The Carmack Amendment and a Clean Bill of Lading

Kevin Anderson Bills of Lading, Cargo Liability, Transportation

For those involved in the trucking industry, it is only a matter of time before a shipper makes a claim for lost, stolen, or damaged cargo. When that happens the claim comes under the provisions of the Carmack Amendment, as long as the goods were shipped interstate. This federal policy is a national policy with established rules that should determine what the rights and obligations of the shipper and carrier are in any given situation. The federal policy of liability for truckers is important for predictability and certainty in the industry, and it has several elements to it that must be met before a claim can go forward. In a recent case from Ohio, a federal court dealt with a trucking company and the claimed loss of tens of thousands of dollars worth of equipment due to damage in the course of its transportation. Proof of Condition in the Goods …

A Primer on Damages and the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

For those involved in the trucking industry, there is always a chance that the goods being transported could be lost, damaged, or stolen while in transit from point A to point B. And when those goods are being transported from one state to another, some may ask which state law should apply to resolve the issue. But thanks to a national policy, there is no need to ask that question. That national policy that provides for what happens when trucking goods are lost, damaged, or stolen is known as the Carmack Amendment. It is a federal law, codified at 49 U.S. Code § 14706, and since its enactment it has provided the trucking and transportation industry with stability and predictability when it comes to mitigating the loss that inevitably happens over the road. But even this national policy can have some variations from one area of the country to another. …

Elements of Basic Carmack Amendment Case in Federal Court

Kevin Anderson Cargo Liability, Transportation

The Carmack Amendment is a federal law that establishes a uniform policy of liability for lost, damaged, and stolen goods shipped from one state to or through another. But before a case can proceed to trial, or before a shipper can make a claim under the Carmack Amendment, the shipper must first show a basic case, or as it is known in the law, a prima facie case. Once a basic case is shown, it usually goes to trial or is settled out of court. The elements of a basic Carmack Amendment case are established by two sources of law. The original and most authoritative source comes from the federal code. And the Carmack Amendment is codified in 49 U.S. Code § 14706. But federal statutes are not the only source of rules and regulations on the Carmack Amendment because there are too many provisions that need to be interpreted …

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 …

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 …

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 …