The Prism of COGSA, 30 J

Fordham Law School FLASH: The Fordham Law Archive of Scholarship and History Faculty Scholarship 1999 The rP ism of COGSA Joseph Sweeney Fordham University School of Law Follow this and additional works at: https://ir.lawnet.fordham.edu/faculty_scholarship Part of the Law Commons Recommended Citation Joseph Sweeney, The Prism of COGSA, 30 J. Mar. L. & Com. 543 (1999) Available at: https://ir.lawnet.fordham.edu/faculty_scholarship/811 This Article is brought to you for free and open access by FLASH: The orF dham Law Archive of Scholarship and History. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of FLASH: The orF dham Law Archive of Scholarship and History. For more information, please contact [email protected]. journal of Maritime Law and Commerce, Vol. 30, No. 4, October, 1999 The Prism of COGSA JOSEPH C. SWEENEY* COGSA, however, requires that we view container cases through a different prism. I INTRODUCTION I first met Jay Joseph, the founder of our Journal, in early spring 1969 at a planning meeting at New York University with our first editor, Professor Albert H. Garretson; our third editor, Professor Nicholas J. Healy; my Fordham colleague, Professor Ludwik A. Teclaff, and his wife Eileen; and Professors Andreas F. Lowenfeld, Julius J. Marke, and Michael A. Schwind of the NYU faculty. Thirty years later, the Journal of Maritime Law and Commerce is the leading publication in admiralty and international maritime affairs due to the guiding hand of Jay Joseph, who, like a prudent master, has recruited an expert crew and charted a careful course through the perils of publication. There was an element of adventure in 1969, as it was uncertain how the various constituencies that make up the maritime industry would react to a theoretical, even academic, presentation of the problems of admiralty law, the law of the sea, and maritime resources. At that first meeting Jay was, as he continues to be, steadfast, gentle, genial, and totally supportive. We can be proud of the achievements of the Journal today as we congratulate Jay and his lovely and gracious wife Ann on the joyous occasion of Jay's 80th birthday and the 30th volume of the Journal of Maritime Law and Commerce. *The John D. Calamari Distinguished Professor of Law, Fordham University. A.B., Harvard University; J.D., Boston University; LL.M., Columbia University. Member of the Editorial Board of the Journal of Maritime Law and Commerce. The author served as U.S. Representative and Chairman of Delegation to the diplomatic conferences to replace the Hague Rules in 1978 (The Hamburg Rules) and to amend them in 1979 (The SDR Amendment). 'Monica Textile Corp. v. S.S. Tana, 952 F.2d 636, 641, 1992 AMC 609 (2d Cir. 1991) (McLaughlin, J.). 543 544 Journal of Maritime Law and Commerce Vol.30, No. 4 II BACKGROUND This article began as a meditation on the Supreme Court's 1995 decision, Vimar Seguros y Reaseguros v. M/V Sky Reefer,2 which changed the existing doctrine that choice of forum and choice of law clauses in bills of lading may be invalid to oust the jurisdiction of American courts over shipments to or from the United States under the Hague Rules treaty 3 and the Carriage of Goods by Sea Act (COGSA).4 Sky Reefer presents a problem in the interpretation of a text that is both a statute and a treaty. It soon became apparent that Sky Reefer was but a small part of a much larger problem of textual interpretation, to which the Supreme Court appears to be giving inconsistent treatment. This article cannot encompass the entire history of textual interpretation, let alone a review of all recent interpretation cases; thus, its scope will be limited to the subject of international transportation. While maritime transport involves a text that is both a statute and a treaty and concerns only cargo damage, air transport involves a treaty only, but deals with carrier liabilities to both passengers and cargo. Although both treaties-the Hague Rules of 1924 and the Warsaw Convention of 19295- came out of the same historical period, there is little evidence that either one influenced the other; maritime law had a long history with profound policy-based decisions, while the air transport industry did not yet exist. The original and only authentic texts of both conventions are in the French language. Because there is no American statute covering the Air Law Convention, American courts must struggle with French grammar and vocabulary. They never, however, consult the French original in maritime cases because of COGSA, whose terms are controlling in American courts in any dispute over a treaty provision. Just as a transparent crystal prism focuses and enlarges the image under study, it is the goal of this article to examine the decisional history of COGSA and to find the historical background and evidence of the intent of its drafters in 1936 and determine how that intent has been developed over the 63 years since enactment. COGSA has never been amended and we 2515 U.S. 528, 1995 AMC 1817 (1995). 31nternational Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, Brussels, Aug. 25, 1924, 51 Stat. 233, T.S. No. 931, 120 L.N.T.S. 155 (U.S. ratification proclaimed effective Dec. 29, 1937 (51 Stat. 246)). 4Act of Apr. 16, 1936, ch. 229, Pub. L. No. 74-521, 49 Stat. 1207, effective from July 15, 1936 (49 Stat. 1213), now codified at 46 U.S.C. app. §§ 1300-1315. 5Convention for the Unification of Certain Rules Relating to International Transportation by Air, Warsaw, Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. II (U.S. ratification proclaimed effective Oct. 29, 1934 (49 Stat. 3013)). October 1999 Prism 545 presently remain uncertain whether an international consensus can ever be achieved on changing it. Assuming, however, that COGSA will remain in some form, it is time to apply modern interpretive scholarship to it-the most important and most frequently litigated statute in American international trade. We must also bear in mind that COGSA emerged from a treaty ratified by the United States; thus, it must be interpreted both as treaty and statute, In either case, preparation of this article has been made much easier 6 by the legislative histories prepared by Professor Michael F. Sturley. III MARITIME TRANSPORT It is appropriate to look at the history of the allocation of cargo damage liability and the circumstances of the passage of COGSA 7 before we analyze the few Supreme Court decisions8 of treaty interpretation and statutory construction 9 to discern the prism of COGSA. The case from which the "prism of COGSA" language is taken involved the narrow issue of the unit limitation of liability ($500 per package).' 0 There had been damage to a cargo of 76 bales of cloth stowed inside a container (20' x 8' x 8') that was being shipped from Africa to Savannah, Georgia. The cloth was damaged by salt water. The bill of lading described the contents as 76 bales of cotton cloth in the "description" column of the bill of lading, but in the column headed "No. of Pkgs." the typed figure "1" was found." The carrier defendant argued that its liability was limited to $500 because of bill of lading language that defined a container as one package. The District Court rejected the carrier's argument and ruled for the cargo 6 Essential documents of the 1924 International Convention and COGSA are printed in The Legislative History of the Carriage of Goods by Sea Act and the Travaux Prrparatoires of the Hague Rules (M. Sturley ed. 1990) [hereinafter cited as Leg. Hist.] See also Sturley, The History of COGSA and the Hague Rules, 22 J. Mar. L. & Com. 1 (1991) [hereinafter cited as COGSA History], and Sturley, The History of the Hague Rules and the United States Carriage of Goods by Sea Act, [19911 11 Diritto Marittimo 1. 7 See infra notes 117-91 and accompanying text. 8See infra notes 192-319 and accompanying text. 9 Professor William Tetley reminds us of the distinction between the word "construction," favored by common law lawyers, and "interpretation," favored by those trained in the civil law, but cites Corbin to the effect that the distinction is by no means necessary. W. Tetley, Marine Cargo Claims 83 (3d ed. 1988) (citing 3 A. Corbin, Corbin on Contracts § 534, at 13 (1960)). In the view of Professor Hans Kelsen, however, "There are no principles concerning the interpretation of treaties different from those concerning the interpretation of other legal instruments." H. Kelsen, Principles of International Law 460 (2d rev. ed. 1966). l°Monica Textile Corp. v. S.S. Tana, 952 F. Supp. 636, 1992 AMC 609 (2d Cir. 1991). "Id. at 637. 546 Journal of Maritime Law and Commerce Vol. 30, No. 4 owner, citing Second Circuit authority on shipping containers.12 After the trial court decision's in Monica Textile,' 3 however, the Second Circuit decided Seguros Illimani S.A. v. MIV Popi P, 14 which seemed to elevate the legal effect of the number of packages column in the bill of lading over the cargo description column; accordingly, the District Court reversed itself and awarded only the $500 package limitation amount. 15 The Monica Textile bill of lading defined the shipping container as one package in a minuscule pre-printed exculpatory clause, allegedly reflecting the agreement of the parties. The Second Circuit, however, reversed,' 6 noting that it had consistently cast a jaundiced eye on exculpatory agreements which are "against the grain of COGSA."' 17 Examining the face of the bill of lading, the court found no agreement but rather an inherent ambiguity.' 8 Seguros Illimani was rejected as analogous because the court's decision in that case was not whether one container is one package but rather whether each individual tin ingot inside the container was a package or whether a bundle of 15 ingots was the package.

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