The Carmack Amendment: A Complete Defense to State Law Claims

Kevin Anderson Cargo Liability, Transportation

One of the many benefits that interstate trucking companies enjoy is that they are regulated, mainly, by federal law. This means that there is one set of rules, laws, regulations, and rulings that generally dictate how they should operate their business. Of course there are exceptions to this general rule, such as state wage, insurance, and benefits laws. But generally federal law is the arena trucking companies operate in. One of the most important laws in the framework of federal rules and regulations is known as the Carmack Amendment. 49 U.S. Code § 14706. That is the federal policy which establishes liability for lost, stolen, or damaged goods being transported interstate. The policy states that carriers are liable for such losses in almost all cases. Defenses Against State Law This can be a harsh pill for carriers to swallow, particularly due to the nature of the transportation industry. To be …

Federal Circuit Court Dismisses Appeal for $9 Million in Stolen Medications

Kevin Anderson Cargo Liability, Transportation

Stolen cargo is one of the worst things that can happen to a truck driver, company, and shipper. Not only is the lost freight a financial loss to the different parties, but in most cases freight is designated for shipment because it will be required for use upon arrival. As a result, lost or stolen freight can seriously hamper other related business ventures. In most cases when freight is lost, damaged, or stolen, the carrier responsible for shipping the freight must pay the costs associated with the loss. This is because of a national policy known as the Carmack Amendment. 49 U.S. Code § 14706. This law makes it clear that once a shipper entrusts their cargo with a carrier, the carrier has the burden of ensuring it gets to the destination, and must pay the damages if it does not. Carmack Amendment Liability is Not Absolute This national policy …

Understanding Payment Liability to Carriers

Kevin Anderson Bills of Lading, Contracts, Transportation

Carriers in the trucking industry lift the heavy load of physically transporting and moving America’s commercial goods. But there are many players involved in getting goods to a carrier, and arranging the details about payment, liability, and more. These arrangements can become quite complex, and may be modified through agreement at different stages. One of the big issues that carriers will often face is regarding payment of freight charges. This is simple when there is only a shipper and carrier, and they deal with each other to move freight. Under that scenario the shipper is fully liable for the freight charges at the time a contract is struck. But what happens when there are subcontractors involved, and the freight charges are not paid? 9th Circuit Court of Appeals on Modifying Bills of Lading This issue was addressed by the 9th Circuit Court of Appeals in 2000, in a case about …

Who is Liable for Shipping Charges?

Kevin Anderson Contracts, Transportation

A transportation contract should be a simple document between shipper and carrier to move goods from one place to another, but rarely is it that simple. In the high-tech, complex, interstate trucking industry, even simple transactions can become quite complex. While there is always a shipper and a carrier, many times those two different entities are represented by several different groups. These can include brokers, freight forwarders, agents, subcontractors, and more. The complex nature of these relationships can lead to a smooth operation, with everyone involved playing a vital role. But it can also lead to problems when bills are not paid, freight is lost, damaged or stolen, and when one or more companies go under. That is when it is important to know who is liable for what charges. 9th Circuit Court of Appeals on Liability This and other issues were addressed by the 9th Circuit Court of Appeals …

Interstate or Intrastate? How to Apply the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

The federal law regulating the movement of commercial items from state to state is the Carmack Amendment. It is a federal policy placing the burden of replacing lost, damaged, or stolen goods squarely on the shoulders of interstate carriers shipping those goods. It is an important law because it establishes a national policy to deal with these kinds of losses in a country where a large portion of our commerce is shipped interstate. This is a straightforward national policy, and one that most trucking firms know and understand. But the applicability of the Carmack Amendment can become quite complex depending on the facts of a given situation. That is why every trucking company needs to have access to a law firm that knows how and when the Carmack Amendment applies. Interstate Shipment or Intrastate One such situation that can become complex is when the Carmack Amendment applies because a shipment …

Jurisdictional Requirements for Carmack Amendment Claim

Kevin Anderson Cargo Liability, Transportation

The Carmack Amendment is a federal law and policy enacted to provide a uniform system of liability for lost, stolen, or damaged goods transported across state lines by a carrier. This is an area of law that the federal government has completely occupied, and it therefore preempts any state laws dealing with such claims based on state laws. Meaning, if as a carrier you are sued in state court over damages to cargo you shipped, then it should be removed to federal court. Removing a damaged goods or cargo case to federal court is important to carriers for a number of reasons. In the first instance, state laws can often impose extra penalties and cases can quickly become more expensive than they should. Once a case is in federal court and the Carmack Amendment is being applied, it is straightforward and can be dealt with on a uniform basis. Threshold …

Preempting a Personal Injury Claim With the Carmack Amendment

Kevin Anderson Cargo Liability, Judgments, Transportation

A case involving a charity, broken legos, and severe personal injuries recently made its way to federal court, and tested the limits of preemption and the Carmack Amendment. The case is an example of just how important, and imposing, the Carmack Amendment is. It is also an example of how different circuit courts are split on the issue of personal injuries and the Carmack Amendment. The case revealing these different lessons was decided in Pennsylvania in November. That case, Krauss v. Iris, involved an autism charity and their wish to have a load of Lego toys delivered across the country. To do so, they bought the goods from a company in Wisconsin and arranged through them to deliver the goods. It was at this point that the delivery went south, and the allegations underlying the lawsuit arose. The shipper in this case sent very strict instructions on how the goods …

Oregon Passes $5 Billion Transportation Law

Kevin Anderson Regulations, Taxes, Transportation

One of the great challenges for each state is to properly distribute the burden of keeping up and improving transportation. Whether freighting goods, services, or simply improving personal travel, transportation is the lifeblood of every economy. However, it is a challenge to maintain, and states are continuously attempting to improve their ability to do so. That was the objective of Oregon’s recent law, which funds the state’s roads and projects for ten years at a cost of $5.3 billion. The goal of the package is to more evenly spread transportation costs across the board, with those using more, paying more. The new law is not without its critics, but the overall response from the transportation industry and others sectors has been positive. What the Bill Includes There are several overall goals with this new bill, that aim to improve transportation in Oregon overall. Some of the biggest goals include reducing …

Potholes for Truckers on Legalized Marijuana

Kevin Anderson Regulations, Transportation

In recent years we have witnessed a phenomenon in the American political landscape of states voting to legalize the use of marijuana in their states, and turn it into a revenue producer. Despite this legalization effort, putting a veil of legality on marijuana use creates a real danger for companies eager to capitalize on the developments. Several states that have chosen to “legalize” marijuana include much of the Pacific Northwest, including Washington, California, and Oregon. Trucking companies may have had a fleeting thought or two about taking advantage of these developments and engaging in commerce to transport marijuana like they do other products, but that would be a bad idea. Marijuana Remains Illegal The trucking and transportation industry is a national industry, regulated (mostly) by federal law, rules, and regulations. And under federal law, no matter what a state chooses to do, marijuana use, possession, and transportation remains illegal. The …

The Condition of Goods at Shipment and the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

The Carmack Amendment is a federal policy aimed at ensuring an across-the-nation principle of liability for the trucking industry. This is the law that applies anytime an interstate shipment of goods is lost, stolen, or otherwise damaged while in transit, and it is fairly straightforward in assigning liability in most cases. This predictability and uniformity has helped grow the trucking and transportation industry into the economic behemoth we have today. In the vast majority of cases involving lost, damaged, or stolen goods, the carrier will face liability for the losses that occur. This policy put the responsibility on the carrier to ensure goods are delivered safely to their destination. Were it not so, the shipper would be more hesitant to ship goods with other companies, and the flow of commerce would be slowed considerably. Basic Case for Carmack Amendment Liability Under the provisions of the Carmack Amendment, there are three …