United States District Court, S.D. California
[Copyrighted Material Omitted]
For Rohr, Inc., Plaintiff: Lauren Elizabeth Komsa, LEAD ATTORNEY, Keith B. Dalen, PRO HAC VICE, Hill Rivkins LLP, New York, NY; Nicholas Anthony Boylan, LEAD ATTORNEY, Law Offices of Nicholas A Boylan, San Diego, CA.
For UPS-Supply Chain Solutions Inc., Defendant, Cross Defendant, Cross Claimant: Bruce A. Lindsay, Christoph M. Wahner, LEAD ATTORNEYS, Countryman & McDaniel, Los Angeles, CA.
For Knight Transportation, Inc., Defendant, Cross Claimant: Scott Longstreth Ghormley, LEAD ATTORNEY, Ghormley and Associates, Irvine, CA; Stephen A Gentes, LEAD ATTORNEY, Gentes & Associates, San Diego, CA; James F. Mahoney, PRO HAC VICE, James F. Mahoney, PLC, Phoenix, AZ.
For UPS Supply Chain Solutions, Inc., Cross Claimant: Bruce A. Lindsay, LEAD ATTORNEY, Christoph M. Wahner, Countryman & McDaniel, Los Angeles, CA.
HON. GONZALO P. CURIEL, United States District Judge.
(1) GRANTING IN PART AND DENYING IN PART DEFENDANT UPS-SUPPLY CHAIN SOLUTIONS, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT;
[Doc. No. 61]
(2) DENYING PLAINTIFF ROHR, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT;
[Doc. No. 62]
(3) DENYING DEFENDANT KNIGHT TRANSPORTATION, INC.'S RENEWED MOTION FOR PARTIAL SUMMARY JUDGMENT
[Doc. No. 64]
This action arises out of two international shipments of cargo between Italy and Southern California. In both instances, after arriving at port unharmed, the cargo sustained damage while en route to a final inland destination. Plaintiff Rohr, Inc. (" Rohr" ) and Defendant UPS-Supply Chain Solutions, Inc. (" UPS-SCS" ) have filed motions for partial summary judgment addressing the following issues: (1) whether the Carmack Amendment to the Interstate Commerce Act imposes liability on UPS-SCS for damage to the cargo; if so, (2) whether the liability of UPS-SCS is contractually limited; and (3) whether the limitations on liability, if any, are valid and enforceable. Rohr also moves for partial summary judgment as to the liability of Defendant Knight Transportation, Inc. (" Knight" ). Knight has filed a renewed motion for partial summary judgment, arguing that the Carriage of Goods by Sea Act limits its liability for damages to cargo incurred during the first shipment. For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART UPS-SCS's motion, DENIES Knight's motion, and DENIES Rohr's motion in substantial part.
Rohr initiated this action against UPS-SCS, Knight, and CAL Modal Freight Systems, Inc. (" CAL Modal" ) on March 21, 2011. See Doc. No. 1. Rohr's original complaint alleges two breach of contract claims against UPS-SCS, brought pursuant to the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (" Carmack" ); a Carmack breach of contract claim against Knight; and five separate claims against CAL Modal, including breach of contract under Carmack, conversion, trespass to chattel, negligence, and negligence per se. Id. ¶ ¶ 31-76.
Subsequent to service of the original complaint, UPS-SCS filed cross-claims against Knight and CAL Modal for indemnification, equitable partial indemnification, and contribution. See Doc. No. 11. Knight also filed cross-claims against UPS-SCS for equitable indemnity and apportionment. See Doc. No. 7.
Rohr served a summons and the original complaint on CAL Modal on April 7, 2011. CAL Modal's response to the complaint was due on April 28, 2011. See Doc. No. 5. UPS-SCS served CAL Modal with the cross-claims on June 8, 2011. CAL Modal's response to the cross-claims was due on June 29, 2011. See Doc. No. 18. CAL Modal failed to file an answer or otherwise respond to either Rohr or UPS-SCS's allegations, and the Clerk of Court entered default against CAL Modal on all claims and cross-claims. See Doc. Nos. 29, 31.
On March 13, 2012, Knight filed a motion for partial summary judgment on the issue of its limited liability for damages incurred by the cargo it transported. See Doc. No. 45. The Court held a hearing on
June 4, 2012 and denied the motion on the record.  See Doc. No. 60.
On April 18, 2012, the Court granted Rohr leave to file a First Amended Complaint, adding six claims against UPS-SCS for negligence, gross negligence, and negligence per se. See Doc. No. 50. Soon thereafter, the Court issued an order granting Rohr and UPS-SCS leave to delay moving for entry of default judgment against CAL Modal until a determination is made as to the amount of damages owed to Rohr, if any, and by whom. See Doc. No. 57.
Discovery closed on May 18, 2012. See Amended Scheduling Order ¶ 4, Doc. No. 44. Rohr and UPS-SCS timely filed motions for partial summary judgment on June 15, 2012. Id. ¶ 5 (setting a June 15, 2012 deadline for filing dispositive motions); Doc. Nos. 61, 62. Knight filed a self-styled " renewed" motion for partial summary judgment on July 31, 2012. See Doc. No. 64.
Rohr is a wholly-owned subsidiary of Goodrich Corporation and is headquartered in Chula Vista, California.  See Rohr's Memo. ISO MPSJ, Doc. No. 62-1 at 3. Rohr manufactures aerospace equipment, such as nacelle systems for commercial and military aircraft.  UPS-SCS is a subsidiary of United Parcel Services. Rohr and UPS-SCS entered into two separate contractual agreements that are relevant to this dispute. Both agreements were in effect at the time of the events in question.
The Subject Agreements Between Rohr and UPS-SCS
On May 9, 2007, UPS-SCS and Goodrich, on behalf of its divisions, subsidiaries, and affiliates, including Rohr, entered into a Master Services Agreement (" MSA" ), effective at the time of the events in question. The MSA provides that its terms apply to services rendered by UPS-SCS to Goodrich in accordance with five Exhibits or Statements of Work attached to the MSA, including International Air Freight Service (Ex. A), Small Package Transportation Service (Ex. B), Trade Direct Service (Ex. C), Less Than Truckload Service (Ex. D), and Importer Security Filing Services (Ex. E).
According to the terms of paragraph 11D of the MSA, UPS-SCS's maximum liability for claims by Goodrich for loss or damage to cargo arising from UPS-SCS providing " freight forwarding or motor broker Services, including arranging for inland or air transportation, [is] $50 per shipment . . ."  The MSA also provides that UPS-SCS's maximum liability for loss or damage to cargo " arising from air,
ground or ocean transportation" is $0.50 per pound, unless set forth otherwise " in the bills of lading, airway bills or other transportation documents issued in conjunction with the Services." 
A Customs Brokerage Services Agreement (" CBSA" ) also exists between UPS-SCS and Goodrich, by which UPS-SCS has agreed to act as a customs broker for Goodrich, assisting in the importation and exportation of cargo.  According to the terms of the CBSA, in certain instances UPS-SCS will act on behalf of Goodrich, its divisions, subsidiaries, and affiliates, including Rohr, in arranging inland transportation of imported cargo.  In furtherance thereof, the CBSA provides that UPS-SCS " shall prepare, and submit to carrier, inland bills of lading or pick-up delivery orders for prompt removal of merchandise from piers of cargo holding areas." Pursuant to the CBSA, UPS-SCS is not liable for loss or damage to cargo when the cargo is " in the possession, custody, or control of third parties selected by [UPS-SCS]" for transportation. Similar to the MSA, the CBSA limits UPS-SCS's liability for loss or damages to the lesser of $50 per shipment or the fees charged for UPS-SCS's services.
In conjunction with the CBSA, Goodrich provided UPS-SCS with a Customs Power of Attorney and Designation of Export Forwarding Agent (" Customs POA" ). Pursuant to the terms of the Customs POA, Goodrich authorizes UPS-SCS and " its officers, employees, and specifically authorized agents to act for and on its behalf . . . full power and authority to do anything whatever requisite and necessary to be done in the premises as fully as said grantor could do if present and acting . . ."  The Customs POA incorporates the limitation of liability set forth in the CBSA.
The First Shipment
On October 15, 2009, Vela Poe, Global Logistics Manager for Rohr, contacted Kathy Nicely, a Program Manager with UPS-SCS, via email, requesting a quote for the shipment of 787 GE Tooling equipment from Italy to Riverside, California. See Dalen Decl'n, Ex. 9 (email string referred to herein). Nicely forwarded Poe's email to several individuals employed by UPS-SCS (Italy) in Milan, Italy. Silvana Catalano, with the Italy Pricing Analyst Group at UPS-SCS (Italy), emailed Kathy on October 22, 2009 with a quote for the shipment of the cargo from the shipper/exporter's factory in Venegono Superiore, Italy to Los Angeles. The quote was broken down into several constituent parts, including: loading and trucking cargo from Venegono to La Spezia, Italy; ...