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Indemnity Ins. of North America v. Hanjin Shipping, 206 F. Supp. 2d 927 (N.D. Ill. 2002)

When the inland carriage is substantial, that transportation is not incidental to the maritime portion of the contract, and the second exception will not apply. What does this mean? What follows constitutes the ov findings of fact and conclusions of law, in accordance with Federal Rule of Civil Procedure 52 a.

A problem arises when an ocean carrier issues a foreign through bill of lading for laeing imported into the United States, because there is no federal statute that governs the liability of the ocean carrier. In addition, federal law must displace state law. Both the waybill and bill of lading nill issued in Hong Kong, and both documents show that Hanjin received the cargo in Shenzhen, China. Other cases have not found federal common law claims, or have done so only after thorough review of the applicable federal statutory and regulatory schemes, together with careful limitations on judicial lawmaking.

Thus, the loss did not arise from the breach of a maritime obligation, and the first exception does not apply.

Defendant Fritz Companies acted as the Customs Broker for the shipment. This is because the jurisdiction of the Carmack Amendment does not extend to ocean shipments originating outside of the United States. Hanjin Shipping, F. Customs Service informed Fritz Companies that the container and its contents would be subject to an intensive Customs examination upon arrival in Chicago. There is no uniquely federal interest in this case.

The Carmack Amendment is limited to situations where a domestic bill of lading is issued to govern domestic transportation. Thus, in order for Indemnity to have a federal common law claim against Hanjin, there must be: Mainfreight are auditing all transactions at present and will advise shippers and consignees accordingly of any possible shipments effected by this situation.


It was not unusual for a shipper to enter into separate contracts with each of the carriers, and the law developed to reflect that type of segmented transit. Second, uniformity may be an issue whether the claim is decided under state or federal common law.

Hanjin Shipping – Container tracking – Container shipping line

Indemnity asserts that the court has jurisdiction under: The better course of action is to resist the invitation to create a federal common law remedy ladin an ocean carrier for cargo damage that occurs during substantial inland transit.

The court recognizes that applying oc law to through bills of lading may lead to some inconsistency or non-uniformity that runs against the expressed intent of Congress.

In this case, the bill of lading called for discharge from the vessel in Long Beach, California and delivery in North Vernon, Indiana, an overland distance of over 2, miles. But, as will become evident in the following discussion, there is no factual basis for the federal claims against Hanjin.

But, as explained above, there is no federal law that governs by its own terms. After careful review, the court finds that the parties have missed the mark. In recent years, the transportation industry has undergone a fundamental transformation due to the proliferation of shipping containers. Illinois follows the principles set forth in the Restatement of Conflicts of Laws, which applies the law of the state with the most significant relationship to the transaction and the parties.

The Carmack Amendment governs surface transportation such as rail and motor carriage, as well as domestic water carriage. Hanjin Shipping Indemnity Ins. If the well pled complaint invokes the court’s jurisdiction, then jurisdiction remains even if the federal claim is meritless.

That gap in statutory coverage creates jurisdictional and choice of law issues for federal courts. The extended discussion herein is only to make clear that the court is not proceeding under federal common law. Instead the courts analyzed the issues in terms of express jurisdictional grants, such as diversity of citizenship, federal statutes, or admiralty. The shipper will be able to proceed against the party it contracted with, and will not be forced to go through the laborious process of discovering the carrier that is actually at fault for the loss.

It is not unusual for the Ports to charge storage on these containers in this situation. Generally speaking, contracts of carriage that have elements of ocean and land carriage are “mixed contracts,” and do not fall under the court’s admiralty jurisdiction.


There is no evidence that Lowe’s relieved Hanjin of the obligation to make final delivery to Lowe’s facility. The specter of limited non-uniformity is not enough for the court to create federal common law.

Shipping containers are structural boxes that adapt easily to multiple modes of transportation, such as ocean vessel, rail, and motor carriage. The Carmack Amendment does not extend seaward to impose liability on an ocean carrier for losses that occur during inland transit. The best method of assuring uniformity of federal law is through Congressional, not judicial, action.

The courts in Korea will now decide whether Hanjin Shipping should remain as a going concern or lsding dissolved. Mudd-Lyman Sales and Serv. United Van Lines, F. The short term ramifications have already been felt and we have seen the following scenarios emerge over the last 24 hours.

Determining factors are the parties’ choice of law, the places gill contracting and negotiation, the place of performance, the location of the subject matter of the contract, and the location of the parties. Defendant Hanjin Shipping Company was the ocean carrier, and issued a through bill of lading to transport the shipment from Shenzhen, China to Lowe’s facility in North Vernon, Indiana.

In essence, Indemnity asks the court to grant it relief under federal law despite the absence of a statutory claim against Hanjin. Therefore, the court must determine if there is a “unique federal interest” that justifies fashioning a judicial claim for relief.

Some cases easily find that federal common law will fill in “statutory gaps” in carriage of goods cases. This case arose out of the loss of a cargo of power tools that were shipped from China to the United States. The parties do not attempt to invoke the court’s diversity jurisdiction, and there is nothing in the record to demonstrate that the parties are of diverse citizenship.

If the container arrived into port on a Hanjin Vessel, has been discharged already and was slot chartered through another carrier it is expected that container will be released. By contrast, the Carmack Amendment governs domestic inland transportation under a domestic bill of lading. Kading jurisdictional argument is incorrect fo two reasons.