Bills of lading are business records. Fed. R. Evid. 803(6) allows the admission of business records when two foundational facts are proved: (1) the writing is made or transmitted by a person with knowledge at or near the time of the incident recorded, and (2) the record is kept in the course of regularly conducted business activity.
Plaintiff Sea-Land Service, Inc. (Sea-Land), brought this action against Defendant Lozen International, LLC (Lozen), to recover money owed under a shipping contract. Lozen counterclaimed for damages resulting from Sea-Land's failure to timely deliver one of the shipments at issue. The parties settled and dismissed Sea-Land's claim, but they were unable to reach an agreement with respect to Lozen's counterclaims. As to those, the district court entered summary judgment in favor of Sea-Land. Lozen appealled, arguing that (1) the parties entered into a special oral contract for carriage of the shipment and, therefore, the terms printed on Sea-Land's international bills of lading do not control the parties' agreement; (2) the Carriage of Goods by Sea Act (COGSA), does not apply to the shipment; (3) assuming COGSA applies, there is a genuine issue of fact as to whether there was an "unreasonable deviation" by Sea-Land; (4) even if the terms on Sea-Land's bills of lading do control the parties' agreement, there is a genuine issue of fact as to whether the "liberty clauses" in the bills of lading protect Sea-Land from liability; and (5) a number of the district court's evidentiary rulings were erroneous.
Whether the district court have subject matter jurisdiction over Lozen's federal and state counterclaims?
The court of appeals reversed and remanded holding that the terms on carrier's international bills of lading controlled. In fact, the President of Lozen admitted in his deposition that he had read the reverse side of Sea-Land's bills of lading before initiating the shipment at issue here. Perhaps most importantly, he demonstrated his awareness that the terms printed on traditional bills of lading generally apply to express sea waybills. This evidence alone justifies a conclusion that the terms printed on Sea-Land's non-electronic bills of lading control the parties' agreement. Accordingly, the district court erred in granting summary judgment on the "liberty clause" issue because there was a genuine issue of fact as to whether the carrier's behavior constituted an unreasonable deviation.