Cite as: 1997 WL 104953 (N.D.Cal.)AMDAHL CORPORATION, Plaintiff, v. PROFIT FREIGHT SYSTEMS, INC., et al., Defendants.
No.
C922253 DLJ. United States District Court, N.D. California. Feb. 24, 1997.
ORDER
JENSEN, District Judge.
A one day bench trial was held in this case on February 6, 1997.
David C. Phillips and Kelly J. Snowden appeared on behalf of defendants Profit Freight Systems, Inc., Lep International,
Inc., and Lep Profit International, Inc. (hereinafter collectively referred to as "Lep").
Amdahl claims that Lep should be held liable for damage to Amdahl's laser wire bonder which was
sustained while the equipment was being transported from California to Ireland. Having considered the evidence presented and the applicable law, the Court hereby adjudicates Amdahl's claims in favor of Lep.
I. FACTUAL FINDINGS
1. In April of 1991, Amdahl contracted with Lep to deliver a shipment consisting of a laser wire bonder from its facility in Sunnyvale, California to its facility in Dublin, Ireland.
2. Amdahl submitted to Lep information about the cargo to be shipped on a Shipper's Letter of Instructions form ("SLI").
3. Lep used the information on the SLI to prepare a master form
used to produce the actual carrier's bill of lading.
4. Lep received the equipment from Amdahl in good order and condition.
5. Lep hired a trucking company, Overnite Transportation Company, to
transport Amdahl's shipment from Sunnyvale, California to New York, New York.
6. On behalf of Amdahl, Lep arranged for a nonvessel operating common carrier ("NVOCC") to transport the laser wire
bonder from New York to Dublin, Ireland. The NVOCC hired in this case was Atlas Consolidated Container, Inc. ("Atlas").
7. The trucking company hired by Lep delivered Amdahl's shipment to
St. George Warehousing & Trucking, Inc., a warehouse leased by Atlas in New Jersey.
8. At that point, Amdahl's equipment likely sat in the warehouse for a few days while Atlas waited for other shipments
going to Ireland to arrive from other forwarders.
9. When those shipments arrived, Atlas consolidated the cargo in containers to be put on a vessel bound for Ireland. In this case, the cargo was not
sent directly to Ireland. Rather, the original vessel made a stop in Antwerp, Belgium, where the cargo was unloaded and reloaded upon another vessel bound for Ireland.
10. After containerizing all the
cargo and booking ACL steamship line, Atlas contracted with a trucker to bring the shipments to ACL's terminal. ACL loaded the containers on board the ship, which then set sail for its destination.
11. Once the cargo was on board the vessel, Atlas issued Amdahl a bill of lading.
12. When the vessel arrived in Dublin, Lep, acting as an agent for Atlas, was contacted by the steamship line. The
container was then released to Lep and Lep broke it down, placing the individual shipments in different areas of the warehouse pending notification of the shippers.
13. Lep contracted with a trucker to
deliver the equipment to Amdahl in Ireland.
14. When the shipment ultimately arrived in Dublin, the equipment was physically damaged and unusable.
15. The rate Amdahl was charged by Lep for
this transaction was set by Atlas, rather than Lep. Atlas, as an NVOCC, must file its rates with the Federal Maritime Commission. Shipping rates are calculated based on the size of the cargo.
16. The
shipment of goods in this case was governed by two written agreements: (1) the SLI between Amdahl and Lep, and (2) the bill of lading issued by Atlas.
17. On the SLI, which the Ninth Circuit held to
be a bill of lading, Lep is included in the definition of a "carrier." However, in that same document, Profit Freight Systems, Inc. is listed as "Forwarding Agent." In other places on the
SLI, Lep is referred to as the "forwarder" or "forwarding agent."
18. In the Atlas bill of lading, Lep is listed as the "forwarding agent," and Atlas as the carrier.
II. CONCLUSIONS OF LAW
19. A "common carrier" or a "freight forwarder" subject to common carrier liability is held to essentially a strict liability standard.
20. A
"freight forwarder" or "forwarding agent" can be held liable only for its own negligence.
21. In determining whether Lep was acting as a common carrier or a forwarding agent, the Court
must look to the leading case of Chicago, Milwaukee, St. Paul Pacific R.R. Co. v. Acme Fast Freight, 336 U.S. 465, 69 S.Ct. 692, 93 L.Ed. 817 (1949).
22. In Acme, the Court explained that the term
"freight forwarder" was originally applied to persons who arranged for the transportation by common carriers of shippers' goods. Id. at 701. The forwarder's duties went no farther than procuring
transportation by the carrier and handling the details of shipment. See J.C. Penney Co., Inc. v. American Express Co., et al., 102 F.Supp. 742, 74647 (S.D.N.Y.1951). After the forwarder arranged for
transportation, the shipper would pay the forwarder a fee for its services, in addition to which the shipper would pay the freight charges of the carrier who actually transported the goods. Acme, 69 S.Ct. at
701. This type of freight forwarder is what the Court refers to as a "forwarding agent," liable only for its own negligence.
23. Acme also discusses another class of freight forwarder,
subject to liability as a common carrier. This type of forwarder picks up a less than carload shipment at the shipper's place of business and is engaged to deliver it to its ultimate destination. After
pickup, the forwarder combines the shipment with others in carload quantities. In addition, the forwarder in this type of arrangement sets the rates himself. Acme, 69 S.Ct. at 701. This group of
freight forwarders is subject to liability regardless of whether it or an underlying carrier was at fault for any loss or damage. Id.
24. Because it is apparent that Lep merely arranges for
transportation of goods by contracting with other companies to carry the goods, containerize them, and warehouse them, the Court finds that Amdahl has failed to meet its burden of proving by a preponderance of the
evidence that Lep is either a common carrier or a freight forwarder subject to common carrier liability.
25. In the Ninth Circuit, bills of lading are strictly construed against the carrier. Cart,
Ltd. v. Hong Kong Islands Line America, S.A., 940 F.2d 530, 532 (9th Cir.1991) (citations omitted). Here, however, the two documents governing the shipment of goods refer to Lep alternatively as a carrier, a
freight forwarder, and a forwarding agent. Therefore, the Court finds this evidence insufficient to meet Amdahl's burden of proving that Lep is a common carrier.
26. For the above stated reasons, the
Court finds that Lep is a forwarding agent subject to liability only for its own negligence.
27. Amdahl made no showing of negligence on the part of Lep. Therefore, the Court finds that Lep is not liable
for the damage to Amdahl's equipment.
III. CONCLUSION
For the reasons discussed above, the Court adjudicates plaintiff's claims in favor of defendants.
IT IS SO ORDERED.
