Galloway Johnson Tompkins Burr & Smith maritime attorney Jason Waguespack was featured in the January 2025 quarterly edition of “The Marine Insurer.” The text of the article, “When COGSA was challenged,” appears below.
From a vessel leaving Vietnam to seeking a port of refuge to the U.S. district court in San Diego, maritime litigator Jason Waguespack of Galloway Johnson Tompkins Burr & Smith navigated it all in a recent cargo loss case to deliver a positive result for his clients.
With decades of experience and an adjunct professor of maritime law at Tulane University School of Law, Jason has the expertise and insight to steer his clients to safe harbor when faced with significant legal challenges.
Jason was recently interviewed about this significant cargo loss claim case, which has been edited for length and clarity.
Q: What’s your first reaction when you hear from the clients?
JW: In this particular case, the vessel, after she left Vietnam, encountered effects from a low-pressure system that caused very rough seas. While the vessel was pitching and rolling, the crew noticed smoke coming from one of the forward holds. They suspected a fire and reacted to contain it. The vessel sought a port a refuge in Japan. When the holds were opened, it was discovered that the stow had collapsed. Once it was determined that some of the cargo was destroyed but other cargo, although damaged, could be restowed and carried to San Diego, we were certain that the cargo owner would take action against the vessel, and we needed to be prepared for that.
What went through my mind was, how could we go about trying to determine the scope of the loss so we would have a reasonable idea of the amount of security that would have to be put up in the event of the vessel’s arrest.
Q: You’ve seen cases like this before, correct?
JW: We have dealt with fire and collapsed stows. We knew this was going to be a large claim because it was valuable cargo, but we did not know how large. There were a lot of moving parts, and my focus was on what was going to happen when the cargo arrived in the States.
There were English solicitors who were brought in first on behalf of the vessel owner, because there was some question as to whether or not it would involve London arbitration. It was the English solicitors who called me in the beginning, because they knew the cargo was headed to San Diego, so they needed a U.S. lawyer.
We recommended filing a declaratory judgment action in Houston, because the Fifth Circuit was an appropriate venue under the bill of lading. But the shipper filed the suit in San Diego first and argued that the forum selection clause in the bill of lading was not controlling. Because the San Diego suit was filed first, the Houston court transferred the declaratory action to San Diego, so we had to proceed under Ninth Circuit precedent.
Q: So the ship’s in San Diego, we know there’s a loss and that the case will be in the Ninth Circuit. Were there other preparations or decisions that were pivotal?
JW: At that stage, because the cargo was discharged and inspected in Japan, and the cargo that could safely make the journey to the US was restowed, we needed to find out how many units of cargo were damaged. COGSA (Carriage of Goods by Sea Act) has a limitation based upon damage to packages or customary freight units, so we had to determine the number of damaged units and whether the damage was caused by the fire or some other mechanism.
Whether the damage was caused by the fire was important because fire is an exempted cause under COGSA. As it turned out, that exemption did not really come into play. But we knew we had to figure out how many units were damaged so we could arrive at the limitation amount, which is $500 per package. Once the suit was filed, the shipper claimed the damaged cargo’s value was over $25 million, so the limitation amount was crucial to determine.
Q: Were there times that collaboration and communication internationally were challenging?
JW: There were three defendants: the vessel owner, charterer, and NVOCC. Each defendant had a set of lawyers, plus there were two firms representing the shipper. Let me say that all of the lawyers involved are very skilled, impressive litigators. From the beginning, the defense lawyers worked collaboratively to secure the best result. We knew the most efficient way to resolve this case, given the amount of damages, was to argue for the application of the COGSA limitation. We first had to agree that was going to be the strategy and that we would spend our time securing the limitation.
The shipper pursued a strategy of avoiding the limitation, and they raised a lot of arguments to support their theory that the limitation was inapplicable. There was a significant amount at stake because, if the limitation was inapplicable, damages would be multimillions of dollars, but if the limitation applied, damages would be limited to an amount significantly less. We tried to settle the case early on, but could not reach an agreement. Instead, the court allowed discovery to proceed, and the plaintiffs were allowed to take discovery on their arguments.
At the close of discovery, the parties urged cross motions for summary judgment on the issue of COGSA limitation. The court ultimately granted the defendants’ motions and held that the limitation applied.
Q: You get the result in a 91-page decision. What’s your reaction?
JW: It’s gratifying. It was the result that we were cautiously optimistic the court would reach. I was excited for the clients, because I knew that they were watching the case very carefully and it was incredibly important to them.
Q: Did you hear anything from your colleagues in the maritime industry?
JW: The day after the decision came out, a lawyer in New York who had read about it in a blurb called me about the details. The case, I think, got the attention of people who were curious about the arguments being raised to avoid the limitation and how we countered those arguments.
Q: Looking back and looking ahead to 2025, what is your takeaway for maritime law?
JW: Overall, claims are down but large claims are up. As the industry has become more efficient, you don’t see the number of claims that you saw 30 years ago when I first started practicing. But the claims you do see tend to be larger and more expensive, and they require a rapid response and the skillful development and implementation of a comprehensive strategy. I think that will continue to be the case.
(This article originally appeared in The Marine Insurer.)