## Facts

- Sea-Land Service, Inc. (Sea-Land) arranged to carry three 40-foot refrigerated containers of grapes for Lozen International, LLC (Lozen) from Hermosillo, Mexico to Felixstowe, England.
- The contemplated movement was intermodal: truck from Hermosillo to Long Beach, California; rail to Elizabeth, New Jersey; then ocean carriage to Felixstowe.
- Sea-Land issued international bills of lading covering the shipments and containing printed terms, including provisions applying the Carriage of Goods by Sea Act (COGSA) during the time the goods were in Sea-Land’s custody and “liberty clauses” permitting certain routing or arrangement changes.
- Sea-Land sued Lozen in federal district court to recover money allegedly owed under the shipping contract; Lozen asserted counterclaims, alleging Sea-Land failed to deliver one shipment on time, causing commercial loss on grapes intended for the British market.
- The parties settled and dismissed Sea-Land’s affirmative claim, but continued litigating Lozen’s counterclaims.
- The district court granted summary judgment for Sea-Land on Lozen’s counterclaims, ruling that the bills of lading controlled, COGSA applied, and Lozen had not raised a triable issue on unreasonable deviation or on the effect of the liberty clauses.
- Lozen sought to introduce an email forwarded to Lozen by Sea-Land employee Laurie Martinez. Martinez pasted the contents of an email written by another Sea-Land employee (Mike Jacques) and added at the top: “Yikes, Pls note the rail screwed us up.”
- The district court excluded the email as hearsay; Lozen appealed.

## Issues

1. Whether the printed terms in Sea-Land’s international bills of lading governed the parties’ contract, or whether an asserted special oral agreement displaced those terms.
2. Whether COGSA applied to the shipment, including the inland rail portion, based on the bills of lading.
3. Whether there was a genuine issue of material fact that Sea-Land committed an “unreasonable deviation” that could affect Sea-Land’s contractual defenses and limitations.
4. Whether the bills’ liberty clauses barred Lozen’s counterclaims as a matter of law, or instead presented fact questions about their scope in the circumstances.
5. Whether the district court abused its discretion by excluding the Martinez-forwarded email as hearsay, and whether exclusion harmed Lozen.

## Decision

- The Ninth Circuit held the bills of lading controlled the parties’ agreement; Lozen did not show a separate oral contract that replaced the written carriage terms.
- The Ninth Circuit held COGSA applied to the shipment because the bills of lading validly applied COGSA during the period the goods were in Sea-Land’s custody, including the inland segment.
- The Ninth Circuit reversed summary judgment for Sea-Land on unreasonable deviation because the record (including the excluded email) created a triable dispute.
- The Ninth Circuit reversed summary judgment on the liberty-clause defense because the clauses did not resolve liability for the alleged delay as a matter of law on this record.
- The Ninth Circuit held the district court abused its discretion by excluding the Martinez email as hearsay; it was admissible (at least in relevant part) as a statement of a party-opponent by employees on matters within the scope of their employment, and the exclusion was prejudicial.
- The court reversed and remanded for further proceedings.

## Legal Principles

- An international bill of lading, issued for and accepted in performance of carriage, generally supplies the operative contract terms absent clear proof of a separate agreement that replaces those terms.
- COGSA may be applied by contract beyond ocean “tackle-to-tackle” carriage when the bill of lading provides that COGSA governs while the carrier has custody of the cargo, including inland transport in a through shipment.
- “Unreasonable deviation” is typically a fact-driven issue; if proved, it may affect a carrier’s ability to rely on contractual protections and COGSA-based limitations.
- Broad liberty clauses may authorize certain changes in routing, methods, or arrangements, but their effect can depend on context and reasonableness, making summary judgment inappropriate where material facts are disputed.
- Under Federal Rule of Evidence 801(d)(2), employee statements offered against the employer may be non-hearsay if made during the employment relationship and concerning matters within the scope of that employment; for an email containing embedded statements, each layer must satisfy an exception or non-hearsay rule.
- Excluding key evidence is reversible when the ruling is an abuse of discretion and the missing proof could have affected the outcome on a material issue.

## Conclusion

The Ninth Circuit held that Sea-Land’s bills of lading governed the parties’ shipping contract and that COGSA applied by the bills’ terms, but it reversed summary judgment because evidence created triable disputes about unreasonable deviation and the scope of the liberty-clause defense; the court also ruled that excluding a Sea-Land employee’s forwarded email as hearsay was an abuse of discretion that harmed Lozen, requiring remand.


Sea-Land Service, Inc. v. Lozen International, LLC, 285 F.3d 808 (2002)