Constructores Tecnicos, S. de R.L. v. Sea-Land Service, Inc.

Constructores Tecnicos, S. de R.L. (Contec) (plaintiff), a Honduran firm, asked freight forwarder Golden Eagle International Forwarding Company (Golden Eagle) to arrange shipment of a truck from Texas to Honduras. Golden Eagle arranged for transportation with Sea-Land Service, Inc. (Sea-Land) (defendant). In filling out the bill of lading, Golden Eagle’s representative did not specify that the cargo should be stowed below deck. The representative knew that Sea-Land sometimes stowed cargo on deck unless instructed otherwise, but the representative did not inform Contec of this fact. The truck was loaded onto a ship owned by San Miguel Shipping, S.A. (San Miguel) (defendant) and chartered by Sea-Land. The truck was lashed to a flatrack rather than being placed in a shipping container and was placed on deck. San Miguel’s workers used inadequate lashings. During a storm, the truck came loose, and other containers fell onto the truck. The truck was a total loss. Contec sued Sea-Land and San Miguel for the truck’s value in district court. The Carriage of Goods by Sea Act (COGSA) limited ocean carriers’ liability to $500 unless the value of the cargo was declared, but the limit did not apply if the carrier unreasonably deviated from the carriage contract. Caselaw established that a shipper could presume that cargo would be stowed below deck if the carrier received a clean bill of lading, that is, if the bill of lading was silent as to where cargo should be stowed. The court found that Golden Eagle had no authority to consent to on-deck stowage. The court also found that on-deck stowage was an unreasonable deviation and that the liability limit did not apply. On appeal, Sea-Land and San Miguel argued that COGSA’s liability limit should apply because Golden Eagle was Contec’s agent and Golden Eagle’s knowledge of Sea-Land’s practices should be imputed to Contec. Sea-Land and San Miguel also argued that on-deck stowage was a reasonable deviation.