Mr. Kiern's winning article, "Liability, Compensation, and Financial Responsibility Under the Oil Pollution Act of 1990: A Review of the Second Decade," is an analysis of key aspects of the Oil Pollution Act of 1990 (OPA90) and was published in the Tulane Maritime Law Journal (36 TUL. MAR. L.J.1 (2011)). This is his second analysis of OPA90; Mr. Kiern previously published a review of OPA90's first decade entitled, "Liability, Compensation, and Financial Responsibility Under the Oil Pollution Act of 1990: A Review of the First Decade," for Tulane Maritime Law Journal in the Spring of 2000.

An awards ceremony will be held on June 11, 2012 at the Jefferson Building of the Library of Congress in Washington, DC.

For more information, please find the attached press release from The Burton Awards or contact award recipient Larry Kiern at LKiern@winston.com.

The journal will be following the case and frequently posting tidbits as rulings come down. 

TMLJ Alumni, Ian Taylor, with Lewis, Kullman, Sterbcow, & Abramson, has been working on this case!  This is an exciting opportunity, and the journal is proud to see their alumni doing great things! 

In a 5-4 decision, the Supreme Court of the United states held: the appropriate standard for establishing liability under FELA is whether or not the railroad's negligence played a party in bringing about the injury, not the common-law proximate cause standard for negligence. 

For the full opinion, please visit: http://www.supremecourt.gov/opinions/10pdf/10-235.pdf 

The vessel lost power at approximately 6:00 a.m. Monday, November 8, 2010, following a fire in its aft engine room.  The blaze was extinguished without injury to passengers or crew. However, engineers have not been able to restore power to the ship, which has been operating on auxiliary generators since the fire.  Several key hotel systems, including air conditioning, hot food service and telephones remain out of service.

At the request of the U.S. Coast Guard in San Diego, the Navy diverted the U.S.S. Ronald Reagan from training maneuvers to assist the Carnival Splendor.  Earlier Tuesday, the aircraft carrier was receiving by airlift thirty-five pallets (containing 10,000 pounds of food and supplies) for the cruise ship, with which it is scheduled to rendezvous Tuesday afternoon.

Additionally, tugboats are en route to the ship to tow the vessel the 130 miles to Ensenada, Mexico and are expected to arrive sometime Tuesday.

The letter, to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, said that tests in February on a cement slurry similar to what was used on the Macondo well showed instability -- and that both companies had the data.  The news caused Halliburton stock to drop in value by almost 8 percent by the end of trading Thursday, to $31.68 a share. 

Bartlit emphasized in his letter that cementing failures are a known hazard in the oil industry, with specific tests such as a "negative pressure test" and "cement evaluation logs" designed to identify cementing problems. However, he wrote, workers at BP and possibly the company that operated the Deepwater Horizon rig, Transocean, "misinterpreted or chose not to conduct such tests at the Macondo well."

A commission hearing on the disaster is scheduled for November 9, but Bartlit's letter said he was notifying the commission about the cement slurry issue immediately in order to "facilitate [its] consideration of their implications for offshore drilling safety."

Prosecutors say that Muse acted as the ringleader when he and this three cohorts seized the U.S.-flagged Maersk Alabama by force about 350 miles off the coast of Somalia on April 8, 2009.  Once on board, the armed men demanded the ship be stopped, then abducted and held the captain of the ship, Richard Phillips, hostage on a lifeboat for four days. The USS Bainbridge, a U.S. Navy destroyer, came to the assistance of the vessel, and in radio communications, the pirates threatened to kill Phillips if they were not guaranteed safe passage away from the scene, authorities have said.  Four days after the hijacking began, Muse boarded the Bainbridge and demanded safe passage for himself and the others in exchange for Phillips' release, according to a criminal complaint.  According to authorities, Muse was then taken into custody, and while he was away from the lifeboat, Navy SEALs shot and killed the three remaining pirates.

During his plea on May 18, 2009, Muse apologized for his actions and blamed the incident on the Somali government.  "What we did was wrong. I am very sorry for all of this," Muse said. "All of this happened because of the government in Somalia," he added.  In addition to the Maersk Alabama, Muse was charged with participating in the hijacking of two other vessels in late March and early April of 2009.  Muse told the court that he and the three other men had agreed to "capture any ship that came by."  He added that he did not recognize the U.S. flag on the Maersk Alabama.

Muse could receive a maximum sentence of almost 34 years behind bars.

In a 6-3 decision handed down on June 21, 2010, the Supreme Court overturned a Ninth Circuit ruling and declared that the Carmack Amendment does not apply to a shipment that originates overseas and travels under a single through bill of lading. Therefore, the forum selection clause in the bill of lading, which obliged the parties to litigate disputes in Tokyo, was binding.

The case, Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., No. 08-1553 (June 21, 2010) arose out of a carriage of goods agreement that originated in China and was to terminate at inland destinations in the United States. The bills of lading required “K” Line to arrange delivery of the goods by any method of transportation it chose, and included a “Himalaya Clause,” extending the bills’ defenses and liabilities to parties subcontracted to perform services that would accomplish the bills’ objectives. The bills also contained a Tokyo forum selection clause. A K-Line vessel transported the goods from China to California, and they were then transferred to Union Pacific for rail carriage. The cargo was allegedly destroyed when a Union Pacific train derailed in Tyrone, Oklahoma.   

The cargo owners filed suit in the Superior Court of California, Los Angeles County, and were removed to the United States District Court for the Central District of California, whereupon the defendants moved to dismiss based on the agreements’ forum selection clause. The District Court granted the motion, but the Ninth Circuit Court of Appeals reversed and remanded, because it concluded that the Carmack Amendment applied to the inland portion of the carriage and superseded the parties’ forum selection clause.

The Supreme Court granted certiorari on the question of whether the Carmack Amendment applies to the inland portion of overseas shipments on a through bill of lading. If Carmack applied, then its venue provisions would trump the parties’ forum selection clause. If, as the defendants argued, the Carriage of Goods by Sea Act (“COGSA”) applied, then the parties are free to adopt a (enforceable) forum selection clause, as was established in Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 537-39 (1995). Though COGSA only applies to shipments to or from ports in the United States, the statute allows parties to extend its terms by contract to cover the entire length of an intermodal journey. See Norfolk Southern R. Co. v. James N. Kirby Pty. Ltd., 543 U.S. 14 (2004). The Court analogized its Kirby holding, where it found that Congress intended for parties to extend COGSA’s terms to inland, domestic segments of an international journey when using a through bill of lading, to the present case.

The cargo owners, on the other hand, argued that the Carmack Amendment applied to the domestic inland portion of the transportation. Because Carmack has its own venue provisions, the argument went, those would trump the party’s forum selection clause. The Court parsed the text of the Carmack Amendment and concluded that it requires only the receiving rail carrier—not the delivering or connecting rail carrier—to issue a bill of lading. This is because, the Court reasoned, “[i]f Carmack’s bill of lading requirement did not refer to the initial carrier, but rather to any rail carrier that in the colloquial sense ‘received’ the property from another carrier, then every carrier during the shipment would have to issue its own separate bill,” which would be contrary to the purpose of Carmack.

By limiting the requirement to issue a bill of lading to only the receiving rail carrier, the Court was able to easily distinguish between through bills of lading and a journey that required separate bills of lading. A rail carrier who takes on goods that have traveled overseas on a through bill of lading is not a “receiving” carrier, by the Court’s reasoning, because it does not issue its own bill of lading. The rail carrier in that situation is not really receiving the property for domestic rail transportation, as Carmack requires. By contrast, where there is no through bill of lading, the first rail carrier in the United States is the receiving rail carrier and must issue a Carmack bill of lading. Citing Reider v. Thompson, 339 U.S. 113 (1950). Here, the Court found that K-Line was not a “receiving” rail carrier, and neither was Union Pacific, because the latter served merely as the “delivering” carrier, who would never be required by Carmack to issue a bill of lading.

The Court then discussed Carmack’s venue provisions, which require that suit be brought against the receiving rail carrier in the judicial district in which the point of origin is located, while suit against the delivering carrier or an intermediate carrier can be brought in various other districts. § 11706(d)(2)(A), (A)(i). The Court reasoned that because Carmack’s venue provisions clearly contemplate a point of origin within the United States, Carmack cannot be intended to apply to carriages like the one in this case. “Indeed, if ‘K’ Line were a receiving carrier in a case where the journey’s ‘point of origin’ was China, there would be no place under Carmack to sue ‘K’ Line, since China is not within a judicial district ‘of the United States or in a State Court.’” Citing § 11706 (d)(1).

The Court found support for its interpretation of Carmack in its statutory history, and invoked the maxim of statutory interpretation that “[w]here the text permits, congressional enactments should be construed to be consistent with one another” when it evaluated the consistency between Carmack and COGSA under this interpretation. In the interest of modern intermodal transport, the Court found that this interpretation reflected the same interests displayed in Kirby: uniformity, efficiency, and predictability. The Court noted that the parties had chosen a venue that was mutually acceptable, and the forum selection clause was “an indispensable element in international trade.” Quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 13-14 (1972). Finally, the Court dismissed the cargo owners’ argument about the not-yet-ratified Rotterdam Rules: “[n]othing in the Rotterdam Rules…requires every country to mandate a different regime to govern the inland rail leg of an international through shipment[.]”  The Court declined to address the instances where goods are received in the United States for export or where goods are received in adjacent foreign countries for import into the United States.

 Justice Sotomayor authored a dissent, and was joined by Justices Stevens and Ginsburg. The dissent argued that as the default legal regime for rail transport of cargo in the United States, the Carmack Amendment applies to the inland leg of a multimodal shipment traveling on an international through bill of lading. Sotomayor found that the absence of a bill of lading is not dispositive of the question of Carmack liability, and that it is the rail carrier’s provision of transport subject to the jurisdiction of the Surface and Transportation Board that establishes Carmack liability. Finding that the Board would have jurisdiction over this shipment (“[o]nce a first domestic rail carrier subject to the Board’s jurisdiction receives property in the United States, Carmack attaches”), Sotomayor concluded that Carmack and its venue provisions should have applied. Because, the dissent argues, nothing in the statute requires that the receiving carrier take goods from the point at which they originate, that the cargo originated in China is unimportant. To the dissent, “[a]s long as there is a receiving rail carrier in the United States…Carmack attaches.”

On March 24, 2010, the Supreme Court of the United States heard oral arguments in the matter of Kawasaki Kisen Kaisha v. Regal-Beloit Corporation, on appeal from the United States Court of Appeals for the Ninth Circuit.

In this matter, the Court will address the issue of whether the Carmack Amendment to the Interstate Commerce Act of 1887, which governs certain rail and motor transportation by common carriers within the United States, 49 U.S.C. §§ 11706 (rail carriers) & 14706 (motor carriers), applies to the inland rail leg of an intermodal shipment from overseas when the shipment was made under a “through” bill of lading issued by an ocean carrier that extended the Carriage of Goods by Sea Act, 46 U.S.C. § 30701.

A copy of the oral argument transcript is available here. For more discussion on the Carmack Amendment, see recent Tulane Maritime Law Journal article, The Extension of an Ocean Carrier’s Limitation of Liability to the Inland Carriage of Goods Under a Through Ocean Bill of Lading: How the Second and Eleventh Circuits Have Undone the Work of the Supreme Court in Kirby by John M. Daley, 33 Tul. Mar. L.J. 111.