SOOTHSAYERS, SAILORS, AND SUPERSTORM SANDY: LESSONS FROM AN ACT OF GOD.
TABLE OF CONTENTS I. Introduction 2 II. "Super-Storm" SANDY 3 III. Act of God as a Common-Law Defense 7 A. Act of God as a Statutory and Contractual Defense 8 IV. Preparing for SANDY 11 A. New York Container Terminal 11 B. National Electronic Transit 14 V. Applying the Law: Foreseeability And Reasonable Precautions 16 A. Lord & Taylor v. ZIM Integrated Shipping Services Ltd 16 B. TGI Office Automation v. National Electronic Transit 23 Corporation C. Containers & Copiers--Lessons Learned 29 VI. Conclusion 31 Blow, winds, and crack your cheeks! rage! blow! You cataracts and hurricanoes, spout Till you have drench'd our steeples, drown'd the cocks! King Lear, Act III, Scene II You call this a storm? Blow, you son of a bitch! Blow! It's time for a showdown! You and me! I'm right here! Come and get me! You'll never sink this boat! Forrest Gump, Scene XIV
From Shakespeare to Eric Roth, from King Lear to Lt. Dan Taylor, man has faced climatic catastrophe and challenged God to do his worst, dismissing deific omnipotence and claiming control over his own destiny. In sharp contrast to theatric bravura, the common law acknowledges that the consequences of storm and tempest, tornado and hurricane--what we commonly refer to as "natural disasters"--are largely beyond the control of mankind.
Rising from the precept of impossibility, (1) the "act of God" defense in the law insulates a party from liability when conditions leading to a loss are of such a nature that they cannot be overcome through the ordinary exertion of human skill and prudence. In maritime law, liability is based upon fault; the fact that damage has occurred, standing alone, does not give rise to legal consequence. (2) But the law also carries a presumption of fault against the vessel, requiring that the party asserting an "act of God" defense proves both the extraordinary nature of the event and the absence of contributing negligence--specifically, failure to reasonably prepare for the force of the storm.
While man and science have advanced greatly in the centuries since the English courts first gave impetus to the "act of God" defense, the ability to forecast the path and strength of weather events--particularly cyclonic storms and hurricanes--continues to be one of the greatest challenges presented to meteorologists. Despite reconnaissance systems ranging from ground observation to near-space satellite surveillance, accurate prediction of a storm track is rarely obtained, leaving its path of destruction in the hands of God. (3)
II. "SUPER-STORM" SANDY
Formed as a tropical depression off the coast of Nicaragua just a week earlier, Post-Tropical Cyclone SANDY made landfall at approximately 7:30 P.M. on October 29, 2012, just north of Atlantic City, New Jersey. (4) After travelling more than two thousand miles and wreaking havoc upon Jamaica, eastern Cuba, and Hispaniola as it transited the Windward Passage, (5) then-Hurricane SANDY underwent a complex evolution, expanding in size but weakening in strength, before it turned sharply to the northwest and took aim at the northeastern United States late on the evening of October 28. As the storm center crossed the beach at Brigantine, New Jersey, sustained winds in excess of eighty miles per hour punished coastal areas and pushed a catastrophic storm surge across the shores and into New York Bay.
As SANDY made landfall, employees of the New York Container Terminal--which is situated nearly eighty miles to the north at the northwestern corner of Staten Island on the Arthur Kill (6)--were making final preparations for the storm. The Terminal pier extends approximately 3,000 feet along the Arthur Kill, with the bulkhead reaching a height of approximately eight feet above high tide. (7) With approximately 2,300 laden containers, most carrying cargoes to be delivered in the New York metropolitan area, another 1,800 empty containers, and 2,550 stand-alone chassis on the terminal, a full team of Operations department employees had spent several days moving mobile terminal equipment to a safe position and policing the pier area in order to remove materials that would be affected by the winds. By noon on October 29, non-essential personnel were evacuated, with only three taking shelter at the terminal in order to "monitor and mitigate" any damage that might occur. (8) As SANDY battered the block-stacked containers with wind gusts in excess of eighty knots, NYCT's Maintenance Foreman made a final pass through the facilities and watched in awe as water from the Arthur Kill rose over the bulkhead of the pier, lifting containers off the ground, knocking over laden chassis, and wetting millions of dollars of cargo as it flooded nearly all of the terminal's 187 acres. (9)
Twelve miles to the north, National Electronic Transit ("NET") Corporation's Clay Avenue warehouse was also exposed to SANDY's most destructive forces. (10) Situated in the midst of low-lying wetlands known as the Meadowlands, NET's one story, 150,000 square foot facility was surrounded by a tidal pool, creeks and tributaries, and canals and aqueducts all flowing east to the Hackensack River. (11) The warehouse floor is approximately eight feet above sea level, while the parking lot surrounding the facility is approximately four and a half feet above sea level. (12) As the storm surge pushed northward through the Arthur Kill, Upper Bay, and the Hackensack River, storm waters inundated the Meadowlands, breached the banks of Berry Creek at the eastern edge of the property and, after covering the parking and loading areas surrounding the facility, flooded NET's warehouse with approximately twenty-one inches of brackish water, damaging more than two million dollars of copy machines and other property that remained on the warehouse floor. (13)
In the aftermath of the storm, Lord & Taylor, LLC and TGI Office Automation ("TGI") each filed claims for property damages suffered as SANDY passed through the Port of New York/New Jersey. Lord & Taylor lodged its claim against ZIM Integrated Shipping Services Ltd., the Ocean Carrier which had been engaged to transport 211 cartons of ladies' cardigans from Hong Kong to New York; those cargoes had been landed at NYCT on October 28th and were destroyed when the terminal flooded the next day. NET, which stood as the bailee of printers and copy machines owned by TGI, received a claim for loss of $735,440 arising from water damage to those machines. Both ZIM and NET denied the respective claims, asserting that SANDY was an "act of God" and that they were absolved of any liability for damage to the property in their care at the time of the storm.
Over the next four years, Lord & Taylor's and TGI's claims were examined and adjudicated in the crucible of the federal courts. In June 2016, following a five-day trial in the United States District Court for the Southern District of New York, Judge Analise Torres issued an opinion which included twenty-five pages of findings addressing physical characteristics and operational procedures of the New York Container Terminal, weather forecasts and advisories in the days preceding the storm's landfall, and the specific preparatory steps taken by the terminal in face of the storm. Holding that SANDY "was an Act of God, that its severity and--in particular--its storm surge, were not reasonably foreseeable and that no exercise of reasonable care could have prevented the loss," Judge Torres upheld ZIM's defense and determined that it was "not liable for the damage to [Lord & Taylor's] cargo." (14)
Three months later, Judge Allyne R. Ross of the United States District Court for the Eastern District of New York, filed a similarly detailed Opinion and Order in TGI Office Automation v. National Electronic Transit Corporation. After considering the location and description of the NET warehouse, operational procedures, publicly available weather forecasts and advisories related to SANDY, the history of flooding in the Meadowlands, and particularly the actions (or lack of action) taken by NET's personnel to prepare for the storm's effects, Judge Ross found that NET could not sustain the Act of God defense and awarded $735,440 in damages to TGI.
These seemingly inapposite results, addressing losses arising from the same natural catastrophe in the same geographic region and largely applying the same precedents, are entirely consistent with act of God jurisprudence: the key to an act of God defense is that it must arise from a natural disaster "outside of human control." Once it is demonstrated that human efforts could have avoided the damages suffered by an act of God event, God's involvement is over, and mortal man becomes the protagonist. It is upon that critical issue that the two cases turned.
III. ACT OF GOD AS A COMMON-LAW DEFENSE
"Act of God" is both a common law and statutory defense; defining the concept--and the circumstances which might trigger its application in the law--has been quite difficult. (15) The earliest common law reference to "act of God" appears in the manuscript report of Wolfe v. Shelley, (16) one of the most celebrated cases in Anglo-American property law. Notably, the case did not address a catastrophic weather event, but the death of a landholder. After identifying "storms, lightning, and tempest" as examples of divine acts, the Court determined that "it would be unreasonable that those things which are inevitably by the act of God, which no industry can avoid, nor policy prevent, should be construed to the prejudice of any person in whom there was no laches." (17)
Although a number of English courts later made reference to "act of God" as a limitation on the duty of a bailee, (18) the first detailed examination of the defense to liability appears nearly two hundred years after Shelley's Case. In Foward v. Pittard, (19) Lord Mansfield detailed the scope of the defense in a case where a consignment of hops was destroyed by fire while in the custody of a common carrier:
It is laid down that [a common carrier] is liable for every accident, except by the act of God, or the King's enemies. Now what is the act of God? I consider it to mean something in opposition to the act of man: for every thing is the act of God that happens by His permission; every thing, by His knowledge. But to prevent litigation, collusion, and the necessity of going into circumstances impossible to be unraveled, the law presumes against the carrier, unless he shows it was done by the King's enemies or by such act as could not have by the intervention of man, as storms, lightning, and tempests. (20)
Finding that the fire had been man-made, rather than the result of a natural event such as lightning, the court held that the carrier was liable for the loss. (21) In so doing, Lord Mansfield defined the essential nature of the act of God defense: the damage at issue must have been done by an act of nature, with no associated human cause or act. (22)
Development of the act of God defense in U.S. jurisprudence has followed the English rule. As Mansfield's approach was adopted, the focus of the defense itself evolved, shifting from the inevitability of the force of nature to man's ability to anticipate and foresee its likely result. While storm and flood stood as events beyond man's capacity to prevent, the defense of act of God defense now "only applies to events in nature so strong that the history of climatic variations and other conditions in a particular locality forced no reasonable warning of them." (23)
That shift has particular import with respect to hurricane litigation: although courts typically characterize hurricanes as an "act of God" as a matter of law, the determination of whether losses suffered result from the destructive winds and tidal surge associated with the storm, or from an act or failure by man, turns on whether the force and effect of the storm were foreseeable. (24)
A. Act of God as a Statutory and Contractual Defense
Although the common law development of the "act of God" defense is significant, the statutory and contract treatment of the doctrine is of greater import for the ocean carriage industry, as it is the Bill of Lading and its terms that define the allocation of risk during transport. Early forms of Bills of Lading included exceptions from liability for Acts of God and Perils of the Sea, (25) and both were enumerated in the few defenses available to ocean carriers prior to enactment of the Carriage of Goods by Sea Act ("COGSA"). (26)
The statutory embodiment of the 1924 International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (the "Hague Rules"), COGSA applies to all contracts of carriage by sea to or from the United States during "the period from the time when the goods are loaded on the ship to the time when they are discharged." (27) Application of COGSA is routinely extended throughout the period of carriage--i.e., from receipt by the carrier or its agent until the moment of delivery to the Consignee or its agent--as a matter of contract. (28)
In order to prove a claim for damages under COGSA, the Plaintiff bears the burden of establishing that its cargoes were delivered to the Carrier in good order and condition and that those same cargoes were received at the point of delivery in damaged condition. (29) Once that burden is met, the Plaintiff has made out its prima facie case, and the burden is shifted to the Carrier to show both the proximate cause of the damage is one of the excepted causes under COGSA and that the Carrier was free from negligence in advance of that cause: (30)
Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:
(c) Perils, dangers, and accidents of the sea or navigable waters;
(d) Act of God;
(q) Any other cause arising without the actual fault and privity of the Carrier and without the fault or neglect of the agents or servants of the Carrier, but the burden of proof shall be on the person claiming benefit of this exception to show that neither the actual fault or privity of the Carrier nor the fault or neglect of the agents or servants of the Carrier contributed to the loss or damage. (31)
Read in full, COGSA provides for exoneration from liability where there is no contributing negligence. If a defendant has sufficient warning and reasonable means to take action to guard against, prevent, or even mitigate the dangers posed by a natural catastrophe, and fails to do so, then he will be held responsible for the loss; if there are insufficient warnings or insufficient means available to protect the cargoes, then the defendant will not be liable. (32)
When considering an "act of God" defense asserted under COGSA, courts must assess whether the weather conditions were foreseeable at a given time and location, but, again, the mere existence of a hurricane will not entitle a defendant to exoneration. (33) To prevail, a Carrier must also show that "the damage from the natural event could not have been prevented by the exercise of reasonable care." (34) The absence of negligence is key and the test is whether the Carrier took reasonable precautions under the circumstances in order to prevent damage to cargoes entrusted into its care. (35)
IV. PREPARING FOR SANDY
A. New York Container Terminal
Lord & Taylor's cargo of ladies' sweaters had been loaded aboard M/V OOCL KOBE on October 1, whose service profile called for transit of the Pacific, through the Panama Canal, and arrival at the Port of New York/New Jersey on October 27, 2012. ZIM and NYCT's management teams each became aware of SANDY as it developed in the Caribbean Sea on October 21 and 22 and, while they monitored available forecasts, began preparing for its potential impacts as it moved northward. While ZIM's U.S. operations team focused on vessel operations along the potential track, NYCT began to prepare for a landfall affecting the greater New York area.
Although the terminal did not have a formal, written hurricane preparedness plan, NYCT's Vice President for Operations, Robert Nixon, and the Director of Marine Operations, Joseph Codero, used an existing "Hurricane Preparedness SOP" as a guideline as they led efforts on the terminal to prepare for the storm. (36) Throughout the week, Nixon and his staff tracked the path and forecasts for the storm, using a private weather service--WeatherWorks--and participated in daily conference calls organized and led by the U.S. Coast Guard Captain of the Port and the Port Authority of New York/New Jersey. On Tuesday, October 23, the WeatherWorks report identified two potential scenarios: one, calling for the storm to track eastward into the Atlantic Ocean, with only rain showers affecting the greater New York City area and the second involving "a trough wrapping SANDY west-northwest, thus creating a significant impact somewhere between the DelMarVa and Cape Cod." (37) During the daily conference call that day, the Coast Guard and Port Authority notified the participants--which included both terminal and vessel operators with activities in the port--that each should take steps to prepare for the storm. (38)
On Wednesday, the WeatherWorks report noted that SANDY had "become a hurricane with max winds of [eighty] [miles per hour]" as it made landfall in Jamaica and that the "deepening upper trough over the Ohio Valley" increased the possibility of a west-northwest turn that could bring "heavy, flooding rainfall, damaging winds capable of bringing down trees and power lines, and major coastal flooding/beach erosion[s]." (39) Tempering that prediction, the WeatherWorks report also warned that "this is a changeable situation and an eastern track leading most of SANDY out to sea is still plausible." (40) That same day, the National Weather Service Report reported the "potential for a major coastal storm with heavy rainfall[,] high winds[,] coastal flooding and beach erosion," noting that its forecast was dependent upon the storm's interaction with an upper level low pressure system that was approaching from the west," but noted that confidence in the forecast was low and opined that "[t]he storm may very well just move out to sea and have little if any impact" upon the coast. (41)
With those reports in hand, Robert Nixon convened a meeting of his Operations team on Thursday, October 25, to discuss storm preparedness; based upon available forecasts and the focus of discussions on the daily Coast Guard/Port Authority conference calls, Nixon's preparatory concerns focused largely on "high wind damage as well as water breaching the pier." (42) Following the meeting, Nixon forwarded an email to NYCT management with preparative tasks, including "updating the 'entire' SOP" and distributing the update to each department head, moving containers from low-lying areas in the Terminal, ordering extra labor for Monday in order to prepare the Terminal, moving "grounded loads from low areas that could potentially flood" and "breaking down empty stacks" to block stow as a means to protect against the effects of high winds. (43) Forecasts issued that afternoon by the National Hurricane Center and WeatherWorks both reflected a change in the storm track, each noting a growing concern and confidence that the hurricane's landfall would be in the Northeast, potentially affecting the Port of New York and New Jersey. (44) Notably, the National Weather Service (hereinafter referred to as NWS) issued a Public Information statement that night, warning residents to "leave low lying or coastal areas" as those areas were threatened by "storm surge," which was described as a "dome of water that comes across the coast as the storm makes landfall." (45)
By Friday morning, when the National Hurricane Center's forecast indicated that the storm would make landfall on the Delaware coast early on Tuesday morning, non-essential vehicles and equipment had been moved upland, away from both the pier bulkhead and Bridge Creek, which had partially flooded during Hurricane IRENE in 2011. (46) Sandbags were also placed around the power substation located in the northeast corner of the Terminal.
While NYCT was preparing for SANDY's arrival, the normal business of receiving container ships at the pier for discharge of import cargoes and loading of export continued. Early on Saturday morning, NWS issued its first coastal flood watch for the NYC area. (47) That warning predicted that "[p]ersistent strong easterly flow will pile water on top of already higher astronomical high tides due to the full moon" and identified the western Long Island Sound as the area most prone to flooding. (48) That bulletin was not, however, accompanied by any estimate of the height of the flood tide. (49) M/V KOBE, carrying Lord & Taylor's two containers of ladies' sweaters, arrived at its NYCT berth at 8:20 A.M. in clear weather, with 826 containers manifested for discharge. (50) At 10:00 A.M., while NYCT's longshoremen were discharging KOBE's cargoes, representatives of both ZIM and NYCT participated in the daily conference call: in the course of that conference, the parties discussed the difficulties of tracking the storm, the prediction of landfall, and the Port Authority's "Tenant Preparation Plan," which included steps to be taken by terminal operators in advance of the storm. (51) At 11:00 A.M., NWS issued Hurricane SANDY Advisory No. 21, refining the landfall forecast and warning of an expected storm surge of four-to-eight feet for Long Island Sound, Raritan Bay, and the Delaware Bay. (52) That prediction was the first for the New York area that included a definitive range for a possible storm surge. (53)
Lord & Taylor's cargoes were discharged to the pier at approximately midnight and placed on the ground in the terminal stacks; (54) following completion of cargo operations, M/V KOBE sailed for its next scheduled port at approximately 2:00 A.M. on Sunday, October 28. (55) Shortly before the ship sailed, the National Hurricane Center issued "Intermediate Advisory 23A," which repeated prior forecasts regarding SANDY's track, but increased the storm surge estimate to five-to-ten feet. (56) That warning was to become a critical element in the trial court's determination of fault.
B. National Electronic Transit
During the week before Sandy's landfall, "it was business as usual" for NET and TGI; NET picked up assembled machines every day, Monday through Friday, and by Monday, October 29, there were roughly 1,100-1,300 copy machines on the warehouse floor. (57) NET's President, Joseph Holl, kept himself informed of the storms path and potential impacts primarily through local and national media coverage. (58) He did not require his managers to meet or have any discussions regarding preparing the warehouse for SANDY's impact, as Holl had not "seen any forecast of a 'direct hit type of situation.'" (59)
While he was aware of the possibility of storm surge, Holl did not know or investigate the specific details of how high the storm surge might be, or how far inland it might reach, relying instead on his knowledge of historical flooding in the area surrounding NET's warehouse. (60) Despite the fact that the parking lot at the rear of the warehouse--which was graded at a lower elevation than the loading docks--and the low-lying streets in the area flooded as much as "knee-high" up to ten times per year, (61) Holl did not believe that a hurricane could cause flooding in a warehouse "tucked all the way back up a river system and then up into the marshes of the Meadowlands." (62) The most severe flooding at the NET warehouse had occurred in 2011, when rainfall caused waters to rise within 12-18 inches of the warehouse floor without entry or damage to the property. (63)
In the week just prior to SANDY's landfall, Vincent Monteleone, one of NET's salesmen, expressed his concern with potential flooding, suggesting that NET consider loading the electronics from the warehouse floor onto trailers and moving them to higher ground; he also suggested purchasing sandbags to place near the loading dock doors in order to protect against water intrusion. (64) Notably, NET owned additional warehouse space in Harrisburg, Pennsylvania and Terterboro, New Jersey; the Teterboro warehouse, located just seven miles from the Lyndhurst facility, was used for NET's "overflow" and record storage. (65) Monteleone's suggestions were largely ignored; while Mr. Holl asserted at trial that there was minimal space available in the Teterboro warehouse that week, he also admitted to moving his Porsche and a small boat there prior to SANDY's landfall for safekeeping. (66)
On Monday, October 29, the warehouse opened at 5:00 A.M., loading approximately 20 delivery trucks for daily runs; as weather conditions deteriorated during the late morning, NET received another twelve trailers full of furniture and machinery, and their delivery trucks began returning, some partially loaded with printers and copiers that they had not been able to deliver as scheduled. (67) Sometime after mid-morning, the warehouse supervisor, Richard Bauer instructed the 16-20 employees present in the warehouse to begin preparing for the storm; efforts focused upon lifting items off the warehouse floor: placing boxes of cabinets onto six-inch wooden shipping pallets, stacking boxed items, and placing new mattresses on top of used ones. (68) Trucks and trailers were moved to higher ground at the front of the warehouse, specifically for the purpose of protecting them from flooding in the loading dock area at the back, and mattresses were placed against the loading dock doors and weighed down with pallets or forklift blades. (69)
V. APPLYING THE LAW: FORESEEABILITY AND REASONABLE PRECAUTIONS
A. Lord & Taylor v. ZIM Integrated Shipping Services Ltd.
The U.S. District Court for the Southern District of New York began its analysis by noting that the parties had stipulated that COGSA applied "ex proprio vigore until the cargoes [were] discharged from the vessel... and then by contract until delivery to Lord & Taylor on November 6, 2012" and that ZIM had conceded that the "cargos were damaged by water during Hurricane SANDY while on the NYCT." (70) With Lord & Taylor's prima facie case established, the burden of proof shifted to ZIM, and the bulk of trial focused upon the issues of foreseeability and negligence: whether or not the steps taken by NYCT were reasonable under the circumstances. (71)
At trial, each party had presented one fact witness; the Vice President of Operations at NYCT testified as a fact witness for the Plaintiff, while the Maintenance Supervisor present at NYCT on October 29, 2012 testified for ZIM. (72) In addition to deposition testimony and documents, each party also presented expert testimony in the fields of meteorology and terminal operations (73)
To determine if ZIM's "act of God" defense would stand, the Court focused upon three separate questions:
(1) What NYCT (acting on behalf of ZIM) knew about Hurricane Sandy prior to the storm making landfall on the evening of Monday, October 29, 2012;
(2) what NYCT knew about the severity of the storm; and
(3) whether NYCT was negligent in its preparations or whether nothing could have been done.
The court's treatment of the first question reflected the import of foreseeability in the analytical framework:
The foreseeability inquiry is not limited solely to whether the path of the storm is consistently well-predicted throughout the forecasts leading up to landfall. Rather, a determination of foreseeability must also account for the other information about the storm that was available to those in the path, including the potential track, wind speeds, and storm surge, and the confidence of these predictions at the time they were made. After all, a warning that a storm is coming is of limited utility if the warning provides little or no information as to its severity and the locus of its impacts. (74)
In other words, what was known about the storm frames the analysis of reasonable preparation. Noting that NYCT became aware of SANDY's existence as much as a week before its actual landfall, the court examined NYCT's response and preparation through the lens of notice and certainty, searching for warnings and information that would identify the actual, discrete risks to be guarded against.
While the NWS "Hazardous Weather Outlook" issued on Wednesday, October 24, warned of a "major coastal [storm] with heavy rainfall[,] high winds, coastal flooding[,] and beach erosion," nothing in that forecast provided specific information regarding the impact of the storm or any indication that it would be "as bad or worse than previous hurricanes." (75) As Lord & Taylor's meteorology expert conceded, the various forecast models available that day disagreed as to whether SANDY would turn into the East Coast or out into the Atlantic. (76) By late evening on Thursday and throughout the day on Friday, there was "increasing confidence" that the New York/"tri-state area" would be affected by heavy rainfall "and resultant significant[,] urban small stream flooding;" and residents were advised to "monitor the progress" of the storm. (77) From Thursday through Saturday morning, the language of public forecasts remained consistently ominous, but vague. (78)
The location and timing of SANDY's landfall--the key variables affecting storm surge--also shifted throughout the end of that week, with reports that it would occur anywhere from the Delaware Coast to central New Jersey, and as late as mid-morning on Tuesday, during low tide. (79) The court opined that uncertainty was critical in determining foreseeability, as "[s]torm surge height and location are closely correlated with the track and landfall time of a storm,... [and] a shift in track just 12 hours before landfall [could] result in changes in storm surge of 10 feet or more" as tide cycles either increase or decrease the surge depending upon the timing of the landfall. (80) Because SANDY sped up along its track over the weekend, it made landfall approximately 12 hours earlier than predicted in the Thursday forecasts, arriving at high-tide, rather than low. (81)
It was not until mid-morning Saturday--after M/V OOCL KOBE had docked at NYCT--that the National Weather Service provided its first explicit and relevant estimate of storm surge, when it predicted a four-to-eight foot surge along more than three hundred miles of coast from Ocean City, Maryland to the Connecticut/Rhode Island border. (82) That prediction remained consistent until Sunday morning at 2:00 A.M., when the National Hurricane Center increased its surge prediction to five-to-ten feet, and then to six-to-eleven feet, for the Long Island Sound, Raritan Bay, and New York harbor. (83)
The uncertainty of available forecasts-particularly regarding the potential height of the storm surge-ultimately played a critical role in the court's determination that NYCT acted reasonably under the circumstances. The preponderance of evidence presented at trial suggested that the most damaging flooding--and particularly that which damaged Lord & Taylor's cargo--resulted from waters from the Arthur Kill that washed over the bulkhead and inundated the terminal. (84) NYCT's managers, Robert Nixon and Joseph Cordero, had prepared for the storm with the understanding that the height of the pier bulkhead along the Arthur Kill was about eight feet above high water. (85)
The actual height of the bulkhead was vigorously contested at trial: evidence presented by ZIM indicated that Nixon's understanding of the bulkhead height was based upon information provided to him by Cordero. (86) Although both were aware that part of the terminal near Bridge Creek had flooded during Hurricane IRENES's passage, each man testified that they focused their prestorm preparations on the potential effects of hurricane force winds based upon three factors: (1) what they understood to be the pier height, (2) their experience with prior storms, and (3) the emphasis of the daily Coast Guard/Captain of the Port telephone conferences. Salvatore Grillo, the terminal's maintenance foreman, testified he believed the bulkhead was between six and eight feet above high tide; the expert witness presented by the defense testified that both industry standards within the Port of New York/New Jersey and his own personal measurement indicated the bulkhead was approximately eight feet above "mean high water." (87) Rejecting testimony by Lord & Taylor's expert witness which indicated that the bulkhead height was only 6.6 feet above Mean High Water and the Plaintiff's complaint that NYCT could and did not provide definitive proof of the bulkhead's height, the court determined that the persuasive evidence "coalesce[d] around 8 feet" and that it was reasonable for NYCT to believe the bulkhead was approximately eight feet above high tide. (88)
The court then considered Lord & Taylor's assertion that the early advisories that warned of a "major storm" with "historic flooding," combined with the history of hurricanes in the New York area, created sufficient reason to require that NYCT prepare for landfall of a Category 1 hurricane and a six-to-nine-foot storm surge. The court rejected the assertion that the terminal was required to prepare for the worst possible scenario and applied the Mamiye Bros.' reasonable care standard; in doing so, the court acknowledged that that the actions required to meet the requirements of "reasonable care" would change with the circumstances, but would not rise to the level of action--a "highest degree of caution" standard--that Lord & Taylor asserted. (89)
Noting that the language of NWS and NHC alerts failed to identify the factors that made the storm "unique," "historic," and "potentially damaging," or to give context to warnings of "record high tides and coastal flooding," (90) the court determined that reliance on such vague terms to prepare for a hurricane would have been unreasonable and unsound, and found the terminal had no obligation to protect against flooding from the Arthur Kill until storm surge predictions clearly indicated floodwaters could exceed the bulkhead height. (91) With that, the court circumscribed the actions NYCT was required to take in order to prepare for flooding from the Arthur Kill.
While ZIM and NYCT argued that they acted reasonably in response to the varying threat posed by SANDY in the week before landfall, Lord & Taylor's terminal operations expert asserted that a number of actions should have been taken in order to protect its cargo, including:
(1) Delaying discharge of the cargo from M/V OOCL KOBE, declining to accept additional laden containers on to the terminal, or arranging to load laden containers to other vessels in order to ride out the storm;
(2) Allow of extraordinary operations hours, providing cargo owners with an option to collect laden containers during the weekend on October 27-28;
(3) Place laden containers above empty containers or on road chassis;
(4) Place laden containers on rail cars in the Intermodal Facilities area to the east of Bridge Creek; or
(5) Deploy makeshift flood barriers.
Unsurprisingly, ZIM maintained such measures were "impractical or impossible, and in any event, would not have prevented the damage." (92)
The court found that while there is an industry custom and practice to delay vessel calls and interrupt cargo operations in the event of hazardous weather, the court noted that the Port of New York remained open in accordance with the orders of the U.S. Coast Guard, that ZIM did not have operational control over the vessel, (93) and that at the time M/V OOCL KOBE began discharge of its cargoes at NYCT, the available forecasts had not yet predicted conditions that would have imperiled cargoes discharged to the pier. (94) The court also rejected the suggestion that cargoes could have been laden to other vessels to ride out the storm, as that strategy depended upon too many unknown variables (95) and the timeframe required for transfer of over 2,200 containers was implausible. (96)
Addressing the option to allow cargo owners the option of picking up their goods over the weekend, the court noted that the terminal was closed for pickups (as was customary) and that while the Plaintiff was likely aware of the arrival of its merchandise on Saturday, it had had not made a request to obtain it over the weekend. (97) The court opined that "[t]he fact that neither party explored this option suggests that neither party expected the storm to be as severe as it was," and rejected the option as unreasonable in light of the information available to both parties. (98)
Taking up the suggestions that laden containers could have been placed on chassis, the court expressed doubt that it would have prevented flooding of the cargoes, as the evidence tendered at trial showed that storm waters flooded many areas of the terminal in excess of the additional four foot elevation that would have been provided by a chassis mount. (99) In addition to noting the terminal grounds and available equipment would not have allowed for mounting of all laden containers to chassis, the court pointed to testimony by Lord & Taylor's expert indicating that at least some of the containers and road chassis could have been dislodged and toppled by the water movement during the storm, which would have resulted in the same flooding damage. (100) As to Lord & Taylor's proposal to stack laden containers on top of empties, the court rejected it as ill-advised, noting that evidence indicated that it was not consistent with industry practice and opining that it was not clear that such placement was either stable or safe. (101) Finally, erection of temporary flood barriers, two-to-three feet high, was rejected, as the court found the storm surge would likely have overtaken any barrier of that height. (102)
At bottom, the court viewed each of the suggested "reasonable" precautions as unworkable, noting that each suffered from a common weakness, timing: "[t]he crucial forecasts that signaled S[ANDY]'s storm surge might breach the bulkhead and flood the terminal did not arrive until early Sunday morning" and none of the precautions suggested, "alone or in tandem," could have been implemented. (103)
Finding that SANDY was a storm of unprecedented proportion, which exceeded worst-case expectations, and that the limited period between the first warning that specified storm surge waters would exceed the bulkhead, the court then determined that "NYCT had no reasonable or practical way to move or protect over 2,200 containers located on the [t]erminal... before landfall" and was thus not liable for damage to Lord & Taylor's cargo. (104)
B. TGI Office Automation v. National Electronic Transit Corporation
This case before the United States District Court for the Eastern District of New York followed a procedural path not dissimilar to that of the Lord & Taylor matter.
The plaintiff, TGI Office Automation ("TGI"), called National Electronic Transit Corporation's ("NET") president and one of his former salesmen as fact witnesses in its case in chief, while NET presented the testimony of its former warehouse manager in its defense. (105) TGI presented the same expert witnesses on operations and meteorology as Lord & Taylor had in its claim against ZIM, although TGFs operations expert was tendered and qualified to testify with respect to warehouse operation and management rather than terminal operations. (106)
Given NET's status as a common carrier, the law and analysis applicable to TGI's claim hewed closely to those relevant to the Lord & Taylor matter. (107) Applying the terms of the Bill of Lading that NET regularly issued upon delivery of TGI products, the parties stipulated that if TGI made out a prima facie claim that "(1) its photocopiers were delivered to defendant in good working order but (2) were returned damaged, [NET] would be liable for the resulting loss and could only disclaim such liability if it sustained its burden to affirmatively prove the Act of God defense." (108)
The only issue before the court, then, was whether NET could absolve itself of liability by showing that the damage suffered to TGI was unavoidable. (109) Determination of that issue rested on the answer to two separate questions: (1) whether the impact of SANDY's storm surge on the NET warehouse was foreseeable to a reasonable warehouseman, and (2) whether NET's preparations for the storm were reasonable, given the available information and circumstances at the time. (110)
The court began its examination of the foreseeability issue by review of the historical data related to SANDY and the import of the NET warehouse location: noting that the 2012 hurricane season began with a 10% chance of a Category ONE hurricane affecting the New York area, and NET's thirty-plus years of experience at the Meadowlands location--during which no storm resulted in surges sufficient to flood the facility--the court concluded that the fact that the warehouse floor was located on an elevation "surpassing the 100-year-storm level" would provide a reasonable warehouseman with a high degree of confidence that flooding was unlikely to occur "in any given year." (111) But what the court gave, it immediately took away, noting that once SANDY began to form in the Caribbean and track towards the U.S. East Coast, "assessing the likelihood that it would cause flooding in the Meadowlands was no longer a historical exercise but rather a predictive one, requiring a reasonable warehouseman to shift focus from prior experience to forecasts of the storm's trajectory and potential consequences." (112) The court then adopted the Lord & Taylor framework to determine the storm's foreseeability, constructing its analysis on review of the "information about the storm that was available to those in its path, including the potential track, wind speeds, and storm surge, and the confidence of those predictions at the time they were made." (113)
Reviewing the expert meteorological testimony related to storm surge, the court noted that TGI had compared the Mean High Water level for Berry's Creek (located at the back of the warehouse property) with the height of the warehouse floor above sea level, with Berry's Creek measured at four-and-a-half feet above sea level and the warehouse floor at eight feet above sea level. (114) As a result, TGI's expert concluded that a storm surge of four feet or more would raise the water level in Berry's Creek high enough to cause water to enter the warehouse. (115) Hurricane SANDY Advisory No. 21, released by the National Weather Service at 11:00 A.M. on Saturday morning, predicted a storm surge ranging from four-to-eight feet two days before the storms' landfall. (116)
In response, NET presented testimony which examined the surge level forecasts at a point located twelve miles from the warehouse, conducting a series of conversions to compare those forecasts with the height of the warehouse floor and used data recorded during SANDY's passage to determine how the storm "tapered" or spread out across the Meadowlands. (117) In doing so, NET's witness opined that the first NWS prediction of a surge level high enough for floodwaters to enter the warehouse was not released until 7:51 P.M. on Monday, as the storm made landfall. (118) Notably, NET's expert testified that the plaintiff's methodology was sound, but believed his own to be more precise, "if admittedly more complicated." (119)
That admission proved telling, as the court concluded that "[a] reasonable warehouseman could not have assessed his exposure to potential storm surge" using the NET expert's more complex approach, as the information was unlikely to be available to, or even understood by, him. (120) While the court was not willing to impose a duty to know the precise storm surge level required to flood the warehouse, the fact that NET's President, Joseph Holl, did not know the elevation of his own warehouse, combined with the lack of evidence that Holl was aware of any specific storm surge predictions proved even more critical, as the court characterized those failures as "unreasonable." (121)
The court then took up analysis of what it characterized as the "stages of foreseeability" relative to SANDY. Noting that NET was aware of SANDY nearly a week before it made landfall, the court acknowledged that early forecasts predicted landfall in the northeastern United States could cause coastal flooding, but that there was little certainty or confidence in the precise location or timing of landfall or the storm's potential impact. (122) By Thursday, October 25, forecasts referred to the "increasing chance" that a coastal storm would have significant impact, particularly in "low-lying or coastal areas," and advised that residents in those should monitor media reports and planning for potential impacts." (123) While the court gave credence to the uncertainty regarding the "precise location, timing, and consequences" of SANDY's landfall, it concluded that "by Thursday evening, it was foreseeable to a reasonable warehouseman in the Meadowlands that the area would be affected by the storm" and that action might need be taken to prepare for its effects. (124)
Although Holl testified that he did not have a real understanding of what might happen on Friday morning because forecasters "didn't know where [SANDY] was going," the court noted that the consensus of forecasts was that SANDY would turn toward the northeast coast and New York declared a state of emergency. Accepting the Lord & Taylor court's statement that "descriptive terms used in media reports such as 'once in a lifetime,' 'historic,' 'worst-case scenario' and 'unprecedented' would not alert a reasonable warehouseman to the specific likelihood of flooding", the court nevertheless concluded that those reports would have made it clear that SANDY posed a "unique and significant threat." (125)
The court again returned to the National Hurricane Center's Saturday morning forecast for storm surge of four-to-eight feet, noting noted that Holl admitted in his testimony that a forecasted surge of four-to-eight feet in the Hackensack River would concern him and, that upon viewing the television coverage of Hurricane SANDY broadcast that Saturday afternoon, he realized the surge would impact the Meadowlands and might affect the warehouse. (126) That testimony alone foreclosed his claim that the affects of the surge were unknowable and the court concluded that by Saturday "it was foreseeable to a reasonable warehouseman in the Meadowlands that SANDY would cause storm surge in the area and that his warehouse was at risk of flooding." (127) The Sunday morning forecast, which increased the predicted surge to five-to-ten feet in nearby Raritan Bay and four-to-eight feet elsewhere and expressed greater certainty that the storm surge would coincide with Monday night's high tide, served to reinforce the court's conclusion and placed greater import on NET's actions once it reopened for business on Monday morning. (128)
After determining that NET was alerted of the likely impact of SANDY no later than Saturday--and should have been so alerted by reports available on Thursday and Friday--the court observed that preparation for the potential impact of a hurricane on a facility such as NET's warehouse requires time, resources, and planning. (129) Noting that NET should have taken preliminary actions upon hearing the early forecasts of impact, the court itemized NET's failures: "the management team held no discussions, made no arrangements, and had no plans for what to do if the storm described as a potential 'worst-case scenario' lived up to that possibility." (130)
Of particular concern was the absence of any contingency plan. While TGI's warehouse operations expert testified that following Hurricane KATRINA's devastating blow in 2005, standard practice for warehouses vulnerable to flooding was to have Disaster Preparedness Plans addressing hurricane preparations, NET had none. (131) The court noted that such a plan might have addressed a number of problems NET experienced as it tried, last-minute, to prepare for the storm. It could have: (1) established a timeline for preparatory actions, including when to stop receiving new shipments and transfer of tangible property to an alternate location; (2) improved the allocation of employees and resources, instead of the "haphazard efforts begun several hours after the warehouse opened;" and (3) also included a contingency to place workers on standby for work on Saturday and Sunday, immediately after surge predictions should have triggered a response. (132)
The court opined that NET "need not have emptied the warehouse on Friday, but conducting "business as usual" until mid-morning Monday-nearly two days after the storm surge had become foreseeable, demonstrated an "unreasonable obliviousness (or dismissiveness) of the time, effort, and planning required" to fulfill its obligations to TGI. (133) Concluding that NET had not met its burden to prove that there were no reasonable actions it could have taken to prevent damage to TGI's machines, the court determined NET's conduct contributed to the loss suffered and it failed to sustain its burden with respect to the act of God defense. (134)
C. Containers & Copiers--Lessons Learned
The divergent results in Lord & Taylor LLC v. ZIM Integrated Shipping Services, Ltd. (135) and TGI Office Automation v. National Electronic Transit Corporation (136) reflect the particular difficulties of the "act of God" defense and its continued vitality in litigation arising from climatic catastrophes. While the common-law treatment of the "Act of God" defense distinguishes the critical issues of "foreseeability" and "fault," that analytical separation is not easily drawn and a successful application of the defense remains fact-intensive.
To begin, the "foreseeability" of a storm is not limited to its forecasted path, but extends to both its strength and potential impact. As SANDY moved northeast, it presented essentially the same threat to the New York Container Terminal and National Electronic Transit's warehouse, and each became aware of the storm a week before its ultimate landfall. As SANDY made its transit from the southern Caribbean, through the Windward Passage, and then turned to the northwest, NYCT and NET were exposed to the same vague and uncertain predictions of the storm's path, strength and expected time of landfall. As the storm neared New York, available forecasts began to reflect increased confidence about its path, as well as greater detail of prospective impacts. In each case, the "stages of foreseeability" became critical to the outcome: the ultimate cause of property damage at both the terminal and the warehouse was the flooding caused by the surge of waters SANDY pushed before its path. It was the identification of that moment in time the storm became an actual, discrete risk to NYCT and NET that led to exoneration from, or imposition of, liability.
NYCT identified that risk more than a week before landfall and began actively tracking the storm, reviewing daily weather reports/forecasts and participating in daily, area-wide telephone conferences to discuss preparations for the storms' impact. As they prepared for the storm, the terminal's management team anticipated damage from both high winds and floodwaters that could breach the bulkhead. Working from prior experience and the understanding that a flood tide of less than eight feet would not affect the terminal, (137) they worked to update existing disaster contingency plans and focused upon the potential effects of hurricane force winds. By the time predictions of storm surge exceeded the height of the bulkhead--at 2:00 A.M. on the day before landfall--options available to protect against the effects of flooding were found to be both impractical and unworkable.
In contrast, NET's management appeared to take little notice of the approaching storm, failed to consider the history of flooding immediately surrounding the warehouse, and failed to follow weather forecasts or warnings until just before landfall. Critically, NET had no existing disaster preparedness or contingency plan, and no one apparently knew, or sought to confirm, the elevation of the warehouse floor above high tide, effectively precluding any rational assessment of flood warnings. Given the absence of any substantive action in anticipation of the threatened storm--which the court characterized as "oblivious... and dismissive" of the threat posed by SANDY--NET was unsurprisingly found to have acted unreasonably and was denied its claim of the "act of God" defense.
As a cautionary note, circumstance and fact play a critical role in assertion of the "act of God" defense. As noted above, the point of departure for each court was the moment SANDY's floodwaters were identified as a discrete risk to the container cargoes dwelling at NYCT, and to the copiers and office machinery on NET's warehouse floor. That moment was largely uncontested in TGI Office Automation; noting (1) the warehouse floor's elevation at four-and-a-half feet above average high tide, (2) the National Weather Service's Saturday morning warning that storm surge would range from four-to-eight feet, and (3) the prior history of flooding in the area immediately surrounding the warehouse, the court found that NET's management should have foreseen that action was necessary to protect against floodwaters.
The Lord & Taylor court's determination was more complicated: no direct, documentary evidence of the height of the terminal's bulkhead was presented; instead, the court considered testimony regarding NYCT management's understanding of the bulkhead height and the observations of a defense expert, along with that of Lord & Taylor's expert. It then found that the "persuasive evidence 'coalesce[d] around eight feet'" and that it was "reasonable" for the Terminal to believe that the bulkhead was approximately eight feet above high tide." (138) Plaintiff argued, without success, that it was "inconceivable that NYCT [did] not have definitive knowledge regarding the height of the bulkhead above MHW and did not produce any documentation demonstrating this fact." (139) The issue of bulkhead height was the eventually the subject of Plaintiff's Motion to Vacate under FRCP 60(b)(2); that Motion was denied by the court nearly a year after issue of the original Order and Judgment. (140)
In that light, the Lord & Taylor and TGI Office Automation opinions should be read for the proposition that a Terminal owner/operator must take steps to determine the actual height of its pier bulkheads in order to assess flooding risk.
The most basic lesson of Lord & Taylor LLC v. ZIM Integrated Shipping Services, Ltd. (141) and TGI Office Automation v. National Electronic Transit Corporation (142) is that the "act of God" defense remains viable; the law looks to foreseeability and the reasonability of actions taken in face of a climatic catastrophe, and does not require that we--as vessel owners, common carriers, or terminal and warehouse operators--be soothsayers or seers. We need not guard against the worst possible risk. Instead, the standard of care is fact-specific: known risks frame the analysis and identify those actions which might reasonably be required to guard against it.
That said, there is little question that the continued viability of the "act of God" defense will be diminished by the advance of technology. As weather surveillance and predictive models improve, as we advance our capabilities in engineering and construction, and as "best practices" improve the quality, scope, and usage of disaster preparedness plans, the duty of care will become more stringent, and the need for preventive action triggered at an earlier moment in time. Ultimately, the "act of God" defense requires ocean carriers to take note of their duty to exercise reasonable care and prudence, even as nature tests the limits of vigilance and foresight.
Mark E. Newcomb (*)
(*) Counsel and Vice President--Claims & Insurance, ZIM Integrated Shipping Services, Ltd., Americas, Canada and Caribbean Home Office--Norfolk, Virginia. The author would like to thank Vince DeOrchis and Kaspar Keilland for their wise counsel and excellent work in the courtroom in Lord & Taylor LLC v. ZIM Integrated Shipping Servs., Ltd. He would also like to thank Vince and Kaspar, as well as his colleagues Kim Stoll and Lynn Kreiger, for their advice and assistance in preparation of this article.
(1) "[A] person cannot be held responsible for not doing what exceeds his powers, and which he is unable with those powers to bring about. Hence the common phrase: there is no obligation to do the impossible." Samuel Pufendorf, ON THE DUTY OF MAN AND CITIZEN ACCORDING TO NATURAL LAW, 26 (ed. James Tully, Cambridge: University Press, 1991).
(2) See The JAVA, 81 U.S. 189, 192 (1871).
(3) William J. Kotsch, WEATHER FOR THE MARINER (Naval Institute Press, 3d. ed. 1983).
(4) NAT'L HURRICANE CENT., AL182012, Center (Eric S. Blake, Todd B. Kimberlain, Robert J. Berg, John P. Cangialosi, & John L. Beven II) TROPICAL CYCLONE REPORT HURRICANE SANDY (AL182012) 22-29 October 2012) (12 February 2013) at 3 - 4. While relevant courts have referred to the storm as "Hurricane SANDY," further reference by the author to Post-Tropical Storm SANDY will be as "SANDY' or "Super Storm SANDY."
(5) The Windward Passage is a straight in the Caribbean Sea, approximately fifty (50) nautical miles wide separating the islands of Cuba and Hispaniola (Haiti and the Dominican Republic).
(6) The Arthur Kill is a navigable waterway that runs northward from Raritan Bay to the Upper Bay of New York, separating Staten Island from New Jersey.
(7) Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197, 201 (S.D.N.Y. 2015).
(8) See Defendant ZIM Integrated Shipping Services Ltd.'s Pre-Trial Memorandum of Law, dated 06/02/14 at 6, (S.D.N.Y. June 2, 2014).
(9) See Lord & Taylor L.L.C., 108 F. Supp. 3d at 200, 211-13.
(10) The most dangerous section of a cyclonic storm (or hurricane) is the right front quadrant--in the northern hemisphere, the northeast quadrant. Based upon the movement of the hurricane, this section of the storm tends to have higher winds, seas, and storm surge. See Hurricanes: Science and Society, www.hurricanescience.org/science/science/hurricanestruture/ (last visited Jan. 28, 2018).
(11) TGI Off. Automation v. Nat'l Electronic Transit Corp., No. 13-CV-3404 (E.D.N.Y. Sept. 09/14, /2015) [2015 WL 12559873]; see Plaintiffs Proposed Findings of Fact and Conclusions of Law, TGI Off. Automation v. Nat'l Electronic Transit Corp., No.l3-CV-3404 (E.D.N.Y. June 06/05, /2015); Defendant's Proposed Findings of Fact and Conclusions of Law, TGI Off. Automation v. Nat'l Electronic Transit Corp., No. 13-CV-3404 (E.D.N.Y. June 06/05, /2015).
(12) TGI Off. Automation v. Nat'l Electronic Transit Corp. at 8, No. 13-CV-3404 (E.D.N.Y. Sept 09/14, /2015) [2015 WL 12559873J.
(13) Opinion and Order at 17, TGI Off. Automation v. Nat'l Electronic Transit Corp., No. 13-CV-3404, (E.D.N.Y. Sept. 14, 2015). The floodwaters damaged $1.7 million dollars worth of TGI machines--which were not ensured, as well as $800,000 of NET's equipment.
(14) Lord & Taylor L.L.C.,108 F. Supp. 3d. at 231.
(15) See Gilmore & Black, THE LAW OF ADMIRALTY [section][section]3-33, Gilmore & Black (2d Ed. 1987) [section][section]3-33.
(16) Wolfe v. Shelley, 1 Co. Rep. 93(b), 97(d), 76 Eng. Rep. 206, 219 (1581) [commonly referred to as Shelley's Case; reported by Sir Edward Coke].
(17) Id. at 219. "Laches" here is from the Old French, "laschesse," which refers to a lack of diligence or activity, i.e., negligence.
(18) See Coggs v. Bernard, 99 Eng. Rep. 107 (1703).
(19) Forward v. Pittard, 99 Eng. Rep. 953 (1785).
(20) Id. at 956-57.
(21) Id. at 957. See also Mark Downs, Inc. v. McCormick Props., Inc. 441 A.2d 1119 (Md. Ct. Spec. App. 1982).
(22) See Mark Downs, Inc. v. McCormick Props., Inc. 441 A.2d 1119 (Md. Ct. Spec. App. 1982).
(23) See Bradford v. Stanley, 355 So.2d 328 (Ala. 1978), see also Pollard v. Pioghe, 35 Cal. 416 (1868).
(24) See Skandia Ins. Co. v Star Shipping AS, 173 F. Supp. 2d 1228, 1240 (S.D. Ala. 2001).
(25) See J. Gerber & Co. v. S.S. Sabine Howaldt, 437 F.2d 580, 588 (2d Cir. 1971). (explaining perils of the sea are defined as conditions "of an extraordinary nature or arise from irresistible force or overwhelming power, and which cannot be guarded against by the ordinary exertions of human skill and prudence.").
(26) 46 U.S.C. [section] 30701 (LEXUS current through PL 115-57, 9/12/2017)(original version 46 U.S.C. [section] 1300 et. seq. see also The Harter Act, 46 U.S.C. [section]192 (repealed 2006).
(27) Id. (original version 46 U.S.C. [section]1301(e) et seq.).
(28) See e.g., Bill of Lading Terms and Conditions, ZlM.COM, http://www.zim.com/knowledgecenter/help/pages/bill-of-lading-terms-and-conditions.aspx (last visited Sept. 22, 2017).
(29) See J. Gerber & Co. v. SS SABINE HOWALDT, 437 F.2d 580, 588 (2d Cir. 1971); see also Demsey & Assoc. v. S.S. SEASTAR, 321 F. Supp. 663, 669 (S.D.N.Y. 1970).
(30) See Tupman Thurlow Co. v. SS CAP CASTILLO, 490 F.2d 302, 303 (2d Cir. 1974); see also Lekas Drivas, Inc. v. Goulandris, 306 F.2d 426, 426 (2d Cir. 1962); see also Mamiye Bros. v. Barber SS Lines, 241 F. Supp. 99, 111 (S.D.N.Y. 1965) aff d 360 F.2d 744 (2d Cir. 1966).
(31) 46 U.S.C. [section]1304(2)(a)--(q)(LEXIS PL 112-57, 9/12/2017).
(32) See Skandia Inc. Co. Ltd. v. Star Shipping A.S., 173 F. Supp. 2d 1228, 1240 (S.D. Ala. 2001). A limited exception to the effect of fault applies only circumstance when the "act of God" would have produced the same effect irrespective of the defendant's negligence, which than cannot be deemed the proximate cause of the damage at issue. (32) See also Warrior & Gulf Navigation Co. v. United States 864 F.2d 1550, 1553 (11th Cir. 1989) (citing Glisson v. City of Mobile, 5050 So. 2d 315, 319 (Ala. 1987).
(33) See Thyssen, Inc. v. S/S EUROUNITY, 21 F.3d 533, 539 (2d Cir. 1994); see also Bunge Corp. V. Freeport Marine Repair, Inc. 240 F.3d 919, 926 (11th Cir. 2001)(affirming rejection of defense when the district court found that reasonable preparations were available to defendant vessel owner to prevent damage).
(34) Mamiye Bros., 241 F. Supp. at 107.
(35) See Sidney Blumenthal & Co. v. Atl. Coast Line R. Co., 139 F.3d 288, 291 (2 (d) Cir.1943); see also Petition of the United States, 425 F.2d 991, 995 (5th Cir. 1970).
(36) Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197, 204 (S.D.N.Y. 2015). See also Plaintiff's Post-Trial Proposed Findings of Fact and Memorandum of Law at 10, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., Ltd., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478) (noting that the "Hurricane Preparedness SOP" did not address care of the cargo stowed in the terminal, made little reference to potential flooding, and had not been updated after 2003).
(37) Id. at 10-11.
(38) Id. at 11.
(39) Id. at 204.
(40) Id. at
(41) Lord & Taylor, 108 F. Supp. 3d. at 204.
(44) Id. at 205.
(45) Id. at 205-206.
(46) Lord & Taylor, 108 F. Supp. 3d. at 206; see also Trial Record Exhibit 107, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478); Plaintiffs Post-Trial Proposed Findings of Fact and Memorandum of Law at 13, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., Ltd., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478)..
(47) Lord & Taylor, 108 F. Supp. 3d. at 207.
(50) Id. at 208.
(51) See Trial Record Exhibit 73, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478) ; see also Defendant ZIM Integrated Shipping Service's Post-Trial Memorandum of Law at 20, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478).
(52) Lord & Taylor, 108 F. Supp. 3d. at 207.
(54) Id. at 208.
(55) Joint Pretrial Stipulations, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478).
(56) Lord & Taylor, 108 F. Supp. 3d. at 209; see also Trial Record Exhibit 93 at 148, Lord & Taylor LLC v. ZIM, Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478).
(57) Opinion and Order at 13-14, TGI Office Automation v. Nat'l Elec. Transit Corp., No. 13-3404 (E.D.N.Y. Sept. 14, 2015).
(58) Id. at 20.
(59) Id. at 14.
(60) Id. at 21.
(61) Id. at 9.
(62) Opinion and Order Id. at 21, TGI Office Automation v. Nat'l Elec. Transit Corp., No. 13-3404 (E.D.N.Y. Sept. 14, 2015). Notably, NET kept waist-high wading boots at the loading dock in the event that trucks had to be loaded or unloaded during such flooding.
(63) Id. at 9-10.
(64) Id. at 14-15.
(65) Id. at 10.
(67) Id. at 15. Opinion and Order at 14-15, TGI Office Automation v. Nat'l Elec. Transit Corp., No. 13-3404 (E.D.N.Y. Sept. 14, 2015).
(68) Id. at 15.
(70) Lord & Taylor v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197, 213-14 (S.D.N.Y. 2015).
(71) Id. Prior to trial, the parties agreed--based upon Term 3 of ZIM's Bill of Lading ("HIMALAYA Clause")--that NYTC was acting as the subcontractor for ZIM during the period the cargoes were at the terminal; as a result of that stipulation, the court dismissed NYCT as a defendant. Id. at 1, n.2. See also ZIM Integrated Shipping Services Bill of Lading Terms and Conditions, http://www.zim.com/knowledgecenter/help/pages/bill-of-lading-terms-and-conditions.aspx (last visited Jan. 28, 2018).
(72) Id. at 199.
(73) Id. (Lord & Taylor Experts: Captain Ivo Knobloch--Terminal Operations, Lee Branscome, Ph.D.--Meteorology; ZIM Experts: Donald Hamm--Terminal Operations, Austin Dooley, Ph.D.--Meteorology.).
(74) Lord & Taylor, 108 F. Supp. 3d at 215.
(75) Id. at 216.
(78) Id. at 218.
(79) Lord & Taylor, 108 F. Supp. 3d at 216-217.
(80) Id. at 217.
(82) Id. at 218.
(84) Lord & Taylor, 108 F. Supp. 3d at 220. Note: the court determined that waters from Bridge Creek likely contributed to inundation of the Terminal, but apparently rejected that as a significant factor in its analysis. Id.
(85) See id at 220-221.
(86) Id. at 220.
(87) Id. at 220-221. "Mean High Water" is the average of high tides in a specified observation / measurement point. Id. at 9.
(88) Lord & Taylor, 108 F. Supp. 3d at 221;, see also Plaintiffs Post-Trial Proposed Findings of Fact and Memorandum of Law at 5-9, Lord & Taylor LLC v. ZIM Integrated Shipping Servs., Ltd., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015) (No. 13 Civ. 3478).
(89) Id. at 229 (citing Mamiye Bros., 241 F. Supp. at 107 and Fischer v. S/Y NERAIDA, 508 F.3d 586, 594 (11th Cir. 2004).
(90) Id. at 221.
(91) Id. at 220.
(92) Id. at 221.
(93) ZIM controlled cargoes were loaded to M/V OOCL KOBE as the result of a Vessel Sharing Agreement, through which vessel operators, such as ZIM Integrated Shipping Services and Orient Overseas Container Line ("OOCL") exchange space on vessels in order to improve service to their customers.
(94) Lord & Taylor, 108 F. Supp. 3d at 222.
(95) I.e., whether ships in the area had sufficient capacity to accept additional cargoes and whether agreements / contracts could be worked out between NYCT and the various container vessel operators, cargo owners, and U.S. Customs official. Id. at 222-223.
(96) Id. at 223.
(99) Lord & Taylor, 108 F. Supp. 3d at 224.
(100) Id. at 224-225.
(101) Id. at 223-224.
(102) Id. at 226.
(104) Id. at 50-58. Lord & Taylor, 108 F. Supp. 3d at 231.
(105) TGI Office Automation v. Nat'l Elec. Transit Co., 13-CV-3404 (E.D.N.Y. Sept. 14, 2015) at 1-2.
(106) Id. at 2-3. Counsel for the Plaintiff in this matter had also represented Lord & Taylor in the case previously described. See supra, notes 65-100.
(107) In fact, both NET and TGI reference, and the court applied, caselaw arising from maritime "Act of God" cases, including the court's opinion in Lord & Taylor v. ZIM Integrated Shipping Services, Ltd. See e.g., Lord & Taylor LLC v. ZIM Integrated Shipping Servs., Ltd., 108 F. Supp. 3d. 197, 220 (S.D.N.Y. 2015).
(108) TGI Office Automation v. Nat'l Elec. Transit Co., 13-CV-3404 (E.D.N.Y. Sept. 14, 2015) at 31-32.
(109) Id. at 32.
(110) Id. at 34.
(111) Id. at 34.
(113) TGI Office Automation v. Nat'l Elec. Transit Co., 13-CV-3404 (E.D.N.Y. Sept. 14, 2015) at 35, (citing Lord & Taylor LLC v. ZIM Integrated Shipping Servs., 108 F. Supp. 3d. 197 (S.D.N.Y. 2015)).
(114) Id. at 8-9.
(115) Id. at 36.
(116) Id. at 36; see supra note 49.
(118) TGI Office Automation v. Nat'l Elec. Transit Co., No. 13-CV-3404 (E.D.N.Y. Sept. 14, 2015) at 36.
(120) Id. In fact, NET's operations expert testified that Joseph Holl "would have [had] no clue how to use [that information]" to assess the risk of flooding, even if he knew the elevation of NET's warehouse floor. Id.
(121) Id. at 37.
(122) Id. at 41.
(123) Id. at 41. TGI Office Automation v. Nat'l Elec. Transit Co., 13-CV-3404 (E.D.N.Y. Sept. 14, 2015) at 41. Id. at 41.
(124) Id. at 41-42. TGI's expert testified that "a reasonable warehouseman who sought the advice of a meteorologist on Thursday would have been informed that Sandy was likely to hit the New York/New Jersey area, while generating a large storm surge. Id., note 23.
(125) Id. at 42.
(126) Id. at 43-44.
(127) TGI Office Automation, 2015 WL 12559873, at 43.
(128) Holl admitted in his testimony that a forecasted surge of 4-8 feet in the Hackensack River would concern him and, that upon viewing the television coverage of Hurricane SANDY broadcast that Saturday afternoon, he realized the surge would impact the Meadowlands and might affect the warehouse. Id. at 43-44.
(129) Id. at 45.
(131) Id. at 46.
(132) TGI Office Automation, 2015 WL 12559873 at 46-47.
(133) Id. at 47.
(135) Lord and Taylor LLC, 2015 U.S. Dist. LEXIS 75868, at 4-6. Supra, note 10.
(136) See TGI Office Automation, 2015 WL 12559873, Supra, note 12.
(137) See Lord and Taylor LLC, 2015 U.S. Dist. LEXIS 75868, See supra, text accompanying notes 37-39, 43-46, 80-83, 86.
(138) Lord & Taylor L.L.C., 108 F. Supp. 3d at 220;; see supra, notes 81-83.
(139) Plaintiff's Post-Trial Findings of Fact and Memorandum of Law, Lord & Taylor LLC v. ZIM Integrated Shipping Services, Ltd. dated 11/18/14 at 5.
(140) Order, Lord & Taylor LLC v. ZIM Integrated Shipping Services, Ltd., 13 Civ. 3478 (S.D.N.Y.) June 6, 2016).
(141) Id. at 4-6, Supra, note 10.
(142) See TGI Office Automation, 2015 WL 12559873.
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|Author:||Newcomb, Mark E.|
|Publication:||Loyola Maritime Law Journal|
|Date:||Jan 1, 2018|
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