Eimskip, the Iceland Steamship Company, Ltd; Eimskip USA, Inc. v. Atlantic Fish Market, Inc.

Of the Southern District of New York, sitting by designation. *
United States Court of Appeals
For the First Circuit
No. 04-2168
EIMSKIP, THE ICELAND STEAMSHIP COMPANY, LTD;
EIMSKIP USA, INC.,
Plaintiffs, Appellees,
v.
ATLANTIC FISH MARKET, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Morris E. Lasker, U.S. District Judge] *
Before
Boudin, Chief Judge,
Lynch and Lipez, Circuit Judges.
Gerald J. Zyfers for appellant.
David J. Farrell, Jr. with whom Admiralty Law Office of David
J. Farrell, Jr. was on brief for appellees.
July 27, 2005

-- 1 of 12 --

-2-
BOUDIN, Chief Judge. This appeal is brought by Atlantic
Fish Market, Inc. (“Atlantic”), a co-defendant in the district
court, to review a judgment of the district court holding Atlantic
liable for freight charges and attorneys’ fees. The plaintiff in
the district court was the carrier, EIMSKIP, The Iceland Steamship
Company, Ltd. (“EIMSKIP”), which transported the shipments in
question--frozen herring--from Massachusetts to Estonia in July
2001. The story is swiftly told.
In June 2001, prior to the shipments now in dispute,
Atlantic booked two shipments of frozen herring to be transported
by EIMSKIP from Massachusetts to Estonia ("the June shipments").
The bills of lading listed Mayflower International, Ltd.
("Mayflower") as the fish's shipper and consigned the fish "to
order of shipper"; but Atlantic received the freight invoices and
paid the charges. Atlantic also purchased the fish, paying
Mayflower half the purchase price upon loading of the cargo and the
balance upon its arrival in Estonia.
A month later, three more such shipments were made ("the
July shipments"). The district court later found that Atlantic was
responsible (among other tasks) for booking two of these shipments
with EIMSKIP, negotiating the freight rates, and receiving the
cargo in Estonia. It also found that Atlantic represented to both
EIMSKIP and Mayflower that it would pay the freight. Mayflower
took responsibility for examining the fish before shipment,

-- 2 of 12 --

The district court found that Mayflower and Atlantic were not 1
acting as partners in a single venture--rather, the former was a
sales agent for the producers of the herring, H&L Axelsson, while
the latter was either the buyer of the fish or an agent for or
joint venturer with OU Watkins, the ultimate buyer.
-3-
coordinating the shipment dates, proofing and finalizing the bills
of lading, and administering other shipping details.
As was the case with the June shipments, the bills of
lading in July listed Mayflower as the shipper and the goods were
consigned "to order of shipper." Mayflower's principal, William C.
Quinby, testified at trial that this had been done to ensure that
control of the cargo would not pass to Atlantic until Atlantic had
paid for the fish. Quinby stated that Mayflower was seeking "to
maintain control of the cargo for the owners of the cargo, H&L
Axelsson, and not let the cargo be released until they had secure
payment." H&L Axelsson is not a party to this proceeding.1
When the herring arrived in Estonia in late July, the
freight–-totaling $91,840--remained unpaid. EIMSKIP placed a hold
on the cargo, and Mayflower called EIMSKIP to say that Atlantic had
not yet paid the purchase price for the herring and that Mayflower
did not wish the cargo to be released to Atlantic. Atlantic, the
district judge found, eventually promised again that it would pay
for the freight, and EIMSKIP then turned over the herring after
Mayflower agreed to the release.
Atlantic then failed to pay the freight charges, first
saying that it was having financial trouble and would pay as soon

-- 3 of 12 --

The bills of lading provided inter alia that any “Merchant” 2
had to indemnify the carrier for collection costs and defined
merchant to include the shipper, receiver, consignee, or bill of
lading holder and anyone owning or entitled to possession of the
shipment whether as agent or otherwise.
-4-
as possible and later saying that it would not pay because there
had been problems with the cargo. In July 2002, EIMSKIP brought
suit against Atlantic and Mayflower in the federal district court
in Massachusetts, seeking to recover freight charges and also
seeking related collection costs (including attorneys’ fees) under
a bill of lading provision purporting to make a variety of persons
liable for collection costs.2
After a bench trial, the district court found that
Atlantic and Mayflower had both been shippers of the cargo.
Because Mayflower was listed as the shipper and consignee on the
bills of lading, the court said that it was presumptively primarily
liable for the freight charges. But the court held that in this
instance Atlantic was primarily liable (and Mayflower only
secondarily liable) because of
Atlantic's multiple representations to both
Mayflower and EIMSKIP that it would be liable
for the cargo; the course of dealings among
the parties prior to the shipments at issue
(in particular, Atlantic's payments of the two
prior invoices [for the June shipments]); and
EIMSKIP's decision to lift the hold on the
cargo after speaking to [Atlantic's president
Boris] Sorkin . . . .

-- 4 of 12 --

-5-
As to collection costs, the district court held that the
pertinent condition in the bill of lading making the “merchant”
liable applied to both Atlantic and Mayflower and made each company
jointly and severally liable for specified costs and attorneys'
fees (approximately $62,000). It entered judgment against the
defendants as to freight and collection costs in accordance with
its liability findings. Atlantic has now appealed, contesting its
liability as to both freight and attorneys’ fees.
Atlantic’s claim on appeal as to freight charges is
straightforward. It says that it was neither shipper nor consignee
on the bill of lading and that under the federal Carriage of Goods
by Sea Act (“COGSA”), 46 U.S.C. app. §§ 1300-1315 (2000), only a
party so named in the bill of lading can be held liable for freight
charges. Whether Atlantic could be regarded as a party to the bill
of lading despite not being named does not matter because
Atlantic's understanding of COGSA as the exclusive basis for
liability is mistaken.
COGSA, which applies to specified classes of shipments
including this one, governs certain aspects of the relationship
between carrier and shipper. For example, it imposes specific
duties and liabilities on the carrier, including an obligation to
furnish a bill of lading to the shipper, 46 U.S.C. app. § 1303; and
it provides procedures and a statute of limitations for claims
against the carrier for lost or damaged goods, id. What it does

-- 5 of 12 --

Another set of federal statutory provisions, 49 U.S.C. §§ 3
80101-80116, applicable to any transportation of goods via common
carrier "from a place in a State to a place in a foreign country,”
id. § 80102, also imposes statutory duties on carriers and
regulates bills of lading for such transportation; but, like COGSA,
it does not create liability for freight charges or regulate
collection of such charges by the carrier.
-6-
not do is create a cause of action for, or regulate the collection
of, freight charges.3
"Absent a relevant statute, the general maritime law, as
developed by the judiciary, applies." East River S.S. Corp. v.
Transamerica Delaval, Inc., 476 U.S. 858, 864 (1986). Anyone who
contracts to pay for ocean freight can be held liable in accordance
with ordinary contract law as applied in maritime matters. See
Norfolk S. Ry. Co. v. Kirby, 125 S. Ct. 385, 397 (2004). And oral
contracts are valid under general maritime law. See Kossick v.
United Fruit Co., 365 U.S. 731, 734 (1961); Fontneau v. Town of
Sandwich, 251 F. Supp. 2d 994, 1001 (D. Mass. 2003). Under general
maritime law, this is a simple case.
The evidence adduced at trial supports the district
court’s finding that Atlantic agreed with EIMSKIP to pay the
freight for the July shipments in return for EIMSKIP's services in
transporting the herring to Estonia. This finding was well
supported by subsidiary findings that Atlantic on numerous
occasions made oral promises to pay the freight on the July
shipments; that Atlantic was invoiced by EIMSKIP for the freight on
both the June and July shipments (Mayflower was never invoiced for

-- 6 of 12 --

-7-
these shipments); that Atlantic did in fact pay the freight on the
June shipments; and that Atlantic's president failed to dispute the
invoices in numerous conversations with EIMSKIP between August 2001
and July 2002.
The only subsidiary finding disputed by Atlantic on this
appeal is the district court’s finding that Atlantic orally booked
the first two of the July shipments. Atlantic's president, who
offered the only contradictory testimony, was found by the district
court to be "uncooperative, evasive, non-responsive, and less than
credible." "[C]redibility determinations are rather well insulated
from appellate challenge." Pimentel v. Jacobson Fishing Co., 102
F.3d 638, 640 (1st Cir. 1996). The district court did not commit
“clear error”–-the applicable standard on review, Fed. R. Civ. P.
52(a); Rational Software Corp. v. Sterling Corp., 393 F.3d 276, 276
(1st Cir. 2005)--in accepting the view that Atlantic booked the
shipments.
This is ample to sustain Atlantic’s liability without
regard to whether Atlantic was technically a party to the bill of
lading. Two parties may each make themselves liable to a third
party for payment of the same freight on a single shipment–-one by
a contract reflected in part by the bill of lading and the other by
explicit promises and course of conduct independent of the bill of
lading. On the district court’s findings Atlantic made such

-- 7 of 12 --

Cf. Pacific Coast Fruit Distributors, Inc. v. Pa. R.R. Co., 4
217 F.2d 273, 274-75 (9th Cir. 1954) (holding that a defendant,
"though not named as a party in the original bill-of-lading became
such by amendment, as it were," since the defendant was "designated
as consignee by the shipper" after the bill of lading had been
executed, "took over control and direction of the shipment and made
successive reconsignments thereof").
-8-
promises both before the voyage and to facilitate release of the
cargo.
Whether Atlantic could be held liable on the bill of
lading is a separate question. Conceivably someone might be liable
on a bill of lading without being named in it, either through
agency doctrine or by separately agreeing to be subject to its
terms. All that matters in this case is that there is nothing in 4
general maritime law or in the precedents concerning bills of
lading that makes them the exclusive means of creating liability
for freight charges.
In Louisville & Nashville R.R. Co. v. Central Iron & Coal
Co., 265 U.S. 59, 67 (1924), chiefly relied upon by Atlantic, the
Supreme Court said that "[t]o ascertain what contract was entered
into we look primarily to the bills of lading, bearing in mind that
the instrument serves both as a receipt and as a contract," and
that "[o]rdinarily, the person from whom the goods are received for
shipment assumes the obligation to pay the freight charges; and his
obligation is ordinarily a primary one." This probably remains the
usual situation.

-- 8 of 12 --

-9-
Yet Louisville & Nashville R.R. Co. itself, as well as
circuit courts in subsequent cases, have held that this pattern and
presumption can be overcome by statute, by contractual provisions,
or by the parties' course of conduct. See Louisville & Nashville
R.R. Co., 265 U.S. at 67-68; A/S Dampskibsselskabet Torm v.
Beaumont Oil Ltd., 927 F.2d 713, 716-22 (2d Cir.), cert. denied,
502 U.S. 862 (1991); States Marine Int'l, Inc. v. Seattle-First
Nat'l Bank, 524 F.2d 245, 247-49 (9th Cir. 1975); see also Capitol
Transp., Inc. v. United States, 612 F.2d 1312, 1319-21 & n.10 (1st
Cir. 1979) (holding that the bill of lading is not the only
evidence as to the identity of the consignee).
The district court also ruled that as between Atlantic
and Mayflower, the former was “primarily” liable. In fact the
district court said further that Atlantic could not seek indemnity
or contribution from Mayflower and that Mayflower would be liable
only if EIMSKIP could not collect from Atlantic. Atlantic has
failed to challenge this determination on appeal, so we are spared
any need for further discussion of the issue.
This brings us to the award of attorneys' fees. In its
opening brief, Atlantic offers an argument of three paragraphs
comprising two points. The main claim is that the district judge
erred in allegedly failing to give Atlantic the requisite time to
respond to EIMSKIP’s request for fees. The secondary claim is that
the district court should have reduced the amount because the fees

-- 9 of 12 --

-10-
sought (so far) are about two-thirds the amount of the underlying
freight claim and therefore excessive.
Starting with chronology, the district court entered its
main order imposing liability for freight charges, costs and
attorneys' fees on July 14, 2004. On July 20, 2004, EIMSKIP filed
a declaration in support of attorneys’ fees setting forth counsel’s
invoices by date and providing a brief justification. On July 27,
2004, at Mayflower’s request, EIMSKIP filed a supplemental
declaration providing daily time sheet summaries and other
information. On August 4, 2004, the district judge entered final
judgment, including the requested attorneys’ fees.
Neither during this two week period, nor afterwards, is
there any filing in the district court reflecting an objection or
opposition by Atlantic. Now, on appeal--apparently dating from
July 27 forward--Atlantic says that it was a violation of Local
Rule 7.1 for the district court to act on Atlantic’s request
without waiting the 14 days provided by the rule for one party to
respond to a motion filed by another. See D. Mass. R. 7.1(b)(2).
EIMSKIP disputes that the local rule applied, but we need not
decide the issue.
If Atlantic actually intended to oppose the request for
attorneys' fees and was surprised by a premature entry of judgment,
it certainly had a duty to tell the district judge and request an
opportunity to respond. Of course, a litigant does not in all

-- 10 of 12 --

-11-
circumstances have an obligation to return to the district judge
and challenge every mistake before appealing. But it is impossible
to believe that the judge would not have accepted an arguably
belated filing where, as here, the deadline was perhaps uncertain
because of EIMSKIP's supplemental filing or the applicability of
the local rule.
In all events, we need not consider further whether the
local rule was applicable or whether the objection should be deemed
forfeit. Instead, we deal directly with the single substantive
objection that Atlantic now makes to the bill for attorneys' fees.
In its opening brief, Atlantic argues that the fee award is
inherently unreasonable because it is large and almost two thirds
of the amount collected in freight charges. Atlantic has now seen
the supporting material and does not suggest that it sees anything
wrong with the documentation.
On the merits of the objection, we think it is hopeless.
There is no necessary relationship between the amount of the
freight owed and the cost of collection, the latter depending on
the complexity of the facts and legal issues, the number of
depositions and documents, and the length of trial. Nor is the
plaintiff carrier, in the face of recalcitrance, required to forgo
suit on amounts owed to it because the costs of collection-–to be
paid by a defendant–-equal or exceed the initial debt. So far as
we can tell, counsel’s fee was well earned.

-- 11 of 12 --

-12-
In its reply brief, Atlantic offers for the first time on
appeal that whatever its liability for freight charges, liability
for attorneys’ fees depends (under the American rule) on a specific
statute or contract, and here the only contract providing for such
liability is the bill of lading. We add that the broad “merchant”
definition in the bill of lading-–although it probably embraces
Atlantic-–arguably is not binding on someone who was not (in some
fashion) a party to the bill of lading or otherwise accepted the
obligation.
Whether Atlantic is liable for counsel fees presents nice
issues--for example, whether Atlantic is implicitly a party to the
bill of lading or whether its separate promises to pay for the
shipments incorporated counsel fees as well as freight. But
Atlantic has forfeited any such argument against its liability for
counsel fees by omitting it from its opening brief, thereby
depriving EIMSKIP of an opportunity to respond. That is the end of
the matter. See Rivera-Muriente v. Agosto-Alicea, 959 F.2d 349,
354 (1st Cir. 1992).
The judgment in this case, admirably handled by the
district court, is affirmed.

-- 12 of 12 --