on this Court.

Next, the parties dispute what constitutes 'delivery' in terms of COGSA. The defendant advocates following the Fifth Circuit's approach which states that '"delivery" occurs when the carrier places the cargo into the custody of whomever is legally entitled to receive it from the carrier': Servicios-Expoarma CA v Indus Maritime Carriers Inc 135 F 3d 984, 992 (5th Cir 1998). The plaintiff relies on dictionaries and a case from the District of South Carolina to conclude that 'delivery' happens 'when the consignee either actually or constructively receives the goods'. Yet another interpretation is expressed by the Southern District of New York in Lithotip CA v SS Guarico 569 F Supp 837, 839 (SDNY 1983): 'We find persuasive the opinions of the courts cited above that "delivery," both as the term is used in everyday language, and as it appears to have been intended in the context of the statute, requires, if not receipt by the deliveree, at least notice to him and opportunity to accept delivery.' Regardless of which interpretation is correct, summary judgment is not warranted at this time.

Under the Fifth Circuit test, the law and custom of the port of delivery affects when 'delivery' has occurred - Servicios-Expoarma 993:

This circuit has applied the custom of the port doctrine to determine who is entitled to receive cargo from the carrier ... . Thus, while contract and maritime law generally will dictate into whose custody an ocean carrier is required to deliver cargo, such law will be overridden by the established law or custom of the port of delivery. 

Here, the custom and law of the port of Qingdao has been contested. The plaintiff has attached an announcement purportedly from China's Shandong province - where Qingdao is located - stating that '[t]he shipping unit is responsible for organizing or entrusting a disinfection unit to disinfect the transportation vehicles loaded with imported container goods before and after shipment in the domestic transportation section'. Because of that, the plaintiff argues that the defendant was still responsible - and delivery did not occur - until the containers cleared customs. The defendant 'objects to the introduction of alleged sources of Chinese law with no support for those sources under Fed. R. Civ. P. 44.1'. Under the Fifth Circuit's standard, summary judgment is improper at this time.

The same result holds under the other standards too. The parties dispute when receipt or the opportunity to receive occurred. Because of its understanding of Chinese customs law, the defendant contends that the containers were released for pick up no later than 27 October 2022. Meanwhile, under its view that cargo is the carrier's responsibility until it clears customs (as opposed to when it is released to customs), the plaintiff asserts it did not have the opportunity to access the soybeans until at least 21 November 2022. More discovery is needed in this case before the Court will adjudicate what the laws and customs of the port of Qingdao were. Therefore, the Court cannot say that the defendant has met its burden of proving the affirmative defense of statute of limitations at this time. The defendant may renew its motion for summary judgment on this ground at a later date.

The defendant also moves for partial summary judgment, arguing that damages for Plaintiff's COGSA claim should be limited to USD 500 per package. Since there were 26 containers of soybeans shipped, the defendant contends that its total liability under COGSA cannot exceed USD 13,000. The plaintiff asserts that damages should not be limited to USD 13,000 both because the defendant engaged in an unreasonable deviation and because the soybeans were not shipped in packages. Partial summary judgment is premature at this time.

For goods shipped in packages, COGSA limits the carrier's liability to a maximum of USD 500 per package. By contrast, 'goods not shipped in packages' are limited to USD 500 'per customary freight unit'. However, '[t]he law in this circuit is that an unreasonable deviation breaches the contract of carriage and renders COGSA's $500 per-package limitation a nullity, leaving the carrier liable as an insurer for the full amount of damage to the cargo': CA La Seguridad v Delta SS Lines 721 F 2d 322, 324 (11th Cir 1983). A reasonable deviation does not nullify the liability limit.