“Hook to Hook” Clause Causes Appeals Court to Reverse Itself

April 23, 2014

–Stevedore Also Working for Shipper Loses $500 Limit


In our Fall/Winter Issue 2013, we reported on a decision of the Fifth Circuit involving a stevedore that was hired by a shipper to receive and store a very large boiler until the ship arrived in port. When the ship arrived, the stevedore loaded the boiler onto its trailer and delivered the unit to ship’s side. The company also had an exclusive contract with the shipowner to load cargo as its stevedore.

The stevedore was told by the ship’s port captain that the boiler was not close enough to the ship’s side for the ship’s hook to lift it. While maneuvering its truck to be able to come close to the lifting hook, the trailer tipped over and the boiler sustained damage amounting to $284,415.

The trial court found the stevedore was acting for the shipper in maneuvering the truck so the cargo could be loaded.  However, the appeals court (in its first decision) held that the stevedore was clearly an agent of the carrier during loading and that it was protected by the $500 U.S. Carriage of Goods by Sea Act (COGSA) limitation contained in the bill of lading because the limitation applied to the period before loading while the goods were in the custody of the carrier. The stevedore was protected, according to the first decision, because the bill of lading defined the stevedore as “a servant” of the ocean carrier.

That decision was handed down in June, 2013. The Appeals Court granted a petition for rehearing in February, 2014. It withdrew its previous decision, and decided that the trial court was not clearly erroneous in its factual finding that at the time of the accident, the boiler had not yet been delivered to the shipowner.

What caused the Appeals Court to change its mind was a provision in the contract noting that boiler was being shipped “FLT H/H (FLT Hook/Hook)”. The Court ruled that the Carrier’s responsibilities began once the cargo was “on the hook.” Because the boiler was not yet on the hook, the stevedore was not performing services for the carrier.  In fact, the stevedore did not bill the shipowner for loading the boiler, since it was never loaded.

The port captain had told the stevedore to move the boiler closer to the hook, but not how to do it. It was the stevedore’s driver who decided to turn the truck around. The burden was on the stevedore to prove he was working for the carrier at the moment the damage occurred, but that would only begin when the load was “on the hook.” Rafinasi v. Coastal Cargo Co., Inc. (5th Cir. Ct. of Appeals, Feb. 19. 2014).