Bill of lading incorporating American COGSA – Stevedores engaged by carriers to discharge cargo entitled to benefit of package limitation
An electric freezing unit was shipped from New York to Panama under a bill of lading incorporating COGSA.
The freezing unit was negligently dropped and damaged by stevedores.
The consignees sued the stevedores who pleaded the package limitation in COGSA.
The District Court judge (Hancock DJ) held that the stevedores were entitled to the package limitation.
The District Court and the majority of the United States Court of Appeals, Fifth Circuit (Russell and Rives, Circuit Court Judges) held that the negligent injury and damage arose in the course of performance of the carriers’ obligation and therefore would qualify for the benefits in the contract.
The majority of the Court of Appeals held also that it would be unreasonable to assume that Congress, knowing of the common occurrence of the employment of stevedores, intended the limitation to operate only when the carrier itself discharged the vessel without appointing stevedores.
In a dissenting judgment, Holmes J held that the majority decision amounted to vicarious immunity from tortious liability.
This case was overruled by Krawill and is no longer good law in the USA.
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