The Monrosa v. Carbon Black Export, Inc.

Background

A Delaware company sued in the Southern District of Texas for damage to a shipment of carbon black carried to Italian ports. It filed a claim against the ship itself (an in rem action) and against the shipowner (an in personam action). The bill of lading contained a printed Clause 27 saying legal proceedings about cargo damage should be brought only in Genoa, Italy. The District Court declined jurisdiction on that ground subject to a $100,000 bond; the Fifth Circuit reversed and allowed the in rem claim to proceed.

Reasoning

The core question was whether the Genoa forum clause bars an in rem action against the vessel or only suits against the owner. The Court agreed with the Court of Appeals that the clause should not be read to bar in rem suits and found the libel in rem properly maintainable, noting the parties had approved a secured stipulation to release the vessel. Because the in rem claim can be tried in the District Court, the Court concluded it should not use its discretionary review power to decide the broader question about enforcing such forum clauses and dismissed the writ of certiorari as improvidently granted.

Real world impact

Practically, this ruling allows a cargo claimant to pursue a claim against the ship in the U.S. despite a printed forum clause naming Genoa, while the separate question whether the clause bars personal suits against owners remains undecided. The Supreme Court declined to resolve the larger nationwide question now, leaving lower courts to face the issue in future cases.

Dissents or concurrances

Justice Harlan, joined by three colleagues, dissented from the Court’s refusal to decide the in personam validity question and urged the Court to resolve the point to avoid recurring confusion.