Latest Case: Progressive Rail Inc. v. CSX Transportation, Inc. (Business Law)

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Progressive Rail Inc. v. CSX Transportation, Inc.

Docket: 20-5378

Opinion Date: December 2, 2020

Judge: Jeffrey S. Sutton

Areas of Law: Admiralty & Maritime Law, Business Law, Contracts, Transportation Law

Siemens shipped two electrical transformers from Germany to Kentucky. K+N arranged the shipping, retaining Blue Anchor Line. Blue Anchor issued a bill of lading, in which Siemens agreed not to sue downstream Blue Anchor subcontractors for any problems arising out of the transport from Germany to Kentucky. K+N subcontracted with K-Line to complete the ocean leg of the transportation. Siemens contracted with another K+N entity, K+N Inc., to complete the land leg of the trip from Baltimore to Ghent. K+N Inc. contacted Progressive, a rail logistics coordinator, to identify a rail carrier. They settled on CSX. During the rail leg from Maryland to Kentucky, one transformer was damaged, allegedly costing Siemens $1,500,000 to fix. Progressive sued CSX, seeking to limit its liability for these costs. Siemens sued CSX, seeking recovery for the damage to the transformer. The actions were consolidated in the Kentucky federal district court, which granted CSX summary judgment because the rail carrier qualified as a subcontractor under the Blue Anchor bill and could invoke its liability-shielding provisions. The Sixth Circuit affirmed. A maritime contract, like the Blue Anchor bill of lading, may set the liability rules for an entire trip, including any land-leg part of the trip, and it may exempt downstream subcontractors, regardless of the method of payment. The Blue Anchor contract states that it covers “Multimodal Transport.” It makes no difference that the downstream carrier was not in privity of contract with Siemens.