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Norfolk Southern Railway Co. v. New York Terminals, LLC

United States District Court, D. New Jersey

September 12, 2017

NORFOLK SOUTHERN RAILWAY COMPANY, Plaintiff,
v.
NEW YORK TERMINALS, LLC, and NY TERMINALS II, LLC, Defendant. NEW YORK TERMINALS, LLC, and NY TERMINALS II, LLC, Third-Party Plaintiff,
v.
NJ ASPHALT TERMINALS, LLC, d/b/a CL ASPHALT, Third-Party Defendant.

          OPINION

          WILLIAM J. MARTINI, U.S.D.J.

         Plaintiff Norfolk Southern Railway Company (“Norfolk”) brings this action against New York Terminals, LLC, and NY Terminals II, LLC (collectively “NYT”), alleging failure to pay demurrage charges as set forth in Norfolk's tariff pursuant to 49 U.S.C. § 10746. NYT, in turn, brings a third-party action against N.J. Asphalt Terminals, LLC d/b/a CL Asphalt (“NJAT”), alleging that NJAT is responsible for payment of the demurrage charges pursuant to their transloading and services agreement. This matter comes before the Court on Norfolk's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Norfolk's motion for summary judgement is GRANTED.

         I. BACKGROUND

         Norfolk is an interstate rail carrier incorporated under Virginia law, with its principal place of business in Norfolk, Virginia. Compl. ¶ 1 (“Norfolk Compl.”), ECF No. 1. NYT is a New Jersey corporation that provides liquid bulk storage and other services to its customers. See Defs.' Answer & Third-Party Compl. 4, ¶ 2 (“NYT Compl.”), ECF No. 9. NJAT is a corporation with a place of business in Wharton, New Jersey, which receives transloading services from NYT at its facility in Elizabeth, New Jersey. Answer to Third-Party Compl. ¶¶ 2-3 (“NJAT Answer”), ECF No. 19. The instant case concerns shipments of liquid asphalt product, which Norfolk transported by rail to NYT's facility between November 2013 and May 2014.

         A. Procedural History

         On December 9, 2014, Norfolk filed a complaint against NYT, alleging that NYT accrued $294, 360.00 worth of demurrage charges by failing to return Norfolk's railcars within the allotted “free time” in accordance with Norfolk's governing tariff. Norfolk Compl. at ¶ 10. NYT answered by denying liability, asserting several affirmative defenses and filing a third-party complaint claiming that NJAT is liable for the charges “under the obligations of being a tenant” at NYT's Elizabeth facility. See NYT Compl. at 3-4. NJAT answered by asserting several defenses against NYT, including breach of the transloading and services agreement (the “NJAT Agreement”), gross negligence and indemnification. See NJAT Answer at 2-3.

         On April 9, 2015, Norfolk filed a separate complaint against NJAT's “sister” company, C.L. Consulting and Management Corporation (“CLCM”), for unpaid demurrage charges between October 2013 and May 2014, totaling $284, 960.00. See Decl. of B. Rose in Supp. of Mot. to Consolidate ¶ 11, ECF No. 52-1. In turn, CLCM filed a third-party complaint against NYT, claiming that the charges arose from NYT's misconduct and that it breached the terms of the NJAT Agreement. Id. at ¶ 12. On December 19, 2016, this Court denied NJAT's motion to consolidate these cases for multiple reasons, which it will not reiterate here. See Op., ECF No. 58.

         B. Norfolk's Motion for Summary Judgment

         Norfolk now moves for summary judgment against NYT, arguing that NYT is responsible for the demurrage charges because the bills of lading list NYT as the consignee for the shipments received during the relevant period. See Norfolk's Mem. of Law in Supp. of Its Mot. for Summ. J. 6-7 (“Norfolk's Mot.”), ECF No. 71-1. It also argues that the railcars at issue transported hazardous material, which resulted in additional charges. Id. at 7-9. Finally, Norfolk argues that NYT's force majeure defense fails because it waived the defense by failing to comply with the force majeure clause in Norfolk's tariff and because the inclement weather was not the sole cause of the demurrage. Id. at 9-15.

         NYT opposes summary judgment, filing a “Preliminary Statement, ” which inexplicably and inexcusably cites no statutory, common or case law of any kind. See Statement of Material Facts in Opp'n (“NYT's Opp'n”), ECF No. 72. NYT does not contest that it received railcars from Norfolk during the relevant period. Instead, it argues that it is not liable for the demurrage charges on the following grounds: (1) NYT is not the true consignee of the product it received, see Id. at 3-4; (2) between December 2013 and March 2014, winter weather caused delays in the unloading of the railcars, which resulted in a large portion of the demurrage charges at issue, see Id. at 5; (3) the product in question required NYT to reheat it before unloading, causing further delays, see Id. at 5-6; (4) the product was not hazardous in fact and, therefore, did not warrant the additional $100.00 per day hazardous material charge, see Id. at 6; and (5) NJAT is responsible for the demurrage charges under the terms of the NJAT Agreement, see Id. at 6-7.

         While NYT filed objections to Norfolk's statement of material facts, there are several critical facts that NYT does not contest. First, NYT does not dispute that it receives electronic notification from Norfolk when railcars have been “constructively placed” in its service yard-i.e., when railcars are ready for unloading. Compare Norfolk's Statement of Facts in Supp. of Its Mot. for Summ. J. (“Norfolk's Statement”) ¶¶ 5-6, ECF No. 71-2, with NYT's Objections to the Statement of Facts (“NYT's Objs.”) ¶¶ 5-6, ECF No. 72-1. Second, NYT does not dispute that it contractually agreed to be listed as a consignee on the bills of lading of the shipments at issue, despite being unaware of potential legal issues. Compare Norfolk's Statement at ¶ 10, with NYT's Objs. at ¶ 10. Third, NYT does not contest the authenticity of the exhibits produced by Norfolk which show bills of lading for the shipments at issue that name NYT as the consignee. Compare Norfolk's Statement at ¶ 11, with NYT's Objs. at ¶ 11. Fourth, NYT does not contest that the shipper of the railcars at issue certified the product therein as hazardous. NYT only contests whether the product should have been considered hazardous after the product cooled during transport to NYT. Compare Norfolk's Statement at ¶ 18, with NYT's Objs. at ¶ 18.

         Fifth, with respect to its force majeure defense, NYT concedes that winter weather had no bearing on the accrued demurrage charges prior to December 2013 and after February 2014. See NYT's Objs. at ¶ 22. NYT admits that winter weather did not completely shut down its operations during the time it claims force majeure. See Id. at ¶ 23. NYT further admits that bad weather was only one of the causes that created operational difficulties during the relevant period and that it continued operating on behalf of other customers during that time. See Id. at ¶¶ 30-31. Finally, without providing any supporting evidence to the Court, NYT claims that it advised Norfolk of its operational difficulties in January 2014; however, NYT does not assert that it followed the protocol set forth in Norfolk's tariff for requesting relief from demurrage charges on account of weather related events. Compare Norfolk's Statement at ¶¶ 24-28, with NYT's Objs. at ¶¶ 24-28.

         Neither NYT nor NJAT moved for summary judgment concerning the third-party complaint. Consequently, the Court will only address the matter before it-i.e., NYT's liability to Norfolk for the demurrage charges.

         II. ...


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