Legal Blog

Southern District of New York Holds That A Helicopter Can Be a Single Unit Under COGSA and that A Shipper Has Only $500 liability; Description in Bill of Lading Was Decisive

Bristow US LLC v. Wallenius Wilhelmsen Logistics AS, 18-cv-3504 February 28, 2019

The Southern District of New York recently confirmed that a helicopter can constitute a single customary freight unit (“CFU”) or “package” under the United States Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C. §30701, which limits the liability for shippers to $500 per package or CFU. The Court found the situation to be analogous to dropped yacht cases and held that the bill of lading was determinative.

Judge Paul A. Engelmayer considered arguments concerning a helicopter that was damaged by the shipper’s subcontractors when loaded onto the ship which then transported it from Savannah, Georgia to Melbourne, Australia. Ordinarily, COGSA applies only to the period between loading and discharge of the vessel, or from “tackle to tackle.” Here, however, the parties contractually extended COGSA to cover the loading. The shipper argued that the helicopter was a single CFU; the sender claimed that the helicopter should be several CFUs, measured in the revenue ton, the unit used to calculate the helicopter’s freight.

The Court reviewed several cases in which similar problems occurred, including numerous “dropped yacht” cases and found that the helicopter is one package or CFU. However, the Court found the bill of lading far more decisive than the case law.

The sender had prepared the helicopter’s description in the bill of lading, had indicated that the helicopter was one “package” and had left the “declared value” box on the bill of lading blank. This, the Court held, was determinative since the bill of lading expressly included language pointing out the limitation per COGSA.

There are two takeaways from this case.

First, helicopters damaged in transit are analogous to yachts damaged in transit for COGSA purposes.

Second, senders of goods should be reminded to take great care with bills of lading in (1) clearly delineating the declared value of the item(s) shipped and (2) indicating whether an item should be considered a CFU or whether they opt out of any COGSA liability limitation (and pay the corresponding higher freight).

ABOUT THEODOR BRUENING

tbruening@offitkurman.com  |  212.380.4111

Theodor has practiced for a number of years in national and international litigation and arbitration. His practice mainly focuses on dispute resolution in construction, architectural, defamation and commercial cases. He also advises on immigration and labor law.

 

 

 

 

 

 

 

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our BlogFacebookTwitterInstagramYouTube, and LinkedIn pages. You can also sign up to receive Law Matters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.

MARYLAND | PENNSYLVANIA | VIRGINIA| NEW JERSEY | NEW YORK | DELAWARE | WASHINGTON, DC