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FEDERAL COURT DISMISSES BREACH OF WARRANTY AND NEGLIGENCE CLAIMS AGAINST OCEAN CARRIER AND EQUIPMENT LESSEE

On June 21, 2019, Judge Feuerstein of the U.S. District Court for the Eastern District of New York issued a decision granting summary judgment for our client, an ocean carrier and container lessee, and dismissing the personal injury claims of the plaintiff who sustained injuries after unloading an allegedly defective shipping container. Judge Feuerstein’s decision fully adopted a detailed Report and Recommendation issued by Magistrate Judge Lindsay on April 23, 2019, which recommended dismissal of the case in its entirety.

The plaintiff alleged that after unloading cargo from an open-top container he was in the process of closing the container’s header bar, when the bar unexpectedly “snapped” and struck him, causing him to fall to the ground. He filed suit against our client, which transported the container from overseas to the Port of New York, as well as against the container’s owner/lessor and its foreign manufacturer, asserting claims for gross negligence, negligence and breach of express and implied warranties. The plaintiff’s main contentions were that the container contained a manufacturing defect, that it was not reasonably fit for its intended purpose, and that the defendants failed to properly inspect, maintain and/or repair the container.

In defending against the negligence and gross negligence claims, FH&M submitted detailed container inspection and maintenance logs and witness testimony which demonstrated the absence of any relevant damage or defects prior to the accident. In dismissing the negligence claims, the court credited these records and also ruled that the plaintiff was unable to rely on the doctrine of res ipsa loquitur which allows an inference of negligence from the very nature of an accident in the absence of direct evidence, as the subject container was outside the exclusive control and possession of our client during the immediate period leading up to and at the time of the alleged accident.

Significantly, the Court further held that our client, as an ocean carrier and container lessee, does not face liability as a matter of law for a breach of an implied warranty claim, as it is not in the business of leasing or selling containers. We believe this ruling will have favorable implications for ocean carriers that lease shipping containers, as well as inland marine trucking companies and other downstream transportation providers.

The case was defended by FH&M partner Justin Nastro, and associate William Yost. To read Judge Feuerstein’s opinion, click HERE. To read Magistrate Judge Lindsay’s Report and Recommendation, click HERE.