Michael E. Stern Obtains Summary Judgment In Southern District Of New York Dispute Arising From Alleged Shipper Strict Liability Due To Vessel Fire Aboard A Pure Car Carrying Roll-On Roll-Off Vessel

Gallo Vitucci Klar LLP Partner, Michael E. Stern recently prevailed on a motion for summary judgment in the Southern District of New York before the Hon. Ona T. Wang. The lawsuit alleged strict liability for fire damage to vehicles owned and being shipped by Daimler Benz and the M/V HONOR.

The plaintiffs HDI Global SE, as subrogee of Daimler AG and Mercedes Benz USA LLC; and American Roll-on Roll-off Carrier, LLC, owner of the M/V HONOR sued International Auto Logistics, Inc. (“IAL”) claiming that one of the cars carried by M/V HONOR for IAL caught fire causing damage to automobiles owned by Daimler, and to the M/V HONOR. IAL was under contract with the US Department of Defense to arrange for the transportation of personally owned vehicles for service members. In February 2017, IAL delivered about 600 cars to ARC at Bremerhaven, Germany for shipment to the U.S. East Coast. One of the personally owned vehicles, a 2010 Nissan Rogue, caught fire causing damage to Daimler vehicles and the vessel. The origin of the fire was determined to have been the solenoid in the starter motor of the Rogue but the cause could not be determined. The plaintiffs argued that IAL should be held strictly liable for the damages based on the section of the United States Carriage of Goods by Sea Act which provides that a shipper of “goods of an inflammable, explosive, or dangerous nature” can be strictly liable for damages when the carrier “has not consented with knowledge of their nature and character” of the goods.

On the motion for summary judgment, Mr. Stern persuaded the Court that based on the applicable domestic and international codes governing the transportation of hazardous goods, automobiles are not goods of an “inflammable, explosive or dangerous nature” as that phrase is used in COGSA. The Court also ruled that the ocean carrier [ARC] had knowledge of the nature and risks associated with transportation of vehicles. As such, the Court denied plaintiffs’ motion for summary judgment and granted IAL summary judgment dismissing the strict liability claims of both HDI Global and ARC.