Opinion
Case No. 01-8187-CIV-RYSKAMP
December 19, 2002
ORDER FINDING DEFENDANTS LIABLE FOR PLAINTIFF'S LOSS
Plaintiff Levi Strauss Company brings this action against Defendants Tropical Shipping Construction Company, Ltd., and All Coast Intermodal Services, Inc. (hereinafter collectively "Tropical"), for damages sustained when a semi-trailer hauling Levi Strauss men's pants was stolen while being transported by Defendants. This cause came for trial on liability before the Court on November 18, 2002. Finding that Plaintiff had proved a prima facia case in this action, the Court instructed the parties to brief the issue of Defendant Tropical's negligence. After carefully reviewing the facts of the case and a thorough examination of the law, the Court finds that Tropical was negligent and that Levi Strauss should recover.
I. Background
Levi Strauss contracted with Tropical for Tropical to ship a loaded and sealed container of men's pants from Puerto Plata, Dominican Republic, to Little Rock, Arkansas. On April 2, 2000, Levi Strauss delivered the container to Tropical in Puerto Plata. Tropical issued bills of lading for the cargo and transported it to the Port of Palm Beach, Florida. In turn, Tropical contracted with All Coast to transport the cargo from the Port of Palm Beach to Little Rock, Arkansas.
Gerald and Robin Baum, drivers for All Coast, picked up the cargo about 9 a.m. on April 5, 2000 from the Port of Palm Beach and headed for Little Rock. After driving for several hours, the couple stopped at Melbourne, Florida, where Gerald's daughter lived. The couple wanted to see Gerald's daughter's newborn baby daughter. The Baums secured a room at a Days Inn. Later that afternoon, they unhitched the trailer and used the tractor to go to Walmart to shop for some personal items. Gerald's daughter spent the evening with them and left close to midnight. Gerald and Robin went to bed shortly after his daughter left. The next morning, they discovered the truck had been stolen and immediately contacted the police. They learned that the hotel manager had seen their truck pull out and leave the hotel about 3:30 am. The tractor and trailer were later found in Miami; police recovered 14,590 units of pants, but 6,976 units were never found.
Levi Strauss brought this action to recover the loss of the stolen pants. The parties have stipulated that the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. ("COGSA"), applies to this case pursuant to the Clause Paramount contained in Tropical's bills of lading. COGSA governs "all contracts for carriage of goods by sea to or from ports of the United States in foreign trade." 46 U.S.C. § 1312. COGSA limits a carrier's liability to a maximum amount in certain situations. Under the act, the Eleventh Circuit applies a shifting burden to determine liability for loss: a plaintiff must first state a prima facie claim under COGSA by demonstrating delivery of goods in sound condition to a carrier and their subsequent receipt in damaged condition. Polo Ralph Lauren, L.P. v. Tropical Shipping Const. Co., Ltd., 215 F.3d 1217, 1220 (11th Cir. 2000). The burden then shifts to the carrier to establish that the damage was not caused by its negligence. Id. If the carrier can then rebut the shipper's prima facia case, the burden returns to the shipper to show that the carrier's negligence at least contributed to the loss. Sony Magnetic Prod. Inc., v. Merivienti O/And, 863 F.2d 1537, 1539 (11th Cir. 1989).
Although there has been some dispute as to whether COGSA could otherwise apply to the inland shipping of products, see e.g. Asahi America, Inc., v. M/V Arild Maersk, 602 F. Supp. 25, 26 (S.D.N.Y. 1985) (recognizing that it is a fascinating question for "all who are involved in admiralty law"), it now appears settled that while "COGSA applies of its own force from `tackle to tackle.' that is from the time goods are loaded onto the ship to the time they are discharged from it," a Clause Paramount may extend the application of COGSA liability rules to overland transport. James N. Kirby, Pty Ltd. v. Norfolk Southern Ry. Co., 300 F.3d 1300, 1304 (11th Cir. 2002). Such is the case here.
At trial, this Court found that Plaintiff Levi Strauss satisfied its burden to state a prima facia claim under COGSA: it established to the Court that it demonstrated a delivery of goods (men's pants) in a sound condition to Defendant Tropical, and that the pants were subsequently stolen and never delivered to Levi Strauss in Arkansas. At the end of the trial, the Court ordered the parties to submit briefs as to the negligence of Defendant Tropical for the stolen tractor-trailer. This issue is now ripe for adjudication.
II. Loss of Cargo Was Due to Defendant's Negligence
The issue of who was to blame for the loss of the cargo in this case — and, more importantly, who must bear the burden of the loss — is a close one. Few if any cases in the Eleventh Circuit seem directly to deal with the negligence of a carrier for a truck and cargo stolen in the context of COGSA and its "Q clause" exceptions.
Plaintiff Levi Strauss has demonstrated that it delivered to Defendant Tropical a container of goods in sound condition, and that Tropical never delivered the pants to Levi Strauss in Little Rock. The parties agree that the pants, along with the truck and trailer hauling them, were stolen in Melbourne, Florida. What is now at issue before this Court is whether Tropical is liable for that theft.
Because Levi Strauss presented a prima facia case, Tropical must prove either that it exercised due diligence to prevent damage or loss by properly handling, stowing, and caring for the cargo, or that the harm resulted from one of the exception clauses contained in 46 U.S.C. § 1304 (2). The "Q clause" provides for a limitation of liability for "[a]ny other cause arising without the actual fault . . . of the carrier and without the fault or neglect of the agents or servants of the carrier." Under the `Q Clause' exception found in § 1304(2)(q), the carrier has the burden to show that the loss was not caused by its neglect. See American Maritime Corp. v. Barge American Gulf III, 100 F. Supp.2d 393, 396 (E.D. La. 2000). Defendant Tropical contends that the loss of the cargo falls within this exception because the truck carrying Levi Strauss' pants was stolen without actual fault or privity of the carrier and without neglect of the carrier and its agents. Because this Court finds that the carrier and its agents were at fault or negligent, Defendant must be liable for the loss of the cargo of men's pants.
Gerald Baum had hauled cargo for Levi Strauss before on about fifteen to twenty occasions. He knew that the cargo he was hauling was valuable. After leaving the Port of Palm Beach about 9:00 a.m. on April 5, 2000, he and his wife drove only about two hours before stopping for the day. Instead of continuing on into northern Florida, he spent the rest of the day and that night at the Days Inn in Melbourne.
Both Gerald and his wife Robin Baum testified that they took certain security precautions. They chose the Days Inn because they had stayed there ten to fifteen times before without any problems. The truck was parked in a well-lit truck parking area about thirty feet from and within eyesight of the couple's room. There was additional truck parking toward the rear of the hotel property, but the couple wanted the truck within sight of their room. After returning from their afternoon shopping trip, Gerald backed the tractor up to the trailer so that it appeared that it was connected, but left it unhooked as a security precaution.
Nevertheless, both the All Coast company and the Baums failed to take sufficient security precautions. No evidence was presented that All Coast required its drivers to take particular security precautions, as do other companies. Gerald did not seek to find a secured yard where he could leave the truck. All Coast apparently never warned the Baums about dangerous areas and did not inform them of reports that there had been about thirty trailers stolen within a sixty mile area of that location in the last year. Even though his company didn't warn him, however, as a trucker he would have heard of trucks being stolen.
Plaintiff Levi Strauss submitted as Exhibit 19 a letter from Land Span Logistics trucking supervisors to their drivers instructing the drivers to take the following procedures, among others, to reduce the risk of theft: a) go as far as possible from the shipper (at least 300 miles) before stopping; b) do not delay a load in transit for unnecessary reasons; c) one driver should remain with the truck; d) no load should be parked in transit unless it is in a secure facility. Any one of these precautions could have prevented the theft here.
Evidence was also presented at trial that the truck door was secured with only a padlock that could easily be cut with bolt cutters. No evidence was presented of any type of alarm used on the truck or the container. Neither Gerald nor Robin slept in the cab of the truck to protect it.
In Asahi America, Inc., v. M/V Arild Maersk, 602 F. Supp. 25, 26 (S.D.N.Y. 1985), a truck and container were stolen when the driver left it parked on a local street in Queens, New York. The court found that the carrier was liable because the driver's overnight "deviation" was unreasonable in that it "substantially increase[d] the exposure of the cargo to foreseeable dangers that would have been avoided had not deviation occurred." Id. at 27 (quoting General Electric Co. v. S.S. Nancy Lykes, 706 F.2d 80, 84 (2d Cir. 1983). Here, the truck was no more protected in the hotel parking lot than on a public street. Moreover, although Baum's route was not necessarily a deviation in the sense that he went out of his way, it was a deviation in the Asahi sense: it substantially increased the exposure of the cargo to foreseeable dangers. The rash of truck thievery has been especially bad in southern Florida, but less so farther north. While it is admittedly speculative to say that the crime would not have occurred had Baum stopped farther into his trip, it is fair to say that by spending the night in southern Florida he increased the exposure of the cargo to loss.
Another Second Circuit case illustrates the options Tropical and Baum could have taken to protect the cargo. The court in Hartford Fire Insur. Co. v. M/V OOCL Bravery, 79 F. Supp.2d 316, 326-27 (S.D.N.Y. 1999) ( rev'd on other grounds) listed seven options which would have prevented the theft of a truck and its cargo parked on a public street. Among those options were storing the truck and container in a secured depot or warehouse when stopping overnight, parking the truck such that the container could not be opened when it was left away from a secured area, using pilferage alarms on the container or other supplementary security devices, and having the driver sleep in the cabin of the truck. Id. Any one of these options would have prevented the theft in the case sub judice. This Court therefore finds that Defendant was not "without the fault or neglect" required to fall under the 46 U.S.C. § 1304 (2) "Q clause," and Defendant's liability shall not thereby be limited.
III. Conclusion
Plaintiff Levi Strauss has satisfied its burden of showing that it delivered to Tropical a cargo in sound condition, and that the cargo was never successfully delivered to Levi Strauss in Arkansas. Although Defendant Tropical has shown that its driver took some precautionary measures, this Court finds that Tropical was negligent in that it did not require and its driver did not take greater security measures. Tropical cannot claim the protection of COGSA because it can prove neither that it exercised due diligence to prevent loss nor that the loss falls under the Q clause exception. Today theft is increasingly common, but there are also many options that can be taken to prevent or decrease the risks of loss. Those measures were not taken here. Accordingly, it is hereby ORDERED AND ADJUDGED that:
1. Defendant Tropical was not without fault or negligence in the loss of Plaintiff Levi Strauss's cargo.
2. This cause shall be set for a hearing on the amount of damages by separate order.
DONE AND ORDERED.