Subcontractor Causes Troubles for Motor Carrier

Kevin Anderson Cargo Liability, Contracts, Transportation

The old adage of you are only as strong as your weakest link holds true with the link of different players that are typically involved in shipping goods from one state to another. Because of these complex relations, one breakdown with one or more of the players can put a company at risk, and cause severe damage to reputations, bottom lines, and company survival. This was the lesson learned as a trucking company lost an entire truckload of lobster recently. A news report from Massachusetts explains that a trucking company is being sued over a lost or stolen load of lobsters that could cost that company hundreds of thousands in legal fees and damages. The story reports about a lawsuit filed in federal court in Massachusetts that is claiming the shipping company is liable for an entire load of lobsters that was supposed to end up in California, but was …

Court Issues Opinion on Second and Third Levels of Insurance

Kevin Anderson Cargo Liability, Transportation

Anyone involved in the trucking and transportation industry understands how complex the relationships used to move products can be. Many times there is a shipper, freight broker, motor carrier, at least one insurance company, assigned shipment receiver and more who are involved in a complex relationship to move goods across the country. And each one of those relationships is ruled (or should be) by a written contract that determines what should happen when the relationship goes south. In most cases, what should happen after cargo is lost, damaged, destroyed, or stolen is clear. The Carmack Amendment is a federal policy which holds motor carriers one hundred percent liable, unless the liability is waived. This policy is one of the reasons why insurance companies are so heavily involved with most shipments. Secondary and Tertiary Insurance Policies A recent case out of the Northern District of Illinois illustrates how different insurance policies …

Motor Carriers and Federal Wage Standards

Kevin Anderson Employment and Labor, Transportation

The trucking industry is one of the most, if not the most regulated industries in the country. Federal regulations touch every aspect of how a trucking company operates its business. Between permits, licenses, inspections, and many other even more complicated areas of regulations, the trucking industry is easily a front runner for being the most heavily regulated of industries. But the news is not all bad regarding regulations in the trucking industry. True, it does complicate things quite a lot, but it also gives relief in other areas through preemption and replacing the myriad of state laws that would, if not preempted, make it even more difficult to operate. And in this web of regulations are rules that even prevent some federal laws from being implemented against a trucking company, under certain circumstances. Federal Labor Standards Act Among the areas in which transportation companies are exempt from federal laws are …

Limits on Liability, Crux of Carmack Cases

Kevin Anderson Cargo Liability, Transportation

More often than not, a Carmack Amendment case comes down to one simple issue, and that issue is one of the most misunderstood in the industry. The crux of the majority of Carmack Amendment cases revolves around whether a carrier properly limited their liability prior to shipment. Obviously in the wake of lost or damaged cargo, the shipper almost always attempts to avoid full liability, while carriers universally affirm liability was limited. This argument surfaces again and again in Carmack Amendment cases, in part, because of nature of the carrier shipper relationship. Anytime a relationship begins between shipper and carrier, the two do not hope or anticipate anything going wrong with the shipment, and expectations are high that the cargo will make it to its destination without any problems. But that is just the sort of thinking that gets carriers into trouble and stuck with giant bills that can break …

FAAAA, Preemption, and the 9th Circuit Court of Appeals

Kevin Anderson Employment and Labor, Transportation

There is a split of opinions among the various federal circuit courts as to when and how the Federal Aviation Administration Authorization Act preempts state wage and other employment rights laws. The 9th Circuit Court of Appeals decided this issue one way in 2014, and recently reaffirmed that decision in a case named Ortega v. JB Hunt Transport, Inc. The split of opinions is over whether a state can pass certain wage and other employment benefits laws that have a significant impact on how interstate cargo carriers do business. The FAAAA was passed by the U.S. Congress in an effort to preempt state trucking regulations that varied across the entire fifty states. In its wake, the Federal Motor Carrier Safety Administration was created to regulate the entire industry. Now the trucking industry is highly regulated, but with what should be a uniform set of regulations coming from one capital, Washington …

Declaratory Judgment: A Tool for the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

Carriers involved in the shipment of goods from state to state are typically on the receiving end of a Carmack Amendment claim. But that does not always have to be the case. In fact, in some situations it is beneficial for a company to take the initiative and have their rights under the act declared by a federal judge. This is the lesson learned from a recent case out of the Northern District of California. That case, United Van Lines, LLC v. Deming, was initiated by the carrier after claims for lost and damaged goods were made by the shipper. The case began when a company relocating one of its employees contracted with a relocation company to have their employee’s goods transported from one state to another. As part of the transaction, the transportation services company agreed with the carrier to limit their liability to the lesser of $100,000 or …

When Carmack and FAAAA Do Not Preempt State Law

Kevin Anderson Cargo Liability, Transportation

An interesting case recently decided in a federal court in Illinois should be of note to any company involved in the trucking and transportation industry. That case, Muzzarelli v. United Parcel Service, Inc., presents two compelling issues related to trucking and transportation law. The first is related to the Carmack Amendment and when that federal statute does not preempt state law. And the second is a similar issue, although it regards the Federal Aviation Administration Authorization Act. The facts of this case involve a well known package delivery company and a property owner who sued them for injuries they suffered. The case began when one of that company’s employee’s left a package on the front porch of a house (a fairly common occurrence for the company and people). The conflict began when a woman living at the house tripped over the package and was injured as a result. A lawsuit …

Indemnification Without an Agreement

Kevin Anderson Bills of Lading, Cargo Liability, Transportation

One of the risks a carrier often runs involves carrying more valuable cargo than they know about or approve of. This can happen in a number of different scenarios, but one of the riskier situations is where two companies have an existing contract for transportation of goods, and a third party ships goods under that contract. That is what happened in a case earlier this year where a judge had to rule whether indemnification was an option when there was no agreement to indemnify. In that case, Macy’s Corp. Servs., Inc. v. W. Express, Inc., the shipper had a contract to transport goods for Macy’s, and a third party entered into that contract and had the carrier take a load of goods interstate. Before taking off, the third party and the carrier had a bill of lading with a declared value, and sometime during transit the cargo was stolen. In …

The Carmack Amendment in Historical Context

Kevin Anderson Cargo Liability, Transportation

One of the great aspects of our interstate trucking framework is comprised of the laws that regulate liability to carriers if cargo is damaged, lost, or stolen. Thankfully we have the Carmack Amendment, a body of laws regulating when, how, and why a carrier can be held liable when cargo is lost, damaged, or stolen. Without it we would live in a world with fifty competing legal systems, each one imposing its own definition of what causes liability, and commerce would not be nearly as free flowing as it is. But the state of interstate commerce was not always thus. Prior to the 1900s the law was not nearly as clear as it now regarding carrier liability for interstate shipments. Though it was widely known that Congress and the federal government had the prerogative to regulate interstate commerce, in many parts of the country that was secondary to the individual …

$20 Million Verdict Siderails Trucking Company

Kevin Anderson Judgments, Transportation

If you are in the business of providing transportation for goods via large trucks, then you run the risk of being involved in a catastrophic accident which could damage or destroy your business. And the rough part is that it probably will not matter if you are the actual party responsible for the crash. It can have the same impact if you or an employee was driving. This is the lesson learned by a mid-size trucking company from the south. One of their drivers was in an accident last year when he ran through a red light and struck a car with a man and his wife. The man had a traumatic brain injury, rendering him unable to do anything for himself, and his wife lost the companionship of her husband. All of these damages added up to a big bill for the trucking company and its insurer. This case …