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Rainbow Navigation Inc. v. United States

argued: June 4, 1991.

RAINBOW NAVIGATION, INC., APPELLANT
v.
UNITED STATES OF AMERICA



On Appeal from the United States District Court for the District of New Jersey; D.C. Civil No. 86-04343.

Sloviter, Chief Judge, Greenberg and Weis, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Chief Judge

In this admiralty action, plaintiff Rainbow Navigation, Inc., the carrier, seeks to recover from defendant United States, the shipper, additional compensation for twenty-two days that Rainbow's vessel was anchored off the coast of Iceland unable to discharge the government's cargo because of a strike. Plaintiff based its claim primarily on the liberty clause contained in Rainbow's bill of lading. The district court held that the clause did not support the requested recovery, and entered judgment in favor of the government.

I.

Rainbow operated an ocean common carrier, the RAINBOW HOPE, which was the only U.S.-flagged vessel offering service between the United States East Coast and Iceland in 1984.*fn1 As required by 46 U.S.C. § 817, Rainbow's tariff was on file with the Federal Maritime Commission.

Rainbow accepted bookings from the government for carriage of government military cargo on a voyage scheduled to depart from Norfolk, Virginia, on September 24, 1984. Prior to the time of departure, Rainbow and the government learned of the possibility of a strike in Iceland by civil service employees, including longshoremen, to begin on October 4, 1984. Rainbow recognized that such a strike would effectively close the ports of discharge in Iceland, and it informed the government that because of the potential strike it would not sail until September 28. Although there was no change in the status of the strike, the RAINBOW HOPE set sail for Iceland on September 28, 1984. The government gave Rainbow no instructions on whether or not to sail.

On October 4, 1984, the Federation of Government and Municipal Workers of Iceland commenced a general strike. The RAINBOW HOPE arrived at Njardvik, Iceland on October 8, 1984, but was unable to discharge its cargo because of the strike. Rainbow repeatedly asked the government for instructions whether the vessel should wait at anchor or discharge at another port. The government refused to advise Rainbow, stating that instructions were inappropriate because Rainbow was a common carrier. The RAINBOW HOPE remained anchored in the harbor until the strike ended on October 30, 1984. On October 31, the vessel discharged its cargo.

The government paid the freight charges in the amount of $266,370.50. However, it refused to pay Rainbow the extra compensation it sought for the expenses it incurred and its lost freights during the twenty-two days that the ship was delayed in discharging the goods. Thereupon, Rainbow filed this action against the United States for damages under the Suits in Admiralty Act, 46 U.S.C. §§ 741-52 (1988). Following a bench trial, the district court entered judgment in favor of the United States, finding that Rainbow's retention of the cargo on board during the strike was not an "extra service" entitling Rainbow to "extra compensation" within the meaning of its bill of lading. Rainbow Navigation, Inc. v. United States, 742 F. Supp. 171, 184 (D.N.J. 1990). Rainbow filed a timely appeal. We have jurisdiction under 28 U.S.C. § 1291 (1988).

II.

A.

The contract of carriage in this case was made up of Rainbow's bill of lading, the government's bill of lading, and Rainbow's freight tariff. It is uncontroverted that when the RAINBOW HOPE arrived at Iceland only to find it could not promptly discharge the goods, clause 5 in Rainbow's bill of lading, the ...


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