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Washington Law Review

Abstract

Armada Supply v. SIT Agios Nikolas was described as "no 'run-of-the-mill' cargo case," but rather a case involving "charges of cargo hijacking and blackmail, ransom and deceit—all the elements of a good high seas drama, short of mutiny. The United States District Court for the Southern District of New York, after awarding full compensatory damages, imposed $250,000 in punitive damages against the owners of the vessel because of reprehensible conduct in converting the cargo, and in blackmailing and deceiving the cargo owner. The court awarded punitive damages after it acknowledged that the Carriage of Goods by Sea Act (COGSA) governed the action, and despite language in section 4(5) of COGSA that "[i]n no event shall the carrier be liable for more than the amount of damage actually sustained. " The court's punitive damage award in a COGSA action creates a hole in the statute's intended exclusive coverage. Further, the court failed to articulate a standard to guide the future imposition of punitive damages. In order to establish the boundaries of COGSA's application, this Note proposes that courts focus on COGSA's preemption of general maritime law remedies. Under this analysis, criminally culpable conduct—defined as conduct exhibiting reckless indifference to the rights of others coupled with intent to commit a criminal act—falls outside COGSA's coverage, allowing the imposition of punitive damages in the extraordinary case. This proposal punishes the egregious conduct before the court in Armada Supply, yet protects both the integrity and exclusivity of COGSA.

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