Mazda Motors of America, Inc. v. M/V Cougar Ace ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MAZDA MOTORS OF AMERICA, INC. 
and INDEMNITY INSURANCE COMPANY
No. 07-35787
OF NORTH AMERICA,
Plaintiffs-Appellants, D.C. No.
v.  CV-07-00062-KI/
HU
M/V COUGAR ACE, her engines,
OPINION
tackle and appurtenances, in rem,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Oregon
Garr M. King, District Judge, Presiding
Argued and Submitted
March 5, 2009—Portland, Oregon
Filed May 8, 2009
Before: Susan P. Graber, Raymond C. Fisher and Milan D.
Smith, Jr., Circuit Judges.
Opinion by Judge Fisher
5383
5386 MAZDA v. M/V COUGAR ACE
COUNSEL
Charles S. Jordan and Michelle Buhler (argued), Danielson
Harrigan Leyh & Tollefson LLP, Seattle, Washington, for the
plaintiffs-appellants.
Herbert H. Ray, Jr., Phillip R. Lempriere (argued) and Catha-
rine M. Morisset, Keesal, Young & Logan, Seattle, Washing-
ton, for the defendant-appellee.
OPINION
FISHER, Circuit Judge:
This in rem admiralty action requires us to decide whether
the defendant ocean vessel may invoke a forum selection
clause in the bills of lading governing ocean carriage on that
vessel. The ocean carrier that issued the bills of lading indis-
putably could have invoked the forum selection clause. Fur-
ther, the bills of lading include a “Himalaya clause,” whereby
anyone assisting in performing the carriage also benefits from
any contract provision designed to benefit the carrier.1 We
hold that, because the vessel assisted in performing the car-
riage, it is a Himalaya beneficiary that may invoke the forum
selection clause. The district court dismissed this case for
improper venue; we have jurisdiction under 28 U.S.C. § 1291,
and we affirm.
1
Such clauses are named for an English case about a vessel named “The
Himalaya.” See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 20 n.2 (2004).
MAZDA v. M/V COUGAR ACE 5387
I. Background
A shipment of automobiles bound for U.S. ports allegedly
sustained more than $40 million in water damage while cross-
ing the Pacific Ocean aboard the defendant vessel, the M/V
COUGAR ACE. Plaintiff Mazda Motors of America, Inc.,
consignee of the cargo, and its subrogated insurer, plaintiff
Indemnity Insurance Company of North America (collectively
“Mazda”), brought this admiralty action to recover for that
damage. The shipment was governed by six identical bills of
lading, which established the contract between Mazda’s affili-
ates in Asia and ocean carrier Mitsui O.S.K. Lines (“Mitsui”)
for transportation of the automobile cargo from Japan to vari-
ous U.S. ports. As carrier, Mitsui issued the bills of lading and
operated the defendant vessel, but the vessel’s owner is MOB
Cougar (Pte) Ltd. (“MOB Cougar”). Neither Mitsui nor MOB
Cougar is a party to this lawsuit, however, because Mazda’s
complaint names only the M/V COUGAR ACE in rem.
Mazda filed its action in federal district court in Oregon,
where the defendant vessel had been towed after it took on
water. MOB Cougar made a restricted appearance to claim the
vessel and defend the suit under Supplemental Rule E(8) of
the Federal Rules of Civil Procedure. MOB Cougar then
moved to dismiss under Federal Rule of Civil Procedure
12(b)(3) for improper venue based on the bills of lading’s
forum selection clause, which requires suits to be brought in
Tokyo, Japan. Mazda opposed the motion, arguing that the
forum selection clause, by its terms, allows only the carrier,
Mitsui, to invoke its protections. In other words, the forum
selection clause was intended to apply only to in personam
suits, not to in rem suits like this one. The district court
rejected Mazda’s contract construction arguments and dis-
missed the suit on two alternate grounds. First, the court
applied the ratification doctrine, concluding that the vessel
had ratified the bills of lading by transporting the cargo, enti-
tling it to contractual defenses in the bills of lading, including
the forum selection clause. Second, the court concluded that
5388 MAZDA v. M/V COUGAR ACE
the vessel could invoke the forum selection clause by virtue
of the Himalaya clause, which extends contractual defenses to
third parties whose services contribute to performing the con-
tract.
Mazda appeals. We review the district court’s dismissal de
novo because its interpretation of the forum selection clause
“d[id] not turn on the credibility of extrinsic evidence but on
an application of the principles of contract interpretation.”
Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009) (per
curiam). We affirm the district court’s dismissal under Rule
12(b)(3) because we agree that the Himalaya clause extends
to the vessel the benefit of the forum selection clause. We do
not reach MOB Cougar’s alternative argument that the vessel
may invoke the forum selection clause under the ratification
doctrine.
II. Analysis
A. The Contractual Terms
[1] Under the Carriage of Goods by Sea Act (“COGSA”),
46 U.S.C. § 30701, Notes Sec. 3(3) (2006) (Responsibilities
and liabilities of carrier and ship), any carrier bringing goods
to or from the United States in foreign trade must issue a bill
of lading to the shipper of those goods. A bill of lading “states
the terms of carriage, and serves as evidence of the contract
for carriage.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 18-19
(2004). Here, the parties dispute the appropriate construction
of several clauses in the bills of lading. Their primary dis-
agreement concerns the scope of the forum selection clause,
which states:
LAW AND JURISDICTION
The contract evidenced by or contained in this Bill
of Lading shall be governed by Japanese law except
as may be otherwise provided for herein.
MAZDA v. M/V COUGAR ACE 5389
Unless otherwise agreed, any action against the Car-
rier thereunder must be brought exclusively before
the Tokyo District Court in Japan. Any action by the
Carrier to enforce any provision of this Bill of Lad-
ing may be brought before any court of competent
jurisdiction at the option of the Carrier.
Mazda asserts that this clause applies by its terms only to suits
against the “Carrier.” Carrier is a defined term under the bills
of lading to mean “Mitsui O.S.K. Lines, Ltd., on whose behalf
this Bill of Lading has been issued.” The bills of lading also
define “Vessel” as the vessel named on the face of the bills
of lading; here, all six bills of lading name the M/V COU-
GAR ACE. Mazda argues that because this is an in rem suit
against the vessel, not an in personam suit against Mitsui, the
plain language of the forum selection clause makes it inappli-
cable here.
MOB Cougar advances three arguments responding to
Mazda’s reading of the forum selection clause. First, MOB
Cougar emphasizes that public policy favors the enforcement
of forum selection clauses in international shipping contracts,
even when plaintiffs would be forced to bring their claims
overseas. See, e.g., M/S Bremen v. Zapata Off-Shore Co., 407
U.S. 1, 12 (1972) (“The choice of that forum was made in an
arm’s-length negotiation . . . , and absent some compelling
and countervailing reason it should be honored by the parties
and enforced by the courts.”). This argument is premature.
Whether the forum selection clause is enforceable on public
policy grounds is not before us. Rather, Mazda’s argument is
that the vessel may not invoke the clause by the plain terms
of the bills of lading.
Second, MOB Cougar argues that Mazda’s reading of the
bills of lading would allow the vessel’s separate legal identity
to frustrate MOB Cougar’s contractual right to the Tokyo
forum. Mazda’s in rem suit is possible only because of the
“long-standing admiralty fiction that a vessel may be assumed
5390 MAZDA v. M/V COUGAR ACE
to be a person for the purpose of filing a lawsuit and enforcing
a judgment.” Cont’l Grain Co. v. The Barge FBL-585, 364
U.S. 19, 22-23 (1960). The purpose of this legal fiction is “to
allow actions against ships where a person owning the ship
could not be reached.” Id. at 23. MOB Cougar asserts that it
would be perverse to allow Mazda to defeat the forum selec-
tion clause by strategically filing suit in rem. See id. (“A fic-
tion born to provide convenient forums should not be
transferred into a weapon to defeat that very purpose.”).
[2] Third, MOB Cougar asserts the ratification doctrine.
The parties agree that, by transporting the cargo, the vessel
ratified the bills of lading — otherwise Mazda would have no
basis for holding the vessel liable in rem for damage to
Mazda’s automobiles. See Lykes Lines Ltd. v. M/V BBC Sea-
land, 398 F.3d 319, 326 (5th Cir. 2005)(“A contract of car-
riage was created by the acceptance of the cargo on board the
SEALAND for transport and the terms of the bill of lading,
even if not authorized by the vessel, set the terms of the
agreement.”). The parties reach different conclusions from the
vessel’s ratification, however. MOB Cougar successfully
argued to the district court that if the vessel can be liable
under the bills of lading, it should also benefit from the
defenses therein, particularly the forum selection clause.
Mazda counters that the bills of lading were ratified only as
they were written, with a forum selection clause that applies
only to in personam suits against the carrier.2
[3] We need not decide whether the forum selection clause,
operating alone, applies to this in rem suit notwithstanding the
absence of the term “Vessel” from that clause, because the
bills of lading also contain a broadly worded Himalaya
clause. MOB Cougar argues that the Himalaya clause enables
the defendant vessel to invoke the forum selection clause, and
2
Mazda makes a secondary ratification argument pertaining to whether
the vessel may benefit from the Himalaya clause, which we address
below.
MAZDA v. M/V COUGAR ACE 5391
we agree. Under the Himalaya clause, contractual provisions
benefitting the carrier also benefit certain other parties. As we
shall explain, the defendant vessel, which is considered a sep-
arate legal person for the purposes of this in rem suit, benefits
from any provision in favor of the carrier, including the forum
selection clause.
The Himalaya clause appears under the heading “SUB-
CONTRACTING AND INDEMNITY”:
The Merchant undertakes that no claim or allegation
shall be made against any servant, agent or Sub-
Contractor of the Carrier which imposes or attempts
to impose upon any of them, or upon any vessel
owned or operated by any of them, any liability
whatsoever in connection with the Goods, and, if any
such claim or allegation should nevertheless be
made, to indemnify the Carrier against all conse-
quences thereof. Without prejudice to the foregoing,
every such servant, agent and Sub-Contractor shall
have the benefit of all provisions herein benefiting
the Carrier as if such provisions were expressly for
their benefit; and in entering into this contract, the
Carrier, to the extent of those provisions, does so not
only on its own behalf, but also as agent and trustee
for such servants, agents and Sub-Contractors.
The bills of lading specifically define each of the terms begin-
ning with a capital letter. Mazda is the “Merchant” because it
is a consignee of the goods. As explained, “Carrier” refers to
Mitsui, who issued the bills of lading. “Sub-Contractor” is
defined broadly, and that broad definition is crucial to our
analysis.
“Sub-Contractor” includes owners and operators of
Vessels and space providers on Vessels (other than
the Carrier), stevedores, terminal and groupage oper-
ators, any independent contractor directly or indi-
5392 MAZDA v. M/V COUGAR ACE
rectly employed by the Carrier in performance of the
Carriage, their respective servants and agents, and
anyone assisting the performance of the Carriage.
(Emphasis added.) In turn, “ ‘Carriage’ means the whole or
any part of the operations and services undertaken by the Car-
rier in respect of the Goods under this Bill of Lading.”
[4] To decide whether the defendant vessel is covered by
the Himalaya clause, we apply general contract interpretation
principles, because a bill of lading is a contract like any other.
See Starrag v. Maersk, Inc., 486 F.3d 607, 616 (9th Cir.
2007). Particularly, the Supreme Court has rejected a rule of
narrow construction for Himalaya clauses, holding that the
plain language of such a clause is the best evidence of the par-
ties’ understanding of which other entities may invoke the
carrier’s contractual defenses. See Kirby, 543 U.S. at 31-32.
B. The Himalaya Clause’s Coverage
MOB Cougar argues that the defendant vessel M/V COU-
GAR ACE, being personified for the purposes of this in rem
suit, is an “agent, servant or Sub-Contractor” of the “Carrier”
under the plain meaning of the Himalaya clause. Given the
definition of Sub-Contractor under the bills of lading, we
agree. The defendant vessel is therefore entitled to invoke the
forum selection clause as a defense that would be available to
the Carrier.
[5] Although we are most concerned with the second sen-
tence of the Himalaya clause, which extends the Carrier’s
contractual defenses to Sub-Contractors, we begin with the
first sentence because it sets out the types of claims to which
the clause applies. The first sentence purports to forbid claims
against any “servant, agent or Sub-Contractor” that would
impose liability on them “or upon any vessel owned or oper-
ated by any of them.” (Emphasis added.) MOB Cougar con-
ceded at oral argument that this complete disclaimer of the
MAZDA v. M/V COUGAR ACE 5393
vessel’s liability is unenforceable under COGSA. See 46
U.S.C. § 30701 Notes Sec. 3(8) (“Any clause . . . relieving the
carrier or the ship from liability for loss or damage to or in
connection with the goods arising from negligence, fault, or
failure in the duties and obligations provided in this section
. . . shall be null and void and of no effect.”). Even if substan-
tively unenforceable, however, the first sentence leaves no
doubt that the Himalaya clause applies to suits that would
impose liability on a vessel, such as the in rem suit here. The
substance of the Himalaya clause is found in the second sen-
tence, which states that all provisions benefitting the Carrier
also benefit Sub-Contractors “as if such provisions were
expressly for their benefit.” By agreement, Sub-Contractor
includes “anyone assisting the performance of the Carriage.”
The parties’ use of inclusive language — “anyone” — unam-
biguously evidences their intent to extend provisions benefit-
ting the Carrier to a wide group of entities. See Kirby, 543
U.S. at 31-32 (noting the expansive plain meaning of “any”).
Applying this definition, we hold the defendant vessel is a
Sub-Contractor because it plainly assisted the performance of
the Carriage; as the carrying vessel, it was indispensable to
that performance. Mazda does not dispute that the forum
selection clause is a “provision[ ] . . . benefitting the Carrier,”
so we see no reason why the forum selection clause should
not also benefit the defendant vessel here.
[6] Our cases interpreting Himalaya clauses support this
reading. To decide whether an entity benefits from a Hima-
laya clause, “the proper test is to consider ‘the nature of the
services performed compared to the carrier’s responsibility
under the carriage contract.’ ” Akiyama Corp. of Am. v. M.V.
Hanjin Marseilles, 162 F.3d 571, 574 (9th Cir. 1998) (quoting
Taisho Marine & Fire Ins. Co. v. Vessel Gladiolus, 762 F.2d
1364, 1367 (9th Cir. 1985)). The Himalaya clause in that case
also applied to every “servant, agent and sub-contractor,” and
the clause’s language extending defenses to other parties was
identical to the clause here. See id. at 573. We held that a ter-
minal operator and a stevedore fell under the Himalaya clause
5394 MAZDA v. M/V COUGAR ACE
because “subcontractor” included terminal operators and ste-
vedores by definition and because the services those parties
provided were the same as the services the carrier promised
to perform. See id. at 574. The corresponding defined term
here is “Sub-Contractor,” which is defined broadly enough to
include the defendant vessel. Further, the ocean carriage the
vessel provided was precisely the same as Mitsui’s chief
responsibility under the bills of lading. Therefore, the COU-
GAR ACE, not unlike a stevedore, is “directly related to the
carrier’s responsibilities under the carriage contract” and can
benefit from the Himalaya clause. Mori Seiki USA, Inc. v.
M.V. Alligator Triumph, 990 F.2d 444, 450 (9th Cir. 1993).
[7] The Supreme Court’s holding in Kirby also supports our
interpretation of the bills of lading. The Himalaya clause in
Kirby also extended contractual protections to any entity
“whose services contribute to performing the contract.” Kirby,
543 U.S. at 31. The Court held this expansive language must
include a land carrier because the contract called for transpor-
tation to an inland destination in Alabama, 366 miles from the
port. “Thus, the parties must have anticipated that a land carri-
er’s services would be necessary for the contract’s perfor-
mance.” Id. at 32. Here, the defendant vessel’s services were
even more obviously necessary for completion of the carriage;
the parties must have anticipated that the vessel’s services
would be necessary for performing a contract for ocean car-
riage.
Mazda insists this reading of the Himalaya clause subverts
the parties’ intent because the Himalaya clause does not
include “Vessel” alongside “servant, agent or Sub-
Contractor.” Citing a district court case, Mazda urges a famil-
iar canon of construction: that the “conspicuous omission” of
a defined entity from “the exhaustive list of third parties to
whom the ocean carrier’s protections extend speaks as loudly
as an explicit exclusion.” Sun-Bar Materials Int’l, Inc. v. Am.
President Lines, Ltd., 1993 A.M.C. 2639, 2643 (N.D. Cal.
1993). We reject Mazda’s proposed construction because the
MAZDA v. M/V COUGAR ACE 5395
Himalaya clause and its incorporated definition of Sub-
Contractor are unambiguous. See Inst. of London Underwrit-
ers v. Sea-Land Serv., Inc., 881 F.2d 761, 767 (9th Cir. 1989)
(rejecting maritime plaintiff’s canon of construction because
the Himalaya clause was unambiguous). Under the circum-
stances, “[t]here is no reason to contravene the clause’s obvi-
ous meaning.” Kirby, 543 U.S. at 31-32. Moreover, refusing
to apply the Himalaya clause to the defendant vessel because
the otherwise unambiguous clause does not specifically name
the “Vessel” would contravene Kirby’s rule that Himalaya
clauses need not be drafted with “linguistic specificity.”3 Id.Mazda also stresses that neither party cited any case in
which a vessel sued in rem was deemed a Himalaya benefi-
ciary. This may be a function of the relatively recent rule of
interpreting Himalaya clauses without regard to special rules
of linguistic specificity. See Kirby, 543 U.S. at 30-31. Pre-
Kirby, we strictly construed Himalaya clauses and required a
“clear and unequivocal intent” to extend the carrier’s contrac-
tual defenses to a readily identifiable entity. Taisho, 762 F.2d
at 1367. Now, absent any special rule of strict construction,
we enforce the bills of lading as drafted and in accordance
with their inclusive list of Himalaya beneficiaries. Further, the
ultimate result here — that the defendant vessel may invoke
the forum selection clause — is not unprecedented. See Kukje
Hwajae Ins. Co. v. M/V Hyundai Liberty, 408 F.3d 1250,
3
We reject Mazda’s related argument that deeming the defendant vessel
a “Sub-Contractor” under the bills of lading would render other terms in
the bills of lading meaningless. Mazda argues that the Himalaya clause
disclaims Sub-Contractor liability, so if the Vessel is also a Sub-
Contractor, other references in the bills of lading to the Vessel’s liability
would be nonsensical. Mazda is mistaken. As is clear from the second sen-
tence of the Himalaya clause and MOB Cougar’s explanation at oral argu-
ment, the parties contemplated that the liability disclaimer would be
unenforceable and provided for that contingency. Thus, references to the
Vessel’s liability are not meaningless in light of the probability that courts
applying COGSA would refuse to enforce the Himalaya clause’s dis-
claimer. See 46 U.S.C. § 30701 Notes Sec. 3(8).
5396 MAZDA v. M/V COUGAR ACE
1253, 1255 (9th Cir. 2005) (enforcing a forum selection
clause that applied to “any and all action concerning custody
or carriage” (emphasis omitted)); Fireman’s Fund Ins. Co. v.
M.V. DSR Atl., 131 F.3d 1336, 1337 (9th Cir. 1997) (enforc-
ing a forum selection clause that applied to “any claim or dis-
pute”).4
Finally, Mazda argues that the vessel cannot be a Himalaya
beneficiary because Himalaya clauses are “used to extend a
carrier’s defenses and liability limitations to certain third par-
ties performing services on its behalf.” Mori Seiki, 990 F.2d
at 450 (emphasis added). Here, the parties agree that the ves-
sel ratified the bills of lading by transporting the cargo, which
Mazda argues made the vessel a first party to those bills of
lading. The district court, in dismissing this suit, also noted
the logical difficulty in the vessel’s status as both a first and
third party to the bills of lading.5
[8] We disagree that merely transporting the cargo made
the vessel a party to the bills of lading. At oral argument,
Mazda cited the Fifth Circuit case Lykes Lines, 398 F.3d at
325, which recites the general ratification rule.
When cargo has been stowed on board the vessel and
bills of lading are issued, the bills of lading become
binding contracts on the vessel in rem upon the sail-
ing of the vessel with the cargo. The sailing of the
4
Our holding is also consistent with the strong judicial preference for
enforcement of forum selection clauses in admiralty cases. See, e.g., M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972) (“[T]he forum
selection clause should control absent a strong showing that it should be
set aside.”); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991)
(upholding a forum selection clause in a passenger cruise line’s ticket);
Fireman’s Fund, 131 F.3d at 1340.
5
Because we affirm on the basis of the Himalaya clause, we do not
reach MOB Cougar’s separate ratification argument — that by accepting
the cargo, the defendant vessel was entitled to invoke any defense in the
bills of lading, regardless of the Himalaya clause.
MAZDA v. M/V COUGAR ACE 5397
vessel constitutes a ratification of the bills of lading.
This action gives rise to a maritime lien which is the
basis of the in rem recovery.
Id. (quoting Cactus Pipe & Supply v. M/V Montmartre, 756
F.2d 1103, 1113 (5th Cir. 1985) (citations omitted)). We have
found no Ninth Circuit case directly mentioning the ratifica-
tion doctrine, but in All Pacific Trading, Inc. v. Vessel M/V
Hanjin Yosu, 7 F.3d 1427, 1433 (9th Cir. 1993), we also held
that “[w]hen a cargo owner has a direct contractual relation-
ship with the operator of a vessel, the cargo owner has a lien
on the vessel for any injury caused by the operator’s lack of
due diligence.” See also Osaka Shosen Kaisha v. Pac. Export
Lumber Co., 260 U.S. 490, 499 (1923). Thus, Mazda is cor-
rect that ratification binds the vessel to the terms in the bills
of lading, but not because the vessel somehow becomes a
party. Rather, the cargo owner’s basis for in rem recovery is
a maritime lien, a security interest arising from the transporta-
tion of goods. See 2 Benedict on Admiralty § 43, at 3-48-49
& n.12 (7th ed. rev. 2008) (“[I]t is not the existence of a law-
ful contract of affreightment but the transport of goods under
it that marks the commencement of the lien.” (citing Osaka
Shosen Kaisha, 260 U.S. 490)). The defendant vessel’s ratifi-
cation is therefore no obstacle to its status as a Himalaya ben-
eficiary.
III. Conclusion
[9] In sum, we uphold the contracting parties’ intent as
expressed in the bills of lading and allow the defendant vessel
to invoke the forum selection clause as a Himalaya benefi-
ciary. We must give effect to the contracting parties’ use of
inclusive language to benefit “anyone assisting the perfor-
mance of the Carriage,” so we reject Mazda’s proposed con-
struction, which would require the “Vessel” to be named in
the Himalaya clause. See Kirby, 543 U.S. at 32 (citing Green
v. Biddle, 21 U.S. (8 Wheat.) 1, 89-90 (1823)). The district
court therefore correctly dismissed Mazda’s in rem suit
5398 MAZDA v. M/V COUGAR ACE
because the defendant vessel could invoke the Tokyo forum
selection clause as though it were drafted for its benefit.
AFFIRMED.