## Facts

- Farrell Lines Inc. (Farrell), an ocean carrier, carried a printing press from Livorno, Italy to Norfolk, Virginia under a bill of lading governed by federal maritime law, including COGSA’s limitation of liability.
- After discharge in Norfolk, the press was damaged in an accident, resulting in approximately $800,000 in loss.
- The cargo owner, Columbus Cello-Poly Corporation, and several insurers (including Cigna, Uteco, UMS Generali, Reunion Francaise, and La Fondiaria) asserted claims arising from the damage.
- Related litigation concerning the same loss was pending in Italy against Farrell.
- Farrell filed an admiralty declaratory judgment action in the Southern District of New York against Ceres Terminals Inc. (the terminal operator) and the cargo interests/insurers, seeking:
  - a declaration that Farrell’s liability for the loss was limited to $500 under COGSA; and
  - an injunction prohibiting the claimants from continuing the Italian action against Farrell concerning the printing-press damage.
- The district court entered declaratory judgment limiting Farrell’s liability to $500 and enjoined the claimants from further pursuing the Italian litigation against Farrell related to the loss.
- The claimants appealed.

## Issues

1. Whether the district court had subject-matter jurisdiction in admiralty and personal jurisdiction over the cargo interests and insurers in Farrell’s declaratory judgment action.
2. Whether a federal district court sitting in admiralty has authority to enjoin parties from pursuing parallel litigation in a foreign court concerning the same dispute.
3. Whether, if such authority exists, the district court abused its discretion by enjoining the Italian proceedings.

## Decision

- The Second Circuit affirmed the district court’s declaratory judgment and injunction.
- The court held the district court had jurisdiction over the maritime controversy and over the defendants.
- The court held a district court exercising admiralty jurisdiction may issue injunctive relief, including an injunction restraining parties from continuing a related foreign action.
- The court held the district court acted within its discretion in barring further pursuit of the Italian action against Farrell concerning the printing-press damage.

## Legal Principles

- Federal courts have admiralty jurisdiction over disputes arising from the ocean carriage of goods and related contractual limitation-of-liability questions.
- A declaratory judgment action may be used in admiralty to determine a carrier’s limited liability for cargo damage where an actual controversy exists between the carrier and cargo interests/insurers.
- A federal district court sitting in admiralty has equitable power to grant injunctive relief.
- An antisuit injunction may be issued to protect the court’s ability to resolve the dispute before it and to prevent foreign litigation from defeating or impairing the effectiveness of the federal court’s determination; the decision is reviewed for abuse of discretion.
- Where applicable, COGSA’s liability limitation can cap a carrier’s exposure for cargo damage even when the claimed damages are far greater than the statutory amount.

## Conclusion

Farrell Lines upheld the district court’s admiralty declaratory judgment limiting the carrier’s liability to $500 under COGSA and affirmed an injunction stopping the cargo interests and their insurers from continuing related litigation in Italy against Farrell arising out of the same $800,000 printing-press loss.


Farrell Lines Inc. v. Ceres Terminals Inc., 161 F.3d 115, 1999 AMC 305 (1998)