Mannesman Demag Corporation v. M.V. Concert Express

This cargo claim arose from damage sustained to an oxygen compressor which was transported from Germany to Indiana. The cargo was transported via ship to the Port of Baltimore, Maryland. Then, a specialized carrier transported the goods from Baltimore to Indiana. While en route from Baltimore to Indiana, the goods were damaged when the trailer overturned. There was only one bill of lading for the entire transportation, reflecting an agreement to transport the goods from Germany to the mid western United States. Since the bill of lading obligated the carrier to transport the cargo through the port to its ultimate destination, it was a "through bill."

The Court recognized that the Harter Act applied to the period between the discharge of the cargo from the vessel and the proper delivery of the cargo to its intended destination. The Harter Act does not define "proper delivery." The courts have defined proper delivery as the discharge of cargo "upon a fit and customary wharf," or the requirement that a carrier "unload the cargo onto a dock, segregated by bill of lading and count, put it in a place of rest on the pier so that it is accessible to the consignee, and afford the consignee a reasonable opportunity to come and get it."

The parties argued over when "proper delivery" actually occurred. The carrier argued that the through bill of lading provided for carriage from Germany to Indiana, inclusive, and therefore the Harter Act would apply because proper delivery had not yet occurred. This is because the carrier’s bill of lading provided that to the extent the Harter Act was compulsorily applicable, the carrier’s responsibility would be subject to COGSA, which contains a $500.00 per package limitation on liability. On the other hand, the cargo owner argued that proper delivery occurred when the specialized carrier acquired control over the goods and began inland transportation. Under this interpretation, at the time the goods were damaged, the Harter Act would not be compulsorily applicable, in which case the carrier’s bill of lading provided that the carrier’s liability would be governed by the specialized carrier’s contracts and tariffs.

The Court of Appeals noted there was no precedent by any circuit court of appeals interpreting Harter Act proper delivery with respect to the inland portion of a through bill of lading. The Court of Appeals relied on several district court decisions considering similar bills of lading. These opinions held that proper delivery occurs when the cargo is ready for inland transport. The Court of Appeals found these decisions persuasive, because the analysis avoids the compulsory application of federal maritime law to non maritime transportation. Therefore, the Harter Act was held not applicable at the time the cargo was damaged, and the carrier was unable to avail itself of the $500.00 per package limitation contained in COGSA.