This was an action for damage to goods transported from Sydney, Australia, to Ballston Spa, New York. The plaintiff alleged that his crate was shipped by sea from Sydney to Los Angeles and then transported by rail to Carteret, New Jersey, where it was damaged while in the defendant's custody at its warehouse prior to clearing customs and delivery. The defendant moved for a transfer of venue to the District Court for the Southern District of New York, pursuant to a forum selection clause in the bill of lading that states that unless the defendant voluntarily submits to or waives jurisdiction, '[a]ll disputes in any way relating to this Bill of Lading shall be determined by the United States District Court for the Southern District of New York to the exclusion of the jurisdiction of any other courts in the United States or the courts of any other country'.

In opposing transfer, the plaintiff submits that: 1) no admiralty jurisdiction exists because damage to the cargo occurred on land upon rail transport to Carteret; 2) the standard terms on the back of the bill of lading, including the forum selection clause, are unenforceable contracts of adhesion; and 3) the forum selection clause and the US Carriage of Goods by Sea Act (COGSA), 46 USC §§ 30701 ff, are inapplicable because the cargo was damaged during transport on land by means other than what was expressly provided for in the bill of lading.

Held: The defendant's motion for transfer is granted.

The plaintiff disputes that admiralty jurisdiction exists because the cargo was damaged on land. However, the determination of admiralty jurisdiction does not turn on where the loss occurred. Rather, the dispositive inquiry rests on '"the nature and character of the contract," and the true criterion is whether it has "reference to maritime service or maritime transactions"': Norfolk S Ry Co v Kirby 543 US 14, 24 (2004) (CMI1454). As explained by the Supreme Court (at 27), 'so long as a bill of lading requires substantial carriage of goods by sea, its purpose is to effectuate maritime commerce - and thus it is a maritime contract. Its character as a maritime contract is not defeated simply because it also provides for some land carriage'.

Here, the bill of lading required performance substantially by sea. That the crate's transport included some journey on land that was not specifically described in the bill of lading does not defeat the maritime nature of the contract.

Generally, a federal court sitting in admiralty should enforce forum selection clauses as prima facie valid absent a showing by the resisting party that to do so would be 'unreasonable' under the circumstances: M/S Bremen v Zapata Off-Shore Co 407 US 1, 10 (1972). Despite the plaintiff's claims, a forum selection clause is presumed valid even when it is part of an adhesion contract. Moreover, the plaintiff has not demonstrated, or even alleged, that litigating in New York would be so gravely difficult and inconvenient as to deprive him of his day in court, or that the forum selection clause was the result of fraud. The Court declines to conclude that the preselection of a New York forum is fundamentally unfair when the plaintiff is a resident of New York and the cargo at issue was contracted to be delivered to New York.

The plaintiff insists that he is not bound by the forum selection clause because damage to his cargo did not occur during the intermodal carriage from Australia to New York, but on land in Carteret during a portion of the journey that was not expressly identified in the bill of lading. Therefore, the plaintiff characterises his claim as a state law claim for negligent bailment. The bill of lading, however, expressly provides for 'through' transportation: 'When either the Place of Receipt or Place of Delivery set forth herein is an inland point or place other than the Port of Loading (Through Transportation basis), the Carrier will procure transportation to or from the sea terminal and such inland point(s) or place(s)'. As such, the occurrence of damage while on land does not render the forum selection clause unenforceable.

All cargo shipments carried by sea to or from the United States are subject to COGSA. Moreover, the bill of lading expressly extends the application of COGSA to 'the entire time the Carrier is responsible for the Goods', including 'after discharge from the vessel'. By the bill of lading's express terms, COGSA governs the land transport of the goods at issue: see Kirby 29 (recognising that parties may extend COGSA's applicability by contract to the entire period in which goods would be under carrier's responsibility, including period of inland transport).

Accordingly, the defendant argues that COGSA pre-empts the plaintiff's state law claims: see Polo Ralph Lauren LP v Tropical Shipping & Const Co Ltd 215 F 3d 1217, 1220 (11th Cir 2000) ('COGSA, when it applies, supersedes other laws.') (CMI1536); Amazon Produce Network LLC v M/V Lykes Osprey 553 F Supp 2d 502, 506 (ED Pa. 2008) (COGSA 'provides an exclusive remedy for damage to cargo incurred during carriage between foreign and United States ports'.) (CMI1462). However, the Court need not resolve this dispute to rule on the pending transfer motion.

[See further Beaumont v Vanguard Logistics Services (USA) Inc, 22-cv-6235 (MKV), District Court, SD NY, 27 September 2023 (CMI2287).]