Rang Dong Joint Stock Co. v. J.F. Hillebrand USA, Inc. ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | Rang Dong Joint Stock Company, No. 2:18-cv-03195-KJM-KJN 12 Plaintiff, ORDER 13 v. 14 J.F. Hillebrand USA, Inc., et al., 1S Defendants. 16 17 Plaintiff Rang Dong Joint Stock Company, doing business as Rang Dong Winery, sued 18 | defendants J.F. Hillebrand USA, Inc. and Blue Eagle Consolidation Services for damage to cargo 19 | carried by sea. Blue Eagle, citing a forum-selection clause, moves to dismiss. As explained 20 | below, the courts grants the motion. 21 | I. BACKGROUND 22 A. The Defendants 23 Defendants Blue Eagle and Hillebrand are both logistics companies that share a common 24 | parent company. See Higgins Decl. {fj 2-4, Mot. Dismiss, ECF No. 50-3; Gilbertson Decl. □□□ 3- 25 | 4, Mot. Dismiss, ECF No. 50-2. Blue Eagle is a German company; it does not have offices or 26 | employees in the United States. Higgins Decl. § 5. But it is registered with the United States 1 Federal Maritime Commission (FMC) as a Non-Vessel-Operating Common Carrier (NVOCC).1 2 Id. ¶ 6. In its capacity as a foreign-based NVOCC, Blue Eagle arranges and coordinates 3 international transportation services. Id. ¶¶ 3–4. Blue Eagle and Hillebrand coordinate in 4 providing these services. Id. ¶ 14. 5 B. Factual Background 6 In early 2018, Rang Dong contracted with Blue Eagle and Hillebrand to ship three 7 containers of Rang Dong’s wine to Vietnam. See generally Bill of Lading, Second Am. Compl. 8 (SAC) Ex. B, ECF No. 47-1. Although the parties disagree on numerous details regarding the 9 contracting process and the contract itself, a few things are undisputed. On January 8, 2018, 10 Mailynh Phan, Rang Dong’s then-managing director responsible for arranging the shipment of its 11 wine to Vietnam, emailed Joseph Higgins, Hillebrand’s then-pricing coordinator. See Phan Decl. 12 ¶¶ 2–3, Opp’n, ECF No. 55-1; Emails at 13–14, Higgins Decl. Ex. A, ECF No. 50-3. Ms. Phan 13 requested “the export schedule from Oakland to Cat Lai Terminal in Ho Chi Minh City for the 14 last week of January and the first week of February.” Emails at 14. Mr. Higgins promptly 15 responded with three vessels departing between January 22 and March 5. Id. at 11–12. 16 The following day, on January 9, 2018, after a few emails discussing pricing, Mr. Higgins 17 sent Ms. Phan a Blue Eagle Negotiable Rate Arrangement (NRA) and requested that she “let us 18 know how you’d like to proceed.” Id. at 8; NRA # SUSS014887, Higgins Decl. Ex. B, ECF No. 19 50-3. Importantly, the NRA provides that “[t]o memorialize your acceptance of this NRA please 20 confirm by e-mail referencing [the] NRA [number] . . . .” Higgins Decl. Ex. B. The NRA 21 number was SUSS014887. Id. Ms. Phan emailed Mr. Higgins on January 16, 2018, specifically 22 referencing NRA number SUSS014887 in the subject line. See Emails at 19. In that email, 23 Ms. Phan “reserve[d]” three forty-foot containers on one of the vessels referenced in Mr. Higgins’ 24 January 8 email; the vessel was scheduled to depart on February 10, 2018. Id. 25 ///// 1 An NVOCC is defined as “a common carrier that does not operate the vessels by which the ocean transportation is provided,” and “is a shipper in its relationship with an ocean common carrier.” 46 U.S.C. § 40102 (17). 1 The NRA provides that “[a]cceptance of this NRA proposal will bind the parties to Blue 2 Eagle Consolidation[] Services rules tariff, available on line [sic] at 3 http://rates.descartes.com/pta/DxiServlet.WsServlet/login.” Higgins Decl. Ex. B. The Blue Eagle 4 rules tariff referenced in the NRA contains a forum-selection clause, which states in pertinent part 5 that “[t]he German courts shall have exclusive jurisdiction to hear and determine any dispute 6 arising from or in relation to these conditions and any contract or agreement subject thereto . . . .” 7 Blue Eagle Tariff at 25–26, Gilbertson Decl. Ex. A, ECF No. 50-2. 8 Ultimately, Rang Dong did not ship its three forty-foot containers on the vessel departing 9 on February 10, 2018; the containers shipped on a different vessel ten days later, but the rates 10 were identical to those provided in the NRA. See generally Bill of Lading; Invoice, SAC Ex. A, 11 ECF No. 47-1. Rang Dong alleges the wine was delivered to the wrong port and left in the sun 12 for eight days, which caused “extensive[] damage.” SAC ¶¶ 14–16. Specifically, Rang Dong 13 alleges it suffered more than $500,000 in damages. Id. ¶ 20. 14 C. Procedural Background 15 Rang Dong sued Hillebrand USA and Blue Eagle on December 12, 2018. See generally 16 Compl., ECF No. 1. The operative complaint alleges damages under the Carriage of Goods by Sea 17 Act, false bill of lading, and deviation claims against Hillebrand and Blue Eagle. See generally 18 SAC. It alleges a negligence claim in the alternative against Hillebrand. Id. at 6. Before Rang 19 Dong could serve Blue Eagle, on January 17, 2019, Hillebrand moved to dismiss Rang Dong’s 20 complaint under Rule 12(b)(6). See First Mot. Dismiss, ECF No. 9. The court granted in part and 21 denied in part the motion. See generally Mot. Dismiss Order, ECF No. 23. In its order, the court 22 declined to consider “at [that] stage of [the] proceedings” Hillebrand’s arguments that Rang Dong 23 was provided with and therefore bound by the forum-selection clause. Id. at 11. 24 Blue Eagle, now served, moves to dismiss. See Mot. Dismiss, ECF No. 50. The matter is 25 fully briefed and the court submitted it without oral argument. Opp’n, ECF No. 55; Reply, ECF 26 No. 58; Min. Order, ECF No. 56. 27 ///// 1 II. LEGAL STANDARD 2 Blue Eagle moves to dismiss this case on the ground that the forum-selection clause 3 renders venue “improper” in the Eastern District of California. See Mot. Dismiss at 6, 10–11 4 (citing Fed. R. Civ. P. 12(b)(3)). A forum-selection clause cannot render venue “improper” under 5 Rule 12(b)(3), however, because “[w]hether venue is . . . ‘improper’ depends exclusively on 6 whether the court . . . satisfies the requirement of federal venue laws, and those provisions say 7 nothing about a forum-selection clause.” Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of 8 Tex., 571 U.S. 49, 55 (2013). Blue Eagle does not allege that federal venue laws are not satisfied 9 here. Thus, “the appropriate way to enforce a forum-selection clause pointing to a state or foreign 10 forum is through the doctrine of forum non conveniens.” Gemini Techs., Inc. v. Smith & Wesson 11 Corp., 931 F.3d 911, 913 (9th Cir. 2019) (quoting Atl. Marine, 571 U.S. at 60). 12 Because the object of Blue Eagle’s motion is to enforce the parties' forum-selection 13 clause, the court construes Blue Eagle’s motion as a motion to dismiss for forum non conveniens, 14 as it may do in these circumstances. Cf. LeBlanc v. C.R. England, Inc., 961 F. Supp. 2d 819, 827 15 (N.D. Tex. 2013) (“[T]he moving party’s choice of procedural mechanisms — Rule 12(b)(3) or 16 § 1404(a) — does not dictate the court’s choice of analytical tools.”) (citing 5B Wright & Miller, 17 Federal Practice & Procedure § 1352, p. 131 (3d ed. Supp. 2013)). The court has sufficient 18 information to resolve the motion so construed. 19 III. DISCUSSION 20 Rang Dong focuses exclusively on the applicability of the forum-selection clause, 21 apparently conceding that dismissal is appropriate if it agreed to the forum-selection clause. See 22 Atl. Marine, 571 U.S. at 63 (“[A] valid forum-selection clause [should be] given controlling 23 weight in all but the most exceptional cases.” (citation omitted)). Specifically, Rang Dong argues 24 it never entered a contract containing a forum-selection clause because: (1) the bill of lading does 25 not include the forum-selection clause; (2) it never agreed to the NRA; (3) the NRA did not 26 comply with FMC regulations and cannot be considered an offer to contract; and (4) even if the 27 forum-selection clause is valid and applicable, Blue Eagle failed to “reasonably communicate” it 28 to Rang Dong. See generally Opp’n. Blue Eagle disagrees on all four counts. See generally 1 Reply. As the party invoking the forum-selection clause, Blue Eagle “bear[s] the burden of 2 demonstrating the . . . inclusion of the forum selection clause in [the] contract.” Morgan Tire of 3 Sac., Inc. v. Goodyear Tire & Rubber Co., 60 F. Supp. 3d 1109, 1113 (E.D. Cal. 2014) (citations 4 omitted). The court reviews each of Rang Dong’s arguments in turn. 5 A. Whether the Bill of Lading Includes the Forum-Selection Clause 6 Rang Dong argues the bill of lading is comprised exclusively of a two-page document that 7 does not contain Blue Eagle’s terms and conditions and does not advise Rang Dong of terms and 8 conditions outside of the bill of lading. See Opp’n at 11–12. Rang Dong acknowledges the 9 disclaimer appearing on the bottom of the first page advising that the bill of lading is “[s]ubject 10 always to the exceptions, limitations, conditions and liberties, extract of which are set out on the 11 reverse side hereof, to which the merchant agrees by accepting the [bill of lading].” Id. at 11. 12 But Rang Dong argues the “exceptions, limitations, conditions and liberties” set out on the 13 “reverse side” of the bill of lading refers to the following language: “THESE COMMODITIES, 14 TECHNOLOGY, OR SOFTWARE WERE EXPORTED FROM THE UNITED STATES IN 15 ACCORDANCE WITH THE EXPORT ADMINISTRATION REGULATIONS. DIVERSION 16 CONTRARY TO U.S. LAW IS PROHIBITED.” Id. Thus, because “[n]othing in the Bill of 17 Lading advises [Rang Dong] that there are additional ‘exceptions, limitations, conditions and 18 liberties’ outside of the language,” Rang Dong argues the bill of lading does not include a forum- 19 selection clause. Id. at 11–12. 20 Blue Eagle disagrees, first emphasizing Rang Dong’s lack of evidence supporting its 21 claim that the bill of lading did not include a forum-selection clause. See, e.g., Reply at 6 (“[N]ot 22 once has Rang Dong provided any evidence to support its claim that the second page of Exhibit B 23 is the ‘reverse’ side of the front of the Blue Eagle bill of lading, as opposed to another document 24 or even an additional portion of the front of the bill of lading.”). However it is Blue Eagle’s, not 25 Rang Dong’s, burden to demonstrate whether the bill of lading incorporates the forum-selection 26 clause at issue here. See Morgan Tire, 60 F. Supp. 3d at 1113. 27 To meet that burden, Blue Eagle submits the declaration of Andrew Gilbertson. 28 Mr. Gilbertson is Blue Eagle’s designated FMC contact, and he was Hillebrand’s Director of 1 Operations during the events at issue here. See Gilbertson Decl. ¶¶ 1, 13. In his capacity as 2 Hillebrand’s Director of Operations, Mr. Gilbertson was responsible for preparing, posting, and 3 maintaining the tariffs required by the FMC. See id. ¶ 14. He notes that both U.S. law and FMC 4 regulations require Blue Eagle to publish its terms and conditions in its rules tariff. Id. ¶ 25. 5 Accordingly, Blue Eagle’s bill of lading terms and conditions, which it adopted on February 15, 6 2011 and were in effect when Rang Dong’s shipment was booked and transported, are “published 7 as Rule 8 of the Blue Eagle Rules tariff.” Id. ¶ 26. Mr. Gilbertson “personally prepared and 8 arranged for the posting of these terms in the Blue Eagle tariff.” Id. Importantly, “[t]he Blue 9 Eagle bill of lading terms and conditions published in Rule 8 of the Blue Eagle Rules Tariff are 10 the same terms and conditions that are published on the reverse side of the Blue Eagle bill of 11 lading.” Id. ¶ 27. 12 Although Mr. Gilbertson stops short of saying the Blue Eagle terms and conditions are 13 published on the reverse side of the bill of lading Blue Eagle provided to Rang Dong, his 14 statement accords with the court’s understanding of conventions surrounding bills of lading. See 15 Kishor Bhatt, Bills of Lading: Purpose; Utility; Legality Explained (2021) (describing difference 16 between short-form bill of lading, which “does not bear the terms and conditions of carriage on 17 the reverse” side, and long-form bills of lading, where “the terms and conditions of carriage are 18 printed on the reverse (back) of the bill of lading”); id. (noting long-form bills of lading are 19 “commonly used in international shipping”); Estes Express Lines v. Whatman Hardwoods, No. 20 19-cv-278, 2019 WL 2273847, at *2 n.2 (E.D. Va. May 28, 2019) (“Bills of lading generally fall 21 into two categories: long-form bills of lading that expressly contain all the terms of the 22 transportation contract and short-form bills of lading that do not expressly contain all the terms of 23 the transportation contract but incorporate them by reference to another document.” (citing 24 Black’s Law Dictionary (10th ed. 2014)). Rang Dong’s position that the two short, all-capitalized 25 sentences representing that shipped goods are exported according to U.S. export laws comprise 26 the “exceptions, limitations, conditions and liberties” applicable here cannot be squared with the 27 court’s understanding of bills of lading. That said, although Blue Eagle offers the more plausible 28 ///// 1 explanation, an evidentiary hearing would be necessary to resolve this issue in full and therefore 2 the court declines to decide the matter on these grounds here. 3 B. Whether Rang Dong Agreed to the NRA 4 Rang Dong argues it never agreed to the NRA Mr. Higgins sent Ms. Phan on January 9, 5 2018. See Opp’n at 12–15. The court disagrees. After discussing pricing with Ms. Phan, 6 Mr. Higgins sent Ms. Phan NRA number SUSS014887 and requested that she “let us know how 7 you’d like to proceed.” Emails at 8; Higgins Decl. Ex. B. The NRA stated: 8 Important Information regarding this NRA 9 This document constitutes a NVO Rate Agreement (NRA) between 10 the NRA shipper and Blue Eagle Consolidation Services, pursuant to 11 46 CFR 532. 12 . . . 13 Acceptance of this NRA proposal will bind the parties to Blue Eagle 14 Consolidations Services rules tariff, available on line [sic] at 15 http://rates.descartes.com/pta/DxiServlet.WsServlet/login[.] 16 Important steps to activate this NRA 17 To memorialize your acceptance of this NRA, please confirm by e- 18 mail referencing NRA #, or return a signed copy of this document, to 19 your JF Hillebrand contract. 20 Higgins Decl. Ex. B (emphasis added). Seven days later, on January 16, 2018, Ms. Phan emailed 21 Mr. Higgins, specifically referencing NRA number “SUSS014887.” Emails at 19. In the email, 22 Ms. Phan “reserve[d]” three forty-foot containers on the “MOL Contribution,” one of the vessels 23 referenced in Mr. Higgins’ January 8 email. Id. Put simply, the NRA directed Rang Dong to 24 “referenc[e]” the NRA number in an email if it wanted to accept the NRA. See Higgins Decl. Ex. 25 B. Ms. Phan, on behalf of Rang Dong, did exactly that, which “b[ou]nd the parties to Blue 26 Eagle[’s] rules tariff,” including the forum-selection clause. 27 Rang Dong’s arguments to the contrary are unpersuasive. Rang Dong first argues that the 28 “major problem” with Blue Eagle’s argument is that Blue Eagle did not comply with federal 29 regulations for NRAs for NVOCCs like Blue Eagle. See Opp’n at 12–15 (citing 46 C.F.R. 1 § 532.5(c) (2018) (listing three ways a shipper can agree to NRA)). But, as Blue Eagle points 2 out, Rang Dong’s argument is based on FMC regulations adopted more than six months after the 3 shipment in this case. See Reply at 10–11 (citing 46 C.F.R. § 532.5 (2018)). Blue Eagle’s NRA 4 complied with FMC regulations in effect in February 2018. See Reply at 10–12 (citing 46 C.F.R. 5 § 532.5 (2012)). And in any event, the NRA also complies with the updated FMC regulations 6 that Rang Dong cites. See 46 C.F.R. § 532.5(c)(2) (2018) (noting a shipper agrees to the NRA if 7 it sends the NVOCC an email indicating acceptance of the NRA terms). 8 Rang Dong next argues it did not agree to the NRA because Ms. Phan only “reserved,” 9 but did not “book,” a shipment. See Opp’n at 14. In support, Rang Dong offers Ms. Phan’s 10 declaration. She states: 11 In my January 16, 2018 email to Mr. Higgins, it was not my intent to 12 enter into any contract or book any shipment with J.F. Hillenbrand 13 [sic]. I could not have entered into any agreement as Rang Dong 14 Winery’s wine had not yet been bottled at that point. Thus, as of 15 January 16, 2018, I did not know whether there would even be a 16 shipment at that time or what the size of the shipment would be. My 17 only purpose in sending the January 16, 2018 email was to reserve a 18 spot on the MOL Contribution in case the wine was completed in 19 time. 20 Phan Decl. ¶ 5. The court is not persuaded. In Ms. Phan’s January 16 email to Mr. Higgins, 21 Ms. Phan “reserve[s]” three forty-foot containers and then notes that Rang Dong was waiting for 22 “a” wine to “stabilize to bottle for the export.” Emails at 19. She then says if that wine did not 23 stabilize in time, she would have to reduce the shipment from three forty-foot containers to two 24 forty-foot containers and one twenty-foot container. Id. In other words, Ms. Phan knew Rang 25 Dong would send most of its wine; the only uncertainty concerned whether one-sixth of the wine 26 would be ready in time. If it was not ready, then the “shipment would be reduced” to two forty- 27 foot containers and one twenty-foot container. Id. Ms. Phan’s January 16 email contradicts her 28 claim that her “only purpose” in sending the email was to reserve a spot on the vessel “in case the 29 wine was completed in time.” Id.; see also Opp’n at 14 (“It actually made no sense for [Rang 30 Dong] to ‘book’ a shipment . . . [because Rang Dong] was still in the process of bottling its wine 31 as of January 16, 2018.”). 1 Rang Dong’s final argument is that, because it ultimately shipped its wine on a different 2 vessel ten days after its originally scheduled shipment, “the shipment . . . at issue in this lawsuit is 3 a different shipment than the shipment discussed under the NRA.” Opp’n at 14. Again, the court 4 is not persuaded by this argument. The NRA does not contain the specific vessel name or date on 5 which Rang Dong would ship its goods. Nor could it: Blue Eagle sent the NRA to Rang Dong 6 before it committed to a date or vessel. The NRA does, however, identify Rang Dong as shipping 7 wine in forty-foot containers, see Higgins Decl. Ex. B, which is exactly what Rang Dong did, see 8 Bill of Lading. More importantly, the NRA provides ten rate quotes for the shipment of Rang 9 Dong’s wine, which are the same rates set forth in Rang Dong’s February 20 invoice. Compare 10 Higgins Decl. Ex. B at 17, with Invoice at 2. Finally, the NRA provides a “time range”: 11 March 31, 2018. Higgins Decl. Ex. B. Rang Dong’s cargo reached its destination before that 12 date. See SAC ¶ 15. The court finds Rang Dong agreed to the NRA. 13 C. Whether the NRA Complied With FMC Regulations and Can be Considered 14 an Offer to Contract 15 Rang Dong argues the NRA was illegal for two additional reasons. First, Rang Dong 16 argues Blue Eagle did not comply with 46 C.F.R § 532.4, which provides “[b]efore entering into 17 NRAs under this Part, an NVOCC must provide electronic access to its rules tariffs to the public 18 free of charge.” Opp’n at 15. Rang Dong claims that the third party through whom Blue Eagle 19 provides its rules tariff, Descartes, requires users to pay a fee to access the website. Id.; Tran 20 Decl. ¶ 2, Opp’n, ECF No. 55-3 (stating and attaching exhibit claiming the Descartes website 21 requires users to pay a fee). This is inaccurate. The rates registration page on the Descartes 22 website provides various registration options to recover tariffs for NVOCCs. See Descartes 23 Registration Form, Danas Decl. Ex. B, ECF No. 58-1. The fourth option is “$0 per month, as 24 required by Part 531.4 and 532.4 of the CFR. (Access to licensed NVOCC governing rules that 25 utilize NRA and/or NSAs.).” Id.; see also Danas Decl. ¶ 4. Blue Eagle, through Descartes, 26 provided free electronic access to its rules tariffs in January 2018. See Gilbertson Decl. ¶¶ 17–19. 27 Second, Rang Dong argues the NRA is not an offer to contract because it does not contain 28 all material terms. See Opp’n at 16–17. Here, Rang Dong primarily argues that the NRA’s listed 1 final destination—Ho Chi Minh, VT, rather than Cat Lai Terminal—is “inaccurate.” Id. But this 2 argument assumes Rang Dong’s desired conclusion: Rang Dong argues the parties agreed to 3 deliver its cargo to Cat Lai Terminal specifically, whereas Blue Eagle maintains it agreed to 4 deliver the cargo to Ho Chi Minh generally. See id. at 16 (“[O]ne of the essential issues in this 5 case is whether Defendants shipped the cargo to the correct destination.”). Blue Eagle’s NRA 6 complied with FMC regulations, and it was an offer to contract. Rang Dong is bound by the 7 terms and conditions referenced in the NRA. 8 D. Whether Blue Eagle Failed to “Reasonably Communicate” the Forum- 9 Selection Clause to Rang Dong 10 Rang Dong’s final argument is that even if the court finds the bill of lading incorporates 11 the NRA or that the NRA is a valid agreement, the court should deny Blue Eagle’s motion 12 because it did not “reasonably communicate” the forum-selection clause to Rang Dong. See id.at 13 17–23. The “reasonably communicated” standard Rang Dong invokes here is the Ninth Circuit’s 14 two-pronged test for determining whether a passenger of a common carrier is contractually bound 15 by the fine print of the passenger ticket. See Deiro v. Am. Airlines, Inc., 816 F.2d 1360, 1363 (9th 16 Cir. 1987). The court declines to apply this test. Rang Dong’s argument depends in part on the 17 court’s accepting its previous arguments and relying on Blue Eagle’s argument in the alternative, 18 which the court does not reach. See, e.g., Opp’n at 18 (“Instead of informing [Rang Dong] of the 19 existence of a forum-selection clause, Blue Eagle contends that as long as it published a forum- 20 selection clause somewhere on the internet as required by laws regulating NVOCCs, [Rang 21 Dong] should have been aware of it.”). In any event, the court is not persuaded by Rang Dong’s 22 arguments. See, e.g., id. at 20 (arguing “the provisions incorporated were in a very lengthy 23 document” and that Rang Dong “would have to scroll through numerous pages before finding the 24 forum-selection clause”); id. at 21 (“Significantly, given that Defendants provided the NRA more 25 than a month prior to issuance of the Bill of Lading, Defendants should have reminded [Rang 26 Dong] of the NRA.”); id. at 22 (arguing Mr. Higgins should have confirmed that Ms. Phan could 27 access the Descartes website and ask her if she had any questions about the website or the NRA); 28 id. at 23 (describing process as “confusing” because the link provided in the NRA, described 1 | explicitly as a link to Blue Eagle’s rules tariff, “does not take the consumer directly to the forum- 2 | selection clause”). Rang Dong 1s a sophisticated commercial shipper of goods engaged in 3 | international trade, not a mere passenger on a boat. Deiro’s “reasonably communicated” test is 4 | not relevant here. 5 | IV. CONCLUSION 6 The court grants Blue Eagle’s motion to dismiss. Rang Dong and Hillebrand are directed 7 | to meet and confer regarding whether Rang Dong can continue its case against Hillebrand in this 8 | court; based on this meet and confer they shall file a joint status report within twenty-one days 9 | setting forth their positions on this issue and proposing a schedule for any briefing they believe is 10 | necessary. 11 This order resolves ECF No. 50. 12 IT IS SO ORDERED. 13 | DATED: May 18, 2022. 14 CHIEF ED STATES DISTRICT JUDGE 11