OOO 'Garant-S' (OOO), a shipper of motor vehicles, sued Empire United Lines Co Inc (Empire), a common carrier, and Michael Khitrinov (Khitrinov), the carrier’s sole shareholder, for breach of contract and various tort claims under New Jersey state law resulting from the theft of two motor vehicles that have been delivered for shipment overseas. The District Court granted summary judgment in favour of defendants, ruling that the carrier’s liability was limited to USD 1,000. OOO appealed and argued that: (1) COGSA/the Hague Rules did not apply to the claims in this case; (2) Empire’s unreasonable deviation deprived it of the benefit of limited liability; and (3) it was denied a fair opportunity to declare a value in excess of the standard limited liability amount.

Held: Regarding the first argument, the Court of Appeals held that, although a bill of lading was never issued, COGSA/the Hague Rules applied because Empire’s house bill of lading expanded the scope of COGSA/the Hague Rules to the time at which vehicles delivered for shipment overseas came into the carrier’s possession. 

Regarding the second argument, the Court of Appeals held that, even if Empire participated in the theft of two vehicles, that conduct was not an unreasonable deviation that nullified Empire's limitation of liability under COGSA/the Hague Rules. The court of appeal reasoned that the deviation doctrine should be limited to geographically deviation and unauthorised on-deck stowage.

Regarding the third argument, the Court of Appeals held that OOO had a fair opportunity to declare a value in excess of USD 500 per package. It was uncontested that OOO had declared a higher value in the past, and OOO presented no evidence to suggest that the bill of lading that would have issued here but for the theft was in any way different from the past bills of lading, or that its interactions with Empire were materially different such that the previous method it used for declaring excess value was not available in this particular instance.