Can a Logistical Broker be a “Carrier” Without Physically Carrying Cargo Under COGSA?
Arendovich Invs., Inc. v. NNR Glob.Logistics, Inc.,754 F. App'x 472 (7th Cir. 2019).
By: Blair Boyd
ArendovichInvestments bought copper from a Chinese corporation for nearly $100,000.Arendovich contracted with NNR Global Logistics (NNR) to organize the copper’s safetransportation “from China to the office of [Arendovich] … and to provide forinsurance against all losses of [Arendovich].” [1]After an Arendovich agent witnessed the copper being loaded and sealed in China,the container was shipped. NNR subsequently accepted the container at the seaport and issued a bill of lading. When the container arrived in Illinois, theseal was broken, and it was filled with cement, not copper. Accordingly, Arendovichsued NNR in state court for improperly shipping a container from China to theUnited States and failing to obtain insurance. NNR subsequently removed tofederal court and moved for summary judgment.
NNRargued that even if Arendovich could prove NNR’s liability, [2] the Carriage of Goods by Sea Act (COGSA)capped a carrier’s liability to $500 per package.[3]In turn, Arendovich argued that COGSA did not apply because the act onlyapplies to carriers. Specifically, Arendovich asserted that NNR was not acarrier or shipper because it did not physically carry or ship the cargo itself.However, because NNR issued a bill of lading indicating that the copper was tobe transported by sea, the district court concluded that COGSA governedthe underlying action.[4] The district court granted summary judgment infavor of Arendovich but limited Arendovich’s recovery to $8,000.
Thirtydays later, instead of filing a notice of appeal, Arendovich filed a motionseeking post judgment relief seemingly under Fed. R. Civ. P. 59(e). Indenying Arendovich’s motion, the district court reasonedthat the post judgement motion under 59(e) was late because it was filed morethan 28 days after the summary judgment order. The court noted that even if themotion arose under rule 60(b), Arendovichfailed to show that the judgment was the result of “excusable neglect” or presentnewly discovered evidence. As a result, Arendovich filed a notice of appeal.
The Seventh Circuit limited itsreview to the district court’s denial of the 60(b) motion because Arendovichfiled the notice of appeal thirty days after the court entered its summaryjudgment order. In doing so, the court explained that “60(b) examines excusableneglect that led to the judgment, not excusable neglect that occurred afterthe judgment.”[5] Thecourt further noted that whether the district court applied an incorrectstandard of law or misapplied the record, for purposes of damages under COGSA, shouldbe considered on a direct appeal and not under a 60(b) motion.
Thus, according to the NorthernDistrict of Illinois, a logistical broker, like NNR, who issues a bill oflading but does not actually participate in the shipping or carrying of cargo,may still be considered a “shipper” for COGSA purposes. However, the SeventhCircuit did not review this issue because Arendovich failed to timely file anotice of appeal.
[1] Arendovich Invs., Inc. v. NNR Glob. Logistics, Inc., 754 F. App'x 472, 472 (7th Cir. 2019)
[2] NNR initially argued thatArendovich would not be able to establish a prima facia case of liability underCOGSA because it could not prove that the copper remained in the containerbetween the time it was sealed and when NNR received it.
[3] 46 U.S.C. § 30701(2018).
[4] Id. Under COGSA, “[e]verybill of lading or similar document of title which is evidence of a contract forthe carriage of goods by sea to or from ports of the United States.”
[5] Arendovich Invs., Inc, 754 F.App'x at 474.
