## Facts

- Vision Air Flight Service, Inc., a Philippine corporation, bought two refurbished airport refueling trucks for use in the Philippines.
- Vision arranged ocean shipment from Oakland, California to Manila through an intermediary; the ocean carrier was Madrigal–Wan Hai Lines Corp., and the carrying vessel was the M/V National Pride.
- Madrigal issued a bill of lading governing carriage of the two trucks.
- The bill of lading incorporated COGSA and limited carrier liability to $500 per package unless the shipper declared a higher value and paid higher freight; it expressly notified Vision of that option.
- Vision did not declare a higher value and instead obtained separate cargo insurance.
- The trucks were discharged at Manila International Container Port on October 17, 1995 and were severely damaged during unloading.
- Vision’s evidence described stevedores lifting at least one truck by attaching cables directly to the vehicle without stabilizing equipment, crushing it; despite obvious damage to the first truck, the same unloading method was allegedly used again, damaging the second truck.
- Vision sought to recover the trucks’ full value; Madrigal asserted the $500-per-package limitation ($1,000 total).

## Issues

1. Whether the bill of lading provided the shipper a “fair opportunity” to avoid COGSA’s $500-per-package limitation by declaring higher value and paying higher freight, such that the limitation was enforceable.
2. Whether evidence of intentional destruction, or reckless conduct with knowledge that damage would probably result, created a genuine issue of material fact that would bar application of the COGSA limitation as to at least one truck.

## Decision

- The Ninth Circuit held the bill of lading gave Vision a fair opportunity to declare higher value and avoid the $500-per-package limit; absent disqualifying misconduct, the limitation was enforceable.
- The court held the record, viewed in Vision’s favor, presented a triable fact issue whether at least one refueler was destroyed intentionally or through reckless conduct with knowledge of probable damage.
- The court vacated the partial summary judgment to the extent it capped liability for the refueler subject to the intentional/reckless-destruction theory and remanded for further proceedings consistent with that ruling.

## Legal Principles

- Under COGSA § 4(5), carrier liability is limited to $500 per package unless the shipper declares a higher value and pays higher freight.
- A carrier may enforce the $500-per-package limitation only if the shipper had a fair opportunity to opt out by declaring higher value; an explicit bill-of-lading clause stating the limitation and offering the higher-value option generally satisfies this requirement.
- The COGSA per-package limitation does not shield a carrier from losses caused by intentional damage or reckless conduct undertaken with knowledge that damage would probably result.
- Where evidence could support a finding of intentional or knowing-reckless cargo damage, summary judgment enforcing the COGSA limitation is improper as to the affected cargo.

## Conclusion

The Ninth Circuit recognized the contractual and statutory enforceability of COGSA’s $500-per-package limitation where the bill of lading clearly offered the shipper a higher-value option, but held that evidence permitting a finding of intentional or knowing-reckless unloading damage required vacatur and remand because such misconduct can defeat the limitation for the cargo at issue.


Vision Air Flight Serv., Inc. v. M/V Nat’l Pride, 155 F.3d 1165 (9th Cir. 1998)