Royal & Sun Alliance Insurance v. Service Transfer Inc.

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Transportation

New York Law Journal

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District Judge Denise Cote

Under a sea waybill between Baxter Healthcare and American President Lines (APL), Service Transfer Inc. (STI) transported a shipment of human plasma from Baxter's warehouse in Kentucky to APL in Virginia, for shipment by sea to Germany en route to Austria. STI was not a party to the waybill, whose Clause Paramount extended the Carriage of Goods by Sea Act (COGSA) to the inland portion of the shipment. The waybill's Himalaya Clause extended COGSA to STI as "carrier" APL's subcontractor. The shipment was destroyed when STI's truck drove off the road. Royal & Sun Alliance (RSA) sued as Baxter's subrogee. STI sought partial judgment that COGSA governed. RSA argued the Carmack Amendment governed. District court applied COGSA to the shipment's inland journey, noting that the second prong of the two-part test in Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp. precluded application of the Carmack Amendment. STI was not the carrier responsible for the entire course of shipment. Baxter signed the waybill and paid APL a single "all-in" through rate to handle shipment of goods from Kentucky through to final destination in Austria. Thus, STI did not function as a "receiving" carrier and the Carmack Amendment did not apply.

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