The plaintiff cargo owner contracted with a logistics company to transport household goods from Malaysia to Texas. The logistics company packed the goods into boxes and loaded them into a shipping container. It issued an invoice and packing list indicating that it was undertaking to provide ‘door to door’ services for the transport. The logistics company then subcontracted to a second logistics company who further subcontracted the transportation to an ocean carrier. The ocean carrier transported the container from Malaysia to California and then transferred it onto a rail line for rail carriage to Texas. Before the container was offloaded in Texas, the ocean carrier placed a cargo lien on the container for nonpayment of certain charges. The original logistics company refused to pay for removal of the lien and the plaintiff paid the charges. After the container was delivered to its intended destination, the plaintiff alleged many of the items were damaged, destroyed, or missing.

The plaintiff sued the logistics companies, the ocean carrier, and others in Texas state court citing damages of USD 78,000. The ocean carrier removed the case to federal court on the basis that the claims involved a federal question requiring the interpretation of COGSA / Hague Rules. The plaintiff filed a motion to remand the case back to federal court on grounds that COGSA / Hague Rules did not apply and that the claims turned only on matters of state law.

The issues before the court were:

(1) whether COGSA / Hague Rules governed the shipment;

(2) whether COGSA / Hague Rules preempt state law claims.

Held: Since the original logistics provider issued an invoice and inventory list showing the goods had been packed and received and would be subject to transportation from Malaysia to the United States, ‘these documents indicate a bill of lading for purposes of COGSA’. Furthermore, since the transportation involved substantial carriage of goods by sea, federal maritime law, and therefore COGSA, is applicable to the claims against the original logistics provider. Additionally, since the downstream ocean carrier issued a bill of lading including a clause paramount ‘extending COGSA’s application to inland areas’ the claims against the ocean carrier are ‘also governed by COGSA’.

While ‘COGSA itself is silent on its preemptive scope’ the Supreme Court has held that ‘maritime law governs contracts involved in the multimodal shipment of goods such as through bills of lading’. Therefore, state law claims brought by the plaintiff against any of the defendants arising out of ‘contract-created rights or obligations’ are ‘preempted by COGSA’. Since COGSA / Hague Rules preempt the state law claims, removal to federal court was proper and the plaintiff’s motion to remand the case to state court was denied.