Court prevents intervention

Court prevents intervention    A subsidiary of Toshiba Corp. with its principal place of business in Texas, develops and sells large industrial generators. In December 2008 it shipped a steam generator for production of electricity from Japan to Houston on a Rickmers ship.
   The generator was sitting in a rail yard on Feb. 1, 2009, when a train carrying an oversized Caterpillar dump truck weighing about 270 tons struck and damaged the generator. The generator allegedly suffered about $2.6 million in damage and the Caterpillar equipment $1.1 million in damage.
   Toshiba and its insurer, NipponKoa, sued Port Terminal Railroad Association, which operates the railroads in the Port of Houston, saying it was negligent in operating the moving train in the yard where the generator was located.
   Caterpillar moved to intervene in the case, arguing it had a valid claim for cargo damage against the railroad that arose from the same occurrence, and that there were common factual and legal issues having to do with the collision and the railroad's alleged negligence.
   The motion was denied. (NipponKoa Ins. Co. Ltd. v. Port Terminal R.R. Association, S.D. Texas, No. H'10'0284. March 23.)
   Caterpillar had argued no other party could adequately represent its interests, and that it was not aware of any undue delay or prejudice to the adjudication of the parties' rights that would occur if it was permitted to intervene.
   Letting it intervene in the Toshiba case, Caterpillar argued, would prevent duplicative litigation, inconsistent rulings and unnecessary costs, conserve judicial resources, and promote comprehensive disposition of litigation for all of the parties and interests.
   The district court, quoting Deus v. Allstate Ins. Co., [15 F.3d 506, 525 (5th Cir.1994), cert. denied, 513 U.S. 1014 (1994)], said the purpose of intervention is to admit a person who is not an original party into a proceeding. The intervenor then becomes a party for the purpose of protecting some right or interest it claims would be affected by the proceeding.
   Intervention, the Deus decision said, 'is intended to prevent multiple lawsuits where common questions of law or fact are involved, but is not intended to allow the creation of whole new lawsuits by the intervenors.'
   The district court in this case said the railroad conceded the accident was its fault and that the focus was therefore on the extent and amount of damages to the cargo involved and on limitation of liability under the Carmack Amendment.
   Toshiba and Caterpillar had bills of lading from different railroads, BNSF and Norfolk Southern respectively, and Caterpillar's mining equipment was being shipped from Decatur, Ill., to Houston's Jacintoport Terminal for ultimate transshipment to Chile.
   As a result, the court said it would 'require different experts to testify to reasonable costs of repair.'
   It denied the motion, saying 'permitting intervention here would only serve to complicate this lawsuit without any added benefit.'

Firm found a carrier, not broker
   This dispute arose out of damages sustained to the nacelle of a wind turbine, the part that contains generation and control equipment.
   The nacelle was owned by Vestas, which hired DFDS Transport to move it from Denmark to the United States. DFDS issued a 'combined transport sea waybill.' A waybill typically functions in the same way as a bill of lading, except that it is non-negotiable.
   About one month prior to the nacelle's transport from Denmark, Vestas awarded a contract to Anderson Trucking Services (ATS) to transport or arrange the transport of wind turbine components from arrival ports to Tiskalaw. The contract award was sent to two companies related to ATS, ATS Logistics and ATS Specialized, but the court said the agreement between Vestas and ATS/ATS Logistics was 'somewhat murky and is at the center of many of the disputed contentions among the parties.'
   The court also said that ATS executives 'conflated the companies comprising the ATS organization and essentially represented to Vestas that 'ATS' could provide full 'turnkey' transportation services ' '
   The transportation manager at Vestas said it was not the company's policy to use brokers, and that ATS was awarded the contract because it presented itself as owning and controlling the specialized equipment needed for the project.
   ATS Logistics had a contract dating to January 2003 with Bay Machinery, and Bay was assigned to carry the nacelle from its port of arrival, Beaumont, Texas, to a wind farm project in Illinois.
   The nacelle fell off a truck in Arkansas on Nov. 21, 2004, sustaining about $606,000 worth of damage after parts were salvaged. Codan was Vestas' insurer.
   The judge hearing this case found liability was not governed by the Carriage of Goods by Sea Act, which creates negligence-based liability with a cap on damages, but the Carmack Amendment. (Bay Machinery Services v. Codan Forsikring, E.D. Arkansas. No. 08cv00368, No. 09cv00246. Feb. 16.)
   'The underlying purpose of the Carmack Amendment is to relieve cargo owners of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods,' the court noted.
   The court said the DFDS bill of lading was not a through bill of lading, as it named Beaumont as 'port of discharge,' and left 'place of delivery' blank on the form. Had the DFDS bill of lading intended to extend the transportation responsibility of DFDS inland, that blank would have been filled in, the court said.
   It also noted Bay was to be paid by ATS Logistics, not DFDS.
   The court also found that ATS Logistics was acting as a carrier, not a broker.
   'ATS Logistics committed to furnishing the vehicles and equipment necessary to physically carry the cargo, a commitment that far exceeds an agreement to act as a mere middleman or broker with respect to Vestas' wind turbine components,' it said.
   The court found Codan established a prima facie case of full liability under the Carmack Amendment and damages in the amount of $606,917.30 ' the total amount Codan paid to Vestas pursuant to its contract of insurance.
   The court found ATS was not entitled to a limitation of liability for damage, but that Bay Machinery was entitled to a limitation of liability of $100,000.